I. General Policy
It is the policy of Rice University to comply with sponsor requirements for cost sharing commitments, tracking and reporting agreed to by the University as part of accepting sponsored project funds. Accordingly, cost sharing commitments to be undertaken by the University are proposed, reviewed and approved during the proposal review and submission process. The decision by the University to commit its resources toward cost sharing is based on institutional priorities and a determination that funds are available. Cost sharing has programmatic, administrative, and financial consequences for the University and should be considered thoughtfully as these commitments may require significant or long-term obligations. Voluntary committed cost sharing from Rice University funds, above the level mandated/required by the sponsor for funding a project, is discouraged and will be approved only in the most exceptional circumstances.
Proposal procedures, available on the Office of Sponsored Programs and Research Compliance (SPARC) website, require that committed cost sharing (as defined below) be identified by type of expense and approved by those with authority to commit the funds within the University before the proposal is submitted to the sponsor. Cost sharing commitment requests made to the Vice Provost for Research for central University funding should clearly state the cost sharing commitments provided by the principal investigator(s), chair(s) and dean(s). Each unit that contributes to a cost sharing commitment is responsible for ensuring that resources remain available to meet that commitment until the project is completed or the proposal is rejected. Requests for cost sharing should be initiated early in the proposal-preparation cycle, as soon as the intention to propose and the need for funds become known.
Once a sponsor awards a proposal that includes any form of quantifiable cost sharing, such commitments must be satisfied and are subject to audit. All cost sharing expenditures must comply with University and sponsor requirements regarding allowability, allocability and reasonableness, be reflected properly in the accounting records and meet the cost sharing expenditure criteria listed below. Additionally, committed cost sharing expenditures are tracked and reported in the facilities and administrative (F&A) cost proposal.
Cost Sharing is that portion of total project costs (including direct costs and related F&A) not provided by the sponsoring agency. Such costs are sometimes referred to as matching funds in the program announcement.
There are three types of cost sharing: mandatory, voluntary committed and voluntary uncommitted.
- Mandatory Cost Sharing is required by the sponsor as a condition of funding. It is described in the sponsor’s program announcement and noted in the award document or the approved budget. It must be included in the proposal as a condition of submission and receipt of award. This type of cost sharing is also referred to as Required Cost Sharing.
- Voluntary Committed Cost Sharing is cost sharing specifically pledged in a quantified manner on a voluntary basis in the proposal's budget or the award and becomes a binding requirement of the award. It is not required by the sponsor as a condition of the award but has been included in the proposal in a quantifiable manner. See the OSR proposal procedures for examples of quantified voluntary committed cost sharing included in proposals. (Note: Under OMB Uniform Guidance (2 CFR Part 200), Voluntary committed cost sharing is not expected and cannot be used as a factor during the merit review of applications or proposals unless it is explicitly specified in a notice of funding opportunity.) Additionally, some sponsors do not allow proposals to include voluntary committed cost sharing.
- Voluntary Uncommitted Cost Sharing is cost sharing that has been recorded in the accounting system but is neither mandatory nor voluntary committed cost sharing. If a faculty member chooses to report voluntary uncommitted cost sharing on a project, the cost sharing is recorded in the accounting system but is not required to be reported to the sponsor. See the post-award cost sharing procedures section of the Research and Cost Accounting (RCA) website for additional information.
Committed Cost Sharing includes both mandatory cost sharing and voluntary committed cost sharing and excludes voluntary uncommitted cost sharing. When an award is made which includes committed cost sharing, the University has agreed to ensure that the cost sharing is funded and expended. Committed cost sharing expenditures must be identified, administered, recorded and accounted for consistently throughout the University and reported as required by the sponsor.
Responsible organization is the department identified on the proposal Review and Approval form as the organization responsible for overall administration of the project. Administration includes: proposal preparation; inter-departmental coordination for multi-departmental projects; technical reporting; budget and financial management, including cost sharing; and award closeout.
Allowable, allocable and reasonable costs are defined in the glossary section of the Research and Cost Accounting website.
III. Elaboration of Policy
A. Cost Sharing Expenditures:
To qualify as cost sharing, direct cost expenditures must be:
- necessary and reasonable for the accomplishment of the project;
- derived from non-federal sources;
- approved by the non-federal sponsor, if funded from non-federal sponsored projects;
- treated as cost sharing for only one designated project;
- allowable and allocable costs; and
- verifiable through the University’s accounting system and records.
Unrecovered indirect costs, including F&A on cost sharing or matching, shouldbe included as part of cost sharing or matching. Including F&A may require the prior approval of the awarding agency. F&A included as cost sharing may be in the form of reduced/waived F&A on the direct costs or calculated F&A on the cost shared costs. When prior approval is required in order for F&A to be allowed as cost sharing, it must be specifically included in the proposal budget narrative or otherwise approved by the agency.
Cost sharing expenditures consist of allowable direct and indirect costs that meet the above criteria. See the post-award cost sharing procedures on the RCA website for information on coding of cost shared direct expenditures. See the Appendix to this Policy for Cost Sharing Roles and Responsibilities.
IV. Cross References to Related Policies
Rice Policy No. 304, Effort Reporting
V. Responsible Official and Key Offices to Contact Regarding the Policy and its Implementation
Responsible Official: VP Finance
Other Key Offices: Controller's Office | Office of Sponsored Programs and Research Compliance
VI. Links to Additional Information
Pre-Award: The Office of Sponsored Programs and Research Compliance should be contacted for assistance on cost sharing proposal procedures and commitments.
Post-Award: Research and Cost Accounting should be contacted for assistance on post-award procedures for cost sharing funding and expenditures.
The following sections of OMB Uniform Guidance (2 CFR Part 200), Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, contain additional information on the federal requirements for cost sharing:
· Section 200.306, for administrative requirements
· Subpart E for cost principles on allowable costs and determination of F&A rates
· Subpart F for single annual audits of federal expenditures on grants and contracts
Also see OMB Memorandum M-01-06, dated January 5, 2001 for treatment of voluntary committed cost sharing in computation of F&A rates
David W. Leebron, President
December 18, 2009
January 8, 2018