Cost share

Lucien Finley, Office of Sponsored Projects Lesley Stephenson, Office of Post Award Management February 7, 2013

Definition

• In accordance with OMB A-110, cost sharing or matching is the portion of the project or program costs not borne by the Sponsor.

Full Cost Sponsor Award Cost share

Types of cost share

• Mandatory cost sharing – The portion of the university's contribution to a sponsored project which is required by the terms of the sponsor’s solicitation. • Voluntary committed cost sharing – Those resources that are committed and budgeted for in a sponsored proposal. • Voluntary uncommitted cost sharing – Expenses that are over and above that which is committed and budgeted.

When should cost sharing commitments be made?

• Required by sponsor as documented in the proposal guidelines, but only to the extent required • When cost sharing is essential given the competitive nature of a proposal (not required by the sponsor, but strongly suggested)

How does this affect the institution?

Administrative risks Increased administrative burden Increased audit risk Legally binding that must be fulfilled Tracking & reporting (certification of effort)

How does this affect the institution?

Financial risks Eligibility barriers Impact on indirect cost recovery Eligibility vs May impact institution’s flexibility to strategically plan & invest in research projects merit?

Cost sharing considerations

• Don’t make or offer cost sharing commitments:  In proposals that will result in a contract award mechanism whether or not the sponsor is a Federal agency  In proposals to for-profit sponsors regardless of the type of award anticipated  That promise to waive or reduce F&A costs

Identifying cost share in a proposal

• Project description, facilities & resources, or budget narrative         “Effort equivalent to $XX,XXX in salary & benefits will be provided by Professor X.” “Professor X will devote 20% of time to the project at no cost to the sponsor.” “Dr. Y is the Principal Investigator & will devote 40% effort (30% salary support requested) to the project.” The department will purchase a [equipment name] (cost $xx,xxx ) for exclusive use in support of Professor X’s project.” “The University demonstrates support and will contribute to the multistage project through partial salary for the project director.” “Dr. Y will contribute a week of field work and the time required for data analysis and report writing, and he will supply all equipment.” “The PI will be contributing funds from other sources for use of [equipment name] to ensure that this scope of work can be performed on the proposed budget.” “Professor X will provide intellectual direction of the project and co-author publications. Her time (5% effort) will be contributed by the College .”

Identifying cost share in a proposal (cont.)

• • Commitment vs. goods, services or facilities that “may be available on an as needed basis” What’s being obligated? Percentages vs. dollars • Responsibility for identifying cost share funds – Internal funds – Letter of commitment from subs or third parties

Examples of cost sharing

Salaries, wages, fringes of project personnel Supplies Tuition categories Travel Equipment F&A costs applicable to shared cost

How to administer cost share in the pre-award stage

• Proposals that intend to include cost share must have Dean’s approval before it can be submitted

Certification Form demo

OSP Contact Information

• • • Email: [email protected]

Phone: (972) 883-2313 Website: http://www.utdallas.edu/research/osp/ • Training site: https://explorer.utdallas.edu/classes/

Cost Share on Awarded Grants

Office of Post-Award Management

I have my award. What now?

• Please review the award paperwork received from OSP: Notice of Award, Cert Form and Letter of Approval – All terms and conditions in the contract also apply to cost share – Cost share will be stated on the Cert Form • If award is approved with cost share: – OSP will notify OPM – OPM will contact school fiscal officer about cost share amount for the award – OPM will submit cost center request for both grant and cost share – Cost share cost centers are based on funding source; multiple funding sources

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Funding Process

BAF – Budget Adjustment Form. Policy is under the Budget and Resource Planning Office – http://www.utdallas.edu/budget/documents/budget-policy.pdf

• • • BAF used for all cost share funding • Funds cannot be directly transferred from OEA level to PED – OEA = operating budget level; PED = grants level • School fiscal officer, or designee, submits a one-sided budget journal to decrease funding at the OEA level and provides OPM specialist with journal number for tracking approval – OPM will notify Finance of journal number so Budget will transfer funds OPM specialist needs to know funding cost center to request cost share cost center from Finance during BAF approval process When Budget Office approves budget journal, OPM specialist post budget at PED level to project – The cost share cost center is attached to the project number and will share the project attributes

How to BAF

Use OEA level cost centers Reduce amount

How Not to BAF

Cannot BAF OEA level using PED cost centers Amount here is increasing OEA

Spending

• • • • • Cost share is binding commitment – Sponsor will hold UTD responsible for cost share presented in proposal OMB A-21: Expenses must be allocable, reasonable and consistent, and conform to contract terms – http://www.whitehouse.gov/omb/circulars_a021_2004/ Percentage of spending on cost share must at least match percentage of spending on parent grant, if not more Spending must match expense accounts where cost share funds were committed to in proposal – e.g.: salary cap means cost share must be spent in salary; committed capital cost share means cost share must be spent on capital equipment; etc.

Cost share can be shared on subcontracts, if allowed by sponsor, but UTD is responsible for reporting subcontracts’ spending along with own spending to sponsor

Notice E-mails

• OPM tracks cost share for each award • After month-end close, cost share expenses are updated on spreadsheet • E-mails will be sent when – End date is approaching – Spending has not started on cost share – – Speed of spending is in question More funds need to be BAF’d to add to budget

Important points

• Project specific – can only be used for expenses used for parent research grant • Held to project’s period of performance – Cost share funds cannot be used for expenses purchased outside of period of performance • Cost share is funded by existing University funds

Important Points cont.

• Cost share cost centers must be funded before the grant is activated. No budget will be posted and OPM will not release grant cost center to department until funding is completed • Cost Share budget cannot be transferred to main grant to make up for overrun on budget. Those expenses need to be moved to cost share if appropriate.

Important Points cont.

• Must be documented and reported – Office of Finance submits financial reports to sponsors – Quarterly reports and then final report 90 days after grant end date – Cost Share numbers are included in each report • Failure to meet commitment could result in audit findings, reduction in funding, reduction in future proposals approved by sponsor, or refusal of sponsor to approve any future proposals

Office of Post-Award Management Info

• • • Email: [email protected]

Phone: 972-883-4837 Website: http://www.utdallas.edu/research/opm/ • • Cost Share info: http://www.utdallas.edu/research/opm/adm ins_and_faculty/cost_share/