Cost sharing is that portion of a project or program cost that is not reimbursed by the sponsor (whether Federal or non-Federal) and as such, represents a commitment of institutional resources that would otherwise be devoted to other University purposes. As a matter of longstanding policy, NYU discourages unnecessary and unsupported cost sharing. As described in Memoranda 01-06 – Clarification of the Office of Management and Budget (OMB) A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs, there are three forms of cost sharing:
Cost sharing may be required by the sponsor as an eligibility criterion of the award (mandatory cost sharing) or it may be offered by NYU (voluntary committed). Mandatory and voluntary committed cost sharing becomes an obligation once an award is made. Federal regulations require that Mandatory or Voluntary Committed Cost Sharing be treated consistently and uniformly in documenting, accounting and reporting. They should comply with NYU’s Federally approved cost accounting practices (DS-2) and be reflected in the University’s Time & Effort Certification. The expenses associated with cost sharing or matching contributions must be allowable in accordance with the OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance) and/or University and sponsor policies.
The purpose of this policy is to provide guidance for proposing and administering cost sharing on sponsored projects, in accordance with Federal and other sponsor requirements.
This policy is applicable to all schools, departments, units and personnel of the University involved in administering sponsored awards.
Under Federal awards, items committed as cost sharing must meet all of the following criteria in accordance with the OMB Uniform Guidance:
The following are illustrations of when cost sharing may be appropriate in sponsored projects:
The following non-sponsored (and in rare cases sponsored) sources would be considered appropriate sources of funds that the University may use to meet cost sharing commitments:
The following costs may not be used to meet cost sharing commitments:
As a general rule, the contribution of a Principal Investigator’s (PIs) academic year effort as voluntary committed cost sharing is subject to the following NYU restrictions:
These are the methods of calculating cost sharing:
The difference between the rate for the grant and NYU’s negotiated rate may be considered as waived Facilities and Administrative (F&A) rate. See the Facilities and Administrative Cost Waivers Policy.
New York University (“NYU”) encourages and supports the efforts of Principal Investigators (“PIs”) to obtain external funding for their research endeavors. PIs are therefore given latitude in developing the scientific and financial aspects of their proposals in order to increase their success in the highly competitive arena of sponsored projects.
PIs should discuss cost sharing requests in advance with their Chairs and Deans, and when applicable, the Vice Provost for Research. Every dollar of mandated or voluntary committed cost sharing results in NYU forfeiting not only the recovery of the direct cost but also the recovery of the associated indirect [“Facilities and Administrative” (F&A)] costs. In addition, in accordance with federal requirements, the total amount of all cost sharing must be included in the denominator, or base, of NYU’s indirect costs calculation. As such, NYU must put amounts into its research base for which no direct cost reimbursement is received. This results in a decrease in the federally negotiated rate and associated indirect cost recoveries, which has far-reaching, negative implications for NYU’s ability to support the research enterprise.
It is thus important to limit the use of cost sharing in order not to overburden University resources or the ability to recover indirect costs. It is also important to recognize the compliance implications of cost sharing, whether the cost sharing fulfills a sponsor mandate or is offered voluntarily. Cost sharing should only be offered if clearly mandated by the sponsor or if it will be explicitly considered by the sponsor in making an award.
The Office of Sponsored Programs (OSP) is responsible for determining whether proposed cost sharing complies with the requirements of the sponsor guidelines and determines whether it is mandatory or voluntary. The approval of all sources of the cost sharing contributions (e.g., Department Chair, Dean, Provost, third party collaborator) is required at the time of the proposal. Approval is conveyed as part of the Cayuse SP proposal routing process, which captures specific information regarding proposed cost sharing arrangements.
Cost sharing commitments must be specifically quantified in the proposal budget and described in the budget justification. Care should be taken so that statements about unbudgeted key personnel involvement or tasks will not be inadvertently construed as voluntary cost sharing, and any such information that will enhance the likelihood of the success of the project should be restricted to the proposal resources section or project narrative.
Any change in the amount of approved cost sharing provided by the University under a sponsored agreement requires the prior written approval of both the University and the sponsor. If the project is awarded as proposed, no adjustments to the budget or cost sharing commitment will be necessary. If the awarded amount will be less than the proposed amount, any cost sharing commitment should be adjusted accordingly. This is true if the approved budget requires a change in the scope of work.
If the level of PI effort committed to a Federal sponsor drops below re-budgeting limits (generally 25%), as during a no-cost extension, either Sponsor approval must be obtained for the reduced effort commitment, following OSP's Prior Approval Matrix procedures, or the difference between the committed effort and the effort charged to the sponsor must be documented in a Cost Sharing Project as described below.
It is the responsibility of the PI and the department to document the fulfillment of cost sharing. Cost sharing is documented through the creation of a separate project in the University’s accounting system which parallels the project established with sponsor funds. The following steps list the process for creating cost sharing projects:
A sponsored award will require multiple cost sharing programs to be set up when the related cost sharing is coming from multiple funding sources (i.e., more than one school or department or multiple sponsored accounts).
Cost sharing by a third party does not require the creation of a cost sharing account, but rather the department is required to maintain records identifying the cash contribution (which may arrive in the form of a gift, grant or contract) or non-cash contribution and its fair market value. Documentation sent to SPA should include a letter of intent (available through OSP) or letter of actual completion, which includes documentation of the basis for determining the value of personal services, material, equipment and other direct expenses as well as written acknowledgement of the contribution, including:
For Federal awards, rates should be consistent with those paid by NYU for similar work, or when such skills do not exist at NYU, with market rates, and documented similarly. Third party employee services should be at regular rates of pay plus fringe benefits and indirect costs based on negotiated rates (or in the absence of a negotiated rate, the de mimimus 10%). Donations of property and equipment cannot exceed fair market value at the time of the donation.
Cost sharing almost always occurs continually over the life of the project. It is the responsibility of the PI to ensure that charges are incurred against the cost-sharing program as it occurs and in a timely manner in order to avoid cost transfers at the close of the project.
At all reporting points in the project, SPA will email the Cost Share Form to the PI and the DA and/or department for confirmation and verification of cost sharing amounts as recorded in the University’s general ledger. At project close-out, SPA will resend the Cost Share Form by email to the PI and departmental administrator for final update.
PIs and DA’s should work closely with SPA to ensure accurate reporting of cost sharing on financial reports to sponsors. When a financial report is due that requires cost share reporting, SPA verifies that the cost sharing requirement is met. However, SPA only requires that total cost sharing requirements are met upon expiration of the sponsored project. When the project is closed out, SPA completes the cost share tab in FAME to indicate that the cost sharing obligation has been satisfied.
Effective Date Supersedes 09/01/13 Issuing Authority Sponsored Programs Administration Responsible Officer Assistant Vice President for Post-Award Administration
The portion of a project or program cost that is not reimbursed by the sponsor (whether Federal or non-Federal) and as such represents a commitment of institutional resources that would otherwise be devoted to other University purposes. Normally at NYU, cost sharing involves personnel effort; however other costs, such as equipment, may be used.
Non-cash donation of tangible or intangible goods and services provided by a third party; In-kind services that are committed as matching must be documented and may require a certification of fair market value.
Mandatory Cost Sharing
Costs borne by the institution and required by a sponsor as a condition of obtaining an award; Mandatory Cost Sharing is a binding commitment on NYU and must be documented, tracked and reported in accordance with the Cost Sharing Policy.
The requirement by some sponsors that grant funds be matched in specific proportion with funds from NYU or another party, whether received from another sponsor or committed by a collaborating organization.
Third party contributions
The value of cash or non-cash contributions directly benefiting a grant-supported project or program that is provided by non-Federal third parties.
Voluntary Committed Cost Sharing
Quantifiable contributions reflected in the proposal narrative, budget, and/or budget justification, but which are not mandated by the sponsor. Voluntary committed cost sharing becomes a binding commitment on the University when proposed and accepted in the award.
Voluntary Uncommitted Cost Sharing
Faculty-donated additional time above that agreed to as part of the award.