Cost Sharing on Sponsored Awards

The federal government and other sponsors define cost sharing as the portion of sponsored project costs not borne by the sponsor.  There are three types of cost sharing:

The federal government does not expect voluntary committed cost sharing in proposals. It cannot be used as a factor during the merit review of applications or proposals unless it is both in accordance with the federal awarding agency regulations and specified in the notice of funding opportunity. When cost share is required as part of the notice of funding opportunity, the cost share is considered mandatory and must be tracked and reported. When cost share is not required by the notice of funding opportunity and effort and/or other costs are quantified and documented in the award or proposal budget or budget justification, unless specifically exempted in the award notice, these costs are considered voluntary committed cost share and must also be tracked and reported.

The reporting and audit requirements for mandatory committed and voluntary committed cost sharing necessitate tracking the actual commitment and funding for a sponsored project against the contractually committed amount. Cost sharing will only be tracked if there is a compliance requirement.

To accomplish the monitoring requirements, an unrestricted cost sharing fund will be used (restricted/unrestricted is an attribute of funds) allowing the Research Administration System (RAS) to ignore this activity for billing purposes while still using the same RAS Project. In addition, a unique cost sharing expense Account will be used to monitor the commitment activity.

Business Process

The business process for Projects with cost sharing requirements is as follows:

1. As part of the post-award process for new contracts, the department submits the Cost Sharing Budget Template including funding chartstring information to Contracts & Grants Accounting (CGA) within ten working days of receiving the award notice.  Required information on the template includes:
   • The unrestricted cost sharing Fund
   • Dept ID
   • Project ID
   • Activity Period (if funding is from another sponsored project)
   • Function
   • Flexfield

With the submission of the Cost Sharing Budget Template, additional documentation in support of the amount of the cost share commitment and reporting requirements must be included. This may include specific award document sections, a sponsor-specific reporting template, reporting timelines, allowability of unrecovered indirect cost, University approvals, etc.

2. As part of the post-award activation process CGA will:
   1. Post a budget journal on cost share Fund 4900 in combination with the sponsored project chartstring
   2. Create a financial journal template to be used to allocate the cost sharing percentage of the payroll and non-payroll expense from the funding source chartstrings to the cost sharing Fund/Project
3. Departments set up all funding distribution lines, including cost sharing distribution lines for the PI and other staff members using the UCPath funding entry process:
   • Sponsored Fund/Dept ID/Project/Function with optional Flexfield
   • Cost sharing Fund/Dept ID/Project/Function with optional Flexfield
4. On a monthly basis CGA will post a financial journal (for the time period) to:
   1. Debit the funding source chartstring for the cost sharing expenses recorded for the time period
   2. Credit the sponsored project chartstring using Fund 4900 for the amount of the cost sharing expense
5. During the course of the award, departments should periodically monitor the cost share by comparing the recorded cost share expenses to the cost share commitment to ensure that the cost share commitment has been met by the award end date.

Example

The following example demonstrates the journal entries associated with a $100,000 award for research into neural stem cells & brain tumor origins that has a $10,000 cost sharing commitment. 25% of the cost sharing will be funded from a gift designated for stem cell research and 75% from a medical comp plan fund (general use project).

When all transactions are complete, the cost sharing Fund (in steps 3 and 4) and the cost sharing expense Account (step 4) will have a net zero balance.

Subaward Cost Sharing

When a subrecipient under the sponsored project will cover the cost share commitment, in part or in full, we consider this to be a third party cost share. The commitment must be included and defined within the subaward agreement. The reporting process and timelines should also be determined with the subrecipient.

When a third party cost share commitment is finalized, complete or update the Cost Sharing Budget Template with the Subaward Cost Sharing section completed and submit to CGA Compliance. If the commitment impacts the cost share totals that UCSF will be covering, also update the UCSF Cost Sharing Commitment section. Include all applicable documentation with the Cost Sharing Budget Template submission.

Cost Sharing in RAS

Cost share commitments are captured in the Cost Sharing section of the Award Profile in RAS. Upon submission of the Cost Sharing Budget Template, the CGA Compliance team enters the following information in RAS:

• Cost Sharing Type
• Category of expense to be used to cover the commitment (e.g., Personnel, Equipment, F&A or Other)
• Begin Date and End Date of the cost share
• Cost share amount
• Chartstring identified covering the cost share

All documentation provided is uploaded and accessible using the UCSF Cost Sharing Documents link from the Cost Sharing page.

Third party cost sharing is also recorded in the Subaward Cost Sharing section, along with any supporting documentation submitted.

If you have questions about cost share, contact the CGA Service Team handling your award.