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Cost Sharing Scenarios
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| There are many situations in which questions about cost
sharing could be raised. Here are some examples: |
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1.
If someone contributes effort which benefits a sponsored
project, but the position was not in the proposal and
is paid by gift or other non-sponsored funds, is the
effort cost-sharing?
According to UR's policy, effort devoted to a sponsored
project by UR employees which was not committed
to the sponsor in the proposal is not accounted for
as cost sharing.
UR and its sponsors both expect that the PI will dedicate
some amount of effort to his or her projects. It is
not appropriate, therefore, for a faculty member to
assume the PI's role if he or she does not expect
to have the responsibility to lead the project. Whatever
level of effort is committed by the PI in the proposal
and subsequently awarded by the sponsor must be accounted
for, either as a direct charge to the project or as
cost sharing (or some combination of those two).
OMB Circular A-21, Section J.10.b(1)(c) however acknowledges
that it is sometimes difficult to specify how certain
kinds of effort in an academic setting should be treated.
The Circular says:
"In the use of any methods for apportioning
salaries, it is recognized that, in an academic setting,
teaching, research, service, and administration are
often inextricably intermingled. A precise assessment
of factors that contribute to costs is not always feasible,
nor is it expected. Reliance, therefore, is placed on
estimates in which a degree of tolerance is appropriate."
Since it can be difficult, if not impossible, to identify
ALL effort that may benefit a research project, UR policy
requires only the tracking of COMMITTED EFFORT.
In January 2001, the Office of Management Budget issued
a clarification
of Circular A-21 , confirming that voluntary
uncommitted effort should NOT be accounted for separately
and included in the organized research base for the
calculation of indirect costs.
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2.
Must I account for cost sharing if I describe the involvement
of a colleague "as needed" and do not include
that as a direct project cost?
Incidental involvement on an "as needed" basis
does NOT have to be accounted for as cost sharing. If
the involvement is minimal and cannot be estimated, you
do not need to include dollars as committed cost sharing
or track them in a cost sharing account.
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3.
If I commit effort and request a corresponding percentage
of my salary on a project, and then rebudget my salary
mid-year without reducing my effort, is this considered
cost sharing?
Yes, because you are providing the effort that was committed
in the proposal, and that effort must be matched either
with a corresponding direct charge to the project or to
a cost sharing account. As soon as this occurs, your department
should designate a cost sharing account by completing
a Proposed
Cost Sharing Commitment Form.
If, on the other hand, you wanted to reduce your level
of effort on the project, you could so inform the sponsor
and could then reduce the amount of salary being charged
without having to designate a cost sharing account. If
this is a federal grant, you will need to get prior approval
of any reduction of more than 25% from the awarded level
of effort. (See Establishing
the Groundrules)
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4.
If the total amount of a proposed budget is reduced by
the sponsor when the award is received, is the difference
cost sharing?
No, as long as the reduced award reflects a corresponding
reduction in the scope of work. In some cases it may be
prudent to prepare and submit a revised budget and scope
document.
In this context, the distinction between a grant and a
contract is relevant. A grant is used when the purpose
is to accomplish a "public purpose," including
carrying out research. This basic research may not result
in a specific product, but rather will follow a general
direction. In the case of a grant, a reduction in budget
does not indicate an agreement to cost share.
In contrast to a grant, a contract is a procurement transaction
between the sponsor and the recipient. In the case of
a contract, the reduction in budget and scope must be
clearly documented.
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5.
Do we need to designate a cost sharing account for a faculty
member who directs a student on an NIH training grant?
No, the effort listed for each training faculty member
reflects a commitment of their overall academic responsibility
related to instruction and not a percentage of their sponsored
research effort.
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6.
If a proposal states that University equipment will
be used to complete the project, do we have to account
for this as cost sharing?
You may offer the use of existing facilities and equipment in the performance
of a project, but should NOT categorize this as cost-sharing. Instead,
in the proposal's "resources and environment" section, the facility
and/or equipment should be identified as available for the performance of the
project at no direct cost to the sponsor.
If, however, you are proposing to purchase a NEW piece of special-purpose equipment
as a direct project cost, you may offer all or part of that purchase amount as
cost sharing only when the award is dependent upon such cost sharing.
Cost shared equipment is identified during the fiscal year survey of cost sharing
and a request for a change of funding code associated with the equipment is sent
to Property Accounting by ORACS.
You may use a third-party in-kind contribution of equipment to meet a
cost sharing commitment. To record this properly, your department may have to
contact either the Purchasing Department or Property Accounting to verify the
estimated fair market value, which must be reduced by any educational discount
that might have been available to UR.
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