Purpose
The purpose of this Policy is to provide guidance to ensure that the University of Texas at El Paso (University) properly accounts for cost sharing expenditures and does not overburden department and/or college resources and facilities and administrative (F&A) recovery. This policy applies to all units of the University and all sponsored awards submitted by the University.
Policy Statement
The University has established the following policy for the management of cost share to comply with the requirements of the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) and federal agency policies and procedures.
Additionally, cost share from non-federal sponsors requires similar diligence to recognize the commitment and maintain appropriate documentation as evidence of a cost share commitment. Therefore, all committed cost share is subject to this policy.
Cost share is generally funded by non-sponsored funds. Non-federal sponsored awards can be used to fund cost share with the approval from the sponsor whose funding is being committed. Federal funds cannot be used for cost share except in unusual circumstances and with explicit sponsor approval. Additionally, startup funds cannot be used for cost share.
In general, the University discourages cost share due to its administrative burden, impact on the Facilities & Administration (F&A) rate base calculations, and audit risk. All mandatory cost share commitments must be documented using the Office of Sponsored Projects (OSP) Cost Share Approval Form, completed by the Principal Investigator (PI) and approved by the College Dean. Any committed cost share must be tracked and may require reporting to the funding agency.
Overview
Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Sections 2 CFR 200.306 (“Uniform Guidance”) states “Under Federal research proposals, 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.” Therefore, voluntary cost share should not be included in federal proposals.
Cost share expenditures must adhere to the same accounting, financial, legal, and regulatory requirements as direct cost expenditures on sponsored awards and must comply with the following:
- Sponsored award terms and conditions.
- Federal regulations, including restrictions for procurement and airfare.
- University sponsored policies and guidelines.
For federally funded sponsored awards, Uniform Guidance Section 200.306 stipulates that cost share funds must be:
- Verifiable from the University's records.
- Not included as contributions for any other federal award.
- Necessary and reasonable for the accomplishment of the project or program objectives.
- Allowable under Uniform Guidance, 2 CFR Part 200 Subpart E-Cost Principles.
- Not paid from another federal award.
- Included in the approved budget when required by the Federal awarding agency.
Failure to appropriately document cost share commitments from verifiable official University records could result in audit findings, potential return of funds to the sponsor, and possible invoice payment hold.
Definitions
Cost Share:
is a quantified portion of the costs of an Award not paid by the sponsor, but paid instead using resources within a department, school/college, or other party outside of the University. Cost Share is a commitment, required by the sponsor, to use resources other than the award itself for completion of the award objectives. Cost share represents a legal commitment by the University to provide resources to an award and is subject to audit. There are three main types of cost sharing:
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Mandatory Cost Share:
Cost share required by the sponsor as a condition of eligibility for an award and is documented in the program announcement or other sponsor proposal document. Mandatory cost share must be included in the proposal budget, documented, and tracked for accounting and compliance purposes.
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Third-Party contributions:
do not require accounting entries in the University's accounting system. However, adequate records must be maintained to demonstrate that the full cost share commitment was performed.
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Voluntary Committed Cost Share:
Cost share not required by the sponsor as a condition of award but provided at the discretion of the institution. Voluntary committed cost share, with required institutional approvals, is a binding, auditable obligation and is referenced in an award document. Voluntary committed cost share must be documented in the proposal budget and tracked in the university financial and effort reporting system for accounting and compliance purposes.
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Voluntary Uncommitted Cost Share:
Cost share of effort or other institutional support not required by the relevant program solicitation, whether or not referenced in the proposal or award. It is not formally tracked or auditable.
Roles and Responsibilities
All employees must comply with this policy. It is the responsibility of the Dean/Vice President to implement and maintain this policy within their unit. Responsibility for resolution of issues that arise regarding this policy rests with Research & Innovation in consultation with the appropriate dean or vice president.
Principal Investigator (PI)
- Ensure that proposed or actual cost share is necessary and required or permitted by the sponsor in the manner described.
- Obtain requisite approvals and Third-Party commitment letters prior to committing cost share in proposals.
- Ensure Third-Party contributors understand allowability and documentation requirements.
- Maintain oversight of all cost share obligations from all sources.
- Ensure the cost share budget includes expenditures that are allowable, allocable, reasonable, and consistently accounted for in accordance with University and sponsor policies.
- Adhere to the University’s processes to track, verify and approve the cost share throughout the life of the award in the University’s financial system.
- Ensure all cost share commitments are met and documented in the University’s financial system.
- Assume responsibility for unmet cost share commitments.
Chair and Dean Reviewers
- Confirm their units have the funds to cover cost share commitments.
- Ensure use of funds for cost share on an award is permitted, appropriate, and consistent with academic unit/school/college policies and State law.
- Ensure proposed cost share is accurate and adequately documented.
- Approve appropriate requests for cost share commitment in a timely manner.
Office of Sponsored Programs (OSP)
- Review that mandatory cost share pre-requirements are met, or, if prohibited by sponsor, cost share is not presented in proposal budget. If cost share is included, the cost sharing unit or party has reflected its approval and the cost share is consistent with federal requirements.
- Ensure Third-Party commitments are made by an authorized individual of that entity.
- Review & submit cost share modification requests to sponsors.
- Process sponsor-approved cost share modifications.
- Notify Grant Management Accounting (GMA) of all budgeted cost share for setup in the University’s financial System.
- Notify GMA of any changes in cost share commitments.
Grant Management Accounting (GMA)
- Ensure sponsor approved commitments are recorded appropriately in the University’s financial system.
- Establish procedures for managing cost share.
- Resolve post award cost share discrepancies with the PI.
- Report cost share contributions to the sponsor.
- Report cost share contributions to the F&A proposal preparation team.
Budget Office
- Review all cost share requests submitted by GMA to ensure allowability and sufficient funds are available.
- Communicate with GMA office to obtain necessary information for the cost share request.
- Create cost share cost centers in PeopleSoft for approved requests.
