These procedures are issued in accordance with Research Policy 306, Cost Sharing.
They are intended for guidance on post-award administration of cost sharing expenditures. Cost shared resources and costs must be proposed, tracked, expensed, and recorded per Rice policy and procedures and per sponsor guidelines.
The Principal Investigator (PI) bears primary responsibility for management of the sponsored programs that are awarded to him/her. Management involves budgetary and cost compliance as well as technical compliance. This includes not only staying within the total program budget and time period, but also staying within specific budget guidelines in the award. While all providers of committed cost sharing are responsible for honoring their cost sharing commitments, the PI is expected to monitor and coordinate the funding and recording of cost sharing expenditures. The PI should request assistance from the Chair and Dean as needed to resolve variances between agreed-upon cost sharing commitments and funding or expenditures.
Commitments of University resources, including academic year time, must be approved in accordance with the cost sharing policy and the cost sharing proposal procedures of the Office of Sponsored Research (SPARC) prior to proposal submission.
Cost sharing is that portion of total project costs not provided by the sponsoring agency. Per Uniform Guidance, all costs that are reported as cost sharing must be allowable, allocable, and reasonable, incurred within the project period, derived from non-federal sources, used as cost sharing for only one project, and certifiable through university accounting records.
There are three types of cost sharing: mandatory, voluntary committed and voluntary uncommitted.
- Mandatory Cost Sharing is required by the sponsor as a condition of funding. It is described in an agency's program announcement and noted in the award document of the approved budget. It must be included in the proposal as a condition of submission and receipt of the award. This type is also referred to as Committed Cost Sharing .
- Voluntary Committed Cost Sharing is not required by the sponsor but has been included in the proposal in a quantifiable manner. See the SPARC proposal procedures for examples of quantified voluntary committed cost sharing. Some sponsors do not allow proposals to include voluntary committed cost sharing.
- Voluntary Uncommitted Cost Sharing is cost sharing that has been recorded in the accounting system but is neither mandatory or voluntary committed cost sharing. If a PI chooses to report voluntary uncommitted cost sharing on a project, it is recorded in the accounting system but is not reported to the sponsor.
Sources of Cost Sharing
The following terms are commonly used at Rice when describing the sources of cost sharing.
- Cash: Funds expended from departmental funds used to fulfill cost sharing obligations for expenditures such as equipment, salaries, travel, supplies and other direct costs.
- In-kind: Non-cash contributions contributed such as time, equipment, or facilities. Value is measured based on fair market value of goods and services received.
- F&A: Facilities and Administrative (F&A) costs related to the direct costs. F&A is budgeted and charged on the cost share project. Since cost share is funded internally with departmental funds, F&A revenue will not be generated on cost share expenses.
- Third party: Used for non-Rice cost sharing providers, both subawardees and others, that commit cost sharing during the proposal process. SPARC reviews cost proposals from third parties to ensure they meet Uniform Guidance requirements for valuation. For subawardees, SPARC includes such cost sharing commitments in award documents. For non-subawardees, PIs are responsible for certifying that cost sharing commitments from them have been met. See Other third party commitments of cost sharing below.
Departmental Administrator Responsibilities for Committed Cost Sharing
At the time of setup of a new award with cash cost sharing, department requests RCA setup a cost share project to be used for recording cost sharing expenditures on the award.
The PI/Project Manager is notified of the cost share project number. The Project Manager of the award is responsible for ensuring funding is available in the project organization to fund the cost share expenses. As expenses are incurred on the cost share project, the departmental account funding cost share will be reduced.
Large/multi-department projects frequently have a number of cost sharing providers across departments and schools. The sponsors of these projects also generally request annual revised budgets that may affect previously submitted cost sharing commitments. For such projects, the departmental administrator of the main/contact PI should have periodic meetings with the departmental administrator of the other providers to ensure that cost sharing commitments are being met and appropriately recorded. Additionally, the departmental administrator of the main/contact PI is responsible for ensuring that SPARC has a copy of revisions to the cost sharing commitments.
SPARC Responsibilities for Committed Cost Sharing
SPARC is responsible for reviewing proposal cost sharing commitments for compliance with Rice policy and sponsor requirements and for ensuring that needed documentation of cost sharing commitments is available. If the proposal commits cost sharing by subawardees, SPARC will ensure that subaward documents require the cost sharing to be certified to Rice. If there are changes in cost sharing commitments or providers, the PI should contact SPARC, who will then contact the sponsor as needed.
RCA Responsibilities for Committed Cost Sharing
At the time of award setup, RCA reviews all proposal and award documents for cost sharing commitments. When a commitment is identified, RCA creates a separate project under the award for the cost share expenses. RCA reports the cost sharing commitments to the award sponsor.
Tracking Cost Sharing Expenditures
Since cost share expenses are being managed as a companion account under the award alongside the external award projects, tracking cost share expenses will be easily done in the iO user interface or in the dashboards. It is the responsibility of the PI/ Departmental administrator to ensure that cost shared expenditures are recorded properly when expenses are entered in iO.
Subawardee Commitments of Cost Sharing
If a cost sharing commitment from a subawardee is required, SPARC includes the provision in the award document that invoices must include cost shared amounts.
Other Third Party Commitments of Cost Sharing
If there are other third party cost sharing commitments in the proposal, SPARC will obtain documentation from the provider that will support the value of the cost sharing. At the end of the project, RCA will request PI certification of fulfillment of the third party commitment.
At the end of the project, in the event that documented cost sharing expenditures are less than the cost sharing commitments, the PI has the following options:
- provide documentation and support for additional cost shared expenditures;
- request sponsor approval through SPARC to reduce cost sharing commitments; and/or
- reduce sponsored project fund expenditures to record them as cost sharing.
(From the SPARC proposal procedures: “If at any time the PI becomes aware that not all of the cost sharing commitments can be met, the PI must notify SPARC and RCA at once and provide a reason why the commitments cannot be met. If it is determined that a reduction is necessary, then SPARC will notify the sponsor and request a reduction of the commitments. Depending on the circumstances, the sponsor may approve the request or reduce the sponsor share of the project costs accordingly.”)
RCA prepares the final cost sharing expenditures report and submits it to the sponsor as required. A copy of the final report is retained in the RCA files.