Policy Number: 75
I. POLICY AND GENERAL STATEMENT
The University of Texas Health Science Center at Houston ("university") seeks to support its faculty in the pursuit of their research interests while, at the same time, allocating all available resources to comprehensive support of the whole university enterprise. In doing so, the university intends to allocate university resources to their highest and best use. Upon occasion, a university principal investigator may desire to respond to a grant announcement where the grantor requires that the university share the costs of conducting the research. Cost sharing, as defined below, may be requested by the grantor in the form of funds or other university resources that would be contributed or allocated to a sponsored project over and above the support provided by the grantor. This commitment made by the university creates the requirement to track cost sharing in accordance with this policy. The purpose of this policy is to describe the methods utilized when cost sharing is contemplated and/or approved.
The most common form of cost sharing is contributed effort. Faculty and other employees' salaries and cost benefits and their related indirect costs may be deemed the most suitable expenses to be contributed as cost sharing. Typically a grantor will require that cost-shared effort be directly related to the project's objectives and not include time spent on administrative or instructional activities (unless directly related to the project's objectives).
The decision as to whether or not to commit to cost sharing with a grantor resides with the university and its fiduciary agents (e.g., department head, dean, vice presidents). Only when an individual in the line of authority of the principal investigator's department or school approves the commitment of funds or resources to cost sharing will the university permit a response to such a grant announcement. Once an award is made, voluntary, committed cost sharing, as defined below, is a binding obligation of the university.
The university and its fiduciary agents will generally approve cost sharing only when it is required by the grantor and, more importantly, when the research in question is deemed to be of sufficient potential and/or quality to warrant the commitment of university resources.
The university actively discourages voluntary cost sharing on the part of principal investigators; exceptions may occasionally be made if the project in question is deemed by the Executive Vice President for Academic and Research Affairs to warrant a voluntary commitment. All exceptions must be approved prior to submission of the grant proposal by the Executive Vice President for Academic and Research Affairs.
Cost Sharing: The funds or resources under the university control that are contributed or allocated to a sponsored project over and above the support provided by the external sponsor of that project. It is that portion of a project cost that is not borne or reimbursed by the sponsoring agency. Below are the various types of cost sharing.
Mandatory Cost Sharing: Cost sharing required by the sponsoring agency as a condition of its support of a particular project. Mandatory cost sharing is usually specified in a program announcement or application package. Mandatory cost sharing is a binding obligation of the university.
Voluntary Cost Sharing: Cost sharing the university contributes to a project at its own initiative without any requirement for any cost sharing imposed by the sponsoring agency. There are two types of voluntary cost sharing:
- Voluntary Committed Cost Sharing: Voluntary cost sharing offered by the university at the time of proposal submission. The proposed cost sharing amount is included in the budget. Once an award is made, voluntary committed cost sharing is a binding obligation of the university.
- Voluntary Uncommitted Cost Sharing: Voluntary cost sharing not offered by the university at the time of proposal submission. Voluntary uncommitted cost sharing is not included in the budget but is contributed after the award has been granted and more resources than awarded are needed to complete the project. Voluntary uncommitted cost sharing is not a binding obligation of the university.
It is the responsibility of the principal investigator and his or her department/school to identify and document the source of funds proposed to be used for cost sharing and to comply with OMB Circular A-110 Subpart C Section 23.
If the funds to be committed to cost sharing are departmental funds, the principal investigator’s direct supervisor must approve the commitment. If the funds to be committed to cost sharing are school funds, the dean must approve the commitment. If institutional funds are requested to be committed as cost sharing, the Executive Vice President for Academic and Research Affairs must approve the commitment.
Only when all the relevant approvals for committed cost sharing have been obtained and documented on the Review and Approval Form, will the Office of Sponsored Projects process the grant proposal.
To identify, monitor and track all mandatory and voluntary committed cost sharing, the Office of Sponsored Projects will notify the Post Award Finance (PAF) Team of any awarded grants that have mandatory or voluntary committed cost sharing. At the time of setting up the project, PAF will enter the code “CS” in the GREP filed in the Grant Description Table (GDES) to flag these accounts.
It is the responsibility of the administrative supervisor to verify the cost sharing amounts remain available and are appropriate, especially when an awarded budget is less than the proposed budget.
It is the responsibility of the administrative supervisor to ensure funds used to meet the matching requirements of a contract or grant are only used once and may not be used against multiple sponsored projects.
At the end of each fiscal year, Budget & Financial Reporting will identify these accounts and notify the departments who in turn will provide the fund source that was used to support the sponsored project and the cost sharing amount.
Particular care must be taken to ensure costs normally included in the indirect cost rate computation are not included as cost sharing. Cost items such as equipment depreciation, university furnished space, department administration expenses (e.g., secretaries, clerks, supplies) are included in the indirect cost computation and must not be considered for cost sharing. In addition, adherence must be made to salary caps established by sponsors. For instance, if a faculty salary exceeds the NIH salary cap and is not reimbursable by NIH, the salary in excess of the cap may not be used as cost sharing.
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