Cost Sharing

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

Voluntary Uncommitted Cost Sharing (VUCS)
Voluntary Uncommitted cost sharing is not initially promised in the proposal or otherwise indicated. For example, if an investigator proposes and charges 25% effort, but the investigator actually devotes 35% effort, the additional 10% 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 Voluntary Uncommitted Cost Sharing is not included in the project budget and not included in the university’s organized research base for computing the indirect cost rate.

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. Dean’s prior approval is required.

Mandatory or Voluntary Committed Cost Sharing must be identified and approved in writing 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 Voluntary Committed Cost Sharing 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.

• PI Effort: The PI has primary responsibility for the technical and administrative success of the project. The PI is also responsible for assuring that the work conducted under the project adheres to the terms of the award or agreement, and to the policies of the sponsor and those of USC. Any faculty/staff member of the University who is listed in a PI or PI equivalent role on a sponsored award needs to have effort with the exception of certain fellowship and equipment grants. If the PI does not wish to charge this effort to the sponsor, then the forgone PI effort would be considered cost share.
  
  
• Total Cost of Project vs. Amount Requested: When submitting a proposal budget to the sponsor, if the total cost of the project is greater than the amount of funds requested from the sponsor then the difference would be considered a quantified cost share and would have to be documented, approved, and tracked.
  
  
• Accepting Reduced F&A: Accepting an F&A rate lower than the sponsor will allow is a form of cost share. Accepting a lower F&A rate must be identified at the proposal stage and clearly documented and approved by the dean (or dean designee) in Cayuse SP.  Forgone F&A, however, does not require a separate cost share account.

Some typical examples of expenses that would not be considered cost share are:

• NIH Salary Cap: Any salary expense above the NIH salary cap would be considered an unallowable cost and so could not be considered as cost share. The difference between the salary charged to NIH and the actual salary must be paid from a university unrestricted account.
• Capped F&A: If the sponsor caps F&A at a lower rate (e.g., 20%, 15%) than USC’s federally negotiated rate, the difference is not considered cost share as any amount above the sponsor’s capped rate would not be considered an allowable cost.

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. Cost share commitments require the review and approval of the dean (or dean designee) of the school affiliated with the Principal Investigator. Cost share approval should be documented at the proposal stage (in Cayuse SP) and cannot be added without securing the required approvals. Cost sharing is, in effect, charging the department or school budget for effort or expenses the PI is devoting to the sponsor’s work and thus can have direct impact on USC’s rate for recovery of indirect costs.

Both Mandatory and Voluntary Committed cost sharing require diligent tracking by the PI/Dept. To facilitate accurate monitoring, a dedicated cost sharing account will be established for recording expenses related to these commitments. Certification of cost-shared effort is necessary to demonstrate fulfillment of these commitments to sponsors.

If the cost sharing commitment (either Mandatory or Voluntary) is being fulfilled by a third party, the PI/Dept should obtain a clear written statement detailing the amount of the cost share and confirming its fulfillment.