Cost-share expenditures

Expenditures that can be cost-shared

Cost sharing may consist of allowable direct or unrecovered indirect cost resources, subject to approval by the providing party (Dean, Center Director, Vice President for Research, Provost) and the award sponsor.

Direct costs

Direct costs for cost share can be broken down into two main categories:

• Cash matching
• In-kind contributions

Cash Matching cost share

Personnel – It may be appropriate to contribute faculty or staff effort to the performance of a Sponsored project. The commitment to provide such support binds the University to contribute the effort and record the associated expenditures including fringe benefits in the total committed effort that may not exceed 100%.

Cost sharing commitments created by replacing funded effort on sponsored projects with cost shared effort must be properly tracked and maintained within the general ledger to ensure that the individual’s total effort on a project both direct and cost shared is accurately reflected and during periods where the PI is under a continuing contract with the university (i.e. a typical faculty member can cost share effort during the nine-month academic year but not during the summer months when they are not under contract).

Salary amounts more than the NIH, AHRQ and SAMSA salary cap (contact OSP for the current amount) are considered voluntary committed cost sharing. The associated fringe benefits and indirect costs are also considered cost sharing.

Non-personnel – It may be appropriate to cost share the cost of equipment (in whole or in part) in the performance of a sponsored project, in proportion to the value of the sponsored project; however, additional institutional approval may be required.

It is not allowable to commit the use of existing NAU-owned or government owned equipment as cost sharing, but instead the PI can characterize the equipment as “available for the performance of the Sponsored project at no direct cost to the project”.

Proposals that include the acquisition of special-purpose equipment as a direct cost may require that NAU provides funds to pay for all or part of the cost of such equipment. These proposals may be for equipment or instrumentation grants, where the purpose of the grant is to buy equipment and NAU is required to share the cost with the sponsor, or research-oriented grants and contracts where the purchase of equipment required for the research is an allowable expense included in the proposal and award. The portion of the purchase price paid by NAU will be considered cost sharing.

In-kind contributions

This is the computed value of any services and/or resources provided by a third-party (neither NAU, nor the sponsor) in support of a sponsored project being administered by the University. In-kind contributions (also known as third-party contributions) may be in the form of real property, equipment, supplies and other expendable property, or goods and services directly benefiting and specifically designated for the University’s project or program. In-kind support of a sponsored project should be committed in writing by the third-party at the proposal stage.

Indirect costs (facilities and administrative costs)

Facilities and administrative (F&A) costs or indirect costs (IDC) are the associated additional costs of conducting instruction, research, and public service projects that cannot easily or directly be attributed to the sponsored project aims/work tasks (e.g., administrative salaries, office supplies, etc.). NAU has a federally-approved IDC rate which should be applied to all sponsored project budgets, unless otherwise instructed by the sponsor.

There are two main ways to utilize IDC for cost share:

• Unrecovered / waived IDC on total sponsored expenditures
• Unrecovered IDC on cost share

Unrecovered / waived IDC on total sponsored expenditures

Unrecovered indirect costs are created when the sponsor’s written IDC policy states that the sponsor will not pay for IDC or will pay a lower percentage for IDC than the university’s federally negotiated IDC rates. If allowed by the sponsor, the difference between NAU’s approved IDC rate (based on the modified total direct costs) and the reduced, sponsor-mandated IDC rate (based on total direct costs) can be used as cost share.

Unrecovered IDC costs on cost share

Indirect costs can and should be applied to the total sponsored project costs, including funds identified from cost share. The proportion of indirect costs applied to the cost share funds can also be included in the total cost share amount. The indirect cost rate used to calculate the amount / proportion of cost share required should be equal to or lower than the applicable federally approved indirect cost rate.

 

Expenditures not eligible for cost sharing

The following expenses cannot be offered as cost sharing commitments in sponsored project proposals:

• Administrative salaries, services, and supplies that are not appropriate as direct costs, as stated in the Uniform Guidance;
• Unallowable costs as defined in the Uniform Guidance;
• NAU facilities costs such as laboratory space (e.g., rent, utilities). PIs should take care not to commit the use of facilities as cost sharing, but rather to characterize facilities as “available for performance of the sponsored agreement at no direct cost to the project”; or
• Depreciation of equipment.