Cost Sharing @ MSU WELCOME! Introduction Overview Specifics Conclusion Dan Evon, Director Contract & Grant Administration (CGA) Introduction Overview Specifics Conclusion MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Cost Sharing (CS) Definition Cost sharing, or matching, is simply the difference between what the project costs, and the amount of money provided by the agency. Generally, the rules used to determine if a cost can be directly charged to a project also apply to CS, i.e., the expenses must be allowable, allocable, reasonable, and benefit the project. For example, alcohol costs of a reception related to a funded conference cannot be used as CS because OMB Circular A-21 Section J-3 prohibits it (Costs of alcoholic beverages are unallowable). CS for federal projects cannot be from other federal funds/projects even if the projects are related (except in circumstances where explicitly authorized by federal statute – very rare). MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Types of Cost Sharing (CS) Mandatory CS – This is CS that is required as a condition to receive the award. This is usually expressed as a percentage of total project costs. Be careful you don’t miscalculate the amount of CS required! If the proposal instructions say 50% of total project costs must be cost shared, then $100k in agency funding requires $100k in CS. If the proposal instructions say 50% of project costs must be cost shared, then $100k in agency funding requires $50k in CS. MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Types of Cost Sharing (CS) Voluntary CS – This is CS that is specifically pledged in the proposal budget or award. It is usually contributed effort of the principal investigator (PI). Per the 1/5/01 OMB cost sharing clarification letter, voluntary CS must be properly documented. In other words, if you list it in the budget, even if it’s not required, you must have documentation to support it. Voluntary Uncommitted CS – This is a federal term used when negotiating Overhead or F&A rates and means that effort which is over and above that which was committed in the budget or award. MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Contract & Grant Administration Types of Cost Sharing (CS) In-Kind Contributions The value of goods or services provided by an assisting organization (e.g., consulting services, equipment…). Signed letter of commitment must be included in your proposal. Donated labor should be valued using MSU’s salary scales and can include fringe benefits but not overhead (see OMB Circular A-110 Section 23)! This type of CS should be extremely rare since it is often difficult to support, and in many cases, MSU doesn’t have sufficient leverage on the outside company to insist they follow-though on their commitment. Be careful! MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Policies on Cost Sharing The CGA web site has an excellent document about CS at: www.cga.msu.edu/CostSharingPolicy.htm In almost all cases, CS should be provided as a percentage of effort, including the related fringe benefits and overhead. In rare cases non-salary related CS can be used. Equipment costs may be used when the equipment is first purchased. Since equipment depreciation is recovered in the overhead rate, depreciation cannot be used as CS. Supplies should not be included as CS as the effort to document them often exceeds the additional value at the proposal stage. CGA will not release the account until the CS details are provided. MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Federal Policies on Cost Sharing Federal definitions are found in OMB Circular A-110 at: www.whitehouse.gov/omb/circulars/a110/a110.html NSF Notice No. 128 which effectively eliminates project specific CS for regular grants. www.cga.msu.edu/NSFImportantNotice128.pdf NSF NSB 02-188 which states “In budget negotiations, any reduction of 10% or more from the amount proposed must be accompanied be a corresponding reduction in the scope of the project.” www.cga.msu.edu/nsb02-187.pdf MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Cost Sharing Policy MSU Contract & Grant Administration www.cga.msu.edu Click! MSU Cost Sharing Policy MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Practices on Cost Sharing VP for Research has limited funds available for CS Funds are only provided for required CS not voluntary CS Usually requires a 4 or 5 way split with the Departments, Deans, MAES or MSUE, the Provost and the VPR Sample Budget Where it needs to be shown on the Transmittal sheet How it is collected on the Semester Effort Report Sample agency certification letter for in-kind CS MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Contract & Grant Administration 2 - 5% MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

MSU Contract & Grant Administration www.cga.msu.edu or 5-5040 Put cost sharing info here (i.e. % Effort) and tuition remission redirect account# if applicable

MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Matching Commitment Letter Example MSU Contract & Grant Administration www.cga.msu.edu or 5-5040

Records Retention – CGA Projects Federal Grants – Usually, three years from the date of the final report. For most federal agencies, this means the final financial report. For NSF, this is the later of financial or technical report. Federal Contracts – Usually three years from date of final payment. State of Michigan projects (no difference between grants or contracts) – Usually, three to five years from the date of the final financial report. Industry – Usually, three years from the end of the project. If you have the records, regardless of the required retention period – they are auditable! Exceptions: Energy contracts 10 yrs, some foundations 5 yrs CGA is planning to put this information on our web site. MSU Contract & Grant Administration www.cga.msu.edu or 5-5040