Cost Sharing

Cost Sharing is a contractual obligation committing the University to share in the costs of a Sponsored Award, usually made at the time a proposal is submitted to an agency.  The proper documentation of cost share has been a major target of audits making it the second leading area of cost disallowances.  In addition, it is essential data used to support the Facilities and Administrative rate proposal.  Therefore, it is crucial that everyone involved in the financial administration of sponsored awards understand cost sharing.

The practice of cost sharing falls under one of two categories:

Required Cost Sharing will be addressed in the sponsor's documentation when preparing a proposal for submission.  Some sponsoring agencies have a specific percentage requirement.  It is not unusual for private foundations to require a dollar for dollar match.  Some agencies require a match for any equipment that may be budgeted.  Whatever the requirement, it will be specified in their guidelines and must be met for the proposal to be accepted.  The dollar amount should be identified on the Sponsored Programs Proposal Approval Form.  Within the proposal itself, a budget detailing the budgetary areas used for match should be included.

Voluntary Cost Sharing is a commitment of university funds that is not required by the sponsoring agency.  This too should be detailed somewhere in the budget that is being submitted to the agency and be reflected in the appropriate area on the Sponsored Programs Proposal Approval Form.

Documentation Procedures

Georgia State University has an accounting procedure for documenting costs where an approved sponsored project has identified a commitment by GSU to share in the costs of such project. Both required and voluntary cost sharing using fund code 10 budgets must properly document the cost sharing using the following procedure.  NOTE:  If you “volunteer” cost sharing where none is required, you will still have to honor that commitment by supplying supporting documentation using this procedure.

For all sponsored projects that incorporate matching or cost share commitments, two accounts will be established at the time of the award. A sponsored project account in fund code 20 (General Fund – Restricted) and a companion account in fund code 10 (General Fund-Unrestricted).

These companion accounts will be uniquely identified to the related sponsored project as illustrated below:

Sponsor funded costs of accomplishing a project are processed through the account in fund code 20 and cost sharing transactions should be charged to the companion accounts in fund code 10.

Generally, cost share expense transactions will be derived from salary and wages and other direct expenses, including travel, supplies, materials, etc.  The following procedures will apply to each of these expense categories:

Salary and Wages 

All cost shared salaries and wages will be directly charged to the companion account via the PAF form Section E. “Earnings Distribution”.  The companion account number will be indicated under the SPEEDTYPE Code column.  There will no longer be a need to use the column labeled “If Salary/Effort is Cost Shared”. 

Travel, Supplies and Material, Equipment (Non-Personnel)

Non-Personnel charges will be processed directly against the companion account number utilizing the assigned Speedtype (e.g.,. ED41) which will ensure expenses are charged to the appropriate account. 

Budgeting for Cost Share Expenses

Although formal budget amendments are not required, it is strongly recommended that units reduce their departmental state budgets to accommodate the companion accounts. The companion accounts in the Financial System will be set up to allow expenses to be incurred against the department or college budget appropriation level.  There are special companion account reports designed to assist in measuring performance.  This will be accomplished by including an estimated amount based on cost share data contained in the Sponsored Agreement.

Monitoring of Cost Share Accounts

Two reports are available in the Spectrum System to assist in monitoring performance of cost share data.  The navigation steps for accessing these reports are found by going to GO/GSU/GC RPTS/ and Cost Share Report.  You will have to identify a Run Control ID and that will bring up a panel in which you will identify certain parameters such as date and then you will need to select the type of report you wish to process, i.e. Summary Report or Department Detail.  The Summary report will provide data for all departments having cost share information, while the Department detail report is designed to provide information for a specific department.   

Information on these reports will provide a budget estimate column from which actual expense performance can be measured for the current fiscal year and cumulative expenses to date.   The final column on these reports provides an estimate of the remaining balance required to meet the budget estimate for each cost share account or department.

(Procedure established in June 2003)

Questions? Contact RFS