When the University bears a portion of the costs of a sponsored project (e.g., by purchasing equipment or supplies for the project from University resources, or by committing faculty or staff effort to the project at no cost to the sponsor) it is considered cost sharing. Cost sharing may be either mandatory (when a sponsor requires a certain portion of the costs to be paid for out of other funds) or voluntary (when no such requirement exists). "Voluntary" cost sharing at the proposal stage becomes "mandatory" once the proposal is approved for funding by the sponsor.
Voluntary cost share and cost share above the amount required by the sponsor must be formally requested and approved prior to proposal submission. Please allow up to five (5) business days prior to proposal submission to complete this process.
Cost sharing has programmatic, administrative, and financial consequences for the University and is strongly discouraged unless required by the sponsor (typically by a statement in the program announcement). An explicit commitment to devote a percentage of effort to a project carries auditable record-keeping requirements, reduces flexibility, and has an adverse effect on the University's recovery of indirect costs. The salary and fringe for the time committed voluntarily in a proposal, and the amount of any other contribution of University funds, are included with other direct charges in the "research base" (the denominator of the fraction used to calculate the University's federal indirect cost rate). As a result, unnecessary cost sharing reduces the University's recoverable indirect costs.
Cost-sharing requirements are ordinarily specified by the sponsor and displayed in the budget as a fraction of total costs. Note that should a program announcement require cost sharing and also cap indirect costs at a rate below the full federal rate, a proposal for that program may be able to use the "unrecovered" indirect costs to fully or partially satisfy the cost-sharing requirement.
It is important to remember that once funding is awarded all cost-sharing amounts are subject to audit.
Also, federal funds from another source may not be used to meet the cost-sharing requirement without specific permission from that source. If a budget revision is requested, remember to revise the cost-share commitment proportionately.
CLICK HERE for the UK OSPA webpage for budget development.
Who to Contact:
For all questions prior to proposal submission, College Grant Officers are responsible for reviewing all proposals prior to submission to assure compliance with both University of Kentucky and sponsoring agency policies.