for UTHSA Departmental Administrators Chris G. Green, CPA Cost Sharing for UTHSA Departmental Administrators Chris G. Green, CPA Director, Sponsored Programs June 15, 2017

Topics What is Cost Sharing? What are the types of Cost Sharing? Who is responsible? Accounting for Cost Sharing Salary Cost Sharing F&A and Third Party Cost Sharing Unallowable Costs and Audits

What is Cost Sharing? Costs that are applicable to a specific award which are not borne (paid) by the sponsor of the award. Often referred to as in-kind or matching contributions.

Policies and Procedures UTHSA Handbook of Operating Procedures (HOP) Policy 7.1.6: http://uthscsa.edu/hop2000/7.1.6.pdf OMB Uniform Guidance §200.306

Who is responsible? Shared responsibilities Principal Investigator Department Administrator Department/Institute Chair or Director Office of Sponsored Programs If applicable, Third Party Providers (e.g. subawardees, non-profits, municipalities) With ECRT, faculty self-certify their own effort. In addition, faculty must also certify all Support Staff that were funded from a sponsored project for which they are the principal investigator. The Certification process takes place twice each fiscal year and covers the performance periods of September-February and March-August.

Cost Sharing Types Committed Mandatory Voluntary Uncommitted Voluntary (a.k.a. VUCS) With ECRT, faculty self-certify their own effort. In addition, faculty must also certify all Support Staff that were funded from a sponsored project for which they are the principal investigator. The Certification process takes place twice each fiscal year and covers the performance periods of September-February and March-August.

Committed Mandatory Cost Sharing Will be identified in the funding opportunity Required by the sponsor before award is issued Will be identified in the grant award documentation Must be reported to the sponsor in the financial reports Could be non-salary or salary related

Committed Voluntary Cost Sharing Voluntary Committed Cost Sharing is not explicitly required by the sponsor, but has been offered by the PI and UTHSA in the proposal application, budget or budget justification This commitment becomes binding once the grant has been awarded Voluntary committed cost sharing should be minimized at all times and is discouraged Could be non-salary or salary related

Voluntary Uncommitted Cost Sharing (VUCS) Not explicitly required on a program and over and above that which is provided in a proposal Not reported to the sponsor Could be non salary or salary related

Cost Sharing Expenditures Must: Be allowable per sponsor guidelines for the award Be properly documented Be incurred within the project period of the award Provide a direct benefit to the award to which it applies

Accounting for Cost Sharing For awards with Mandatory Cost Sharing (C/S), OSP will establish a companion non-grant project Department will provide OSP with a non-grant project so funds can be transferred to the C/S project at the time of award Cost Sharing project will be used exclusively for recording allowable cost sharing expenditures On a periodic basis, OSP will transfer expenditures from the funded award project to the C/S project in order to meet the match requirements

Deep-Dive Salary Cost Sharing Accounts for 95% of all cost sharing at the UTHSA Is reported to senior leadership each fiscal year Affects all funds across the UTHSA Negatively impacts the UTHSA research F&A rate

Examples of Salary Cost Sharing Mandatory Salary Cost Sharing - required by sponsor (e.g. DHHS, CPRIT Salary Caps) Voluntary Committed Salary Cost Sharing (e.g. committing 20% effort but only requesting 10% salary) Voluntary Uncommitted Cost Sharing (VUCS) - effort expended in excess of effort commitment (effort over and above what is committed & budgeted on a sponsored agreement) With ECRT, faculty self-certify their own effort. In addition, faculty must also certify all Support Staff that were funded from a sponsored project for which they are the principal investigator. The Certification process takes place twice each fiscal year and covers the performance periods of September-February and March-August.

How to identify Salary Cost Sharing At Proposal Submission: BUDGET JUSTIFICATION (FUNDS REQUESTED FROM NIH) KEY PERSONNEL John Grant, PI and Director, 2.4 calendar months effort. We request 1.2 calendar months of salary from NIH ($10,000) and the remaining 1.2 calendar months of salary will be covered in- kind by the institution. Fosters a simplified and standardized approach to effort reporting! Standardized: UT Arlington, El Paso, San Antonio, Dallas, Pan America, Brownsville, Tyler, Permian Basin, Health: UT Houston, UT Tyler, UT San Antonio Simple for an end-user to quickly and easily complete the certification task! The web-based ECRT system serves as the system to facilitate the university's effort reporting and certification process 3. Manages institutional compliance! (http://www.utsystem.edu/policy/policies/uts163.html) Estimated Risk Avoidance: $750k – 7.5m, in potential federal fines for non-compliance in Effort Reporting (Estimates based on min to max fines levied when federal False Claims Act has been violated. Min fine is 5K per violation and max of 10k per violation); UTHSCSA has approx. 750 grants, dollar amount calculated assuming 20% - 100% violation count) Example of Voluntary Committed Cost Share

How to identify Salary Cost Sharing Investigator had Committed Effort of 34%, was paid 34%; however, Expended Effort of 40% on the project. The 6% effort over and above the Committed Effort is Voluntary Uncommitted Cost Sharing. Note: The second project listed is also an example of VUCS. Example of Voluntary Uncommitted Cost Share (VUCS)

How to identify Salary Cost Sharing Investigator had Committed Effort of 10% and Expended Effort of 10%; however, no salary was charged to the project. Note: Most common example of Salary Cost Sharing. Example of Voluntary Committed Cost Share

Effects of Salary Cost Sharing Salary not borne by sponsored programs are covered by institutional funds (e.g. state and designated funds) An increase in the Salary Cost Sharing decreases the UTHSA’s Facilities and Administrative (F&A) rate A reduction of F&A cost revenue from sponsored projects reduces the amount of F&A recovery that is provided to each school and other units of the institution

F&A Cost Sharing Cost-Share F&A For federal awards, sponsor approval is required for all F&A utilized as Cost Share (included in proposal budget justification) Waived/Unrecovered F&A Difference between F&A at the approved, federally negotiated F&A rate and the rate charged to the sponsor portion of direct costs Contributed F&A F&A amounts associated with the cost-shared direct costs With ECRT, faculty self-certify their own effort. In addition, faculty must also certify all Support Staff that were funded from a sponsored project for which they are the principal investigator. The Certification process takes place twice each fiscal year and covers the performance periods of September-February and March-August.

Third Party Cost Sharing Cost Sharing not under direct control of UTHSA Subrecipients with committed cost sharing Reported per subaward agreement terms Other Third-Party Providers Proposed and reported amounts based on fair market value of donated services, supplies and equipment Documented and tracked by UTHSA per formal certifications from providers Pilot group was involved in the testing, was also used to bounce of ideas and provided recommendations on how to improve system as well as training. OSP – Chris Green – SME PMO – Ulises – Project Manager IMIS – Sherlie Schickedanz – Tech Lead Pilot Group: Regina Pease – Barshop Institute Diana Hottle - Physiology Natalina Martinez - Pharmacology Daniel Anzak - Psychiatry Mary Rowe - Medicine

Unallowable items Cost Sharing expenses are subject to audit and must meet project allowability requirements of OMB §200.403 Reasonable (prudent person test) Necessary for performance of award Allocable (Note: must be allocated) Treated consistently across funding sources (e.g., direct vs. indirect; paid regardless of funding source) Per award terms and conditions (within project period; prior approvals needed?) Per institutional policies and procedures Remember that Cost Sharing expenditures are subject to audits. Reference for federal awards: For guidance on Selected Items of Costs, see §200.420 through §200.475 of OMB Uniform Guidance.

Most important to remember! Cost Sharing should not be utilized as a “key word” in the proposal just to impress the reviewers. Cost Sharing is a real promise that has real money and reporting implications. As you have learned, it must be properly tracked and reported to the sponsor.

Questions about Cost Share? Contact Chris Green in OSP at 567-4938 or via email at greenc@uthscsa.edu.

Thank you for coming!