Cost sharing refers to an institution’s commitment to take responsibility for a portion of a project’s expenses. Cost sharing is committed whenever a statement is made in any component of the application (budget justification, research narrative, letters, etc.) that the principal investigator’s (PI) institution, or an external entity, will contribute actual funds, or devote a specified amount of personnel time–or other resources in the case of the external entity−to the project without charging the grant for them. PIs do not have the authority to commit any institution to cost share on a project, and must seek the appropriate college and university approvals from authorized administrators prior to making such commitments. Cost sharing can be difficult to understand, but the Office of Research & Sponsored Programs (ORSP), located in Kiely Hall 306 (718-997-5400), is available to assist PIs.
Mandatory Cost Share
When the sponsor requires cost sharing, the sponsor guidelines will usually state the requirement. This type of cost sharing is termed mandatory cost share. For example, an agency may state that the applicant must cost share 40% of the project expenses. For the majority of grants, the applicant is the college, not the PI. If the PI secures institutional approval for the mandatory cost share, ORSP will help the PI to generate a budget that divides the project’s expenses in two columns: 60% covered by the grant and 40% covered by the college. Sometimes the sponsor’s mandatory cost share is expressed as a dollar-for-dollar match, which means the PI must seek approval for the college to defray the project expenses up to a dollar amount equal to the size of the grant.
Voluntary Committed Cost Share
If the sponsor does not require cost sharing, but the PI makes a cost sharing statement in the application, this type of cost sharing is referred to as voluntary committed cost share. A common example of voluntary cost sharing is to quantify in an application that a person will work a specific amount of hours or a faculty member will devote a specific percent (%) of effort, but the cost for this time and effort does not appear in the grant budget; therefore this time and effort are contributed at the expense of the college/institution. If awarded, this cost share must also be documented.
Whether mandatory or voluntarily committed, statements of cost sharing in an application become a condition of the award, which means that they will be subject to the same federal cost principles as the award, and must be fully met, tracked and documented.
Cost Sharing - Federal Policy
The Office of Management and Budget (OMB) has published its comprehensive overhaul of federal grant administrative, cost accounting, and audit policies in the Federal Register, to be codified in Title 2 of the Code of Federal Regulations. This final guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, supersedes and combines the requirements of eight existing OMB Circulars (A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133). This new policy, which covers all federal agencies, specifically prohibits voluntary cost sharing by applicants unless otherwise mandated in program-specific guidelines issued by an agency or otherwise exempted by law.
Cost Sharing - Sponsor Policy
For each application, PIs must read the sponsor’s general and specific program guidelines to determine whether the sponsor has mandated cost sharing or matching funds. If the sponsor does not specifically allow cost sharing or require it for the program, then it is not allowed. Example, the National Endowment for the Humanities issues this statement in its Challenge Grant guidelines: "Successful applicants will be offered a matching grant. Recipients must raise three times the amount of federal funds offered, except for Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities, and two-year colleges. These three types of institutions are required to raise only two times the amount of federal funds offered."
In addition to federal government and sponsor requirements on cost sharing, Queens College adheres to the cost sharing policy of the Research Foundation of CUNY (RFCUNY), which serves as fiscal conduit for grants to Queens College. The college’s policy and internal approval process for cost sharing are as follows:
Cost Sharing - Research Foundation/CUNY and Queens College Policy
Application Stage – Seeking Cost Share Approval
Queens College Commitments:
If a sponsor requires cost sharing (mandatory cost share), the PI must obtain written approval from the department chairperson, divisional dean, and provost at least 15 days prior to the proposal deadline. For approval, PI must:
- provide provost/dean with the section of sponsor guidelines that state the requirement*;
- detail the cost share dollars in the internal budget;
- refer to RFCUNY policy for types of costs that may not be used as cost sharing;** and
- identify the proposed institutional source of cost share funds.
If these conditions are met, approval from the vice chancellor for research will be sought.
*Queens College will very rarely approve a voluntary commitment of cost share. No approval will be given for any voluntary cost sharing on any federal grant unless mandated by the agency in writing. All of the conditions listed above must be met before voluntary cost sharing may be proposed. In addition, the CUNY vice chancellor for research will make the ultimate determination if voluntary cost sharing will be committed.
Waiving or reducing indirect costs (also termed “overhead” and “facilities and administrative fees”) constitutes cost sharing. The college will not waive or reduce the indirect cost rate unless the sponsor mandates it.
PIs or their collaborators cannot state in the application that an institution other than Queens College is cost sharing, unless the PI obtains a letter of commitment from that institution on letterhead, detailing the commitment toward the specific grant and signed by an authorized official at that institution. PIs should inform their collaborators to consult their institution’s cost share policy and approval process. Indirect costs are charged to a grant to cover the the college’s cost for the grant’s use of space, utilities, basic equipment, etc. Applications cannot mention, such as is often done in a facilities and resources statement, another institution’s resources (space, equipment, personnel time, etc.) as being available for the grant, unless the other institution is part of the grant budget through a subcontract, in which case that institution will also receive indirect costs; or the other institution has provided a letter committing to these expenses as cost share.
Post Award Stage - Tracking
As the person with firsthand knowledge of the design and expenses of a project, the PI:
is accountable from the start of the grant for tracking cost share commitments to ensure that they are being met (at the college or external entity);
must be mindful that all project expenses, including the cost share dollars, adhere to federal cost principles (verifiable; allowable; accountable; necessary and reasonable; incurred for this grant and during grant term; etc.);
reviews RFCUNY cost share policy for Regulatory Requirements for Cost Sharing; and
completes and certifies the RFCUNY cost share form at minimum before each year ends and again before award closing.
Terms of the award will indicate when financial reports are due. As these reports must include an accounting of cost share met, PI must provide supporting cost share documents to the Office of Research & Sponsored Programs (ORSP) along with the completed and signed RFCUNY cost share form. ORSP will liaison with RFCUNY and is available to guide the PI.
IMPORTANT: If the PI determines that the cost share can no longer be met, s/he must notify ORSP (x75400) immediately. At that time, all expenses on the account may be stopped, because the government may disallow the costs or take further actions if a project continues to spend when it cannot meet a commitment of cost share.
**Certain pages of the RFCUNY website are password restricted; if you do not have a password, please contact ORSP at x75400.