Contracts and Grants Accounting C&G Training Presentation May 21, 2014 Cost Share: Budgeting, Spending and Reporting Procedures Effective July 1, 2014

Cost Share Commitment Cost sharing committed on a award means designated costs are covered by the University, not by the sponsor. –Commitment may include salaries, equipment/supply purchases, waived F&A, etc., as defined in the award documentation and allowable –Cost sharing can be funded by donations/gifts, in-kind contributions, start-up or retention funds, or non-federally sponsored funding source (provided it has been approved) Once a cost sharing commitment is made, cost share becomes mandatory and the University is required to measure, track, report on, and meet that commitment. –UCOP requires a centralized tracking system to capture committed cost sharing amounts –New C&G functionality facilitates the identification of cost share transactions throughout the life of the award 2

3 Current ChallengesSystem and Process to Address Challenges Inconsistent processes across campus for meeting, reporting on cost share commitments New procedures for budget set up, coding and monitoring spending, and closeout/final report CGA knows only the $ amount of the commitment, not how the department plans to fund that commitment PI’s plan when committing cost sharing $ in the proposal will be used by the RA to create a cost share budget; provide budget to CGA at set-up Lack of consistent tracking method (which can result in a single expense being used to meet cost sharing commitments on multiple awards) Each award has a unique cost share CF1 value that is used on all transactions, including salary and F&A (overhead rate auto-calculated, applied) Lack of a consistent recording methodology means there is no way to produce a cross- campus cost share report Project Costing module in BFS captures all cost sharing transactions (including those not in BAIRS reports) using analysis type and PC ChartFields Cost sharing treated as an afterthought at the end of the award -- no method to ensure commitment is monitored/met during award Initial budget establishes how commitment will be met, coding expenses as they are incurred identifies cost sharing transactions in GL Effective July 1, 2014

Cost Sharing Process Summary AWARD SET UP Define budget allocations, amounts based on commitments made in award docs Submit budget to CGA using new CF1 in ChartStrings (within 48 hours of NOA) Transfer budgeted allocations via 7xxxx transfer, use the CF1 Request ongoing payroll costs (or percentage of payroll costs) be coded with the cost share CF1 ChartString MANAGING TRANSACTIONS THROUGHOUT AWARD Code cost shared expenses, purchases using CF1 Throughout the life of the award, department monitors spending against the budget If budget revision required, submit one to CGA using budget submission process CLOSE OUT REPORT Submit Cost Share Contribution Report and supporting documentation to C&G along with Closeout Certification (within 70 days of award expiration) CGA analyst does a final review to ensure that cost share commitments have been met, prepares final report for Sponsor as required, CGA certifies the final report 4

5 Award Setup Timeline Notice of Award from SPO Submit Complete Budget Day 0 Day 2 Award Setup Process Day 3 Spending Authorized ( from CGA) Spending Authorized ( from CGA) Day 4 Validate Budget, setup award 2 Days At NOA, the CSS-RA/Department has 2 days to submit complete budget information, including cost sharing, to CGA. When the budget is received, CGA has 2 days to verify accuracy and completeness, setup the award in BFS, then notify CSS-RA/Department. If the submitted budget is inaccurate or noncompliant, the award setup will be delayed.

Budget at Award Set up NOA alerts CGA that a new award has cost sharing, and the total committed amount. CGA will create a specific CF1 value in BFS to use on cost share transactions (CF1 associates these transactions with the award). –A CF1 value in the range identifies transactions as cost share when used in a ChartString with a non-grant fund* RA/Department creates the award budget, determining BUDSUM categories (for personnel effort, equipment, travel, unrecovered IDC, etc.) as well as specific $ amounts that meet the cost share commitment defined in NOA –Look up the new CF1 in BFS (use the SPO award number) to use in Cost Share rows in award budget, due to CGA within 48 hours of the NOA –Each Cost Share row has a F&A row in the budget Once the award is activated, unit providing the cost share transfers designated budget in BFS using 7xxxx –Unit providing the cost share requests recharge units and payroll use cost share ChartString with CF1 6 *When the fund source for cost sharing is a faculty start-up or retention fund, using a CF1 from the 2 range in combination with that fund “trumps” the Management Code 3 series CF1 requirement.

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Example Budget at Award Set up Transaction TypeAccountAccount DescriptionFundDeptPrg CdCF1 CF2AmountPC BUProjectActivityAnalysis Type Budget - COE BUDSUM General Supplies COE fund Dept providing cost share ,000GM CBU Budget BUDSUM Indirect Cost Recovery COE fund Dept providing cost share ,000GM CBU Budget - VCRA BUDSUM General Supplies VCRA: Dept providing cost share ,000GM CBU Budget BUDSUM Indirect Cost Recovery VCRA: Dept providing cost share ,000GM CBU Budget -University BUDSUM General Supplies U Fund - EECS Dept providing cost share EHSIS-15,000GM CBU Budget BUDSUM Indirect Cost Recovery U Fund - EECS Dept providing cost share EHSIS-7,500GM CBU Budget -University BUDSUM General Supplies U Fund – Chem E Dept providing cost share EEXXX-15,000GM CBU Budget BUDSUM Indirect Cost Recovery U Fund – Chem E Dept providing cost share EEXXX-7,500GM CBU 8 The NOA from SPO includes this Cost Sharing Commitment for one fiscal year: –College of Engineering$75,000 –VC Research$75,000 –Other University funds$45,000 ($22.5 from EECS + $22.5 from Chem E) $195,000 total cost share commitment (DIR+IDC) The budget has a row for each direct cost and associated indirect cost. Using the CF1 provided by CGA in each ChartString identifies the row as Cost sharing. Here, “Prof. X” from Chem E plans to use his endowment funds for Cost Sharing. Using Prof. X’s CF2 in the ChartString means he will see this in PI Portfolio. Select the expense category that reflects the award’s spending plan (salary, supplies, etc.) CGA will create the PC ChartFields for each ChartString during the award set up process.

Coding Direct Costs along with related indirect costs Transaction TypeAccountAccount DescriptionFundDeptPrg CdCF1CF2AmountPC BUProjectActivityAnalysis Type Budget BUDSUM General Supplies Gift Fund Dept providing cost share EHSIS-10,000GM CBU Budget BUDSUM Indirect Cost Recovery Gift Fund Dept providing cost share EHSIS-5,000GM CBU Actual Spending 55040General SuppliesGift Fund Dept providing cost share EHSIS6,000GM CAC Actual Spending Indirect Cost Recover-C&G Gift Fund Dept providing cost share EHSIS3,000GM CFA Actual Spending 55040General SuppliesGift Fund Dept Providing cost share EHSIS4,000GM CAC Actual Spending Indirect Cost Recovery – C&G Gift Fund Dept Providing cost share EHSIS2,000GM CFA 9 When budgeting, create a cost share line for each expense category of direct costs (faculty and staff salary and related fringe benefits, equipment, travel, etc.) as well as a line for related indirect costs When spending, use the award’s cost share CF1 in the chartstring. Indirect costs will be automatically calculated at the appropriate rate for each cost- shared direct expense as it is incurred (shaded rows above) Use a non- grant fund Use the cost-share CF1 created for this award IF the fund used is a faculty- managed fund, use that person’s CF2

Coding Cost Shared Effort Transaction TypeAccountAccount DescriptionFundDeptPrg CdCF1CF2AmountPC BUProjectActivityAnalysis Type Budget BUDSUM Academic Salaries Dept providing cost share EHSIS-10,000GM CBU Budget BUDSUM Indirect Cost Recovery Dept providing cost share EHSIS-5,000GM CBU Actual Spending 50210Faculty19900 Dept providing cost share EHSIS10,000GM CPY Actual Spending Indirect Cost Recover-C&G Dept providing cost share EHSIS5,000GM CFA 10 Cost shared effort (even if included without a dollar value in the award docs) needs to be tracked in BFS. At award set up, request HR allocate the appropriate % of salary* to the cost-share chartstring/ CF1 –Indirect costs will be automatically calculated at the appropriate rate as salary expense is incurred (shaded row below) In ERS, cost-sharing salary transactions (coded with a CF1) are NOT automatically shown “above the line” in the cost share column. –RA/Effort Coordinator must manually adjust Effort Report to reflect appropriate percentage of cost share effort on an award, i.e., move the % above the line *Note: if the employee whose salary will be cost shared is NOT already in the ERS system (i.e., not paid from a federal fund) Payroll will need to add that person to the ERS system.

Coding Waived F&A Transaction TypeAccountAccount DescriptionFundDeptPrg CdCF1CF2AmountPC BUProjectActivityAnalysis Type Budget BUDSUM General Supplies Gift Fund Dept providing cost share EHSIS-10,000GM CBU Budget BUDSUM Indirect Cost Recovery Gift Fund Dept providing cost share EHSIS-5,000GM CBU Actual Spending 55040General SuppliesGift Fund Dept providing cost share EHSIS10,000GM CAC Actual Spending Indirect Cost Recover-C&G Gift Fund Dept providing cost share EHSIS3,000GM CFA Waived F&A on Actual Spending* Indirect Cost Recover-C&G Gift Fund Dept providing cost share EHSIS2,000GM WFA 11 Waived Indirect (F&A) cost sharing occurs any time the Sponsor and University agree to recover less than the federally negotiated indirect cost rate. –If the rate is lower than the current negotiated federal rate and the sponsor has no alternative agreement/policy, approval from UCOP is required The overhead rate that CGA sets up in the system automatically “splits” F&A on expense transactions into the cost shared portion and the waived portion. At closeout, both the cost shared F&A (pink line) and the waived F&A (green line) are reported to the sponsor, depending on the sponsor’s requirements * Waived F&A on Actual Spending is only recorded in the BFS project costing module. It is not available in the GL and therefore not currently availably on BAIRS reports.

Coding In-Kind Cost Share Transaction TypeAccountAccount DescriptionFundDeptPrg CdCF1CF2AmountPC BUProjectActivityAnalysis Type Budget BUDSUM Computer Equip Inventor Donations Dept providing cost share EHSIS-10,000GM CBU Actual Spending Computer Equipment =>5k Donations Dept providing cost share EHSIS10,000GM CTP Actual Spending Indirect Cost Recovery (per sponsor terms) Donations Dept providing cost share EHSISGM CFA 12 In-kind contributions represent the value of non-cash contributions (equipment, services) that are a benefit to or are used for award activities. If in-kind contributions are committed as cost share, they must be included in the cost share budget, recorded in BFS, and included on the final report –Sponsor terms determine if F&A is charged on in-kind contributions “Spending” in-kind contributions in BFS ensures these assets are used only once and only for one award. Use the award’s specific cost share CF1 in the chartstring to ensure in-kind costs are documented on the Cost Sharing Contribution Report for the sponsor.

Spending, Monitoring, and Budget Revisions Department periodically reviews expenses to see that Cost Share transactions meet award commitment cost share transactions are identified by having a non-grant fund* and a cost share CF1 Department will NOT see cost share F&A or 3 rd party on BAIRS report Periodic Cost Share reports, when required, are generated by RA and CGA and sent to the sponsor along with the invoice To revise cost sharing allocations, submit a revised (net 0) budget to CGA 13 * A very rare exception is Matching Program Income, which allows income earned on a grant to be used for cost sharing.

Reporting at Award Close Continue to use the existing Cost Sharing Contribution Report (until such time as a new report is available) –Submit a copy of in-kind contribution documentation Submit Contribution Report along with the Closeout Certification form (due within 70 days of award expiration) 14

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Cost Share Analysis Types 16 TypeCodeDescription Salaries and BenefitsCFR CPY Cost Share Fringe Cost Share Payroll BudgetCBA CBU Cost Share Budget Adjustment Cost Sharing Budget CommitmentsCAJ CCO CCR Commitment Adjustment Cost Sharing Commitment Commitment Reversal OtherCAC CFA CGE Cost Sharing Actuals Cost Sharing F&A Cost Sharing GL Expense Waived F&AWFAWaived F&A (third party cost share) (award to award cost share) CTP CAA Third Party Cost Share Award to Award Cost Share