Analysis of Cost Sharing Types and Recommendations for Researchers

This report provides a comprehensive overview of cost sharing in the context of research administration. It begins by defining cost sharing and its significance in sponsored programs, highlighting how universities and third parties contribute to project costs. The report then delves into the different types of cost sharing, differentiating between mandatory, voluntary, and voluntary uncommitted cost sharing, and explaining the conditions under which each applies. A significant portion of the report is dedicated to the factors that must be considered when deciding whether to commit to cost sharing, emphasizing the importance of cost-effectiveness and adherence to Uniform Guidance. Finally, the report concludes with recommendations for principal investigators, advising them on how to navigate cost sharing policies, identify requirements, and ensure proper documentation and compliance with university and sponsor guidelines. The report is based on the provided assignment brief, which required a 3-5 page paper, adhering to APA guidelines and citing relevant resources, including the Uniform Guidance and the textbook 'Research Administration and Management'.

Running Head: COST SHARING
COST SHARING
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Cost Sharing...........................................................................................................................2
Different Types of Cost Sharing............................................................................................3
Factors Taken Into Consideration for Committing Cost Sharing..........................................4
Conclusion and Recommendations............................................................................................5
Reference....................................................................................................................................7

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Introduction
The costs that are incurred for supporting the sponsored programs are generally paid
by the organization or the agency. Cost sharing occurs in case when the university or the third
party pays for the cost, which specifically helps in giving benefit to the sponsored project. It
generally takes the form of the direct costs, which is utilized or charged for supporting the
contract or grant. Cost sharing involves the process under which, two or more than two firms
works together for securing the savings that one would not be able to obtain. Hence, these
partnerships will help in realizing the different objectives of the business organizations such
as reduction of expenses in purchasing or reducing the costs by the economies of scale,
access to the technology, increased exposure of marketplace and so on (Govinfo.gov.2019).
Therefore, this report will contain brief report on the different aspects of cost sharing.
Discussion
Cost Sharing
Cost sharing is the portion of the project or the program costs that are not borne by
funding agency. It occurs when sponsor is not paying the portion of the costs of the Award
but it is being paid by using the resources within the department, college or school or the
other party. Cost sharing is the situation that occurs when two or the more organizations
together pay the cost of something such as the cost sharing between states and the federal
government for the particular projects, which the most sensible option. Such type of
partnership can be helpful in the implementations in various operating areas that is from
marketing to the transportation to the research and development. Hence, the effort of cost
sharing is included in calculation of the total committed effort. Effort here is referred as the
portion of the time, which is spent on the particular activity, which is expressed as the
percentage of total activity of the individual for institutions (Taylor & Van Grieken, 2015).

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The auditing of cost sharing is possible and it must be allowed under the cost principles as
well as verifiable to the records. Cost share is mandatory in case when sponsor requires it or
it is being committed when the department voluntary commits for providing the funds or the
resources for completing the objectives of Award. In Uniform Guidance 2 CFR 200.29, the
cost sharing is defined as the portion of the costs of the projects that are not paid by the funds
of federal. In addition, as per Uniform Guidance 2 CFR 200.306, provides the guideline that
governs the cost sharing as well as it helps in outlining the requirement of the grants by the
organizations (Shelton & Sharma, 2017).
Different Types of Cost Sharing
Following are the major types of Cost Sharing:
Mandatory- In occurs when sponsor stipulates that the cost sharing or the matching
funds are required as the condition for receiving the award.Especially it is pledged in
the budget of the proposal or the award. It is generally expressed in the terms of the
percentage of total cost of the project or the percentage of the sponsor share of total
cost of project; however, it is expressed as the fixed dollar amount. As per RA50-
Cost Sharing, it is required as the condition for receiving the award as well as
specified by agency in program announcement or proposal guidance. It would be the
minimum costs sharing that are required by agency. Anything that is committed
beyond minimum level becomes the Voluntary committed cost sharing
(Govinfo.gov.2019).
Voluntary: The sponsor does not require it but Principal Investigator includes it for
enhancing the proposal. Especially it is pledged in the budget of the proposal or the
award. It is quantified effort, which is neither required nor it is being paid by sponsor
of the project; however, it is being committed to the sponsored project.As per
Uniform Guidance 2 CFR 200.306, under the proposals of federal research, the

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voluntary committed cost sharing is not expected. The criteria for considering the
voluntary committed cost sharing as well as any other factors of program policy,
which may be used for determining who should receive the Federal award, must be
described explicitly in the notice of the funding opportunity (ADAMS, 2017).
Voluntary Uncommitted- Voluntary uncommitted cost sharing occurs when the
faculty or the senior researchers donates their effort to the sponsored agreement that is
committed as well as budgeted for in the sponsored agreement, which is either cost
shared or paid by sponsor. It helps in allowing the voluntary effort for contributing to
the research project without requiring time or effort for documenting. In case of the
non-sponsored sources such as gifts, clinical funding or the state budgets, these funds
are being used for the payments of the salaries of those who are donating Voluntary
uncommitted cost sharing, which is paid as long as these funds are not committed for
the other purposes. Uniform guidance RA50 provides the guidelines regarding detail
on the accounting that must be followed to the appropriately document the cost
sharing in both committed as well as uncommitted (Pfister, 2016).
Factors Taken Into Consideration for Committing Cost Sharing
The cost sharing commitments has to be considered carefully. Considering the
administrative responsibilities and the requirements that are inherent in the commitment of
the cost sharing should derive carefully the cost effectiveness versus expected benefits of
every potential commitments of cost sharing. Uniform guidance in 8-320 has stated that every
effort have to be made in order to recover the costs of extramurally-funded projects after
applying the appropriate federally negotiated rate to the appropriate base. This is the reason,
it is not appropriate for the cost share on the proposals to for the profits (Pinkerton,
2016).Hence following are the factors that has to be taken into consideration for committing
cost sharing:

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In case if the cost sharing is proposed then the dean as well as chair should provide
the documentations to Office of Sponsored Programs that indicates the explicit
approval for contributing to the departmental funded salary or the other cost items.
The cost becomes the official part of budget and it should be documented on the
justification pages and proposal budget.
In order to avoid the confusion, the commitments of the effort or the other forms of
cost sharing should not have to be included in proposal text.
There should be commitment of a specific dollar amount as opposed to the
percentages (Hoffman Jr & Esposito, 2018).
Conclusion and Recommendations
Hence, it can be said that cost sharing is the arrangements, under which the costs of
the projects or the program are shared by the parties involved in accordance with the agreed
terms. It helps in addressing the competitive challenges of the rising cost by reducing the
direct expenses by sharing the costs. The costs of the project are not reimbursed by sponsor
for supporting the scope of the work, which is defined by federal and non-federal sponsored
award. Moreover, Uniform guidance helps in providing the guidelines on the cost sharing.
Therefore, the recommendations that would be given to the principal investigators
who would like to commit voluntary cost sharing on their proposals is that they should
comply with the policy of cost sharing of the university. They should identify the
requirements of mandatory cost sharing in the announcement of the program. Moreover, they
should understand the situation under which the voluntary committed cost sharing is
appropriate. Further, they should consider all resources, which are required for completing
the objective of the projects. In addition, they should identify all the contribution of the cost
sharing in the proposal. Lastly, they should assure that the committed cost sharing are being

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provided as well as documented according to the guidelines of the university and the policies
of sponsor.

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Reference
ADAMS, E. (2017). Cost Share Compliance.
Govinfo.gov. (2019). govinfo.Retrieved 17 July 2019, from
https://www.govinfo.gov/app/details/CFR-2014-title2-vol1/CFR-2014-title2-vol1-
sec200-306
Hoffman Jr, W. F., & Esposito, D. (2018). Effort Reporting: Understanding the
Requirements.
Pfister, B. (2016). Day 1-Proposal Review 101: What You Need to Know to Be a Pre-Award
Research Administrator.
Pinkerton, T. M. (2016). Federally-funded research proposals: Voluntary components and
the interpretation of their effects on institutional resources (Doctoral dissertation).
Shelton, D., & Sharma, S. (2017). Cost Sharing on Sponsored Programs 1.0
Purpose. Policy, 1, 13.
Taylor, B. M., & Van Grieken, M. (2015). Local institutions and farmer participation in agri-
environmental schemes. Journal of Rural Studies, 37, 10-19.