Definitions

Some funding agencies require the grantee institution to demonstrate its financial commitment to the project, or the commitment of other funding sources, by sharing the project costs.

• Cost sharing is defined as project costs not borne by the sponsor.
  Cost sharing funds may come from an outside source in the form of cash contributions, volunteer services, or donated property; from the University’s own funds (e.g., personnel effort without salary recovery); or from shared resources or facilities. If the award is federal, only acceptable non-federal costs qualify as cost sharing.
• Matching funds, if required by the funding agency, are raised from non-federal outside sources to increase the level of support provided by the funding agency. Such funds must be identified by the donor or funding source for use as matching funds.
• In-kind contributions represent the value of non-cash contributions provided by the University or non-federal third parties to a sponsored project when such contributions directly benefit that project and are generally counted as cost sharing.

• Direct-cost cost sharing is the provision of faculty and staff time and related fringe benefits, dedicated equipment, tuition, computer support, and other resources as direct support for the project, as well as related indirect costs. Commitments made by departments, schools, or other units must be detailed in the proposal and appropriate approvals must be provided.
• Indirect (F&A) cost sharing occurs any time the University agrees to recover less than the federally negotiated indirect cost rate. Approval from the UC Office of the President is required if an indirect cost rate is lower than the university approved rate. The appropriate IDC rate can also be applied to direct-cost contributions on an MTDC base.

• Mandatory cost sharing is required by the sponsor as a condition of the award. Ordinarily this requirement will be indicated in the program announcement.
• Voluntary cost sharing is not required by the sponsor but is nevertheless offered in the proposal by the investigator. Often this is in the form of contributed effort. Cost sharing that is proposed voluntarily by the investigator becomes mandatory (also known as 'voluntary committed' cost sharing) once the award is made.
• Committed Cost Sharing is a contribution of effort or other costs that are quantified in the proposal narrative, budget, budget justification, or in the award document. Committed cost sharing may be either mandatory or voluntary.

Committed cost sharing represents a binding commitment by the University to a sponsor and, as such, is subject to audit under federal and other sponsor regulations. Any quantifiable cost offered in the proposal becomes a legally binding and accountable commitment of the Universiity upon award. Cost sharing must be documented in the same way as other charges. Once a cost sharing commitment is made, the principal investigator is required to measure, track, record, and be prepared to report the commitment.

To avoid financial liability as a result of audit disallowance, it is the responsibility of the principal investigator to incur expenditures in accordance with applicable regulations and policies:

• The cost principles contained in Office of Management and Budget (OMB) Circular No. A-21, Cost Principles for Educational Institutions;
• Clarification of OMB Circular No. A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs
• The standards contained in OMB Circular No. A-110 – Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations;
• The terms and conditions of each extramural award (including sponsor policies); and
• Any other applicable University policies.

Unfulfilled cost sharing commitments or lack of documentation may result in a reduction of costs allowed against the sponsored project and a return of funds to the agency. Also, the cost sharing commitment is not automatically reduced when an award is reduced. Should the awarded amount be reduced from the porposed amount, the committed cost sharing may need to be adjusted accordingly, particularly if the awarded budget requires a change in the scope of work.

Cost sharing is normally stated in the budget. However, cost sharing commitments can be stated in the budget explanation or justification or in the text of the narrative. No matter where cost sharing commitments are found within the proposal, statements of cost sharing commitment are legally binding on the institution should the proposal be funded, even when not required by the sponsor.

By using language in proposals that cites percentage of time, salaries, or specific levels of support, principal investigators can commit to cost sharing, often unintentionally. In all instances where cost sharing is specified and quantified, the principal investigator and University are obligated to account for and track these commitments along with funds awarded by the sponsor.

The examples below may be used in proposals to address the issue of academic or programmatic contributions or support without creating a contractual and auditable commitment to cost sharing. Also below are examples of language not to use because doing so would consitute cost sharing.

• The University of California, Berkeley fully supports the academic year salaries of Professors, Associate Professors, and Assistant Professors, but makes no specific commitment of time or salary to this particular project.
• Professor X will be providing expert advice and consultation to the project, as needed.
• The University demonstrates support to the project through the availability and expertise of the Project Director (or Principal Investigator).
• Professor X is Principal Investigator and requests 25% salary support for this project. She will provide additional support to the project, as needed.
• An annual stipend of $xx,xxx is requested for one full-time Graduate Student Researcher. It is University of California, Berkeley practice that Graduate Student Researchers are supported, in addition to their monthly stipend, through waived tuition costs for each semester enrolled.
• Professor X will direct all research activities associated with the project [specify...]
• Professor X will oversee [all aspects of] the project.
• Dr. Y will participate in the project at every stage [specify...]
• Professor X will provide scientific direction and supervision for the project [including...]
• Professor X will have significant involvement throught the project. She will be providing expert advice and consultation on all aspects of the research.
• Dr. Y is Principal Investigator and requests 30% salary support to the project. He will provide additional support as needed.
• Professor X's laboratory is 800 square feet. She also has access to the departmental [equipment name] that is beneficial to the research.
• The University demonstrates support to the multistage project throught the availability and expertise of the project director.
• Dr. Y will be integrally involved in the project. He will have access to equipment that will ensure the successful execution of the proposed research and she will see the data analysis and report writing through to completion.
• The PI will have access to additional resources, such as [equipment name], to ensure the successful execution of this scope of work
• No salary support is being requested for Professor X; however she will provide intellectual direction for the project, will have direct and significant involvement throughout the project, and will co-author publications

• As a faculty member at a state-supported institution of higher education, Dr. Y's salary is paid by the State of California; she will devote 25% effort toward this project.
• The University of California, Berkeley is highly supportive of this project and agrees to be responsible for the salary of the PI for its duration.
• Effort equivalent to $xx,xxx in salary and benefits will be provided by the Professor X.
• An annual stipend of $xx,xxx is requested for one full-time Graduate Student Researcher. In addition, the University of California, Berkeley will cost-share the graduate student's out-of-state tuition at an amount approximately totaling $xx,xxx per year.
• Professor X will devote 20% of her time to the project at no cost to the sponsor.
• Dr. Y is Principal Investigator and will devote 40% effort (30% salary support requested) to the project.
• The department will purchase a [equipment name] (cost $xx,xxx) for exclusive use in support of Professor X's project.
• The University demonstrates support and will contribute to the multistage project through partial salary for the project director.
• Dr. Y will contribute a week of field work and the time required for data analysis and report writing, and he will supply all equipment.
• The PI will be contributing funds from other sources for use of [equipment name] to ensure that this scope of work can be performed on the proposed budget.
• Professor X will provide intellectual direction of the project and co-author publications. Her time (5% effort) will be contributed by the College.

• Cost sharing
• Sharing
• Matching
• In-kind
• Donate
• Commit % or $
• Allocate % or $
• Exclusive Use
• Volunteer
• Support at no cost
• Contribute

• Extramural Funds Accounting: Cost Sharing - Policies and Procedures
• UCOP Contract and Grant Manual, Chapter Five - Cost Sharing
• UC Berkeley Procedures for Cost Sharing And Matching (memo on provision of central funds for cost sharing required in grant applications)
• Request for Central Campus Cost Sharing Form