Cost sharing commitments can be met using direct or indirect costs that are allowable, allocable, reasonable, and consistently accounted for by the university. Since all cost-shared expenditures must be verifiable from university records, the use of companion accounts (see Definitions section) is required for all cost-shared direct expenses. If tracking via companion accounts is not possible, the school must track the cost sharing manually.
This policy describes two categories of cost sharing expenditures, direct and indirect. Section A defines direct costs (effort, equipment, and other direct expenses), and Section B defines indirect costs (unrecovered overhead on sponsored expenditures, overhead on cost-shared university resources, and costs normally considered indirect). Note that there is often more flexibility with cost sharing on non-federal awards.
A. Direct Costs
Faculty effort or research staff salary
PIs can commit to expend faculty or research staff effort on a sponsored program without charging commensurate salary to the sponsored fund. Such a commitment of effort binds the university to contribute research staff or faculty time to the project and to record salary expenditures, including fringe benefits, in a manner that makes the expenditure verifiable from university records. Like all committed effort, cost-shared faculty effort must be effort-reported.
Costs representing salaries over regulatory caps, such as the National Institutes of Health salary cap, cannot be used to meet a cost sharing commitment.
Equipment
If the purchase of new equipment is necessary for the project or the sponsor mandates the purchase of new equipment, then the acquisition cost of specific equipment may be offered as cost sharing. Purchase and acquisition must occur during the period of performance of the project, and procedures must be in place to ensure that the depreciation on such equipment is not included in the indirect cost rate calculation.
Existing equipment cannot be offered as cost sharing, since the depreciation of UA Little Rock-owned equipment is included in UA Little Rock’s indirect cost rates and the equipment was not purchased for use on the project. Rather than committing the use of UA Little Rock-owned equipment as cost sharing, proposals should characterize the equipment as “available for the performance of the sponsored agreement at no direct cost to the project.”
Other direct costs
Most other (allowable, allocable, reasonable, and consistently treated) costs that could be charged to a sponsored project can be cost shared. The following are examples of other direct costs that may be cost shared:
- Travel expenses
- Laboratory supplies
- Equipment that does not meet the capitalization threshold (currently $5000)
B. Indirect Costs (Facilities and Administrative Costs)
Indirect costs may be offered in a proposal to meet cost sharing requirements imposed by the sponsor if needed to meet required cost sharing threshold and is an allowable cost by the sponsoring agency. There are three ways to cost share indirect costs. Note that none of these cost-shared indirect costs are recorded in UA Little Rock’s General Ledger—they will be calculated and reported manually by ORSP.
- Unrecovered overhead on sponsored expenditures
The amount of indirect costs not recovered from a sponsor due to a sponsor funding an award at a rate below UA Little Rock’s negotiated indirect cost rate. - Overhead on cost-shared university resources
The amount of unrecovered indirect costs that are associated with the direct cost sharing on an award. - Indirect cost expenses treated as direct cost sharing (non-federal awards only)
Costs that UA Little Rock normally considers indirect (such as depreciation, administrative support, rent, etc.).
