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Documenting Cost Sharing for Awards

Cost share or matching funds are terms used to describe the portion of a project supported by the university or a third party other than the sponsor.

If cost share is a required part of a project, then the university must document that cost share was provided.  Items included as cost share must be in conformance with the same rules and regulations as direct charges to the award fall under and must support the work of the project.  

Requirements for cost share vary widely among sponsors but generally require that the university provide personnel time, equipment or other items of value to the project.


Cost sharing in a nutshell

Cost sharing consists of the portion of the total costs of a sponsored project that is obligated to the university or a third party. These funds are generally contributed from the department’s general fund, an indirect cost return fund or other non-restricted funds identified by the appropriate department personnel. Funds obtained under another research project (grant or contract) are generally not allowed for use to meet cost sharing obligations.

Click here for a more in-depth description of cost sharing.

Examples of allowable cost share include:

  • Salary and fringe (release time)
  • New equipment
  • Travel
  • Materials and supplies
  • Publication costs
  • Forfeited indirect costs
  • Startup funds
  • Tuition
  • Research and/or Graduate Assistants

Allowability is determined by the sponsoring agency guidelines.


Cost share falls into three categories:

Mandatory: Costs required as a condition of the award which must be tracked and may require reporting. This type of cost sharing is required by the Sponsor and must be included in the proposal.

Voluntary Committed: an amount or percentage committed in the proposal and/or budget not required by the sponsor in order to receive the award. Amount is quantified in either the proposal budget and/or narrative and becomes a binding requirement of the award, must be tracked, and may require reporting. 

Note: When a PI decides to use other funding source(s) to fulfill a proposed and budgeted effort commitment, that effort must be treated as voluntary committed cost sharing for both effort reporting and inclusion in Facilities and Administrative rate calculation purposes; however, reporting to the sponsor is not required.

Voluntary Uncommitted: Costs and effort that are not included as part of the submitted proposal or upon acceptance of the award. This does not need to be tracked or reported. Typically personnel time not required by the sponsor as a condition for the award and not committed by the faculty in the proposal and/or budget, but performed as part of the project work. Other costs can also be Voluntary Uncommitted.

Cost share must be documented and substantiated. If mandatory or voluntary committed cost share requirements are not met, a proportionate amount of the project’s direct costs may be disallowed. 

Cost share generally requires additional documentation. Therefore, unless required, cost share should not be included in a proposal.


Over-the-Cap Salary

The portion of a faculty or staff member’s salary and associated fringe benefits that exceed regulatory maximum imposed by the sponsor (e.g., National Institutes of Health and Department of Defense salary cap). Over-the-cap salary cannot be used to meet a mandatory or voluntary committed cost sharing requirement, since it is considered an unallowable cost to the sponsor.


In-Kind Cost Sharing

In-kind cost sharing are contributions wherein the value can be readily determined, verified, documented, and justified but where no actual cash is transacted in securing the good or service comprising the contribution.

When applicable, an estimated value of the in-kind cost sharing must be identified and documented based on the fair market value determined at the time of accepting the award. In-kind cost sharing must be tracked manually by the department/local unit managing the award.


2CFR§200.306 Guidance on Cost Sharing

For valuing donated items and volunteer hours this section requires cost share to be:

  1. verifiable to records
  2. not included as a contribution for any other federally assisted program
  3. necessary and reasonable to accomplish the program objectives
  4. allowable and allocable under the cost principles
  5. not paid under another federal award
  6. provided in the budget when required by federal agency
  7. in conformance to other 2CFR§200 provisions

The majority of cost share is in the form of salaries and wages and is documented using payroll and effort reporting.

Other forms of cost share must be documented in the same manner as costs charged directly to an award. All cost share is subject to audit. Paid receipts and travel vouchers should be kept in accordance with university retention policies.

A subsidiary ledger of items of cost used to support an award’s cost share requirement can be maintained by the department (and provided to Post-Award). The original invoice submitted to should have the information “USED AS COST SHARE FOR AWARD XX-XXXX” written on it. 

Subsidiary ledgers should be used when there are few financial transactions needed to support an award’s cost share requirement or the cost share will be met entirely (or mostly) with salaries and wages.


Cost Share provided by a Third Party

If cost share is being provided by a third party, special care should be exercised to ensure that the third party meets its requirement and can document that it was met. The Third Party Cost Sharing/Volunteer Time Form may be used to substantiate that the cost share was provided.

Donated Items

Donated items can be used as cost share but must be assigned a reasonable value and shall not exceed the fair market value of the item at the time of donation. Documentation of value must be provided.

Volunteer Services

Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program.  

Rates for volunteer services shall be consistent with those paid for similar work in the grantee’s organization. In those instances when the required skills are not found in the grantee’s organization, rates shall be consistent with those paid for similar work in the labor market in which the grantee competes for the kind of services involved. 

In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.

To calculate the value of volunteer and donated time, programs need to keep accurate records of volunteer service which include how many hours they work (sign in sheet denoting time in/time out, for example) and the type of work they perform for the project.

If you have any questions, please contact your Research Accountant.

Last updated: 9/2/2020