1306 PR.01 Cost Sharing

Revision Date: 
August 7, 2018

Contents

1.     Overview

2.     Cost Sharing Effort

3.     Calculating Salary Cost Sharing for the Proposal and Award

4.     Required Documentation and Approvals

5.     Charging Cost Sharing

6.     Salary Cost Sharing and Effort Reporting

7.     In-kind/Matching

8.     Financial Activity Reports

9.     Financial Reporting to Sponsors

10.   Roles and Responsibilities

Cost sharing in general is discouraged.  In certain instances, however, cost sharing is a requirement of the sponsor and should be proposed in accordance with In accordance with Policy 1306 Cost Sharing on Sponsored Projects, ensuring that voluntary committed cost sharing and in-kind/matching is identified in proposals, appropriately approved, administered, and accounted for consistently throughout the University.

For proposals seeking federal funding either directly or as a subrecipient, 2 CFR Part 200 (OMB Circular A-81) applies.  This regulation states that voluntary committed cost sharing on Federal research proposals is not expected and cannot be used as a factor in merit review of applications or proposals.  Voluntary committed cost sharing should not be included in a proposal unless it is in accordance with specific regulations from the Federal sponsor and is explicitly described in the notice of funding opportunity.  Any cost sharing included in the application must be approved prior to the Office of Sponsored Projects’ proposal review and submission.

Approval for voluntary committed cost sharing in the form of effort must be obtained from the dean for self-support schools or the cognizant provost, as appropriate.  For faculty with an academic appointment and whose salary is 100% supported with University funds, approval must be obtained when the aggregate commitment for all awards exceeds 5% effort per academic year.  In such cases, the faculty member should provide a copy of the detailed budget and proposal (or proposal abstract) with Form 1306 FR.01 Cost Sharing Approval Request to the dean or provost for their review and approval.

For individuals paid on the Executive (Confidential) Payroll, salary supporting effort proposed in a sponsored proposal is always cost shared.  Therefore, approval from the Provost’s Office for committed cost sharing in the form of effort is not required.  Form 1306 FR.01 Cost Sharing Approval Request must, however, be completed and submitted to the Office of Sponsored Projects in order to facilitate the award set-up process.

IMPORTANT NOTE: Salary in excess of a sponsor-imposed rate cap is considered by the Federal government and University to be an unallowable expense and not considered to be cost sharing.  HOWEVER, when a salary over the cap situation occurs, both the salary charged to the award and the salary representing the capped amount must together fulfill the commitment of effort made to the sponsor.  It is imperative that the capped amount/% is properly coded so it is reflected in the sponsored awards section of the Effort Certification Statement.

Also note, Federal regulations do not permit the use of salary over a sponsor-imposed salary cap to meet any cost sharing requirements of the sponsor.  Refer to Procedure 1315 PR.03 Salaries Above a Sponsor Imposed Rate Cap and Other Program Salary Limitations for additional information.   

When salary cost sharing is proposed, the cost shared amount must be calculated based on the individual’s appointment and not how the individual is paid (i.e., a nine month salary distributed over 12 months). Therefore, in order to calculate salary cost sharing for the purposes of submitting a proposal budget, the percentage of effort committed to the sponsored project is multiplied by the number of months of the individual’s appointment. The resulting person month(s) is/are multiplied by the individual’s Yale monthly rate of pay.  For example:

a.     5% of a 9 month academic year appointment equals .45 (AY) person months (9 x .05 = .45)

       .45 months x monthly rate of pay (salary ÷ 9) = salary cost sharing

b.    10% of a 12 month calendar appointment equals 1.2 (CY) person months (12 x .10 = 1.2)

       1.2 months x monthly rate of pay (salary ÷ 12) = salary cost sharing

Once an award is made, the same calculations above would apply, except for Example a. Since 9 - month faculty normally receive their academic salary over twelve months the following example would apply:

5% of a 9 month academic year appointment equals .45 (AY) person months (9 x .05 = .45)

.45 months x monthly rate of pay (salary ÷ 9) ÷ 12 = salary cost sharing per month

For assistance in converting % effort to person months or the reverse, please refer to Guide 1316 GD.01 Effort Percent/Calendar Month Conversion Tables.

Cost sharing should not be included in proposals unless specifically required in the notice of funding opportunity.  Any cost sharing included in the application should be identified in the budget and budget justification. 

When a sponsored project proposal includes mandatory, voluntary committed cost sharing, or in-kind/matching, the Principal Investigator (PI), business office, or business support unit personnel must complete Form 1306 FR.01 Cost Sharing Approval Request, indicating a Yale fund number.

The Cost Sharing Approval Request Form must reflect the signatures of the department chair, business administrator and appropriate University official signifying that funds are available in the specified funding source and approved for the purposes requested.

Note:  Departments and business support units should utilize existing budgeting, planning and commitment tools to create plans for managing the accounts. As a reminder, budgets for labor costs in cost sharing accounts must also include the appropriate fringe benefit costs. 

For both the School of Medicine and Central Campus, Workday is used to record sponsored projects budget plans and departmental budgets as well as project labor and non-labor financial commitments.

At the time of transaction, expenditures (both labor and non-labor) can be charged to the appropriate account for either sponsor supported or University supported contributions to the project. 

For example, Payroll Costing permits the allocation of a portion of salary to the sponsored project/sponsored award and another portion of salary to the Yale Designated account supporting the cost sharing commitment to the sponsored project. The following scenarios are provided to illustrate some of the situations that could occur:

Scenario 1:  A PI with a 12-month appointment committed 30% effort to an award over the course of a year. At the proposal stage the PI received prior approval from the Dean to cost share 10% of the 30% effort (voluntary cost sharing).   

  • The labor schedule would be set-up to charge 20% of the PI’s salary directly to the sponsored project account and 10% of the PI’s salary to a Yale Designated account.

Scenario 2:  A PI with a 9-month appointment received prior approval to commit 25% academic year effort to an award with a start date of October 1 and expiring September 30. An existing labor schedule indicates that the 9-month academic year salary (the Regular Salary Earnings Element) of the PI is paid over 12 months.

  • To accommodate for the cost sharing of 25%, the labor schedule must be modified to charge 25% of the academic year salary (the Regular Salary Earnings Element) to a Yale Designated account beginning on October 1 and ending on September 30 of the following year. 

Once the cost shared salary is charged to the account, this charged salary is later reflected as a percentage of total effort on an Effort Certification Statement (ECS).  The effort must at a minimum fulfill the cost sharing commitment made to the sponsor.  Note that both the cost shared salary and the salary charged directly to the sponsored award appear (if salary is charged to both for the reporting period) in the Grant Number and Grant Activities section of the ECS.

Some sponsors require that sponsored project funds be matched in some proportion with funds from another party, either from a University source (i.e., General Appropriations, Endowment, or Gifts) or another sponsor (may require prior approval of the sponsor). Matching requirements may be in the form of actual cash expenditure of funds or may be an “in-kind” match, which is the value of non-cash contributions to the project.

An in-kind or matching contribution made by a party external to Yale requires documentation from that third party supporting the use of the funds as in-kind/matching for the designated project or program. This documentation is typically a certification of expenses or financial reporting of project costs signed off by a financial officer of the external organization. The department or business support unit is required to maintain documentation and certification of in-kind/ matching for reporting, retention and audit purposes.

In-kind (non-cash) contributions provided to the University requires the department or business support unit to maintain records identifying the non-cash contribution and its fair market value. An example of such a contribution would be the donation of membership fees to a University museum, or the loan of equipment to perform tests necessary for the success of the awarded project.

Documentation supporting in-kind/matching should be retained in accordance with Policy 1105 Retention of University Financial Records, section 1105.7 Records Related to Grants and Contracts.

The Account Holder Report located in the Data Warehouse Portal is the University’s standard financial report for the monitoring of all accounts, both sponsored and non-sponsored.

Departments and business support unit personnel should work closely with the Office of Sponsored Projects accountants to ensure accurate reporting of cost sharing on financial reports to sponsors.

Chair or Dean/Provost (as appropriate)

  • Review and approve cost sharing commitments indicated in all proposal submissions (excluding cost sharing in the form of salary over a sponsor imposed rate cap).

Principal Investigator

  • Commit to cost sharing only when required by the sponsor.
  • Receive approval from the chair and appropriate University official (self-support school dean or cognizant provost) regarding any cost sharing commitments. 
  • Meet cost sharing commitments. 

Departmental Business Office/Business Support Unit

  • Advise Principal Investigators on the University’s cost sharing policy and procedures when preparing proposals and at award set-up
  • Properly charge and account for mandatory and voluntary committed cost sharing.
  • Appropriately identify, administer and report on cost sharing.

Office of Sponsored Projects

  • Review proposals for cost sharing commitments and determine appropriate approvals are in place.
  • Record cost sharing amount for all sponsored awards in IRES.
  • Provide guidance to Business Offices, Business Support Unit and PIs on the appropriate use and treatment of cost sharing.
  • Report cost sharing to sponsors in accordance with sponsor requirements and the terms and conditions.