Purdue University Cost Sharing Guidelines - April 1, 2016

This document provides guidance that will facilitate compliance with Federal Costing and Cost Sharing requirements as set forth in OMB Uniform Guidance 2 CFR 200. This guidance applies to both Federal and non-Federal sponsored programs.

Cost Sharing Defined

Cost sharing means that portion of project or program costs that are not borne by the sponsor.

The provision of cost sharing or matching funds can be an important component in many proposals for extramural funding. Typically, cost sharing falls into one of four categories:

• Mandatory cost sharing includes institutional support that is required in writing by the granting agency, and the amount is specified in a granting agency’s written solicitation. 
• Voluntary committed cost sharing includes institutional support committed to the project solely at the discretion of the institution. These resources are pledged formally in a proposal and thereby become binding commitments that the granting agency may audit.
• Institutional support/leverage includes institutional resources not specified as mandatory or committed specifically yet discussed in the proposal narrative or supplementary documents as organizational resources or infrastructure necessary for, and available to enable, a project. Such resources can be described quantitatively but they are not allocated to a specific project. Institutional support/leverage is communicated to demonstrate Purdue’s capacity or capability.
• Voluntary uncommitted cost sharing includes institutional support provided by Purdue but not pledged formally in the proposal usually because of agency restrictions against cost sharing. Such cost sharing is subsequently made available to the project upon receipt of the award and is not binding or auditable. Such resources can be internally quantitated and solely support a specific project, but they are not normally shared with the sponsor prior to award.

Criteria for the Acceptability of Cost Sharing

The obligation for cost sharing is predominately associated with Federal grants and cooperative agreements. In accordance with OMB Uniform Guidance 2 CFR 200, cost sharing must meet all of the following criteria:

• The cost sharing must be verifiable and auditable within the University's accounting system.
• The cost sharing must not be included as contributions for any other federally assisted project or program.
• The cost sharing is necessary and reasonable to accomplish project or program objectives.
• The cost sharing is allowable in accordance with the applicable cost principles, the terms of the agreement and Purdue University costing policies.
• The cost sharing must be funded from non-Federal sources, unless authorized by Federal statute.
• The cost must be incurred during the term of the agreement.

Cost Sharing and the Proposal

Any University commitment to share in the cost of a project should be identified early in the proposal process. The Business Manager, Sponsored Program Services staff and the Project Director share responsibility for ensuring that the following has occurred prior to the submission of the proposal:

• The University commitment and the cost associated with the commitment are in accordance with University policy.
• The University commitment complies, in all ways, with the Criteria for the Acceptability of Cost Sharing.
• The funding source(s) for the University commitment have been identified and authorized utilizing a Form 32.

Sponsored Program Services personnel authorized to submit proposals will ensure that the preceding has occurred prior to approving the proposal for submission to the sponsor.

Funding University Cost Sharing Commitments

University cost sharing commitments must be funded from non-Federal sources. These sources include University general funds, gift funds, PRF funds and non-Federal sponsored program funds. In general, the responsibility for funding the University cost sharing commitment lies with the department/school. The exceptions are as follows:

• Funding to meet special or unusual cost sharing needs has been budgeted by the Executive Vice President for Research and Partnerships.   Requests for research cost sharing funds are initiated at the EVPRP website or by emailing EVPRP contact:  Kristyn Jewell, kristynj@purdue.edu, 494-2876; Pre-Award Center contact: Amanda Hamaker, ahamaker@purdue.edu, 496-9647; Business Office contact: Katrina Feitz, kfeitz@purdue.edu, 494-1885.  PIs will need to provide general information related to PI and co-PI faculty, granting agency, participating units, category of cost sharing requested, and external partners. Requests to department, school, and colleges should be in place prior to obtaining EVPRP approvals. The EVPRP will assist investigators and department heads in developing a cost sharing package for each proposal. All requests for cost sharing from the EVPRP should originate with the PI in collaboration with their department head and associate dean for research in accordance with intra-college/school/department cost sharing processes or procedures. Contact by the department, school and college with the EVPRP must be initiated early for the required negotiations to take place.The Facilities & Administrative costs applicable to mandatory cost sharing funded by department/school general funds will be funded from central sources. If mandatory cost sharing is funded by a fund source that is chargeable for fringe benefits and/or Facilities and Administrative costs, then that fund source will be responsible for the fringe benefits and/or Facilities and Administrative costs associated with the cost sharing

Documentation of Cost Sharing

The University has the following obligations regarding the documentation of cost sharing:

• Proposal commitments to cost share, when accepted, become a condition of the agreement relationship established by the University and the sponsor.
• If no effort for the Principal Investigator is included in the budget to the sponsor, then voluntary cost sharing should be noted so the faculty effort is appropriately classified for purposes of the University's facilities and administrative cost proposal.
• All cost sharing must be verifiable and auditable within the University's accounting system.

Consistent with these obligations, University cost sharing will be documented as follows:

• Mandatory cost sharing will be documented by utilizing the University's single account cost sharing procedures.
• Mandatory cost sharing funded by non-federal restricted funds will be documented annually and at closing by memorandum cost sharing procedures. The memorandum documenting the cost sharing will be prepared and certified by the Project Director within thirty days of the completion of each annual budget period and within sixty days of the completion of the entire project period. The memo will be maintained in the Sponsored Program Services project file for audit purposes.
• Cost sharing involving donated items or volunteer services will be valued and documented in accordance with the guidance provided by OMB Uniform Guidance 2 CFR 200.