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Rice University Policy No. 306


 

COST SHARING

Click here for a full .pdf version of Policy No. 306.    

Policy Overview:  

It is the policy of Rice University to comply with sponsor requirements for cost sharing commitments, tracking and reporting agreed to by the University as part of accepting sponsored project funds. Accordingly, cost sharing commitments to be undertaken by the University are proposed, reviewed and approved during the proposal review and submission process. The decision by the University to commit its resources toward cost sharing is based on institutional priorities and a determination that funds are available. Cost sharing has programmatic, administrative, and financial consequences for the University and should be considered thoughtfully as these commitments may require significant or long-term obligations. Voluntary committed cost sharing from Rice University funds, above the level mandated/required by the sponsor for funding a project, is discouraged and will be approved only in the most exceptional circumstances. 

Proposal procedures, available on the Office of Sponsored Research (OSR) website, require that committed cost sharing (as defined below) be identified by type of expense and approved by those with authority to commit the funds within the University before the proposal is submitted to the sponsor. Cost sharing commitment requests made to the Vice Provost for Research for central University funding should clearly state the cost sharing commitments provided by the principal investigator(s), chair(s) and dean(s). Each unit that contributes to a cost sharing commitment is responsible for ensuring that resources remain available to meet that commitment until the project is completed or the proposal is rejected. Requests for cost sharing should be initiated early in the proposal-preparation cycle, as soon as the intention to propose and the need for funds become known.

Once a sponsor awards a proposal that includes any form of quantifiable cost sharing, such commitments must be satisfied and are subject to audit. All cost sharing expenditures must comply with University and sponsor requirements regarding allowability, allocability and reasonableness, be reflected properly in the accounting records and meet the cost sharing expenditure criteria listed below. Additionally, committed cost sharing expenditures are tracked and reported in the facilities and administrative (F&A) cost proposal.

Definitions:  

Cost Sharing is that portion of total project costs (including direct costs and related F&A) not provided by the sponsoring agency. Such costs are sometimes referred to as matching funds in the program announcement.

There are three types of cost sharing: mandatory, voluntary committed and voluntary uncommitted. 

  • Mandatory Cost Sharing is required by the sponsor as a condition of funding. It is described in the sponsor’s program announcement and noted in the award document or the approved budget. It must be included in the proposal as a condition of submission and receipt of award. This type of cost sharing is also referred to as Required Cost Sharing.
  • Voluntary Committed Cost Sharing is not required by the sponsor but has been included in the proposal in a quantifiable manner.  See the OSR proposal procedures for examples of quantified voluntary committed cost sharing included in proposals. Some sponsors do not allow proposals to include voluntary committed cost sharing.
  • Voluntary Uncommitted Cost Sharing is cost sharing that has been recorded in the accounting system but is neither mandatory nor voluntary committed cost sharing. If a faculty member chooses to report voluntary uncommitted cost sharing on a project, the cost sharing is recorded in the accounting system but is not required to be reported to the sponsor. See the post-award cost sharing procedures section of the Research and Cost Accounting (RCA) website for additional information.


Committed Cost Sharing
includes both mandatory cost sharing and voluntary committed cost sharing and excludes voluntary uncommitted cost sharing. When an award is made which includes committed cost sharing, the University has agreed to ensure that the cost sharing is funded and expended. Committed cost sharing expenditures must be identified, administered, recorded and accounted for consistently throughout the University and reported as required by the sponsor.

Responsible organization is the department identified on the proposal Review and Approval form as the organization responsible for overall administration of the project. Administration includes: proposal preparation; inter-departmental coordination for multi-departmental projects; technical reporting; budget and financial management, including cost sharing; and award closeout.

Allowable, allocable and reasonable costs are defined in the glossary section of the Research and Cost Accounting website.

Cost Sharing Expenditures:  

To qualify as cost sharing, expenditures must be:

  • necessary and reasonable for the accomplishment of the project;
  • derived from non-federal sources;
  • approved by the non-federal sponsor, if funded from non-federal sponsored projects;
  • treated as cost sharing for only one designated project;
  • allowable and allocable costs; and
  • verifiable through the University’s accounting system and records.


Cost sharing expenditures consist of allowable direct and indirect costs that meet the above criteria. See the post-award cost sharing procedures on the RCA website for information on coding of cost shared expenditures.

See the Appendix to this Policy for Cost Sharing Roles and Responsibilities.

Additional Information 

The following Office of Management and Budget (OMB) Circulars contain additional information on the federal requirements for cost sharing:

  • OMB Circular A-110 for administrative requirements, including section C23, Cost sharing or matching
  • OMB Circular A-21 for cost principles on allowable costs and determination of F&A rates
  • OMB Circular A-21 Clarification Memo for treatment of voluntary committed cost sharing in computation of F&A rates
  • OMB Circular A-133 for single annual audits of federal expenditures on grants and contracts  


Contact Offices
 

Information about requirements, reporting and procedures is available from the Office of Sponsored Research and Research and Cost Accounting websites. 

Pre-Award: The Office of Sponsored Research should be contacted for assistance on cost sharing proposal procedures and commitments.

Post-Award: Research and Cost Accounting should be contacted for assistance on post-award procedures for cost sharing funding and expenditures.

 

Policy No. 306

Issued: December 18, 2009

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Related Rice University Policies 

            • Rice Policy No. 304, Effort Reporting 

 

APPENDIX TO POLICY NO. 306

Cost Sharing Roles and Responsibilities 

Roles
 

Responsibilities 

Principal Investigators (PIs)and co-PIs  

 

·         Initiate discussions with providers regarding planned cost sharing commitments early in the proposal development process. 

·         Indicate plans to contribute cost sharing (voluntary or mandatory) from funds available to the PI. 

·         Finalize cost sharing commitments by provider and type of expenditure and prepare the cost sharing form. 

·         Submit the signed (department, school, Vice Provost) cost sharing formwith the proposal. 

·         Honor cost sharing commitments. 

·         When cost sharing is based on contributed effort, ensure that certified Effort Reports accurately reflect the commitment for faculty, staff and students. 

·         Monitor the status of all committed cost sharing funding and expenditure commitments.  

·         For multi-PI awards, the main/contact PI has primary responsibility to monitor and coordinate the funding and recording of cost sharing expenditures. 

·         Request assistance from the Chair and Dean as needed to resolve variances from agreed-upon commitments of cost sharing funding and/or expenditures. 

·         Certify that non-subcontract third party cost sharing commitments have been met. 

 

Department Administrators (DAs)  

·         Assist PIs and co-PIs with cost sharing responsibilities. 

·         Process needed payroll forms to record cost sharing effort. 

·         Monitor and properly code cost sharing expenditures. 

 Note: The DA of the responsible organization is responsible for processing needed budget transfers to fund the cost sharing commitments. Such budget transfers should be processed within 90 days of the start of each project year. 

 

Chairs 

·         Review and recommend to the Dean any proposed departmental cost sharing commitments. 

·         Honor cost sharing commitments. 

·         Assist the PI and Dean in resolving variances from agreed-upon commitments of cost sharing funding and/or expenditures.  

 

Deans 

·         Review and approve proposed cost sharing commitments from the department and the school to ensure they meet school goals. 

·         Make recommendations to the Vice Provost for Research for cost sharing commitments in those cases where central funds are sought. 

·         Honor cost sharing commitments. 

·         Negotiate any revision to cost sharing commitments resulting from the departure of a PI or co-PI. 

·         Assist PIs and Chairs in resolving variances from agreed-upon commitments of cost sharing funding and/or expenditures.  

 

Vice Provost for Research 

·         Review and approve requests from Deans for central administration cost sharing commitments in consultation with Provost as necessary.  

·         Honor cost sharing commitments. 

 

Provost 

·         Assist the Deans, Chairs and PIs, as needed, in resolving variances from agreed-upon commitments of cost sharing funding and/or expenditures. 

 

Office of Sponsored Research (OSR) 

·         Review cost sharing proposal commitments for compliance with both Rice and sponsor policies, including allowability of costs. 

·         Ensure that all cost sharing commitments have been signed by providers. 

·         Review documentation of third party cost sharing for compliance with Office of Management and Budget (OMB) Circular A-110 requirements. 

·         Ensure subcontract awards include committed cost sharing as needed. 

 

Research and Cost Accounting (RCA) 

·         Assist PIs and DAs with tracking cost sharing expenditures. 

·         Request assistance from PIs, DAs, Chairs, Deans, and VPR as needed to ensure compliance with committed cost sharing expenditures. 

·         Certify cost sharing expenditures on periodic reports to sponsors. 

·         Provide cost sharing schedule on federal awards during the annual OMB Circular A-133 audit.