Cost Sharing is a financial commitment toward the total costs of a project from a source other than the granting organization. It can be one of two types, either mandatory or voluntary. Mandatory cost sharing is that which is required by statute, regulation, or written policy. Such cost sharing is set forth in the Program Announcement (PA) or the Request for Proposal (RFP) announcing the availability of the funding. Depending on the particular program or agency, this contribution may be satisfied by providing cash, services, or other contributions such as tuition waivers, or faculty or staff effort devoted to the project. In some instances, the program will mandate a percent of the total project costs as cost sharing, but in others, the requirement will be stated without a specified amount or percentage.
Voluntary cost sharing is a more complex issue. On an increasing basis, various funding programs and agencies are trying to further leverage their limited grant funds by encouraging applicants to show a commitment on the part of the submitting institution through voluntary cost sharing. In these instances, while it is not mandated by the regulations, it is nonetheless encouraged as an indication of support by the institution. Program officers at various agencies view this as a means to augment their program dollars and may stress the importance of an institutional financial commitment. While voluntary cost sharing is subjective and subject to perception, faculty may feel the pressure to meet these expectations.
Tulane has developed the following guidelines to aid faculty in understanding the rationale by which Tulane will commit funding for cost sharing, within the constraints of the Provost's account. While cost sharing commitments must be made at the time of proposal submission, the precise amount of the cost sharing is not known until and unless an award is made by the program. In instances where the proposal review is favorable but the budget is reduced, the reduction should also be reflected in the cost sharing commitment.
The following recommendations are proposed as guidelines for committing funds from the Provost's Office cost sharing account on the Uptown campus.
- Cost sharing commitments should be reviewed by the appropriate dean for consistency and appropriateness. Faculty should indicate whether the cost sharing is voluntary or mandatory , and if mandatory, should attach a copy of the program requirements.
- Cost sharing commitments from the Provost's account on proposal submissions shall be reviewed on the following prioritized criteria:
- Is the commitment shared between the college and the Provost's account?
- Does the proposal include other incentives, or considerations for the University, i.e., salary relief for faculty, post doctoral support, graduate student support, indirect costs, etc.?
- Will the proposed sponsored agreement benefit a wider constituency than the principal investigator? For example, is there a benefit to other areas or divisions.
- If the cost share is for equipment, will the equipment be available for use by other schools, by the Coordinated Instrumentation Facility, etc.?
- When an award involving cost sharing is received, if the budget is reduced, the amount of previously committed cost sharing may also be reduced on a proportionate basis.
SPECIAL INSTRUCTIONS FOR IMPLEMENTATION OF COST SHARING ON AN AWARDED GRANT OR CONTRACT
When an award is made in which there is a cost sharing commitment, Tulane is responsible for verifying such cost sharing as part of the overall project costs. To do so, the actual expenses associated with the contributed costs must be tracked in and charged to the grant or contract account, just as any other expense attributable to that sponsored project is charged. While the expense is charged to the applicable object code in Tulane's Financial Records System (FRS) (for example, salaries, supplies, equipment, etc.), the money to fund the expense must be transferred into the cost sharing object code (9810) in the grant or contract account through an Interdepartmental Transfer (IT) form. Since the source of any such cost sharing is identified at the time a proposal is submitted on the Tulane Proposal Routing form, the IT should reflect the responsible account number(s), be signed by the responsible signature authority for that account, and forwarded to the Office of Grant and Contract Accounting for processing in a timely fashion.
In the case of cost sharing on salaries, in addition to the transfer of the funds by way of IT, other steps are required. First, it is important to determine if time is available to be committed to the project. This determination can be usually best be made by the chair/dean of the unit. A rule of thumb on the uptown campus for the maximum amount of time that can be committed to a research project during the academic year (without release time from teaching) would be approximately 25%. The department of the individual committing time to the grant must initiate a Payroll Action Form (PAF) allocating the appropriate percentage of effort to the account and reducing the previous source of that effort. The initiation of the PAF "charges" the effort to the account and redistributes the effort from the department account or the source which previously supported that individual's work. It is important that the PAF's be initiated in a timely fashion during the fiscal year in which the effort is expended. While a grant account may cross fiscal years, regular departmental accounts do not roll over from fiscal year to fiscal year. Failure to intitiate the appropriate documentation can result in overages in grant accounts.
Finally, it is important to remember that the annual PARS (Personnel Activity Reporting System) report should always reflect this effort and should be updated when changes in effort are made.
