Cost sharing or match is defined in the Uniform Guidance 2 CFR 200.29 as the portion of project costs not paid by Federal funds.
The Uniform Guidance 2 CFR 200.306 outlines cost sharing requirements for grants and cooperative agreements and provides specific guidance on cost sharing. Individual agencies may have guidelines that vary slightly from those identified herein, so one should verify an agency’s specific requirements prior to taking any action.
Types of Cost Sharing
There are two basic categories:
Committed Cost Sharing
Committed cost sharing is specifically identified in a grant proposal.
Mandatory
Required as a condition to receive an award and specified by the agency in the proposal guidelines or program announcement. This would be the minimum cost sharing required by the agency. Anything committed beyond the minimum becomes Voluntary Committed cost sharing.
Voluntary
Committed by the University through the inclusion in the proposal as a specific commitment. This commitment could appear in the proposal either in the administrative/business section (e.g. budget or budget justification) or the narrative.
Note that per the Uniform Guidance 2 CFR 200.306:
(a) Under Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications or proposals but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity.
Committed cost sharing – both mandatory and voluntary – are accounted for in the same ways and must be properly documented for cost accounting purposes.
Note: The nature of uncommitted cost sharing (see below) changes to committed as soon as it is included in the proposal budget or award.
Uncommitted Cost Sharing
University expenses, such as faculty salaries, over and above that which is committed and budgeted for in a sponsored agreement.
Uncommitted cost sharing is not and must not be identified specifically in the proposal budget or award or any modification and must not be documented or accounted for as part of the award.
Guidance
Any shared costs or matching funds and all contributions, including cash and third-party in kind, must be accepted by the Federal agency as part of the University’s cost sharing or matching when such contributions meet all of the following criteria:
- Are verifiable from the University’s records,
- Are not included as contributions for any other federal award,
- Are necessary and reasonable for accomplishment of project or program objectives,
- Are allowable under the applicable cost principles,
- Are not paid by the Federal Government under another Federal award, except where authorized by Federal statute to be used for cost sharing or matching,
- Are provided for in the approved budget when required by the Federal awarding agency,
- Conform to other provisions of the UG, as applicable. (Uniform Guidance 2 CFR 200.306(b))
Valuation
University Services and Property
Values for University contributions of services and property must be established in accordance with the applicable cost principles of Uniform Guidance 2 CFR 200 Subpart E – Cost Principles.
If a Federal awarding agency authorized universities to donate buildings or land for construction/facilities acquisition projects or long term use, the value of the donated property for cost sharing or matching purposes shall be the lesser of:
- The value of the remaining life of the property recorded in the University’s accounting records at the time of donation, or
- The current fair market value.
- However, when there is sufficient justification, the Federal awarding agency may approve the use of the current fair market value of the donated property, even if it exceeds the value at the time of donation to the project (Uniform Guidance 2 CFR 200.306(d)).
Volunteer Services
Volunteer services furnished by third-party professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program.
Rates for third-party volunteer services must be consistent with those paid for similar work in the University’s organization.
If the required skills are not found in the University organization, rates must be consistent with those paid for similar work in the labor market in which the University competes for the kind of services involved. Paid fringe benefits that are reasonable, necessary, allocable and otherwise allowable may be included in the valuation. (Uniform Guidance 2 CFR 200.306(e))
Third Party Employer Services
When an employer other than the University furnishes the services of an employee:
- These services must be valued at the employee’s regular rate of pay
- Plus: reasonable, necessary, allocable fringe benefits
- Indirect costs at either:
- the third-party’s approved federally negotiated indirect cost rate, or
- a rate in accordance with Uniform Guidance 2 CFR 200.414(d), provided these services employ the same skill(s) for which the employee is normally paid. (Uniform Guidance 2 CFR 200.306(f))
Please use the Third Party Cost Sharing Form to document this information and submit the form to the Office of Sponsored Projects.
Donated Equipment or Property
Donated property from third-parties may include items such as:
- Equipment
- Office supplies
- Laboratory supplies
- Workshop and classroom supplies
The value assessed must not exceed the fair market value (FMV) of the property at the time of the donation.
(Uniform Guidance 2 CFR 200.306(g))
Determining Method
The method for determining cost sharing or matching for donated equipment, buildings and land (when title passes to the University) may differ:
- If the purpose of the Federal award is to assist the University in acquisition, the total aggregate value may be claimed.
- If the purpose of the Federal award is to support activities using the equipment/building/land, normally only depreciation may be claimed — however, FMV of equipment or capital assets and fair rental charges for land may be allowed, with sponsor approval. (See also Uniform Guidance 2 CFR 200.420)
Requirements for Valuation
- Donated land and buildings: Must not exceed FMV at donation, established by an independent appraiser and certified by a responsible official of the University.
- Donated equipment: Must not exceed FMV of same age/condition at donation.
- Donated space: Must not exceed fair rental value, established by appraisal.
- Loaned equipment: Must not exceed fair rental value.
FMV of goods/services must be documented and, where possible, supported by the same methods used for University internal transactions.
Cost Sharing and F&A Costs
The Uniform Guidance states: Unrecovered indirect costs, including indirect costs on cost sharing or matching, may be included as part of cost sharing or matching only with prior approval of the Federal awarding agency.
Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been charged under the non-Federal entity’s approved negotiated indirect cost rate.
(Uniform Guidance 2 CFR 200.306(c))