Cost Share


  • Funding for part of a sponsored project that is not paid by the sponsor or contracting agency
    • Necessary to complete the project
  • Must be auditable and verifiable separately from the sponsor expenditures
  • Must comply with the same requirements as the sponsored funding
    • Conform to all University, state, and federal regulations
    • Exception – Louisiana Board of Regents
      • Does not allow tuition for graduate students in their portion of the budget
      • But is allowed as cost share  

Federal Regulations

  • Office of Management and Budget (OMB) circulars A-110 (general federal grant administration) and A-21 (cost allowability)
    • Applied to all awards for consistency

OMB Circular A-110

  • Cost share can be cash or in-kind
    • In-kind contributions examples– volunteering time or donating space
  • Can use funding from other projects if all parties agree, except for federal awards
    • Federally funded projects may not be used on cost share unless authorized by Federal statue
  • Must be necessary and reasonable to complete the project
  • Must be stated in the budget and be approved by the sponsor
  • Expenditures must be verifiable from all other records
  • UNO policy – separate accounts/speed keys  

OMB Circular A-21

  • Identifies cost principles (direct quote from the circular):

"C.2.Factors affecting allowability of costs.   The tests of allowability of costs under these principles are (a) they must be reasonable; (b) they must be allocable to sponsored agreements under the principles and methods provided herein; (c) they must be given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstances; and (d) they must conform to any limitations or exclusions set forth in these principles or in the sponsored agreement as to types or amounts of cost items."

  • Four tests to pass:
    • Reasonable
      • Something a prudent person would do in the same situation
      • Necessary for the completion of the project
    • Allocable
      • Clearly benefit the project
      • Clearly identified as expended for that project
      • If an item has multiple users, users/uses must be tracked
        • Examples: general office supplies or a department's printer or copier
    • Consistency
      • Costs identified as university overhead cannot be directly charged to the grant in a similar situation
    • General allowability
      • Some costs are not allowed, such as:
        • Advertising cost
        • Membership fees
        • Alcohol
        • Food
      • See Circular A-21 for other restrictions
      • Additional compensation is generally not allowable unless prior approval
      • Other restrictions may be in the award document

Cost Share Uses

  • Any of the regular budget categories, as long as allowed by the sponsor or regulations
  • Most common cost share use - salary and fringe benefits
    • Submit Personnel Action Form (101) prior to the start of the project
    • Add the cost share speed key and the appropriate fund code type

add appropriate fund code type

    • Fringe benefits will automatically be charged based on the salary charged
  • Can also be the indirect cost amount for the other cost share amounts
  • Can be unrecovered indirect cost
    • Refer to sponsor guidelines to see if allowed or obtain sponsor approval
    • Director for Research must approve
    • Calculate by multiplying the indirect cost base (or MTDC) by the difference between the UNO approved on/off campus indirect rate and the sponsor reduced   indirect cost rate
      • Indirect base excludes tuition, scholarships, fellowships, and equipment
      • Example:

        Budget indirect cost rate = 25%
        Negotiated indirect cost rate = 45%
        Unrecovered indirect cost = MTDC X (45% - 25%)

Cost Share Types

  • Two types of cost share – mandatory and voluntary

Mandatory Cost Share

  • Required by the sponsor
    • Identified in the request for proposal, award announcement, or other correspondence
  • Proposal will not be considered if cost share is not included
    • Funding lost not based on the merits of the project, but rather on a failure to follow directions
  • Includes when the sponsor will not pay for an allowable cost
    • Louisiana Board of Regents will not pay for graduate assistant's tuition
  • Referred to as committed cost share
    • Committed cost share includes all amount specified in the proposal budget even if the amount is not included in the sponsor's award budget
  • Must be separately tracked and reported

Voluntary Cost Share

  • Not required by the sponsor
    • Investigator includes it in proposal or it is provided after the award is made
    • Must be tracked if included in the proposal
  • The Office of Research will usually not approve voluntary cost share
    • May be unusual situations when approved
    • Proper justification must be supplied
  • Department Chairs, Deans and Directors may not approve
  • Can be either committed or uncommitted
  • Uncommitted cost share
    • Faculty time spent on the project above what was detailed in the proposal
    • University resources not specified in the proposal
    • No dollar amounts in the proposal or the award document
    • Does not have to be separately tracked and reported

Cost Share Sources

  • Three sources – restricted, in-kind/third party, and general fund
  • Most common sources at UNO – the Office of Research (restricted) and general fund accounts


  • The Office of Research provides the majority
    • Usually only approve mandatory cost share
    • Approval granted by the Director for Research or designee
  • Other sources – other grants, endowments, or gift
    • Must have the approval of the sponsor(s) and not be in violation of any terms and conditions
    • Should already have a speed key
      • Sponsored Programs Accounting will determine if a new speed key will need to be assigned
  • Must receive approval from individual responsible for managing the account

General Fund

  • Either a department or college level general fund account
    • Must have approval for use
    • Individual responsible for monitoring the spending from the particular general fund (such as the Department Chair, Dean or Director) must approve
  • Procedure
    • Appropriate general fund cost share amounts moved to the project's cost share account at start of award period
    • Sponsored Programs Accounting is responsible
    • Unused amounts will be returned to appropriate general fund

Third Party

  • Both cash and in-kind contributions from a private or public organization
  • Cash contribution
    • Specifically offered as the cost share for the project and not previously given to the university for some other purpose
    • Separate speed key will be assigned
    • Will be tied to the sponsor's account
  • In-kind contribution
    • Offer to use the entity's lab or office space without being charged a fee
    • Donation of an employee's time
    • Not tracked in a separate account
    • Tracked with annual letter from the entity stating the amount of cost share provided for the project
      • Sponsored Programs Accounting will keep the letter(s)

Cost Share Approval

  • Cost share section of the internal routing form must be completed
    • Attach justification for cost share use
    • Identify source of cost share
    • Provide appropriate speed keys for sources, if applicable
  • By signing the routing form, the Chair, Dean and/or Director, and the Office of Research approve the cost share
    • Approval for other restricted sources must be attached or mentioned in the comments field
  • Third party contributors must submit a letter of commitment
    • Must be received before the routing form is approved by the Office of Research
    • Necessary for both cash and   in-kind

UNO Policies

  • Separate speed key for cost share amounts
    • Same project number as the sponsor
    • Different fund code based on the cost share source
      • 103XX – General Fund cost share
      • 142XX – Office of Research cost share
      • 130XX – Third-party cash cost share
    • Example:
Source Project Fund Code Speed Key
Sponsor 000010000001500 115XX 13XXX
Office of Research 000010000001500 142XX 13XX1
Department General Fund 000010000001500 103XX 13XX2
Third-party cash 000010000001500 130XX 13XX3
  • Cost share requirements end when the project ends and are closed
    • Extended if a no-cost extension is received from the sponsor
  • Expend concurrently with the sponsored funding
    • Do not "save" spending for the end of the project
    • Do not spend before the sponsored funding is allowed to be spent  
    • Can be differences if the nature of the project dictates the variances
      • For example – cost share is for tuition for last semester of the project

Reporting and Invoicing

  • Sponsored Programs Accounting reports and invoices the sponsored funding
    • Only report actual expenditures/costs or amounts reported on a third party's cost share letter
  • Sponsor may refuse to pay all or part of an invoice if mandatory cost share is not used
    • Expend cost share at same time as sponsor's funding, if project allows for this
    • Cost share funds cannot be held to be used as a reserve

Budget Adjustments

  • Two situations
    • Proposal budget is reduced or increased when awarded
    • Awarded budget category amounts need to be adjusted
  • If the proposal budget is reduced or increased:
    • Cost share adjusted based on sponsor's budget adjustment, most of the time
    • Sponsor may dictate the cost share amount remain the same
    • Investigator may request cost share amount remain the same when the sponsor reduces the funding but the scope remains the same
      • May need the same amount to complete the project
      • Need approval from the Department Chair, Dean, Director, or Director for Research
    • Third-party contributors must be informed of budget reductions from the sponsor
      • Will then decide whether to keep the committed amount the same
  • If determine the cost share amounts need to be used for a different budget category:
    • Request a budget adjustment through Sponsored Programs Accounting
      • Same procedure as if requesting an adjustment of the sponsor's budget
    • May need sponsor approval

Close out Procedures

  • Upon project completion, final invoice and report sent to the sponsor
    • Only include cost share amounts that were spent
  • Investigator needs to contact Sponsored Programs Accounting if there are trailing cost share charges or waiting for third-party cost share letter
  • The Office of Research (fund code 142XX) and General Fund (fund code 103XX) cost share accounts are closed with the main grant
    • Unused funds will be returned to their source

What happens if I don't use the cost share?

  • Sponsor may not fully reimburse an invoice
    • Has occurred with awards from Louisiana state agencies
    • Lack of cost share spending may be interpreted to mean that their full amount is not needed or there is a lack of commitment by the university
    • Sponsor may have a policy of reimbursing only a certain percentage of the total spending based on the percent of cost share required
      • For example:
        • Sponsor requires a 10% cost share
        • Reimburse up to 90% of the total costs (which is sponsor and cost share funds) on each invoice
    • Reductions may be taken on quarter, annual, and/or final invoices
  • UNO may receive audit findings
    • Award document is legally binding – all terms must be met
      • Includes cost share
    • Could lead to returning sponsor funds, paying fines, or losing future funding
      • Sponsors may read prior audit reports and not fund a proposal based on a finding  

Cost share – Should it be in the proposal?

  • Only include if mandatory or absolutely necessary for the completion of the project
    • Remember – all identified cost share will be issued a separate speed key and must be tracked and reported on
    • Adds responsibilities to the principal investigator, college and department staff, Office of Research and Sponsored Programs Accounting
  • Provide justification for inclusion of committed, voluntary cost share
    • Sponsor may not allow an expense (Louisiana Board of Regents will not pay for graduate assistants' tuition) but it is required
    • Sponsor may cap their funding but more is needed  


Principal Investigator

  • Accurately complete the internal routing form
    • Answer all of the cost share questions
    • Attach all necessary documents
    • Provide justification for cost share  
  • Use correct speed keys
    • Monitor the project spending – sponsor and cost share amounts
  • Stay within the approved budgets
    • Follow Sponsored Programs Accounting's budget adjustment policy if necessary
  • Provide final copy of the budget to their departmental staff responsible for tracking the general fund and processing human resource paperwork

College or Department Offices

  • Dean, Director, or Chair
    • Review routing forms for any cost share
    • Cost share approval obtained when sign the routing form
  • Administrative staff
    • Assist with payment documents – personnel action forms, purchase orders, lab supply requests, etc.  
    • Check to make sure proper speed key is used

The Office of Research and Sponsored Programs

  • Ensure the cost share section of the routing form is properly completed
    • Contact investigator if there are questions
    • Read cost share justifications
    • Make sure a letter of commitment is attached for third-party cost share
  • Review requests for Office of Research cost share
    • The Director for Research, or designee, must approve

Sponsored Programs Accounting

  • Assigns speed keys
  • Complete request to move appropriate general fund cost share amounts
  • Transfer amounts for Office of Research cost share
  • Process budget adjustments
  • Track and report all spending
  • Close sponsor and cost share accounts at end of project
    • Move or request to move unspent cost share amounts back to the original source