Cost sharing, matching, and in-kind contributions are all terms that refer to the portion of a project or program cost that is not paid for by the funder.2 (Leveraged funds are also a form of cost sharing; however, they do not require the same level of record keeping.) While some agencies make a distinction between the terms, essentially, they are all the same thing. Therefore, in this manual, we will use the term “cost sharing.” Cost sharing represents a commitment by the College. It may be required by the funder as a condition of the award (mandatory) or it may be offered by the College in excess of mandatory cost sharing requirements (voluntary). It is important to realize that whether cost sharing is required by the funder or is offered by the College voluntarily, once an award is made, all cost sharing commitments are considered to be mandatory and, as such, represent binding obligations of the College. Cost sharing must be approved by the appropriate Vice President prior to the submission of a grant proposal.
- Defined in 2 C.F.R. § 200.29.
For all federal awards, cost sharing contributions must meet all of the following criteria:
- Are verifiable from the College’s records;
- Are not included as contributions for any other federal award;
- Are necessary and reasonable for accomplishment of project or program objectives;
- Are allowable under Part 200, Subpart E – Cost Principles;
- Are not paid by the federal government under another federal award, except where the federal statute authorizing a program specifically provides that federal funds made available for such program can be applied to cost sharing requirements of other federal programs;
- Are provided for in the approved budget when required by the federal awarding agency; and
- Conform to other provisions of Part 200. 2 C.F.R. §200.306(b).
Examples of cost sharing include:
- Time and effort of Project Director and other employees devoted to grants, including employee benefit costs;
- Equipment (total value or depreciation depending on the circumstance);
- Supplies and services directly associated with the project;
- Volunteer services;
- Unrecovered indirect cost, only if specifically approved by the funder; or
- Cash contributions from in-kind contributions from third parties.
Examples of costs that are typically unallowable as a cost share include:
- Other federal awards: Funds from one federal award cannot be used as cost sharing on another federal award. Pass-through funding, which is typically a subgrant from an organization who originally received funds from the federal government, also falls under this category because the funds originated with the federal government.
- Facilities such as classroom space: The cost of the use of facilities are usually recovered from funders through the application of the Facilities and Administrative (F&A) cost rate. Facilities and Administrative costs (often called indirect costs) are used to cover additional expenses which are incurred by the College to administer grant projects, but that cannot be directly charged to a specific program or grant award (e.g., facilities, human resources, administration, office supplies, etc.). Since the cost of space and facilities falls under F&A, not direct costs, it cannot be used as a cost share. NOTE: If indirect costs are not being recovered from the funder and facility space is used for a specific grant program (direct cost), then it may be used as a cost share.
Throughout the program’s life, the Project Director must maintain sufficient documentation to substantiate the actual cost sharing contribution and report the cost sharing to the funding agency. The specific type of documentation required is based on the nature of the award, taking into consideration the type of cost sharing, the terms of the grant agreement, and any applicable federal, state, or local regulations. Documentation within the College’s financial accounting system will be provided by Office for Finance. The Time and Effort Certification and Third Party In-Kind Contribution forms included in this document must be completed to document cost sharing and retained by the Project Director. Copies of these forms are sent to the Office for Finance department for reconciliation with payroll records and documentation in the grant financial records. Electronic copies of these forms can be requested from the Office for Finance.
