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Fulfilling and Documenting Cost Sharing

 

Background

As a recipient of Federal funds, UCI is required to account for and report cost sharing in a manner consistent, and in accordance, with federal regulations.

If UCI accepts in response to a proposal that offered a cost sharing commitment, or if an award contains a cost sharing requirement, UCI is legally bound to cost share. Failure to fulfill the cost sharing commitment may result in the sponsor reducing available project funds and an increase in the project costs charged to departmental funds. Therefore, it is important to understand UCI Research Policy - Cost Sharing on Sponsored Projects, which defines cost sharing and describes when cost sharing is appropriate and permitted.

Please note that these guidelines do not supersede UCI Research Policy - Cost Sharing on Sponsored Projects.

Definitions

UCI Research Policy - Cost Sharing on Sponsored Projects defines certain terms, including the following, which are restated below for the convenience of the reader:

  • Cost sharing is any portion of the total costs of a project or program not borne by the sponsor. Cost sharing typically takes the form of in-kind resources (e.g., contributed project personnel effort) or cash.
  • Cost sharing commitment means any cost sharing that is offered and quantified anywhere in a proposal.
  • Cost sharing contribution means the use or expenditure of any in-kind resource or cash to fulfill a cost sharing commitment in the course of performing the scope of work under and extramural award.
  • Third party cost sharing means cost sharing commitments or contributions made by an organization other than UCI or the sponsor.

Fulfilling Cost Sharing Commitments

UCI assumes certain obligations when it accepts an award involving a cost sharing commitment, including the obligation to certify and report to the sponsor the aggregate dollar value of cost sharing contributions. In fulfilling cost sharing commitments, principal investigators, department administrators, chairs, directors, deans and vice chancellors must exercise care to ensure that costs identified and tracked as cost sharing contributions meet the following eligibility criteria:

  • the costs must be able to be documented and verified based on UCI's records;
  • the costs must not be included as a cost sharing commitment related to any other project or program (i.e., the same costs may not be proposed as cost sharing for two or more projects);
  • the costs may not be committed, or contributed, from another extramural award, except where specifically authorized by Federal statute or the sponsor (i.e., costs incurred under a NIH grant may not be proposed or accounted for as a cost sharing contribution under a NSF grant or any other federal or non-federal grant);
  • the costs must be necessary and directly related to the project objectives;
  • the costs must be incurred during the same performance period as the award supporting the project;
  • the costs must be allowable and allocable under federal cost principles (OMB Circular A-21) and the terms of the sponsored agreement; and
  • the costs must be identified in the approved budget or award (either directly or incorporated by reference) when required by the sponsor.

Principal investigators should notify the Office of Research Administration as soon as they reasonably know that the cost sharing commitment for a particular project may not, or will not, be fulfilled. This is includes those situations when a principal investigator transfers to another institution during the performance period of a project, as the sponsor may hold UCI responsible for fulfilling all or a proportionate share of any cost sharing commitment associated with the project.

Documenting Cost Sharing

Cost sharing contributions and third-party contributions are subject to audit and unit business offices and/or principal investigators may be requested to provide auditors with supporting documentation and records to justify the cost sharing contributions tracked in the UCI Cost Sharing Tracking System and ultimately reported to sponsors. Cost sharing records and supporting documents, such as paid invoices, travel vouchers and receipts should be retained in accordance with the University Records Management Disposition Schedules. In addition, effort contributed by project personnel should be recorded and certified on a Personnel Activity Report. If third-party contributions (other than cost sharing provided by subrecipients under UCI's prime awards) will be used to fulfill a cost sharing commitment, source documents supporting the dollar amount of third party cost sharing should also be retained.

Certifying and Reporting Cost Sharing

The principal investigator of a project must certify all cost sharing contributions related to a project by reviewing and signing the Cost Sharing Contribution Report, which is generated through the UCI Cost Sharing Tracking System. When the principal investigator certifies the report, he/she is assuring UCI and the sponsor that:

  • the costs recorded on the report are true and accurate;
  • the costs were contributed to the identified project during the reporting period; and
  • the costs have not been, and will not be, used as cost sharing contributions on any other projects or for any other periods relating to the identified project.

Overdrafts

Any total fund overdraft of an award (or overdraft of a cost category, in certain circumstances) represents cost sharing and may be used to meet any required cost sharing for that award. The over expended amount must be transferred to an unrestricted funding source and identified as cost sharing on the cost transfer if the overdraft will be used to fulfill a cost sharing commitment. If the overdraft amount is not being used to meet the cost sharing commitment, it does not need to be tracked or reported as cost sharing.

Any over expended amount that was charged to an award in error does not represent cost sharing and must be transferred to the appropriate account/fund.

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