The Uniform Guidance 2 CFR 200.306 Cost sharing or matching 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 of cost sharing, committed and uncommitted. Committed cost sharing is specifically identified in a grant proposal.  Uncommitted is cost sharing which was not identified in the grant proposal but must be treated as cost sharing to assure appropriate allocation and treatment of costs.

Committed:

• 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:

• 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:

1. Are verifiable from the University’s records,
2. Are not included as contributions for any other federal award,
3. Are necessary and reasonable for accomplishment of project or program objectives,
4. Are allowable under the applicable cost principles,
5. 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,
6. Are provided for in the approved budget when required by the Federal awarding agency,
7. 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:

1. The value of the remaining life of the property recorded in the University’s accounting records at the time of donation, or
2. 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. In those instances, in which 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. In either case, 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 an amount of fringe benefits that are reasonable, necessary, allocable and otherwise allowable, and, 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 such items as equipment, office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to donated property included in the cost sharing or matching share must not exceed the fair market value of the property at the time of the donation (Uniform Guidance 2 CFR 200.306(g)).

The method used for determining cost sharing or matching for third-party donated equipment, buildings and land for which title passes to the University may differ according to the purpose of Federal award, if (1) or (2) apply:

1. If the purpose of the Federal award is to assist the University in the acquisition of the equipment, buildings or land, the total aggregate value of the donated property may be claimed as cost sharing or matching, or
2. If the purpose of the Federal award is to support activities that require the use of equipment, buildings or land, normally only depreciation for equipment and buildings may be made. However, the fair market value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the Federal awarding agency has approved the charges.  (See also Uniform Guidance 2 CFR 200.420)

The value of donated property must be determined in accordance with the usual accounting policies of the University, with the following qualifications:

1. The value of donated land and buildings must not exceed its fair market value at the time of donation to the University as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the University,
2. The value of donated equipment must not exceed the fair market value of equipment of the same age and condition at the time of donation,
3. The value of donated space must not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality,
4. The value of loaned equipment must not exceed its fair rental value,

The following requirement pertains to the University’s supporting records for in kind contributions from third parties:

• Fair market value of goods and services must be documented and, to the extent feasible, supported by the same methods used by the University for its own 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 the 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 to the Federal award under the non-Federal entity’s approved negotiated indirect cost rate (Uniform Guidance 2 CFR 200.306(c)).

• Allowable vs Unallowable Costs 
• Budget Revisions 
• Cost Allocations 
• Cost Sharing
• Participant Support Costs 
• Program Income
• Subawards