What is cost sharing?

What is cost sharing? • UW Definition: “Cost sharing is the portion of total costs of a sponsored project that is borne by the UW, rather than the sponsor.” Office of Extramural Support

Three Types of Cost Sharing Mandatory Mandatory; required by the Sponsor Voluntary Unavoidable Examples: NIH Salary Cap cost sharing, PI’s minimum 1% Critical to support the research enterprise Example: Small awards where PI’s salary would be too great a portion of the awarded amount Offered “just because” Institutional Institutional Office of Extramural Support

Problem Statement • As an institution, we often do not meet our objectives • Breakdowns occur at every point of the process and lead to: • Excessive voluntary committed cost sharing • Failure to fulfill our commitments or prove that we’ve done so • Incomplete, incorrect, and inconsistent information in tracking systems • A risk of negative audit outcomes • A reduced F&A rate • Thousands of person-hours spent on reactive problem-solving every year • Faculty and staff are confused and frustrated Office of Extramural Support

Observations • The amount, nature and impact of the UW’s cost sharing data is incomplete and indeterminate. • The current situation offers no definitions, roles, responsibilities, policies, or procedures which causes the inconsistencies, frustrations and breakdowns we witnessed • The large amount of variation within the process showed us the objective of this project is not to increase throughput or reduce processing time, but to reduce the variation Office of Extramural Support

Cost Sharing Policy Office of Extramural Support

Cost Sharing Policy • Generally, UW’s policy is to minimize institutional and 3rd party cost sharing on sponsored projects • Approval of voluntary committed cost sharing rests with the Dean’s or Director’s office • Allowed when mandated or necessary to reflect accurately the resources that must be expended to accomplish the project objectives. • Each Division may have their own requirements in addition to this policy. Office of Extramural Support

Cost Sharing Policy • Researchers who engage in sponsored projects will: • Comply with University and sponsoring agency regulations regarding proposing, charging, and reporting of cost sharing. • Policy applies to both federal and non-federal sponsored projects. Office of Extramural Support

Cost Sharing Policy • Who approves cost sharing? • Dean’s/Director’s Office Office of Extramural Support

Cost Sharing Policy • What are the cost sharing impacts? • Institution redirects resources to support specific scientific project beyond the funding level provided by the sponsor. • Potential limitations to programmatic, administrative and financial capabilities to the researcher and University • Reduces flexibility of researchers to conduct other research by obligating effort • Increasing requirements for capturing, monitoring and documenting commitments and expenditures • Decreases the University’s recovery of indirect costs Office of Extramural Support

Cost Sharing Guidance Office of Extramural Support

Cost Sharing Guidance • When is it appropriate to offer voluntary cost share? • To meet OMB requirements for minimum commitment of PI effort on sponsored projects (1% minimum at UW) • To support investigator on an award for which the total direct costs are a small dollar amount • To respond to clear indication from the sponsor that cost sharing will increase competitiveness of a specific proposal • To establish an institutional commitment for certain federal agencies (NEH, NEA) that use cost sharing to demonstrate the leveraging effect of federal funding Office of Extramural Support

Cost Sharing Guidance • When is it appropriate to offer voluntary cost share? • To provide institutional support for a project that is significant in scope and vital to the campus mission • To support an institutional investment in a pioneering project with potential significant future sponsored funding • To secure sponsored funding for an individual or department in a research discipline in which access to extramural funding is inherently limited Office of Extramural Support

Cost Sharing Guidance • What are alternatives to voluntary cost sharing? • Offer resources without making a specific and quantifiable commitment. • Limit number of explicit commitments • Ex: “PI X will oversee all aspects of the project. University resources are available as needed for the performance of the sponsored project at no direct cost to the project” Office of Extramural Support

Cost Sharing Guidance • What should be offered to meet a cost sharing requirement? • Consider two criteria: • Is there a new cost to the university? • Is there a significant burden for documentation or audit? Office of Extramural Support

Cost Sharing Guidance • Preferred mechanisms for cost sharing • UW salaries and fringe benefits • F&A costs associated with any cost shared direct expense • Unrecovered F&A costs due to a lowered or waived F&A rate • Third party cash contributions Office of Extramural Support

Cost Sharing Guidance • Acceptable, but not preferred mechanisms for cost sharing • Purchase price of equipment being acquired by the UW • Travel expenses • Tuition or tuition remission • Supplies • Volunteer effort, whether coordinated by the university or a third party • In-kind contributions from non-UW third parties Office of Extramural Support

Cost Sharing Key Ideas for Dean’s Offices Office of Extramural Support

Cost Sharing: Key Ideas for Dean’s Offices • Cost sharing may be required, but there are drawbacks for the university and PI. • University seeks to minimize cost sharing when possible • Voluntary committed cost sharing is discouraged. Although, there may be instances where it’s appropriate. • There are alternatives to voluntary committed cost sharing. • Cost sharing should be reviewed at the time of proposal submission or when a change is made. Final approval of cost sharing resides with the Dean or Director. Office of Extramural Support

Cost Sharing: Key Ideas for Dean’s Offices • If cost sharing must be approved, preferred mechanisms are based on: a) is there a new cost to the university? and b) is there a significant burden for documentation or audit? • All cost sharing contributions should be explicitly identified in the proposal budget • The PI is expected to identify cost sharing items, identifying a funding source for each, and seek approval for cost sharing via the Dean’s or Director’s office • Colleges/Schools may wish to create forms and formal processes for submitting and reviewing requests to cost share. Office of Extramural Support

Cost Sharing Key Ideas for PIs Office of Extramural Support

Cost Sharing: Key Ideas for PIs • Minimize cost sharing when possible. • Cost sharing regulations derived from OMB Circulars. Standards apply to federal and non-federal sponsored projects. • Non-compliance brings risk of penalties, up to suspension or termination of awards. • Voluntary committed cost sharing is discouraged, unless appropriate. • Alternatives to voluntary committed cost sharing exist. Office of Extramural Support

Cost Sharing: Key Ideas for PIs • Cost sharing should be reviewed at proposal or when change occurs. • Dean or director makes final approval of cost sharing. • Cost sharing contributions should be explicitly identified in the proposal budget. • PI should identify cost sharing items and identify a source for each prior to seeking approval from the Dean’s or Director’s office. • Cost sharing commitments cannot be changed without prior sponsor approval. Office of Extramural Support

Award Setup Office of Extramural Support

Award Setup • At award setup, OES will enter information into the Projects tab in PeopleSoft Grants • After setup, this information is visible in WISDM. Office of Extramural Support

Cost Sharing Documentation Office of Extramural Support

Cost Sharing & Commitment Updates Form & Instructions Office of Extramural Support

Managing, tracking, documenting cost sharing • For payroll cost sharing, campus will submit form if: • Missing rows (i.e., was never scheduled) • Corrections to percentage, dates, source funding, etc. • Personnel changes • For non-payroll, campus will submit form after transaction has occurred • For third party, campus will submit form for goods and services used to meet obligation Office of Extramural Support

How update forms will be handled • All forms will be sent to the Office of Extramural Support (after all appropriate signatures have been obtained) • Forms will be reviewed and if there are questions, Dean’s/Director’s office will be contacted for further clarification • Data will be entered into the cost share bolt-on Office of Extramural Support

Monitoring and reporting of cost share • Accountants will draw information from WISDM for invoices and financial reports Office of Extramural Support

Cost Share Example 1 Office of Extramural Support

Cost Share Example 2 Office of Extramural Support

Key Comments • Type of cost share is crucial for set up. • If not mandatory, considered voluntary, committed. • At time of award, verification from sponsor will be needed. • If cost share is quantified, will be considered “voluntary, committed”. • Must be tracked in the cost share system. • May have to report if requested by sponsor. • Deans’/Directors’ effort cannot be included as cost share • UW-Extension does not use the cost share toolkit mentioned in the guidelines Office of Extramural Support

Questions? Office of Extramural Support

What is cost sharing?