Cost Sharing

Responsibilities

Department Chair, Director, DBO, or MSO

• Approves cost sharing commitment and funding availability
• Validates cost sharing in the absence of the PI

Principal Investigator (PI) / Department

• Recommends whether to include formal cost sharing in the proposal
• Advises purchasing of subcontract cost sharing requirements
• Ensures that:
  • The proposal text and budget accurately reflect their intent regarding cost sharing commitments
  • The cost sharing portion of the Request for Extramural Support (RES) ePD is complete and submitted with each proposal
  • Proposal budget costs and actual accumulating and reporting practices are consistent
  • The level of accounting detail equals or exceeds the level of budget detail in proposals
  • Required cost sharing data is entered in the Oracle
  • Records and information are available to support cost-sharing validations
  • The university's cost sharing commitment is fulfilled for all cost sharing, including cost sharing from a sub-awardee and/ or secondary sponsoring units\
• Supervises the department's reporting procedures
• Reports and validates all cost sharing effort on the CSS report
• PI (or MSO/DBO in his/her absence) validates in the Cost Sharing System

Office of Contract and Grant Administration (OCGA)

• Advises departments on appropriate cost sharing and analyzes proposals for compliance with cost-sharing requirements
• Coordinates the campus review and approval process for cost sharing
• Verifies that the cost sharing amount committed to by the department represents a reasonable estimate of the commitment stated in the award documents
• Activates, upon acceptance of an award, the cost sharing flag and enters the cost-sharing information in Kuali Research
• Requests approval for changes in referenced cost sharing from sponsoring agencies as needed

Sponsored Projects Finance (SPF)

• Consults with department and/or OCGA as needed about cost sharing commitments, and communicates with them about any issues identified
• Monitors that cost sharing reported in Oracle represents a reasonable estimate of the cost sharing commitment
• Ensures that the amount cost shared is in compliance with cost accounting standards and agency policy
• Consults with and trains others in cost sharing policies and procedures
• Assists the campus community in the use and applicability of Oracle

Vice Chancellor, Resource Management and Planning

• Reviews and approves cost sharing commitments that fall into the "other resources" category

Consequences

Impact to the university

• Costly
• Creates administrative workload
• Reduces cost recovery of both direct and indirect (F&A) costs
• Creates potential liability

Risk of non-compliance

• Withholding % of total award
• Disallowance of expenses that are already incurred
• Termination of active awards
• Possibility of not getting future funding
• Suspension of new awards
• Extrapolation

Oracle

Use Oracle to record, track and review cost sharing transactions.

Cost Accounting Standards

Follow the Cost Accounting Standards (CAS) 501 as incorporated in  OMB Uniform Guidance or 2 CFR 200. 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. Once evidence is provided to SPF, the accountant will enter this information in Oracle as a miscellaneous transaction so that it will be included in the Cost Share Compliance 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 will be reflected in Oracle based on Kuali Research information. The department should justify and document these changes for audit purposes and work with OCGA to update Kuali Research accordingly.
• 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.
• Best practice is to enter the transaction monthly into Oracle.

Formal Cost Sharing

• Formal/ Mandatory cost sharing: Required by agency policy or award terms and conditions.
• Formal/ Voluntary committed cost sharing: The university may voluntarily commit the use of its resources. With some agencies and under certain circumstances, these commitments become a requirement of the award and must be treated the same as mandatory cost sharing that must be tracked and reported.
  • Voluntary cost sharing becomes "formal" cost sharing only if one or more of the following criteria apply:
    • Cost sharing is specifically identified and a monetary value or a percent of effort is established in the proposal budget
    • Cost sharing is specifically identified in the proposal text
    • Cost sharing is specifically identified and a monetary value or a percent of effort is established in the award document, either directly or by reference to the proposal
  • Unless at least one of the three critieria also applies, the following alone do not create a cost sharing commitment:
    • Completing UCSD internal documents such as internal budgets
    • Completing a list of current or pending support that associates a percentage of effort with a specific project
    • Providing voluntary cost sharing that was neither specifically identified nor assigned a monetary value in the proposal budget, proposal text, or award document
• Formal/Statutory cost sharing refers to cost sharing that is required by law, stating that the grantee (university) must share in the cost of research projects. Statutory cost sharing is typically tracked by central administration. No entry is required in Oracle and departments do not report these costs.

Example: The National Science Foundation (NSF) previously required 1% cost sharing of research projects resulting from unsolicited proposals.

Informal/ Voluntary uncommitted cost sharing

If the criteria noted above for formal cost sharing are not met — such as when there is no monetary value or effort noted in the proposal budget, text, or award document — voluntary cost sharing remains informal and tracking or reporting is not required.

An example of voluntary cost sharing would be time spent on a project by a principal investigator that is above and beyond the amount of time committed or paid by the project or required by any formal cost sharing commitment. This time can be considered project collaboration or enhancement.

Project collaboration or enhancement is a voluntary commitment of university resources/ funding to supplement externally sponsored projects. Project collaboration or enhancement exists if the cost fits all of the following criteria:

• Is not quantified in the proposal budget
• Is not quantified in a narrative or transmittal letter, and support is described as resources available for the project
• Is not quantified and not required as a condition to the acceptance of the award

Cost sharing exceptions

Certain activities that may otherwise be considered formal cost sharing are exempted from reporting
requirements, including:

• Commitments that are not specifically identified as a cost element, percent of effort, or some other measure that can be reduced to a dollar value

Example: University expenditures in support of research which are not separately budgeted, and which are not included or addressed in either the project proposal and/or in the award notice, are classified as departmental research.

Q. Who can Validate (confirm) cost sharing and why?

A. The most important component of meeting our cost share commitment involves the validation and recordation of the cost share commitments that have been made. The two major parts of this component include the establishment of where those financial records will be found in the appropriate Project, Task and Funding Source and the verification when final reports are issued that our cost share commitments have been reached. The supporting financial transactions and other records are to be included as a part of the final document record.

Our compliance requirements are to:

• Insure that we have a documented record of those contributions
• Insure that the same contributions are not re-applied; and to
• Have records available for instances when an audit selects an award containing cost sharing.

Managers (MSOs and DBOs) are responsible for assuring that commitments were met and the validation that we have documentation record(s). This is different from Effort Certification where we require PIs to review and certify effort in the period worked, but instead this is a documented record of all expenditures applicable to the cost share commitment made.

Note: Remember to include documentation records to support non-UCSD expenditures.

Q. What chartstring do I enter for UCPath?

A. Use the same chartstring that you would for your sponsored project, but make sure to enter the FUNDING SOURCE that is appropriate for your costsharing. This will ensure that the same controls for your sponsored project will be applicable to the costsharing commitment as well.

Q. How does my GL reconcile with my Cost Sharing?

A. Your expenses that are charged to your costsharing will be charged with the SP project number in the chartstring, but a different fund from the externally sponsored portion. If you need to move resources in the GL to “zero out” the fund/finu, you can process a journal to do so. 
 
Example: NSF award with cost sharing being met be SOFI 
Expense to the NSF portion: 16110.20000.1000020.522401.440.000.000000.1234567.000000.00000.
Expense to the SOFI portion: 16110.13991.1000020.522401.440.000.000000.1234567.000000.00000.
SOFI resource: 16110.13991.1000020.774009.000.000.000000.2345678.000000.00000.
Optional Journal:
CR 16110.13991.1000020.774009.440.000.000000.1234567.000000.00000.
DR 16110.13991.1000020.774009.000.000.000000.2345678.000000.00000.

Q. What if my Cost Sharing is being met by another Department?

A. You have 2 options to set this up depending on your accounting requirements

1. Create new project with that other department project owning organization. When you charge costs to this new project, the expenses will post to this other dept FinU
2. Other dept transfers the resources to your FinU, same project number, different fund. Create a separate task to track this separately if desired

Q. What if my Cost Sharing is being met by another Department?

A. This is a very rare situation, but if you do have this, please follow the instructions for 3rd party cost sharing and make sure that your documentation is very clear that it is approved and that the costs are not being cost shared on any other award.

Cost Sharing FAQ in OFC

Q. What if my Cost Sharing is being met by another Department?

A. You have 2 options to set this up depending on your accounting requirements

• Create new project with that other department project owning organization. When you charge costs to this new project, the expenses will post to this other dept FinU
  
• Other dept transfers the resources to your FinU, same project number, different fund. Create a separate task to track this separately if desired

Q: What chartstring do I enter for UCPath?

A: use the same chartstring that you would for your sponsored project, but make sure to enter the FUNDING SOURCE that is appropriate for your costsharing. This will ensure that the same controls for your sponsored project will be applicable to the costsharing commitment as well

But won’t that be a mismatch of FUND?

A: Yes, but the accounting is derived from PPM when the payroll is posted, so the appropriate Costsharing fund as setup by your internal funding source will be charged.

Q: How do I record costsharing that is being met by another sponsored research award?

A: this is a very rare situation, but if you do have this, please follow the instructions for 3rd party costsharing and make sure that your documentation is very clear that it is approved and that the costs are not being costshared on any other award.

Q. How does my GL reconcile with my Cost Sharing?

A. Your expenses that are charged to your costsharing will be charged with the SP project number in the chartstring, but a different fund from the externally sponsored portion. If you need to move resources in the GL to “zero out” the fund/finu, you can process a journal to do so. 
 
Example: NSF award with cost sharing being met be SOFI 
Expense to the NSF portion: 16110.20000.1000020.522401.440.000.000000.1234567.000000.00000.
Expense to the SOFI portion: 16110.13991.1000020.522401.440.000.000000.1234567.000000.00000.
SOFI resource: 16110.13991.1000020.774009.000.000.000000.2345678.000000.00000.
Optional Journal:
CR 16110.13991.1000020.774009.440.000.000000.1234567.000000.00000.
DR 16110.13991.1000020.774009.000.000.000000.2345678.000000.00000.

Q: How do I allocate my costsharing committment to the project in the GL?

A: Process a resource allocation journal as outlined above.

Q: What if I'm using The Resource Commitment Tracking Tool (RCTT)?   

A: The Resource Commitment Tracking Tool (RCTT) does not allow a user to designate a sponsored project as either a commitment source or a commitment destination - this restriction was based on guidance previously received by our design team. Our integrations to load new projects as commitment sources therefore exclude sponsored projects by checking to see if there is an award on the project - since these projects are not loaded as potential sources, they are not available for our team to load as destinations either.

In cases where a project is specifically unavailable in the RCTT, we have advised users to use the Financial Unit's default project (all of which are available in the RCTT), and 1) use the RCTT data export to journal resources as they are captured in RCTT, then 2) use a separate journal to move resources to another project.