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1. Introduction

Office of Management and Budget (OMB) Uniform Guidance states that, “Cost sharing or matching means the portion of project costs not paid by Federal funds.” The University of Colorado Boulder (“CU Boulder,” “university”) uses this as the standard definition for all its cost share obligations unless otherwise defined by a non-federal sponsor.

Cost sharing is a commitment by CU Boulder (or a third party through the university) to provide a portion of the direct costs necessary to fulfill the objectives of a sponsored project award. Cost sharing that has been committed to the sponsor shall be documented for individual projects and for inclusion in the organized research direct cost base used to develop the campus Facilities and Administration (F&A) rate.

Cost sharing is a legally binding obligation to the university and the value is subject to audit. Failure to fulfill cost sharing commitments may result in audit findings and/or reduction of the award.

2. Definitions, References and Resources

2.1 Definitions

Cost sharing and matching are terms that are often used interchangeably and identify the financial or in-kind support contributed by CU Boulder (or third parties through the university) to sponsored projects. For purposes of this policy, these terms are used interchangeably.

Committed cost sharing is pledged in the proposal budget, budget justification, or proposal narrative whenever a specific dollar amount is stated or can be calculated from information provided in the proposal. There are two types of committed cost sharing:

  1. Mandatory cost sharing is required as a condition of the award.
  2. Voluntary cost sharing is offered by the recipient when not specifically required by the award.

Voluntary uncommitted cost sharing is incidental support that is over and above what was proposed and agreed upon for the project. This is not included or quantified in the proposal budget or the narrative. Generally, uncommitted cost sharing is not auditable or reported to the sponsor.

2.2 References and Resources

  • OMB Uniform Guidance Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, particularly Subpart D, Post Federal Award Requirements §200.306  Cost sharing or matching
  • OMB Circular A-21, Cost Principles for Educational Institutions
  • Clarification of OMB A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition   Remission Costs (OMB Memorandum)
  • Electronic Personnel Effort Reporting System (ePERs) (CCO Policy and Procedure)    
  • Gift In Kind (OUC Accounting Handbook topic)
  • Gift In Kind Acceptance (OUC Form) Cost Share Addendum Form
  • Certification of In-Kind Cost Sharing Contributions
  • Fiscal Management of Sponsored Projects

3. Policy Statement

CU Boulder commits to cost sharing only when required by the written policies of the sponsor or the specific terms of an award and/or is in the best interests of the university, e.g., experience indicates that a particular proposal will be more competitive if cost sharing is offered. All cost sharing commitments become binding obligations and part of the project’s scope of work when identified in a proposal and approved in advance by each contributing unit to the cost sharing, i.e., cash, effort, or in-kind support (see Section 4.2). Cost sharing beyond the required minimum is strongly discouraged.

When committed, cost sharing shall fulfill all the following:

  1. Comply with federal cost principles, federal regulations, and applicable university policies and procedures, regardless of the federal or non-federal sponsor;
  2. Be clearly identified in the Finance System when CU Boulder funds are committed;
  3. Be used exclusively to support the project as proposed and awarded;
  4. Be incurred during the project period of performance; and
  5. Be fully documented by the PI and verified by the Campus Controller’s Office (CCO) cost share accountant.

Principal investigators (PI) are responsible for ensuring that cost sharing commitments are fulfilled and documented. Deficits resulting from reduced funding or unpaid invoices due to a failure to satisfy cost sharing commitments are the responsibility of the PI’s department. Failure to meet the pledged cost share can result in a reduction of the award and sponsor funding, which can impact department/institute/college resources.

It is the policy of CU Boulder to reduce the cost share budget proportionately with a reduction in the awarded budget. Whenever the amount of mandatory cost sharing is tied to a specific percentage of the award or is budgeted by project year and the number of proposed project years is reduced, then the amount of the cost share is also reduced. Whenever the amount of the required cost share is not pre-determined by a percentage or number of project years, then the principal investigator will be required to prepare a reduced cost sharing budget, which will be proposed to the sponsor for approval. In all cases, a revised budget is required (see Section 4.4).

4. Procedures

4.1 Cost Share Requirements

Committed cost sharing, from all sources, shall meet all of the following criteria as expressed in OMB Uniform Guidance 2 CFR 200.306:

  1. Are verifiable in the university’s Finance System and substantiated by departmental records;
  2. Are not used as cost sharing for any other sponsored project;
  3. Are necessary and reasonable for proper and efficient accomplishment of project objectives;
  4. Comply with applicable federal cost principles as expressed in OMB Uniform Guidance Part 200 Subpart E – Cost Principles, including being reasonable, consistent, allocable, allowable and incurred during the award period of performance;
  5. Are not paid by the federal government under another award, except when authorized in writing by the federal sponsor;
  6. Are provided for in the approved budget when required by the awarding agency.

4.2 Cost Sharing Approval

It is the policy of CU Boulder to cost share only when it is required by sponsor policies or award terms. Therefore, voluntary cost sharing should only be proposed when it is clearly in the best interests of the university. This policy does not prohibit the university from contributing resources toward the performance of sponsored projects, which includes PIs spending additional time on research projects without additional salary from the sponsor.

Proposals that commit cost sharing must include a completed Cost Share Addendum Form with the proposal application. Principal investigators are required to complete the Cost Share Addendum Form, including additional documentation as required by the type of cost sharing proposed. All cost share forms must be signed by the Principal investigator and the department chair, institute director or equivalent. In addition, authorized signatures are required from each unit that contributes to a cost share commitment. Committed cost sharing is an official part of the budget and should be detailed in the budget justification. 

Committed cost sharing by outside entities supporting CU Boulder proposals require “commitment letters” endorsed by a person authorized to approve these commitments and, if the entity is a subawardee, a proposed cost share budget. All commitment letters must be submitted with the proposal and include the following information:

  1. The kind of cost sharing to be provided, e.g., services, monies, supplies, equipment;
  2. The actual dollar value or fair market value of the contribution (as valued by the 3rd party and confirmed by the PI)
  3. The time period over which the contributions will be made. Note: All cost sharing must be expended or provided within the project’s period of performance.

4.3 Cost Sharing Sources

Committed cost sharing may be supplied from a number of sources, including the following:

  1. Cash Contributions: Cash contributions are CU Boulder funds and/or money provided to CU Boulder by external sources to pay the university’s direct costs of a sponsored project. The university can make a cash contribution to a sponsored project for cost sharing purposes. This can be in the form of a university gift, endowment earnings and/or other unrestricted funds to pay for any of the direct costs associated with a sponsored project (e.g., salaries, fringe benefits, travel, equipment, etc.). In addition to a PI’s home department, the following entities may also be available to contribute cash cost share depending on the availability of funds: Research Innovation Office (RIO), College of Arts and Sciences, College of Engineering, and Graduate School. In most cases, federal funds cannot be used to fulfill a cost share commitment. 
  2. In-Kind Contributions: In-kind contributions represent non-cash support such as volunteer services, donated use of university or non-university equipment or facilities, or services of employees from non-university organizations. The value of in-kind contributions is what it would have cost had CU Boulder directly paid for the item or service. Special rules apply to the valuation and documentation of in-kind contributions as specified in Section §200.306, Cost sharing or matching, (d)-(j) of the OMB Uniform Guidance, and university policies governing gift-in-kind transactions.
  3. Contributed Facilities & Administrative (F&A) Costs: This refers to the F&A associated with any cash contributions made to the project by the university. For example, if the PI plans to contribute time and effort to the project without compensation from the sponsor, the monetary value of this effort as well as the F&A associated with that effort may be offered as cost share. Contributed F&A is always calculated using the F&A rate appropriate for the activity that the university has negotiated with the Department of Health and Human Services (DHHS) or according to the sponsor’s established indirect cost rate policy for non-profit, U.S. governmental agencies, and some federal sponsors. Contributed F&A may only be used as a part of the fulfillment of the university’s cost share obligation if the sponsor approves.
  4. Mandatory Waived or Unrecovered Facilities & Administrative (F&A) Costs: Waived or unrecovered indirect costs may be included as part of cost sharing or matching with prior approval of the sponsor. Waived F&A are those unreimbursed indirect/overhead costs which the university forfeits when it is the written policy of the sponsor to pay a rate less than the university’s negotiated F&A rate with the federal government. The Cost Share Addendum form must identify these sources whenever used to fulfill part of a cost share. Waived F&A occurs when the sponsor has a lower F&A rate, consistently applied to all awards, than CU Boulder’s negotiated rate. When F&A is “waived,” the university agrees not to charge its federally negotiated F&A rate to the sponsor. The waived portion is considered “unrecovered F&A” and can be used as cost share if allowed by the sponsor.

For example, if the sponsor will allow only a 12% F&A rate for their funding and our campus rate is 54%, we can request to claim the 43% difference as part of our cost sharing. The 12% sponsor rate would automatically calculate on the project. CCO would calculate the waived amount of 43% on direct costs funded by the sponsor and track that as part of the fulfilled amount. Ifa companion source (program or project) is used to pay for university cost share direct costs, CCO would calculate the full 54% on allowable direct costs charged to that source. Of that 54%, 12% represents the “unrecovered” portion and the remaining 43% represents the “waived” portion.

  1. Voluntary Waived F&A are those unreimbursed indirect/overhead costs which the university voluntarily forfeits. Specifically, if the sponsor will provide the negotiated F&A rate but the university proposes to accept a lower rate, then this represents a voluntary loss of income to the university and requires pre-approval through the Office of Contracts and Grants (OCG).
  2. A sponsored award whose specific purpose is to match another sponsored award funding a single project or program: This is allowable as cost share if pre-approved by all sponsors involved. Note that federal funds cannot be used as cost sharing on other federally funded projects, except where authorized by the sponsor.
  3. Subawardees may be required to contribute cost sharing requirements based on the proposal solicitation.

4.4 Revised Cost Share Commitment Budgets

Whenever the awarded budget is less than the proposed budget, a revised budget is required.

  1. If the sponsor requires a resubmission of the revised budget for approval, then the resubmission will include revisions to both the proposed budget and to the cost share budget.
  2. If the sponsor accepts the revised project and cost share budgets, then the project will be implemented using the revised budgets which will reduce the university’s level of cost share commitment proportionally to the reduction in the value of the project budget.
  3. If the sponsor does not require the resubmission of a revised budget, then the university will submit a written request for a proportional reduction in the cost share requirement. If the sponsor approves the request, then the project will be implemented with the revised budget. If the sponsor declines the request, then the project will be implemented with the original level of commitment. The sponsor’s response will be included as part of the permanent project record.

If the principal investigator requests a cost sharing budget greater than the recalculated amount, then the PI will submit a written justification to the Office of Contracts and Grants (OCG) and each contributor to the original cost sharing commitment for consideration.

If the award is modified after the initial award, a new cost share addendum is required for any new or additional cost share commitments, and a revised budget should accompany the award modification.

4.5 Documentation

Committed cost sharing made at the proposal stage becomes a binding obligation at award and must be verifiable in the university’s Finance System and substantiated by departmental records. The cost sharing must occur during the period of performance. To be “counted” as cost sharing, contributed effort and resources must be expended within the approved project period. The type of costs contributed as cost share must be considered “allowable” by the sponsor, and allocable to the project. Typically, the cost share expenditures should follow the sponsor-approved budget, as varying from the sponsor-approved budget may require sponsor pre-approval. 

The following sections describe the documentation required for each type of cost share to demonstrate its fulfillment:

4.5.1 Cash

Each project with a proposed cash commitment shall, upon award, have a companion cost share account established with its own SpeedType in the Finance System specifically for tracking cost share expenditures. This companion account will enable the segregation of cost shared expenses from sponsor-funded expenses and prevent commingling of general purpose funds with project expenditures. The SpeedType for the companion account will be requested by CCO and assigned by CCO at project set up. The account will be titled “Cost Sharing for [insert project number].” All cost sharing expenditures must be recorded in SpeedTypes created for this purpose.

The PI and department are responsible to ensure that:

  1. Any funds obligated to meet committed cost share are transferred into the companion SpeedType(s);
  2. Cost sharing funds are spent concurrently with award expenditures and/or per the terms of the award;
  3. Costs used to satisfy matching or cost sharing requirements comply with the same policies governing allowability as other costs under the approved budget;
  4. Indirect costs are used to meet this obligation only if specifically allowable in the award.

Once the cost sharing commitment has been fulfilled, unexpended funds in the companion SpeedType should be returned to the campus contributors in proportion to each unit’s contribution.

4.5.2 Effort

University-paid salary expense and fringe benefits committed as cost sharing are to be recorded on the cost share SpeedType in the Finance System. 

4.5.3 In-Kind

Non-cash contributions shall comply with the valuation guidelines of Section §200.306  Cost sharing or matching, (d)-(j) of the OMB Uniform Guidance, and university policy. The PI is responsible for obtaining documentation from the donor as soon as possible after the cost sharing commitment is completed but no later than the conclusion of the award. One of the following is required to support these contributions:

  1. A signed, dated letter from the donor describing the donation, its purpose, its value, and, verifying the information is true and correct;
  2. A statement and signature on the commitment letter certifying that the commitment has been fulfilled; or
  3. A completed Certification of In-Kind Cost Sharing Contributions form.

4.5.4 Facilities and Administrative (F&A) Costs

The Finance system tracks F&A only in sponsored project SpeedTypes. Therefore, to capture this amount when F&A is fulfilling cost share, CCO performs background calculations using the appropriate F&A rate on cost share expenditures posted to the project’s cost sharing companion SpeedType(s). Likewise, CCO calculates any pre-approved waived F&A on sponsor funded direct costs.

  1. If the cost sharing commitment is mandated by the sponsor, then F&A costs will be calculated and included with the direct cost shared expenses to fulfill the cost sharing obligation.
  2. If the cost sharing commitment is volunteered by the university, then no F&A costs will be calculated and only the direct cost shared expenses will be used to fulfill the cost sharing obligation, unless specifically requested by the PI.
  3. Effort, however, will always have the sponsor approved F&A rate calculated on the contributed salary to fulfill mandatory or voluntary cost sharing.

4.5.5 Another Sponsored Award

Cost sharing contributions from another sponsored award shall be uniquely identified in the Finance System and will be treated as any other Fund 30/31 award. It will have its own project number and its description shall read “Cost Sharing for [insert project number].” Cost share expenses on these projects are subject to the same policies governing the allowability of costs under the award being matched.

4.5.6 Subawardees

Subawardee cost share commitments shall be documented, reported, and certified as true and accurate on the subcontractor’s invoices submitted to the university. The PI is responsible for ensuring that these commitments are fulfilled and providing any documentation needed by the CCO cost share accountant for the award.

4.5.7 Uncommitted

Uncommitted cost sharing does not require sponsor reporting and is not tracked by CCO.

5. Compliance and Reporting

The PI is responsible for immediately informing OCG or CCO, as appropriate, of any changes in the cost sharing commitments or the unit’s ability to meet and/or document those commitments. This applies to mandatory or voluntary commitments because all committed cost sharing must be fulfilled.

It is also the responsibility of the PI and/or unit to provide to the CCO cost share accountant any documentation about cost sharing that is not available in the Finance System. The cost share accountant uses this documentation and Finance System records to monitor the progress of all cost sharing commitments in order to verify compliance, to provide cost sharing reports to sponsors when required, and to sign off as a responsible party to verify completion.

6. Exceptions

Exceptions to this policy must be approved by both the Campus Controller’s Office and the Office of Contracts and Grants.

PDF Version

Policy Profile

Effective Date: July 1, 2020

Replaces: Cost Sharing dated December 4, 2013; Cost Sharing dated January 1, 2010

Approved by: Leila McCamey, Interim Controller

Original Approved by: Laura Ragin, Assistant Vice Chancellor and Controller; Steve McNally, Senior Associate Vice Chancellor for Budget, Finance and Enrollment Services; Stein Sture, Vice Chancellor for Research