University of California
ANR Employees

Contracts & Grants: Cost Sharing

Cost Sharing

Understanding Cost Share
What is Cost Sharing?
Federal Regulations
What do I include at the Time of Proposal?
How is cost share managed After the Award is received?
Myths about Cost Sharing
Truths about Cost Sharing

Understanding Cost Share Fact Sheet

What is Cost Sharing?

Cost sharing is the portion of the project expenses provided (“matched”) by the University and not paid by the sponsoring agency. Shared costs are typically direct costs or may include un-recovered indirect costs with the prior approval of the federal awarding agency, and are paid from ANR funds as a cash match or are provided by a third party as an in-kind match in support of the project.

Per the Uniform Guidance, voluntary cost share is not expected and cannot be used as a factor during the merit review of proposals. If cost sharing is mandatory, this will be listed as a condition of the award in the request for proposals issued by the awarding agency. Cost sharing should only be offered by the University if it is a condition of receiving the award.

The cost-shared amount must be disclosed to the sponsor in the proposal. This constitutes a promise that the University will provide funds in support of the project and will not charge the sponsor for those costs.

Once an award is made, the cost sharing offered to the sponsor and documented in the proposal documents becomes a binding commitment. Failure to fulfill the cost sharing obligation at the proposed level may result in reduction of the amount of the sponsor’s award.

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Per federal regulations, costs eligible for cost sharing must be:

  • Readily verifiable in the University’s records and documented in writing, if provided by a third party
  • Necessary and reasonable for the proper and efficient accomplishment of project or program objectives
  • Allowable under applicable cost principles
  • Not paid by another federal award, except as authorized by statute
  • Provided for in the approved budget when required by the federal awarding agency
  • Incurred within the performance period of the award

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At the Time of Proposal:

The PI prepares a cost share pledge by

  • Clearly documenting cost sharing in the proposal budget or budget justification
  • Leaving any discussion of cost sharing out of any other proposal text
  • Obtaining signed documentation from each funding source that has promised to contribute.  
    • If the contribution is from the University, a signed letter from a unit head and OCG as applicable is acceptable. Please see the Forms Page for a generic template which can be used to certify the cost share.
    • If the contribution is from a third party, the letter of commitment specifying the dollar amount to be contributed must be on the contributor’s letterhead.
    • Submitting all signed documentation with the proposal package to OCG.

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After the Award:

  • The BOC or unit Business Manager is responsible for recording and tracking cost share expenses.
  • The PI is responsible for reviewing and certifying cost share reports to ensure that all cost share contributions are captured correctly and that all cost sharing obligations are met in a timely manner.
  • The PI and/or the BOC or unit Business Manager must submit cost share contribution reports, signed by the PI, to Extramural Funds Accounting for submission to the sponsor in accordance with the reporting terms defined in the award agreement.
  • It is important to notify OCG immediately if there is any possibility that a cost sharing commitment will not be fulfilled. This includes situations in which a PI transfers to another institution during the performance period of a project. The sponsor may hold ANR responsible for fulfilling all, or a proportionate share, of any cost sharing commitment associated with the project.

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Myths about Cost Sharing

1. "Including cost sharing in my proposal will help me get approval"

2. "Including cost sharing in my proposal requires little additional work on my part"

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Truths about Cost Sharing

1. Most sponsors do not require cost sharing and unless it is required, it is generally discouraged.

2. Including cost sharing in your proposal requires:

  • Preparing signed documentation of commitments   
  • Recording and Tracking shared expenses through award period
  • Certifying cost sharing reports
  • Verify cost sharing amounts to be reported on financial status reports

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