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Procedures for Cost Sharing and In-Kind or Matching Requirements for Sponsored Projects

 Click here to access Cost Sharing Form and Instructions

PURPOSE: To establish procedures for the funding, accounting, and reporting of cost sharing or matching requirements in conjunction with a sponsored project.

DEFINITION: Cost sharing or matching means that specific portion of the project or program costs that is not funded by the sponsor.

Refer to Sponsored Projects Policy #2119 for detailed definitions and examples of the different types of cost sharing.

Proposal Submission:

Proposed cost sharing must be clearly indicated on the Proposal Transmittal and Approval Form and the ORS Sponsored Projects Cost Share form must be completed and submitted with the proposal prior to submission of the proposal to the sponsor.

Accounting Procedures

Direct Cost Expenses:

A separate "5" ledger fund will be set up by ORS to account for required cost sharing related to a sponsored project when expenditures for direct costs such as salaries and wages, equipment, supplies, animal care costs, etc., will be made which require the expenditure of University funds of $10,000 or more specifically for the project. These cost shared expenditures will be accounted for in a cost share fund. The cost share fund will appear as a Prime/Sub-account relationship in the ORS PennERA award database, where the amount awarded by the sponsor will be considered the prime fund. The link between the award and the cost share fund will be made through use of the Account Attribute Grant Gift I.D. This field will be populated with the ORS Institution number. A Billing Frequency CS (Cost Share Account) and Format Code 09 (No Invoice Required) will be assigned to the fund so it will be easily recognized as a Cost Share Fund. A Special Budget Journal will be posted to Object Code PTCS (Project Total Cost Share). This is a special budget object code that will reflect the amount of the cost share for this award. Additionally the cost share fund number will have an F&A rate of 0%. PBIL and PBUD will be blank.

F&A Cost:

ORS will calculate the amount of F&A costs associated with the amount of direct cost share when necessary for financial reporting purposes as an additional cost sharing contribution of the University, using the current applicable F&A cost rate.

In-kind Cost Share:

In-kind cost share is the provision of goods or services whose value can be established by reliance on what those good or services may bring in the open marketplace. It is provided by sources outside of the University of Pennsylvania thus it is not reflected in our financial system. The in-kind cost share should be clearly stated in the proposal, detailed on the ORS Sponsored Projects Cost Share Form and tracked by the department.

Department Responsibilities:

1. The Proposal Transmittal and Approval Form must indicate that cost sharing has been included in the proposal, whether required as a condition of the submission of the proposal, or voluntarily committed to the project.

2. The ORS Sponsored Projects Cost Share Form (available from ORS web site) must be attached detailing the proposed cost sharing.

3. The source of cost sharing needs to be specified prior to account set-up.

4. Direct cost expenses other than “in-kind” and “matching” should be budgeted based on the notice of award and charged directly to the fund established for the cost share portion.

5. Personnel costs, whether required as mandatory in the award document, or voluntary committed cost sharing included in the proposal, must be budgeted and expensed from the cost sharing fund. Under limited circumstances and with sufficient documentation, an exception to this may be made by the Executive Director, ORS. Such exception may involve budgets at the Provost or higher level, (e.g., sabbatical leave, tuition subsidy, etc.). In such cases a link of the costs to the sponsored project must be made. The name of the individual on sabbatical leave, the period, salary amount and relation to the project is sufficient. Similar information is necessary for tuition subsidy.

6. The department will be responsible for funding the cost sharing by posting a revenue entry to Object Code 4822 in the “5” ledger fund established for the amount of the cost sharing. Revenue entries must be posted at the time the fund is set up for the amount of cost share required for the current fiscal year. At the start of each succeeding fiscal year a revenue entry must be posted for the amount of cost share required for that fiscal year.

7. A certification of the amount of required cost share, when a separate fund was not established, must be provided in detail to ORS by either the PI or the BA within the adjustment period (close-out) of the award to ensure that the costs are included in the financial report submitted to the sponsor. The certification must include any in-kind contributions, matching gifts, tuition match, etc., used as cost sharing. Indicate the ledger fund charged, or an identification of the in-kind contribution with a value of the amount contributed. The certification statement will be made part of the official accounting records and will be subject to audit review and verification. Detail by Object Code is required. If the In Kind cost sharing has been provided by a source outside of the University of Pennsylvania, this report is required to be certified by a financial official of that organization.

Research Services Responsibilities:

1. ORS will issue a separate AIS for the required cost sharing account as a Prime/Sub relationship in the PennERA Sponsored Projects database. Except for cost sharing in those cases where a separate fund is not established (i.e. in-kind contributions, matching gifts, tuition matching, etc) ORS will set up a separate fund in BEN Financials to account for the costs. The amount of the committed cost share will be included in the remarks section of the AIS.

2. When the financial report is due, Research Services will combine the expenditures on the prime and the cost share sub-account and report the total expenses to the sponsor.

3. The fund established for the cost share will be linked to the award fund through the Account Attribute Grant Gift I.D. The field will be populated with the ORS Project ID number.

Click here to access Cost Sharing Form and Instructions

Click here for a printable version of the above Procedure

last updated -August 18, 2005