Cost Sharing

I. POLICY AND GENERAL STATEMENT

The University of Texas Health Science Center at Houston ("University") seeks to support its faculty in the pursuit of their research interests while, at the same time, allocating all available resources to comprehensive support of the whole University enterprise. In doing so, the University intends to allocate University resources to their highest and best use. A University principal investigator (PI)  may, on occasion, request the university to share the costs of conducting a research project.  This happens when the funding agency's support doesn't fully cover project costs or requires matching funds.  Cost sharing, as defined below, may be requested by the grantor or PI in the form of funds or other University resources that would be contributed or allocated to a sponsored project over and above the support provided by the grantor. This commitment made by the University creates the requirement to track cost sharing. The purpose of this policy is to describe the methods utilized when cost sharing is contemplated and/or approved.  Cost sharing should always be minimized.

The most common form of cost sharing is contributed effort. Faculty and other employees' salaries and benefits costs and their related indirect costs may be deemed the most suitable expenses to be contributed as cost sharing. 

The decision to commit to cost sharing with a grantor resides with the University and its fiduciary agents (e.g., department head, dean, vice presidents). Only when an individual in the line of authority of the principal investigator's department or school approves the commitment of University funds or resources to cost sharing will the University permit the funding request to the granting agency to move forward. Once an award is made, mandatory cost sharing and voluntary committed cost sharing, as defined below, are binding obligations of the University.

The University and its fiduciary agents will approve cost sharing only when it is required by the grantor or when the research in question is deemed to be of sufficient potential and/or quality to warrant the commitment of University resources.

II. DEFINITIONS

Cost Sharing: (also known as in-kind, matching or institutional costs) The funds or resources under University control that are contributed or allocated to a sponsored project over and above the support provided by the external sponsor of that project. It is the portion of project costs that are not borne of or reimbursed by the sponsoring agency. Below are the various types of cost sharing.

Mandatory Cost Sharing: Cost sharing required by the sponsoring agency as a condition of its support of a particular project. Mandatory cost sharing is usually specified in a program announcement or application package. Mandatory cost sharing is a binding obligation of the University.

Voluntary Cost Sharing: Cost sharing the University contributes to a project at its own initiative without any requirement for cost sharing imposed by the sponsoring agency. There are two types of voluntary cost sharing:

• Voluntary Committed Cost Sharing: Voluntary cost sharing offered by the University at the time of proposal submission. The proposed cost sharing amount is included in the budget. Once an award is made, voluntary committed cost sharing is a binding obligation of the University. The University discourages voluntary committed cost sharing.
• Voluntary Uncommitted Cost Sharing: Voluntary cost sharing not offered by the University at the time of proposal submission. Voluntary uncommitted cost sharing is not included in the budget but is contributed after the award has been granted and more resources than awarded are needed to complete the project. Voluntary uncommitted cost sharing is not a binding obligation of the University. The University discourages voluntary uncommitted cost sharing.  

III. PROCEDURE

A. Responsibility

It is the responsibility of the principal investigator and his or her department/school to identify and document the source of funds proposed to be used for mandatory and voluntary committed cost sharing and compliant with OMB Circular A-110 Subpart C Section 23, as applicable.

This commitment must be documented as part of the grant budget and submitted for approval within the University’s grants and contracts management system prior to proposal submission to the grant sponsor.  Grant and contract budgets must include the total costs to complete the project inclusive of the mandatory and voluntary committed cost share. 

Approval for allocating University resources as cost-share funds is required as follows:

Funding Source	Total Cost Share Per Grant Year	Approvers	Delegates Allowed (one level only)
Department (Medical School Only)	Up to $100,000	DMO/Admin Director or Chair	None
Department (Medical School Only)	> $100,000	DMO/Admin Director or Chair + School Dean and CFO	Dean may delegate approval to the appropriate Assoc. Dean
School (All)	Up to $100,000	School Dean	Dean may delegate approval to the appropriate Assoc. Dean
School (All)	>$100,000	School Dean + CFO	Dean may delegate approval to the appropriate Assoc. Dean
Institution	Any Amount	School Dean + CFO	Dean may delegate approval to the appropriate Assoc. Dean

Only when all relevant approvals for cost sharing have been obtained can the the proposal move forward in the grants and contracts management system.

B. Tracking

A separate FMS project number will be established when a grant or contract includes mandatory cost-share that must be tracked and reported to the awarding sponsor.  The department, school or institution will be required to transfer the committed funds to cover the cost share expenses.

For non-mandatory cost share, it is the department’s or school’s responsibility to ensure the cost share commitments are properly tracked.

It is the department’s or school’s responsibility to verify that cost sharing amounts remain available and are appropriate, especially when an awarded budget is less than the proposed budget.

It is the responsibility of the school or department to ensure funds used to meet the matching requirements of a contract or grant are only used once and may not be used against multiple sponsored projects.

Particular care must be taken to ensure costs normally included in the indirect cost rate computation are not included as cost sharing. Cost items such as equipment depreciation, University-furnished space, and department administration expenses are included in the indirect cost computation and must not be considered for cost sharing. In addition, adherence must be made to salary caps established by sponsors. For instance, if a faculty salary exceeds the NIH salary cap and is not reimbursable by NIH, the salary in excess of the cap may not be used as cost sharing for NIH awards.

IV. CONTACTS

• • Sponsored Projects Administration
  • 713-500-3999
  • https://www.uth.edu/sponsored-projects-administration/index.htm

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