COST SHARE

Neta FernandezDirector, Grants and Contracts

Cost Share

• What is it?

• What qualifies as cost share?

• When do we document?

• Does it need a CAS template?

• Does CAS apply?

Definition

Cost sharing or matching means that

portion of a project or program costs not borne by the sponsoring agency

Cost Share

• Usually associated with federal grants or cooperative agreements - NOT contracts

• Grants/cooperative agreements represent financial assistance

• Reasonable to expect recipient to participate in costs of project

Criteria

In order to qualify as cost sharing, costs:

• must be directly identifiable with project

• must represent costs incurred during period of performance

• must be allowable under A-21 and guide- lines of funding agency

• Mandatory - required by statute or program as a condition of award

• Voluntary - offered by the grantee when not specifically required by sponsor

TypesOf Cost Share

If cost share is shown in proposal:

• IT IS A COMMITMENT OF THE AWARD

• It is tracked

In ProposalCost Share

Mandatory/Voluntary

• CAS applies

• requires a CAS template

• requires justifications

• is tracked

What Qualifies as Cost Share

What Qualifies as Cost Share

• salaries (usually of faculty members)

• associated fringe benefits

• equipment

• supplies

• indirect costs associated with these

Requirements

Cost share must meet followingrequirements:

• verifiable from grantee’s financial records

• not included as cost sharing contributions on any other federally funded project

Requirements(Continued)

• necessary and reasonable for project

• allowable under the applicable cost principles

• may include indirect costs not reimbursed by the sponsor, but only with prior approval of awarding agency

Cost-Share at NMSU Cost-Share at NMSU

• Direct Cost Cost-sharing

• Matching (Non-Federal Sponsor)

• Indirect Cost Cost-sharing

• Third Party In-Kind

Direct Cost Cost-Sharing Direct Cost Cost-Sharing

Definition: Actual expenses paid by NMSU with institutional funds that are required to fulfill the project scope and were agreed to in the award.

Matching (Non-Federal Sponsor)

Matching (Non-Federal Sponsor)

Definition: Another grant/contract awarded to NMSU that is from a non-federal source that can be used as a match.

Expenses are charged the normal way to the grant/contract account that is to be used as a match and then SPA will reportthe activity on the matching grant/contract as a source of cost-sharing to the otheraward.

Indirect Cost Cost-sharing Indirect Cost Cost-sharing

Definition: Waived indirect cost may be used to meet cost-sharing if approved in advance by the awarding agency at the time of award.

Third Party In-KindCost-sharing

Third Party In-KindCost-sharing

Definition: In-Kind cost-sharing must be from athird party and must be in support of the scope ofthe project. It is a non-cash contribution by a thirdparty.

Written confirmation from the third party after the in-kind support is provided will be needed

Reporting of Cost-Share Reporting of Cost-Share

SPA will be responsible for reporting to the agency all cost-share that has been incurred oraccumulated for each project which has a cost-share requirement.

Other Information about

Cost-Sharing Other Information about

Cost-Sharing

• Cost-share is audited annually by the OMB A-133Auditors

• If cost-share is committed in the award it must bereported to the agency

• Direct Cost Cost-sharing requires universityresources from unrestricted or gift accounts

• Indirect Cost Cost-sharing reduces the Overhead recognized at NMSU - Loss of Income!

• Direct Costs can be applied only once as costsharing for all sponsored programs

• Direct Cost Cost-sharing reduces the F&A RATE!!!

Total Project Costs Total Project Costs

Total Project Costs =

Grant/Contract Award + Cost-share

Total project costs must be allocable and benefit the project.

FAQs FAQs

Question:

Can funds from either a federal

or non-federal source be used

to cost share on another award

?

FAQs FAQs

NO. Funds from a federal awardmay NOT be utilized as the sourceof cost sharing, except when authorized by both sponsors.

Per A-110, non-federal awards may be utilizedas the source of cost sharing ONLY if authorized by the non-federal sponsor.

Answer:

FAQs FAQs

If a project requires the purchase of a new piece of special-purpose equipment, can part or all of its costbe offered as cost sharing

?

Question:

FAQs FAQs

Answer:

Yes, you may include in the proposalthe use of University funds to pay forall or part of the cost of special-purposeequipment as a direct cost. This willbe recorded in a cost share account.

FAQs FAQs

Question:

Can University facilities such as

laboratory space be offered as cost

sharing ?

FAQs FAQs

Answer:

No. These costs are charged to sponsorsthrough the indirect cost rate. Theproposal may contain a statement sayingthat the facilities “are available for theperformance of the sponsored agreementat no direct cost to the project.”

FAQs FAQs

Question:

If the total amount of a proposed budgetis reduced by the sponsor when the award is received, is the difference considered cost share

?

FAQs FAQs

Answer:

No, as long as the reduced amount ofmoney also reflects a reduction in the scope of work. It may be a good idea toprepare and submit a revised budget andscope of work.

FAQs FAQs

Question:

Does CAS apply to cost shared direct

costs

?

FAQs FAQs

Yes. OMB A-110(23)(a)(4) requires that cost share be “allowable under the applicable costs principles”. This requires that direct costs and any indirect costs counted for cost sharingare allowable costs for the project andcomply with A-21 which are the costPrinciples with which NMSU is required to comply. CAS is part of OMB A-21.

Answer:

FAQs FAQs

Question:

Does CAS apply to third party In-Kind

?

FAQs FAQs

Answer:

Since expenditures are not incurredby NMSU, the CAS standards we followwould not apply. There are many otherapplicable sections of OMB A-110 that should be followed with regards to thirdparty In-kind. See OMB A-110 Section 23.

FAQs FAQs

Question:

Does cost share expense have to fall

within the project period of the award

?

FAQs FAQs

Answer:

Yes, unless otherwise stated in the award agreement. This can gettricky with matching or third-partyIn-kind cost sharing.

FAQs FAQs

Question:

Does cost share affect our

F&A rate

?

FAQs FAQs

Answer:

Yes, in the case of cost share of direct costs, our F&A rate is reduced. In thecase of cost share of indirect costshare, our income generated from theF&A rate is lower. So overall the answeris YES!!

Thank you!

Questions?