PI Training: Stewardship and Compliance for Principal Investigators
DOR-0680
Exit course
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2.7 Cost Sharing
1. What is Cost Sharing?
Cost Sharing is defined as that portion of the total project costs of a sponsored agreement paid for by Stanford, rather than the sponsor.
Mandatory Cost Sharing
Required by the sponsor as a condition of obtaining an award. The cost-sharing commitment must be included in the proposal to be considered by the sponsor.
Voluntary Cost Sharing
Is not required by the sponsor as a condition of obtaining an award. It must be included in the proposal, but the sponsor does not require cost sharing as a condition of the award.
Committed Cost Sharing
Is when an award is received and there was either a mandatory or voluntary cost sharing commitment by Stanford in the proposal. The cost sharing activity becomes a binding commitment which the University must provide as part of the performance of the sponsored agreement. This commitment must be tracked in the accounting system as cost sharing.
Voluntary Uncommitted Cost Sharing
Is faculty donated effort or other direct costs agreed to as part of the award. Since it was not proposed and constitutes “additional” time or materials it is not considered a binding agreement and is not accounted for as cost sharing.
Matching
Refers to the sponsor requirement that the University match grant funds in some proportion with funds from another party, either from the University or more typically another sponsor (with both sponsors’ approval). Matching requirements may be in the form of actual cash expenditure of funds or may be an “in-kind” match, which is the value of non-cash contributions to the project. An in-kind or matching contribution made by a party other than Stanford requires documentation from the third party supporting the use of the funds as in-kind/matching and may require a certification of fair market value.
If cost sharing is committed, that is, proposed by Stanford and accepted by the sponsor, then it must be accounted for as cost sharing. The costs can then be sorted and categorized for the indirect cost calculation. Uncommitted effort (not in the proposal) does not need to be tracked as cost sharing.
For committed cost sharing, OSR (Office of Sponsored Research)will open both:
- Project PTA (Project Task Award)
- Related cost sharing task and award
Identifying and providing resources for cost sharing of direct costs including equipment is always the responsibility of the PI. The PI may NOT utilize funds from another federal award as the source of cost sharing, except as authorized by statute. The PI may utilize funds from non-federal awards as the source of cost sharing ONLY when specifically allowed by both parties. Funds for cost shared expenditures are typically identified from among gift, endowment income, operating budget (except in the School of Medicine), or other department designated funds. At the time of proposal submission, the OSR (Office of Sponsored Research) or the RMG (Research Management Group) is notified of the cost-sharing commitment through the Proposal. When OSR/RMG receives the award from the sponsor, the notice of award will indicate if the project involves cost sharing. In addition, the existence of cost sharing is noted in SeRA (Stanford Electronic Research Administration) and Oracle. Cost sharing PTAs are budgeted so that the committed cost sharing appears in the Expense Control column of the Monthly Expenditure Statement. In ALL cases, the cost sharing PTAs may not be in overdraft at the end of the University's fiscal year. The cost-sharing PTAs must be funded at the end of each fiscal year and at the end of each award period.
2. The Rules
The Uniform Guidance made the following changes to cost sharing for federally sponsored agreement and any new funding increment awarded on or after December 26, 2014 that states it incorporates the Uniform Guidance.
- Under Federal research proposals, voluntary committed cost sharing is not expected
- Cost sharing cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity
Note, a sponsor may choose not to incorporate the Uniform Guidance.
