Cost Sharing

What is cost sharing?

Cost sharing is defined as the portion of project or program costs not borne by the sponsor. Cost sharing occurs whenever any portion of project costs is provided at USC’s expense rather than at the expense of the sponsor. For example, a sponsor may award $400,000 for research and the school may pledge to contribute $50,000 to buy a piece of equipment needed for the research.

What are the different types of cost sharing?

Mandatory Cost Sharing: is required by the sponsor as a condition of the award and is quantified in the proposal.

Voluntary Committed Cost Sharing (VCCS): is not required by the sponsor but is quantified in the proposal. For example, if an investigator proposes to devote 35 percent effort to a project but only requests 25 percent salary support, the additional 10 percent effort that will be supported by USC is VCCS. This must have prior approval by the dean.

VCCS also can develop during an award period. For example, if an investigator proposes, receives and devotes 35 percent effort to the project, but only charges the project for 10 percent effort, the additional 25 percent effort not charged to the sponsor but supported by USC is VCCS.

You may not offer a cost-share commitment on your own, even if you think it is desirable to free up funds for other project costs. You would in effect be charging the department or school budget for effort you are devoting to the sponsor’s work, as well as impacting USC’s rate for recovery of indirect costs. A dean or vice president’s prior approval is required.

Voluntary Uncommitted Cost Sharing (VUCS): is not initially promised in the proposal or otherwise indicated. For example, if an investigator proposes and charges 25 percent effort but the investigator actually devotes 35 percent effort, the additional 10 percent effort that was not originally promised is VUCS. VUCS must be supported by unrestricted or appropriate gift sources and may not be attributed to another sponsored project.

The significance of the distinction between the two types of voluntary cost sharing is that VUCS is not included in the university’s organized research base for computing the indirect cost rate while VCCS is included.

Who needs to approve cost sharing and how is it tracked?

Mandatory or VCCS must be identified and approved in writing or via the Kuali Financial Systems-KC approval system by the dean of the relevant school(s) or unit(s) or their authorized designee, prior to submission to the Department of Contracts and Grants.

Both mandatory and VCCS must be charged to companion cost sharing accounts and any cost-shared effort of these types must be certified. This is to demonstrate to sponsors that cost-sharing commitments have been fulfilled.

What if I charge the sponsor a different percentage of my effort than I proposed or that I actually performed?

You should charge according to actual effort. However actual effort can be different than what was originally proposed, and can be reduced. A large, usually more than 25 percent, reduction in effort performed from effort committed requires prior approval from most sponsors. Keep in mind that limits vary by sponsor and that the reduction applies to the average effort over the life of the grant.

You may never charge more than actual effort and, if your effort is reduced, the salary charge must be reduced.