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Cost Share
Kiev, Ukraine
26-29 October 2009
Objectives
 Understand the definition of Cost Share
 Identify USAID regulations that apply to Cost
Share
 Determine Allowable and Unallowable Cost
Share
 Account for Cost Share
 Report Cost Share
Cost Sharing Is…
“The portion of the project or program costs
not borne by the United States Federal
Government”
[Source: 22 CFR 226.2 Definitions]
Purpose of Cost Share
 To further the objectives of the program
 Ensure that the recipient will build its organizational
capacity for resource mobilization
 To promote sustainability
 Expand the impact of the program
 Demonstrate recipients’ degree of support
Consequences of Not Meeting
Cost Share Goals

Reduction in funding:
1. The AO may reduce the amount of USAID funding
for the following funding period, or,
2. If the award has expired or has been terminated,
may require that the recipient refund the
difference to USAID

Opportunity lost for programmatic achievements
USAID Regulations





22 CFR 226.23 (U.S. Organizations)
USAID Standard Provisions
USAID ADS 303.5.10
AAPD 02-10
USAID Policy Papers
- “USAID Partnership in International Development with
Private and Voluntary Organizations”
Cost Share Criteria
 Are verifiable from the recipient’s records
 Are not included as contributions for any other USG
federally-assisted project
 Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives
 Are allowable under applicable cost principles
 Are not paid by the Federal Government under another
award or through indirect cost recovery
 Are provided for in the approved budget
 Confirm to provisions in applicable regulations
Cost Share Examples
 Cash, Goods or Services
 Funds spent from Non-U.S. Government
Sources
 Labor of Grantee Volunteers or Employees
 Donated Equipment, Buildings and Land
 Program Income
Donated Cash, Goods, Services
 Donated supplies include items such as expendable
equipment, office supplies, laboratory supplies, software
and contributed utilities.
 Examples: Donated condoms, computers for grant work
and brochures.
 Note: Source, origin, and nationality, and commodity
restrictions rules DO NOT apply to cost share.
Funds from Non-U.S. Government Sources
 Use of non-U.S. Government funds towards a
Cost Share requirement.
 Examples: Global Fund, Private Foundation,
Organization’s (Recipient/Subrecipient),
unrestricted funds.
Labor: Employees & Volunteer Time
 Activity must support program performance
 Services can be of any skill level as long as work is
relevant to the goals and objectives of the program
 Time must be recorded using timesheets or similar
mechanism
 Hourly/Daily rates justified - Question
– First look in-house (in organization) for similar work
– If not available – then consider rates in labour market
Donated Equipment, Buildings and Land
 Normally only depreciation for equipment and building
may be made (determined in accordance with org
accounting policy). The full value of the equipment or
the fair rental charge for land may be acceptable if
approved by AO.
– Value may not exceed fair market value of a good of
the same age and condition at the time of donation.
 Examples: motor vehicles, servers, Porta cabins
of Required Backup Documentation
by Type of Cost
Backup List
Documentation
by Type
of Share
Cost Share
Type of cost share
contribution
Volunteer services
Donated employee time
Valuation
Backup documentation
Rates for volunteer
services must be
consistent with those
paid for similar work
▪
Employee’s regular
rate of pay
▪
▪
▪
Donated supplies
Fair market value of
the supplies at the
time of the donation
▪
▪
Signed time sheet showing the
hours worked, and
A rate calculation of how the
time should be valued
Signed time sheet showing the
hours worked, and
A rate calculation of how the
time should be valued (e.g. pay
stub)
Letter of donation being made,
and
Valuation of the donated
supplies from catalogue or
internet prices, bills/invoices, or
quotes for same supplies
consistent with those
paid for similar work
▪
A rate calculation of how the
time should be valued
Donated employee time
Employee’s regular
▪ Signed time sheet showing the
rate of pay
hours worked, and
▪ A rate calculation of how the
time should be valued (e.g. pay
stub)
Donated supplies
Fair market value of
▪ Letter of donation being made,
the supplies at the
and
time
of
the
donation
List of Required Backup Documentation▪ byValuation
Type of of
Cost
Share
the donated
supplies from catalogue or
internet
prices,documentation
bills/invoices, or
Type of cost share
Valuation
Backup
contribution
quotes for same supplies
Volunteer
services
Rates
for volunteer
Cash
contributions
Cash
value
Signed
time
▪ ▪ Letter
from
thesheet
donorshowing the
services must be
hours
worked,
and
documenting the amount
of cash
consistent with those
▪ donated
A rate and
calculation
the nameofofhow
the the
paid for similar work
time should
be valued
project
supported,
and
Donated employee time
Employee’s regular ▪ ▪ A Signed
time sheet
showing
bank statement
showing
the the
rate of pay
hours
andreceived by
date
andworked,
the amount
▪ theAgrantee
rate calculation of how the
time
shouldwhat
be valued
(e.g. pay
Donated equipment, building or Fair market or rental
▪ Letter stating
was donated,
stub)
land
value at the time of
and
Donated supplies
Fair
marketas
value of
the
donation
Letter of donation
made,
▪ ▪ Comparable
cataloguebeing
or market
the supplies
established
byatanthe
and prices, or
survey
time of the appraisal
donation
independent
Valuation of the donated
▪ ▪ Independent
appraisal of the
supplies from catalogue or
value
internet prices, bills/invoices, or
Project co-funding
Actual cost incurred
▪ Letter
from
what
quotes
fordonor
same stating
supplies
donated,
copy
of
Cash contributions
Cash value
▪ was
Letter
fromorthe
donor
agreement
or contract,
and of cash
documenting
the amount
▪ Copy
of invoice
paid
by the
donated
and the
name
of the
project
supported, and
other
donor.
Backup Documentation
▪
A bank statement showing the
Flow Down of Cost Share
 Cost share requirements vary by recipient
 Cost share is often flowed down to sub-recipients
and reflected in a submitted cost share plan and
in sub-agreement
 Reporting system for sub-partners should be
clearly defined
Exercises
 Regulations
 Documentation
NGO In-Kind Contributions
Example:
You have a sub-grant with a local NGO to establish clinics in
rural areas. The NGOs have their own land and buildings in
areas where they want to establish these clinics and will not
charge any rent. If the NGO had to rent buildings to establish
these clinics, they would have paid $2,000 per month. Can the
value of the rent of those buildings be counted as Cost Share?
Documentation Guidelines
•
The agreement that details what contribution the NGO will make to the
project and its estimated value.
•
Financial reports or other documentation from the NGO that support
the valuation of the contribution (i.e. if the NGO is contributing clinic
space, the documentation could include quotes for comparable rental
space in the area).
Funds from Non-USG Sources Contributions to NGOs
Example:
You have a sub-grant for $5,000,000 with a local NGO. This NGO
also has a $1,000,000 sub-grant from the Packard Foundation. It
is renovating clinics throughout India to support the activities of
your program. The Packard Foundation agrees to pay $75,000
from its sub-grant to contribute to the costs of the clinic
renovations. Can this $75,000 can be counted as cost sharing?
Documentation Guidelines
• A signed statement/contract from the donor that details the value and purpose
of the donation (this will likely be a statement/contract between the donor and
the NGO).
• Financial records and/or a memo with supporting documentation (receipts,
agendas, etc.) from the NGO that provides details on how the funds were
spent.
Donated Property (Equipment)
Example:
The Gates Foundation is closing out a project in your
country, and would like to donate a used vehicle to your
project there. Can this contribution count as Cost Sharing?
Documentation Guidelines
•
•
•
•
•
Information on fair-market value for the donated goods including
quotes from vendors and/or copies of invoices for similar items.
Depreciation calculations (including current fair market value and
useful life of the donated item).
In cases of donated land, buildings, or space, a valuation
information from an independent appraiser.
A signed statement from the donor that details the equipment that
was donated to your organization.
A memo/report detailing how the equipment was/is being used.
Volunteer Services
Example:
A graduate student attending a university in your country volunteers to
provide Monitoring and Evaluation services to your project for a period
of one year. The project could use her services but cannot afford to
pay her so she volunteers her time. Can the project count the value of
her donated time, plus applicable fringe benefits, as Cost Sharing?
Documentation Guidelines
• Timesheet
• Documentation for the valuation of the services. This could include Local
FSN Scales; Financial report detailing the rate of pay for a similar
position(s) at your organization; Copy of hire letter of a similar position at
your organization
• Description of work performed
• A brief memo stating the work performed and the deliverables met by the
volunteer should be included as documentation.
Any Questions?