Voluntary Cost Sharing is cost sharing that has not been required by the sponsoring agency or committed to in the proposal. Once cost sharing has been identified as voluntary it must be disclosed to the sponsoring agency if the agency requires reporting of cost sharing. Post-Award Cost Sharing Issues Cost sharing should be documented when the Principal Investigator and other University employees spend a significant amount of time on sponsored projects that is not reimbursed by the sponsor. Significant effort should be determined based on a review of the individual facts and circumstances of each sponsored project. Federal regulations require that significant cost sharing, regardless of whether it was required by the sponsored agreement, be documented to ensure accurate financial reporting and regulatory compliance in the development of the University's indirect-cost rates.
Cost sharing is a significant factor in the calculation of the indirect cost rates.
The reasons for reductions in award amounts should be clearly documented during negotiations with sponsors to avoid unplanned or unnecessary cost sharing. Examples of reasons for a reduction in award amount include original cost estimate was too high, the scope or objective of the proposal was reduced, or the sponsor wants the University to bear more of the project cost. Cost sharing may also be required to maintain the committed level of effort on sponsored projects when rebudgeting results in significant decreases in salaries of the principal investigator or other personnel funded from the project that could impact the outcome of the work. Cost sharing must be verifiable from University records. Expenditures documented as cost sharing must be necessary and reasonable for the proper and efficient accomplishment of project objectives.