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Cost Sharing/Matching

About this Policy

Cost Sharing/Matching

Policy Number: 27003

Effective Date:
Dec 12, 2017

Last Updated:

Responsible Office:
UM System Controller’s Office

Responsible Administrator:
UM System Controller

Policy Contact:

Campus Sponsored Programs Offices


  • Finance

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This policy provides guidance to the University for recording and reporting Cost Share on externally funded awards. 

Reason for Policy

To ensure the University maintains adequate documentation on all award charges including committed Cost Share.

Policy Statement

Cost sharing represents that portion of the total project costs of a sponsored project borne by some entity or funding source other than the project sponsor. Typically, cost sharing relates to the commitment of personnel (i.e., effort devoted to the sponsored project), but may also include non-personnel commitments, such as equipment costs.

It is generally the case that all of the costs incurred in carrying out a sponsored project are normally funded by the sponsor of that project. There are occasions, however, when some of the costs of carrying out a sponsored project are to be funded from other sources, whether Mandatory Cost Sharing, Voluntary Committed Cost Sharing, or Voluntary Uncommitted Cost Share.  The University requires that when cost sharing commitments (Mandatory or Voluntary Committed Cost Share) are made to sponsors, the source of funds to be used to cover that cost sharing must be identified and approved by the Dean (or equivalent) at the time the commitment is made to the sponsor.  

Under Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity.  It is not necessary to either identify or account for voluntary uncommitted cost sharing.

Forms of Cost Sharing:

  • Cash Contributions (Institutional Funds)
    Cash contributions include faculty, student and staff effort and other non-payroll expenses.  When effort is committed, it must be identified in the Electronic Effort Verification Report (eEVR) system.  Cost sharing associated with individuals receiving NIH funding whose salaries exceed the US Department of Health and Human Services (DHHS) salary cap should also be reflected in the eEVR system.
  • Third Party In-Kind Contributions
    The Sponsored Programs Office (SPO) must obtain a commitment letter at the time of the proposal when a Third Party provides Cost Share on an award. Before submission of proposals, Cost Share must be evaluated for reasonableness whether stated in dollar amounts or percentages.
  • Unrecovered Indirect Costs
    Unrecovered indirect costs, including indirect costs on cost sharing or matching may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.

Post-award Processing
The PI must ensure committed Cost Share is documented in the financial system as follows:

  • Record non-salary expenses to the award and Cost Share ChartField strings.
  • Obtain and document Third Party Cost Share.

Cost Share should generally be recorded in unrestricted funds such as Fund 0000.

Salary Cost Share commitments are typically based upon percent of Effort. Some Cost Share commitments may be based on a fixed dollar amount. The PI along with the fiscal manager must ensure commitments of Cost Share are met in a timely manner consistent with the terms of the agreement, applicable regulations, and University Policy.

The PI must obtain certification from the Third Party of the dollar value of Cost Share provided. This certification must include a statement that the Cost Share was allowable and consistent with Uniform Guidance (2 CFR 200, Subpart E).

Award Closeout:
Cost Share is documented in the final financial report to the sponsor at the end of the award. The PI must provide verification to SPO that all expenses, including Committed Cost Share amounts, have been recorded to the sponsored award. Contributed F&A will be calculated by the SPO and included in the final financial report. The SPO should request a report of Cost Share from the subrecipient prior to closing out the award when a subrecipient is required to provide Third Party Cost Share.

The SPO must ensure that all Cost Share (including certification and documentation of allowable Third Party Cost Share) is included in the final report. The SPO must prepare the final financial report and/or invoice for review and approval by SPO management and the PI to ensure accuracy and completeness of required Cost Share documentation.


Cost Sharing (also referred to as Matching) - a portion of total sponsored award costs provided by someone other than the sponsor is further classified as either Mandatory or Voluntary Committed (see definitions below).

Effort - compensated time spent, expressed as a percentage of total institutionally controlled time that may be allocated among multiple activities funded by various funding sources.

Mandatory Cost Share - an institutional contribution to a sponsored award required by the sponsor as a condition of obtaining the award. Note: Sponsor “encouraged” Cost Share that is not documented, as a condition of receiving an award is not Mandatory Cost Share.

Third Party Cost Share - contribution to a sponsored award provided by a party other than the University or the primary sponsor. Third Party Cost Share may be in the form of cash, real property, equipment, supplies and other expendable material, salaries, or goods and services directly benefiting and specifically designated for the sponsored award.

Unrecovered Indirect Costs - the difference between the amount charged to the Federal award and the amount, which could have been charged to the Federal award under the University's approved negotiated indirect cost rate.

Voluntary Committed Cost Share - Cost Share not required by the sponsor that occurs when a proposal is submitted in which the proposal text, budget, budget justification, and/or scope of work states or implies that more work will be done than the sponsor is paying for.

Voluntary Uncommitted Cost Share - a contribution to a sponsored award neither required by the sponsor as a condition of obtaining the award, nor offered to the sponsor as part of the proposal or by any other official communication with the sponsor.


Campus Sponsored Programs Office (SPO):

  • Ensure Cost Share commitments on the proposal meet the sponsor’s Cost Share requirements, and commitments have been authorized by academic units
  • Document budget for all committed Cost Share when awarded
  • Provide the MoCodes for committed Cost Share
  • Managerial review and approval of the final report and/or invoice

Principal Investigator/Department Administrator:

  • Obtain a commitment letter and provide to SPO for Third Party Cost Share before submitting proposal
  • Ensure cost share is recorded on the appropriate Chartfield
  • Provide verification to SPO that all Cost Share requirements have been met
  • Evaluate the workload implications of proposed Cost Share
  • Identify, quantify, and record the Mandatory Cost Share commitments
  • Obtain commitments and initiate appropriate PAF changes to record committed Cost Share
  • Review and approve the final report and/or invoice
  • Upon completion of the project, obtain certification of Third Party Cost Share and provide to SPO
  • Review subrecipient invoices and obtain Cost Share certifications—provide to SPO

Additional Details



Related Information



Formerly Accounting Policy Manual 60.30 – Cost Share – Matching, Level of Effort, and Earmarking (revised 2/26/2009)


Reviewed 2017-12-06