Treatment of Cost Sharing for Sponsored Awards, Procedure for

1. Purpose

Boston University receives substantial funding from the federal government and other sources in the support of sponsored programs. These funding sources may require cost sharing or matching by the University. Cost sharing is a financial commitment by the University toward the total cost of a project from a source other than the granting organization. Cost sharing of expenses must be treated in a consistent and uniform manner when preparing proposals, requesting University approval, negotiating awards, transferring cost share funds, and financial reporting to Sponsors.

All employees involved in cost sharing must understand the process and implications of the cost share commitment in order to determine when cost share is appropriate and how to accurately record and report cost share expenses.

2. Covered Parties

This procedure applies to all individuals who commit to cost share funds in sponsored funding proposals and agreements. Such agreements may derive from both federal and non-federal sponsors.

3. Definitions

Mandatory Cost Sharing

Mandatory cost sharing is funding that requires a university contribution toward the project as a condition of receiving the award. Mandatory cost sharing may be a specific dollar amount, cited as a percentage of the costs requested from the sponsor, or the amount may not be specified.

Voluntary Committed Cost Sharing

Voluntary committed cost sharing is a cost associated with a sponsored project and supported with university and/or other non-sponsored funds that were detailed in the proposal but were not required or funded by the sponsor. Some common examples include the following:

• A percentage of effort of faculty or senior researchers included in a proposal budget or stated in the text of the proposal for which no compensation or only partial compensation was requested.
• The purchase of equipment for the project, identified in the proposal, for which no funds or only partial funds were requested.

Certain sponsors, most notably the National Institutes of Health (NIH), impose a limit or “cap” on the annual rate of salary reimbursement for a given amount of effort. According to the OMB Uniform Guidance §200.306, the difference between the reimbursed salary (“capped amount”) and the un-reimbursed salary is no longer considered voluntary committed cost sharing and is therefore outside of the scope of this procedure. All salaries over the “cap” will be tracked separately as part of the Effort Reporting Procedure located here.

Voluntary Uncommitted Cost Sharing

Voluntary uncommitted cost sharing is a cost associated with a sponsored project that was not committed in the proposal or in any other communication to the sponsor. This includes effort of faculty or senior researchers that is over and above that which is committed and budgeted for in a sponsored agreement. Some common examples include:

• Donated faculty effort on a sponsored project over and above the effort identified in the proposal or award.
• Academic year effort on a sponsored project for which only summer salary was proposed, if the effort was not listed either on the budget page or described in the body of the proposal.

Voluntary uncommitted cost sharing should not be reported on time and effort sheets.

NIH training grants, for example, fall within the category of voluntary uncommitted cost sharing. The NIH does not require the University to contribute cost share funds to supplement the student’s stipend and tuition to the institutional standard level, yet we recognize that these are, in fact, very real costs for the University in support of its graduate students and programs.

In-kind/Matching

Some sponsors that award funds to a university insist that those funds be matched in some proportion with funds from another party, either from the university or another sponsor. Matching 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. In-kind or matching contributions made by a party other than BU require documentation from that third party supporting the use of the funds as in-kind/matching and may require a certification of fair market value. How third party matching may be valued as cost sharing is described in OMB Uniform Guidance §200.306.

4. University Procedure

Boston University strongly discourages voluntary committed cost sharing when submitting proposals to an external sponsor and expects that all proposal submissions include only the minimum amount of cost sharing necessary to meet the sponsor’s requirements. According to the OMB Uniform Guidance §200.306, “voluntary committed cost sharing is not expected. It 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.” For most sponsors, cost sharing is not a requirement in order to receive the award. For example, the National Science Foundation (NSF) specifically prohibits voluntary committed cost share in proposals.

The University does not typically cost share on a voluntary basis, consistent with its objectives of receiving fair compensation from sponsors for research and scholarly activity conducted at the University. A voluntary commitment of effort not compensated by the sponsor and/or other types of commitment should be made only where the competitive circumstances or perceived institutional benefit of receiving the award are deemed to be sufficiently strong to warrant the commitment. Approval for voluntary committed cost sharing (for Federal proposals) must be obtained from the VP for Research on the CRC campus and the School Dean on the Medical Campus.

There is a consequence of the University committing cost share to sponsored programs. Mandatory and voluntary committed cost share on federally sponsored research projects is included in the Organized Research direct cost base that is included in the calculation of the Facilities and Administration (F&A), also known as the Indirect Cost or IDC rate. An increase in the Organized Research direct cost base may result in a decrease to the University’s F&A rate and consequently a reduction of indirect revenue from sponsored projects to the University.

Costs Acceptable for Cost Sharing

Any shared costs or matching funds and all contributions, including cash and third party in-kind contributions, must be accepted as part of the University’s cost sharing or matching when such contributions meet all of the following criteria:

• Are verifiable from the non-Federal entity’s records;
• Are not included as contributions for any other Federal award;
• Are necessary and reasonable for accomplishment of project or program objectives;
• Are allowable as described in the Policy on Charging of Direct Costs to Sponsored Awards
• Are not paid by the Federal government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs;
• Are provided for in the approved budget when required by the Federal awarding agency;

Unrecovered indirect costs, including indirect costs on cost sharing or matching, may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency. Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been charged to the Federal award under the non-Federal entity’s approved negotiated indirect cost rate.

5. Cost Sharing Procedures

A. Proposal Submission for all non Training Grants

For CRC:

• The Principal Investigator (PI) initiates the request for cost share funds in the initial stages of compiling the grant application on the Proposal Summary Form (PSF).
• PIs also need to complete the Cost Share Budget Worksheet to be submitted along with the PSF, which is routed by the PI to the Department Chair; if approved it is routed to the Dean of the School/College; and then to the Office of VP for Research.
• Once the VP for Research reviews and approves the cost share commitment, the completed package will be sent back to the PI for submission to Sponsored Programs.

Please note that not all cost share requests will be approved due to the University’s limited budget. If a letter of cost sharing support from the Associate Provost/VP for Research is required for the application, please include a draft of this letter as part of the cost sharing request package.

For BUMC:

The Principal Investigator (PI) initiates the request for cost share funds in the initial stages of compiling the grant application.

• A Cost Share Approval Form Non Training must be completed by the PI in order to facilitate the review of the request and to ensure that all pertinent information is included.
• The approval form is routed by the PI to the Department Chair; if approved it is routed to the Dean of the School/College.
• Once the Dean reviews and approves the cost share commitment, the completed form will be sent to the Office of Sponsored Programs, along with the budget worksheet.

The Cost Share Budget Worksheet includes a column “BU” to include the cost share component of the budget. This budget form is now required for the proposal package and must be used in lieu of any department worksheets or the previously used Cost Share Approval Form. It is expected that the PI’s academic department chair and/or dean/center director will cover the cost share or, at a minimum, split the cost with the University. In cases where there is faculty from more than one department or school/college, it is expected that both department chairs/deans will contribute to approved cost share requests. All cost share contributors (department chairs/deans) must sign the Proposal Summary Form.

Once a cost share request has been reviewed by all parties, the PSF will be returned within 2 business days to the requestor with the decision as to whether it has been approved.

B. Proposal Submission for Training Grants

The Principal Investigator (PI) initiates the request for the training grant supplementation in the early stages of compiling the grant application. Similar to the process above, a Cost Share Budget Worksheet must be completed by the PI in order to facilitate the review of the request and to ensure that all pertinent information is included in Section Four. Both the Proposal Summary Form and the Cost Share Budget Worksheet should be completed in the early stage of the grant application to allow sufficient time to review.

The request form follows the same routing and approval process for non- training grants (cited above). Once the supplementation request has been reviewed by all parties, the PSF will be returned to the requestor within 2 business days with the decision as to whether or not it has been approved. If a letter of support from the Associate Provost /VP for Research is required for the application, please include a draft of the letter in the supplementation request package.

The table below illustrates the approvals required prior to making any cost-sharing commitments in proposals and / or sponsored awards.

C. Award Set Up for non Training Grants

If the grant is awarded by the sponsor, a Notice of Award (NoA) is received by Sponsored Programs and serves as the starting point for the set-up of the award. For mandatory and voluntary committed cost share, Sponsored Programs will create a cost share account to be housed in the 950xxxxxxx / 955xxxxxxx series. With all new cost share accounts, fringe will be calculated and tracked within SAP. Fringe will be visible via Business Warehouse Reports in Sponsored Class 03 Fringe; departments should ensure they budget accordingly.

Please note that for mandatory and voluntary committed cost share, account numbers may be issued on an annual basis per terms and conditions of the award. Some funding agencies require annual segregation of funding, so new account numbers will need to be issued each year to capture that requirement.

The transfer of approved cost share funds will be overseen by SP, in conjunction with the Budget Office and the Office of Research. Over the course of each fiscal year staff will work with department research/grant administrators to track and transfer cost share committed by both Departments/Deans, as well as centrally from the Office of Research budget. SP will report all cost sharing to sponsored funding agencies as required.

*If we are required to report 3^rd party cost share to the Sponsor, department must provide documentation from that 3^rd party to Sponsored Programs to support the amount.  An example may be an entity who submits an invoice to Boston University as the entity is a subawardee on the award.

D. Award Set Up for Training Grants

If the training grant is awarded by the sponsor, a Notice of Award (NoA) is received by the Sponsored Programs office and it will serve as the starting point for the implementation of the award. For CRC: The Office of Research (Assistant Vice President for Research Initiatives and Research Administration Specialist) in conjunction with the Budget office will create the new internal order(s) (909xxxxxxx series) and notify the PI’s department grant administrator.

The transfer of funds will be overseen by the Office of Research. Over the course of each fiscal year, the staff will work with department research/grant administrators to track and transfer cost share committed by both departments/deans, as well as centrally from the Office of Research budget. The Office of Research will also arrange for transfers to be processed by the Budget Office.

For BUMC: The Dean’s office of the school or college will be included on the account notification and will work with the appropriate school parties involved to fund the cost share.

6. Responsible Parties

7. Related Policies and References

OMB Uniform Guidance §200.306

Effort Certification Procedure

Sponsored Program Financial Reporting and Closeout Policy

8. History

Cost-sharing guidance has been cited in the Sponsored Programs Handbook (section 6.6), March 2011. This went into effect 12/26/2014.

9. Related Forms and Documents

• Cost Share Budget Worksheet
• Proposal Summary Form (PSF)