• Uniform Guidance: Cost Sharing or Matching (govinfo.gov)
• Cost Sharing Reference Guide (PDF)

Cost sharing is discouraged when not required by the sponsor because it reduces Brown’s ability to maximize its reimbursement from external sponsors. In addition, there are negative facilities and administrative (F&A) calculations and administrative impacts when committing to cost sharing.

Cost sharing requirements are explicitly stated in the request for proposals (RFP), the program guidelines, program announcement and similar documents. This information is also frequently found in a “special instructions” section, or in the budget guidelines of the proposal-preparation section.

Federal regulations require full accountability for costs committed in the fulfillment of sponsored projects. Cost Accounting Standards (CAS) require that costs proposed on a sponsored projects application be accumulated and reported on completely and accurately.

Cost sharing expenditures must satisfy all of the following criteria:

• They are necessary and reasonable for proper and efficient accomplishment of project objectives.
• They are allowable, allocable, reasonable and consistently treated under applicable federal costs principles.
• They are incurred during the effective dates of the grant or during the pre-award phase when authorized by the sponsor.
• They are verifiable from the official University records.
• They are not included as contributions for any other federally assisted project.
• They are not paid by the federal government under another award, except where authorized by federal statute to be used for cost sharing.

Unrecovered indirect costs may be included as part of cost sharing with the prior approval of the federal awarding agency.

 The following costs may not be proposed as cost sharing:

• Costs not deemed to be necessary and reasonable for the proper and efficient accomplishment of project objectives.
• Costs that are included and reimbursed through the F&A rate (administrative salaries, office supplies, library expenses and operations and maintenance expenses).
• Costs pledged as cost sharing for another funded project.
• Costs funded by other sponsored programs.
• Costs considered unallowable by the University or the sponsor or under Uniform Guidance.

Mandatory cost sharing is required by the sponsor as a condition of the award. Ordinarily this requirement will be indicated in the program announcement. Proposed mandatory cost sharing requires the signature of the responsible program officer to ensure the cost sharing commitment is secured prior to proposal submission.

Voluntary cost sharing is not required by the sponsor but is nevertheless offered in the proposal by the investigator; ordinarily in the form of contributed effort. 

Cost sharing that is included in the proposal voluntarily by the investigator becomes mandatory (or also known as “voluntary committed” cost sharing) once the award is made. All committed cost sharing, whether mandatory or voluntary committed, must be accounted for and tracked.

A third-party, in-kind contribution is a noncash contribution to a sponsored project or program provided by a party other than either Brown University or the primary sponsoring agency. Third-party in-kind contributions may be in the form of goods, services, real property, equipment, supplies or other expendable property directly benefiting and specifically designated for the project or program.

If the project includes a requirement for cost sharing, it is important that the account is monitored closely to ensure that the PI meets those requirements. If there is a concern that the PI will be unable to meet the committed amount, it is essential that the sponsor is contacted as soon as possible to request approval for a budget modification or an amendment to the award.  

Your Sponsored Projects Pre-Award grant and contract accountant should be involved in this communication. If you have not met the cost sharing requirements, and the sponsor is unwilling to renegotiate the amount, it is likely that the funds provided by the sponsor will be reduced by the percentage the shortfall represents. Not meeting the cost-sharing requirement puts the project at risk of being deemed noncompliant by the sponsor and may require the University to have to return the funding. Every effort should be made to meet the obligated amount using start up/discretionary funds, unrestricted monies and/or any appropriate nonfederal grants.

Salary that exceeds a sponsor’s salary cap may not be used to meet a sponsor’s cost sharing requirement unless prior approval is obtained from the sponsor.   

Salaries and fringe benefits may be cost shared depending on two factors. First, a time commitment to the project for the individual has to be estimated. Second, the salaries and fringe benefits have to be calculated for that individual based upon the full-time equivalent (FTE) committed. Salaries and fringe benefits may be cost shared through Workday.

Federal dollars cannot be applied to matching or cost sharing requirements of other federal programs, except where the federal statute authorizing a program specifically provides for that use. Federal funds that “pass through” another state agency are still considered federal funds and cannot be used for cost share.

A federal award may be used as a cost share on a nonfederal proposal in certain circumstances. Uniform Guidance specifically states that all contributions, including cash and third-party, in-kind contributions, may be accepted as part of the recipient’s cost sharing or matching when such contributions meet all of the following criteria.

• The contributions are verifiable from the recipient’s records.
• The contributions are not included as contributions for any other federally assisted project or program.
• The contributions are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
• The contributions are allowable under the applicable cost principles.
• The contributions are not paid by the federal government under another award, except where authorized by federal statute to be used for cost sharing or matching.
• The contributions are provided for in the approved budget when required by the federal awarding agency.
• The contributions conform to other provisions of this part, as applicable.