Avoid cost sharing commitments when possible. Cost sharing:

• Is costly to the University
• Creates significant administrative workload
• Reduces cost recovery of both direct and indirect (F&A) costs
• Creates potential liability for the University

Cost Sharing System: Use the Cost Sharing System (CSS) to periodically review cost sharing activity.

Cost Accounting Standards: Follow the Cost Accounting Standards (CAS) 501 as incorporated in OMB Circular A-21. These standards require consistency between proposed formal cost sharing estimates and actual expenses and reporting. See Sponsored Project Cost Accounting Standards for details.

Non-UCSD entities: When non-UCSD entities are involved in a project, obtain evidence of their cost sharing expenditures. Enter this information in the Miscellaneous Screen of the Cost Sharing System so that it will be included in the Cost Sharing Contribution Report.

Changes in type or timing: Principal investigators (PIs) can change the type or timing of cost sharing — usually without agency approval — if the change agrees with the terms and conditions of the award.

• If the changes impact the project — such as change in its scope, likelihood of success, reduction of PI cost-shared effort, etc. — the changes may require agency approval.

Reduction to cost share amounts:

• Reduction to proposed amount: When formal cost sharing is proposed as a percentage of the total award, the amount of proposed formal cost sharing may be adjusted downward when the total award amount ultimately received is less than the amount requested.

• However, if your formal cost-sharing commitment is based on a percentage of the total award, and if the award amount is not fully spent or is reduced during the life of the award, the total commitment should be reduced proportionately, unless otherwise noted in the award terms and conditions.

• Reductions in the amount of formal cost-sharing commitments should be reflected in the CSS budget. The department should justify and document these changes for audit purposes.

• Formal cost-sharing commitments stated as a percentage of a participant’s effort or a specific expenditure commitment (such as for equipment), may not be reduced without written approval from the agency.

Extension: If you request a no-cost extension of an award that includes cost sharing, do not create additional cost-sharing commitments.

• The original commitments, contained in the original proposal budget, text, or award documents, remain unchanged unless you include additional cost sharing in the extension request and the agency has explicitly approved it.
• You can complete existing cost-sharing commitments during the approved extension.

Recording, updating, reviewing: In general, record cost-sharing expenditures as often as you record research expenditures.

• If the award terms and conditions do not specify a certain rate of distribution of cost-sharing expenditures, cost-sharing commitments may be met and recorded at any point during the project.
• Cost-sharing commitments must be met during the life of the project.
• PIs and sponsoring units are responsible for ensuring that cost-sharing commitments are met. Failure to expend cost sharing in a timely manner can have adverse consequences, especially for awards with large amounts of cost sharing.
• Review and update budget entries in the CSS at least twice a year because employees' professional commitments change over time.

If you have questions, e-mail the OPAFS award analyst.