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1.0 - Purpose

To provide guidance regarding the circumstances in which cost sharing is permitted by the University; including what kind of services, expenditures, or assets may be cost shared.

To provide information to the University community regarding the contractual, financial, and administrative implications that result from the commitment to cost share.

To establish procedures which give the University the ability to provide information to sponsoring agencies which demonstrates that the University has fulfilled any cost sharing commitments it has made as a condition of obtaining external sponsorship.

2.0 - Scope

The following document comprises The University of Texas at Dallas' Policy on cost sharing and the procedures for monitoring project-by-project cost sharing and reporting such cost sharing to sponsoring agencies. The policy is effective for proposals submitted and awards received on or after May 1, 2002.

3.0 - Definitions

• Cost Sharing - That portion of a project or program costs that is not borne by the sponsor. Cost sharing consists of two types: mandatory cost sharing and voluntary cost sharing.
• Mandatory Cost Sharing - Cost sharing contractually required by the sponsoring agency.
• Types of Mandatory Cost Sharing - Mandatory cost sharing includes:
  • Costs funded by the University from non-sponsored accounts, and certain non-federal sponsor accounts, and not included as cost sharing for any other sponsor project
  • Cash and third party cash contributions that are verifiable in the University's accounting system and are not included as contributions for any other federally assisted project or program
  • In-kind contribution including volunteer services provided by professional and technical personnel, consultants and other skilled and unskilled labor if the services are an integral and necessary part of an approved project or program and are required by the award
  • Grant related income included in the approved project/program budget.
• Project or Program Costs - All allowable costs incurred by the University, both directly and indirectly, in accomplishing the objectives of the grant or other agreement during the project or program period. Project costs include mandatory cost sharing, which can be direct or indirect costs.
• Voluntary Cost Sharing - Cost sharing provided by the University in excess of mandatory cost sharing requirements.
• Allowable Costs - Costs are considered allowable if they meet the following tests:
  • They must be reasonable
  • They must be allocable to sponsored agreements, that is, they are incurred solely to benefit the sponsored project
  • They must be given consistent treatment
  • They must conform to any limitations or exclusions set forth in the Office of Management and Budget, Circular A-21 and in the sponsored agreement.
• In-Kind Contributions - Represents the value of non-cash contributions, which may be in the form of charges for real property and nonexpendable personal property, provided by the University and third parties, and the value of goods and services directly benefiting and specifically identifiable to the project or program.

4.0 - Basic Requirements

1. The University will maintain accounting records on all project-by-project mandatory cost sharing. Project-by-project mandatory cost sharing is identified as an amount or percentage in the award agreement received from the awarding agency.
2. Mandatory cost sharing or matching costs recognized by the University include those costs that are allowable under applicable federal cost principles, that originate from nonfederal sources, that are not applied to more than one federal cost sharing or matching project, that are provided for in the approved budget when required by the agency, and that are verifiable from University accounting records.
3. Cost sharing includes the following: a) salaries and fringes; b) other direct costs; c) facilities and administrative costs (previously known as indirect costs).
4. Cost sharing of salary and wage costs is considered direct salary cost, and included in the Payroll System as part of the individual's 100 percent effort.
5. It is essential that all claims for mandatory cost sharing be accounted for by actual charges to the cost share account. The related accounting procedures for recording the cost sharing commitments required by the award document are an integral part of the accounting system of the University.

5.0 - Mandatory Cost Sharing (excluding In-kind & Third Party Cost Sharing)

1. When budgeting an award which requires mandatory costs sharing, schools/departments will request a new account number through the BIS Request for New Account System - Cost Sharing Route #11. This will be done prior to the Office of Sponsored Projects (OSP) assigning of the 6xxxxx account number. The funding source account for the new cost share account must be identified in the description area of the request.
2. OSP will assign a 6xxxxx account number for the funded portion of the contract or grant and then forward the request to the Office of Finance for the opening of a cost sharing account number in the Financial Records System (FRS).
3. The initiating department/school will receive confirmation of the new cost sharing account number through the BIS system. Once the new cost sharing account is established, the department/school will process a Budget Adjustment Form (BAF) to move budget to the account and a Signature Authority form to establish the signature authority for expenditures.
4. The BAF must be submitted through the same BIS route as the "TARP/TATP" accounts are processed to allow for the approval by OSP. The route name has been changed from TARP/TATP to TARP/TATP/Cost Sharing Route.
5. Cost sharing accounts that are established from State - 2xxxxx accounts will have to be re-budgeted each fiscal year, as these accounts do not roll into the new fiscal year automatically.
6. The Budget Office will monitor the cost sharing accounts only for over-expenditures. The Principal Investigator for a project or program is responsible for the allowability and recording of cost sharing expenses accumulated and reported under the account.
7. The related 6-account will not be opened until the budgeted funds for the current fiscal year have been moved to the cost share account. For subsequent years, if the budgeted funds are not moved to the cost share account, the related 6-account will be frozen one month after the start of each fiscal year (September). Cost share account overruns will be the responsibility of the School/Department responsible for the account. Fund balances in the cost share accounts will be carried over to the next fiscal year if the contract is not closed out.
8. Cost share accounts will be held to the same approval process as the 6-accounts are under). No facilities and administrative costs will be budgeted or recorded in the cost share account. Time and Effort reports will be produced on salary costs which are subject to the Time and Effort certification policy and procedure.
9. Generally, funds from the sponsoring agency and cost sharing funds should be spent at about the same rate throughout the project, for example, when 10% of sponsoring agency funds have been spent, 10% of cost sharing funds should have also been spent. This provides even support by both parties throughout the project and prevents problems at the end of the project. This may not be possible if cost sharing funds are for equipment.
10. It is emphasized that the amount of University cost sharing should generally be limited to the amount specifically required by the funding agency. All required cost sharing plus any voluntary cost sharing in excess of the requirements must either be specifically identified in the proposal or by a separate form accompanying the proposal during internal routing and approvals.
11. If the fiscally responsible department/center does not provide the cost sharing amounts required in the agreement, a proportionate reduction will normally be made in the sponsoring agency's 6-account budget.
12. In accordance with our close-out procedures, sponsored research awards are final billed 60 to 90 days after the end of the period of performance unless an extension has been granted or a risk memo has been submitted pending an extension. After all receivables are collected on the final bills, any remaining funds in the cost share account will be returned to the school/department funding the cost sharing.

5.1 - In-Kind Cost Sharing

In-kind cost sharing will be approved by the University only in rare circumstances.

In-kind cost sharing must be clearly identified on the Certification of In-kind Cost Sharing Form. This form must be signed by the principal investigator and the dean/director of the department/center. See attached instructions for completion of the form.

The department which is responsible for the project should keep detailed, auditable records for in-kind cost sharing throughout the project. The completed form should be sent to Contracts and Grants Accounting quarterly or at periods set forth in the agreement. Contracts and Grants Accounting will compute applicable indirect costs and include them in the cost sharing report.

In-kind Cost Sharing includes depreciation expense on previously purchased equipment and interest on bond principal.

5.2 - Third-Party Cost Sharing

Third-party cost sharing may be cash or non-cash. Non-cash contributions are the value of contributed goods and services directly benefiting the project. Cash contributions should normally be processed through a separate 6-account to be counted as cost sharing for the sponsor project. All non-cash contributions must be verifiable.

The written agreement should include information on any third-party non-cash contributions. Complete information (such as names, dates, hours worked) on such contributions should be submitted to Contracts and Grants Accounting quarterly or in the intervals required in the agreement.