Administrative and Business Practices
The sponsor's award document normally includes the form and the amount of the cost-sharing commitment or it may reference the proposal submitted to the funding agency. If the proposal is referenced as a part of the award, the proposed cost-sharing amount becomes the intended (mandatory) cost-sharing commitment.
However, if during the performance period on an active project, there is a reduction in the award amount, the ensuing gap will be defined as a funding shortfall, a change of project scope is assumed, and the intended cost-sharing commitment will be adjusted accordingly. In the event of a funding shortfall, the agency may require a revised budget, which would then become the intended commitment. If a revised budget is not requested, the actual cost-sharing commitment should be negotiated with the sponsor. Please contact the Office of Contracts and Grants for assistance.
If a sponsored project requires mandatory cost-sharing, the cost-sharing expenses will be documented by a corresponding current unrestricted companion account. The cost-sharing account number will mirror the account number of the sponsored project with the exception of the first two digits; for example, a sponsored account with the account number 53-4515-0001 will have a corresponding companion cost-sharing account 12-4515-0001. The expense object codes to be used in the cost-sharing account must correspond to cost-sharing expense categories that are itemized in either the award notification or the budget proposal. It is recommended that costs be recorded in the month where the cost-sharing activities are performed.
There is no need for additional cost-sharing documentation for graduate tuition remission, an indirect cost rate less than the official rate, or applicable indirect costs associated with cost-sharing activities such as the indirect costs associated with faculty effort. These cost-sharing amounts can be documented from available records. For example, the graduate-student award notification in conjunction with actual payroll distribution records will be sufficient to demonstrate fulfillment of tuition-related cost-sharing. It should be noted that these costs are real dollars expensed. Total cost-sharing for a given project will include all costs supported by university funds, direct and indirect costs.
If a project that includes mandatory cost-sharing is awarded, the Senior Business Officer will be notified by Financial Administration, who will establish a cost-sharing account. The Senior Business Officer should provide the budget form departmental accounts that will fund the cost-sharing commitment.
If a sponsored account requires mandatory cost-sharing expense, the Office of Contracts and Grants will fully describe the cost-sharing commitment in the Notification of Award, and notify the Office of Financial Administration and Budget Performance for the creation of a companion cost-sharing account. The department Business Officer of the School will then do a budget modification to provide sufficient cost-sharing funds to this account in order to fulfill cost-sharing commitments for the current fiscal year. The Office of Sponsored Projects Accounting will monitor that cost-sharing expenses are recorded in a timely manner in accordance with the wording of the award notification or budget proposal. At year-end closing, Sponsored Projects Accounting will prepare a cost-sharing report.
Dennis F. Dougherty, Senior Vice President for Administration
University of Southern California