Research Policy Handbook

COST SHARING
Frequently Asked Questions (FAQ)

February 2012

See RPH 3.5, Cost Sharing Policy and Cost Sharing Accounting Procedures

 

1. If an individual commits 50% FTE to a project, what is that 50% of? What does the concept of 100% FTE mean?

   For a full-time employee, 100% Full-Time Equivalent (FTE) encompasses all of the time that an individual spends doing the work for which he or she is being paid. For exempt staff, including faculty and Academic Staff, compensation is not based on the number of hours worked, but rather it is for whatever amount of time it takes to get the necessary work accomplished. Any of the "extra" hours that an individual may spend doing Stanford work, sometimes called "midnight oil" or "sweat equity," is part of 100% FTE. If a faculty member commits 50% FTE to a project, he or she is saying that half of ALL THE EFFORT he or she puts into their Stanford work will be directed toward that project. If a faculty member makes a commitment of a percentage of effort to a sponsored project, and that amount of salary is NOT charged to the project, than the faculty member has made a cost sharing commitment.

2. A postdoc in my department is funded for a total of 100% on three different sponsored projects. She increases the number of hours that she works on one project, but does not decrease her effort on the other projects, i.e., she is working more hours. Should we treat the extra effort as cost sharing?

   No. Since there can be no more than 100% FTE, there can be no cost sharing when 100% FTE is funded by sponsored projects. However, in this situation, you may have to go back and adjust her allocation of effort on all three projects.

   Whenever anyone is funded 100% on sponsored funding, it is very important to assure that the apportioning of time and effort is reasonably accurate when considered over an academic quarter. Effort is allocated over the base of ALL time spent doing Stanford work. In this case, 100% effort includes the total amount of the postdoc's effort on the various projects on which she is working. If she significantly increases the percent FTE spent on one project, then the percent FTE on the other projects will necessarily be reduced and payroll records must be adjusted to be reasonably accurate over an academic quarter.

   REMINDER: NO faculty should be 100% funded on sponsored projects. Effort should be reserved and charged to non-sponsored accounts for the other academic and administrative duties of the faculty member. Individual schools have established upper bounds on the percentage of effort that may be charged to research (including upper limits for Professors � Research). See section 1.c of RPH 3.1 for more on commitment of effort by the PI.

3. When I prepared the proposal, I committed to cost share a percentage of an individual's effort. I knew the person's current salary, but did not know the future salary. I included an estimate of the salary increase, but the individual's actual future salary may be more or less than my estimate. Is my cost sharing commitment tied to the estimated dollar amount included in the budget or the percentage of effort?

   The cost sharing commitment is tied to the specified percentage of effort. Depending on what happens with salaries in the future, the effort may represent more or less than the estimated amount included in the budget. As long as the committed effort has been expended, the cost sharing commitment has been met.  In preparing the proposal budget, some

4. 1. When preparing my proposal budget, can I use the term "as needed" and not include any dollars as committed cost sharing when referring to personnel who may be asked to consult or advise occasionally on the sponsored agreement?

      Yes, because it is difficult to determine the amount of time the personnel will contribute, you may use the term "as needed" when personnel are expected to work an undetermined, incidental amount of time. In this situation you do not need to include dollars as committed cost sharing or track them in a cost sharing PTA.

   2. When preparing my proposal budget, can I use the term "part-time at no cost" and not include any dollars as committed cost sharing when referring to personnel who will be working on the sponsored agreement?

      No, the amount of time expected to be contributed on a part-time basis to a sponsored agreement needs to be estimated and the associated dollars shall be recorded in the proposal budget as cost sharing. See question 4a for personnel used purely in an occasional advisory or consultative capacity.

5. 1. If someone "works" in support of a sponsored project, but the position was not committed in the proposal and is paid by gift or other non-sponsored funds, is the effort cost-sharing?

      No. According to both Stanford policy and the clarification issued on this point by the Office of Management and Budget (OMB), effort devoted to a sponsored project that was not committed to the sponsor in the proposal is not considered cost sharing.

      The clarification issued by OMB in January, 2001, states: "Voluntary uncommitted cost sharing should be treated differently from committed effort and should not be included in the organized research base for computing the F&A rate . . . "

   2. What if someone is paid by gift funds (or other non-sponsored funds) and is committed to more than incidental effort in the narrative of a sponsored project proposal? If the individual is budgeted at 0% FTE (and consequently no dollar amount), is that cost sharing?

      Yes. If the effort is more than incidental, then it has been committed and must be recorded in a cost sharing PTA. The proposal and budget should specify the level of effort committed and related dollar amounts identified. If this amount is not identified as a project expense, then it is cost sharing.   NOTE that, if a sponsor prohibits cost sharing, e.g. NSF, it may not be proposed (see questions 6 and 7, below).

6. Can I cost share on an NSF Proposal?

   Unless specified in the applicable program solicitation, NSF prohibits the inclusion of voluntary committed cost sharing in solicited and unsolicited proposals.

7. My NSF award was made prior to the implementation of the new policy and contains a cost sharing commitment. What should I do?

   Cost sharing commitments contained in current active awards remain a commitment and must be cost shared.

8. Does a university waiver of F&A on a NSF proposal constitute cost sharing?

   Yes, NSF considers “waived F&A” to be voluntary cost sharing and inclusion of voluntary committed cost sharing in proposals to the NSF is prohibited. Cost sharing will only be allowed in NSF proposals when explicitly authorized by the NSF Director and included in specific program announcements.

9. If a sponsor lines out the effort of a specific person in the awarded budget, for example, a 50% FTE Research Assistant, and the individual performs the planned work but does not charge salary to the project, is that cost-sharing?

   If the individual still works on that project as proposed, and is funded with other University funds, then it IS cost sharing.  However, if the work is reduced and the individual does not work on the project, then there is NO cost sharing.

10. Do we need to set up a cost sharing PTA for a faculty member who directs a student on an NIH training grant?

    No, this is not a cost sharing commitment by the faculty member. These proposals should include the following statement:
    "The effort listed for each training faculty member reflects a commitment of their overall academic responsibility related to instruction and not a percentage of their sponsored research effort." 

    See also the answer to question 11, below.

11. A PI commits effort and requests salary on a sponsored project, but then rebudgets his salary mid-year without reducing his effort. Is this considered cost sharing?

    Yes, because the PI is providing the effort committed in the proposal, the effort must be captured either on the sponsored project or in a cost sharing PTA. As soon as this occurs, you should set up a cost sharing PTA by sending the Cost Sharing PTA Attribute Setup Request [ downloadable file ] to the Office of Sponsored Research (OSR).

12. I've heard that the School of Medicine requires that all faculty effort on sponsored projects be proposed and budgeted, and not offered as cost sharing. Is this true?

    Yes, the School of Medicine requires that all grant/contract proposals and/or awards must contain and identify faculty effort, and reflect salary support for the faculty in an amount equal to the percentage of time to be spent on the project, consistent with the policies of the sponsor.

    If you are in the School of Medicine, please contact your RPM for more information.

13. Do we need to cost share effort for faculty with a joint VA/SU appointment?

    No, we surveyed departments that have joint VA/SU faculty and found that those faculty that have a portion of their salary paid by Stanford rarely devote effort to a project without requesting commensurate salary.

14. Is the effort of a faculty member who was committed in a research project proposal considered cost sharing if it the salary is paid from clinic PTAs (e.g. funded by Stanford Hospital and Clinics)?

    Yes, because the source of the salary is University funds and the salary is paid through the University's payroll, even though the funds are transferred from Stanford Hospital and Clinics.

15. How do we account for cost sharing effort for faculty with a 9-month academic appointment, who is paid over 12 months and puts in no summer quarter effort?

    Cost sharing is based on effort and salary earned which may or may not be directly connected with the pay process. For example, if Prof. Nobel cost shares 10% of effort during the academic year, and does not expend any effort during the summer, the amount of cost sharing is 10% X 9-month salary, regardless of when it is paid. There is no effort during the summer, therefore no cost sharing in the summer.

    If Prof. Nobel elected to receive his 9-month salary spread over 12 months, the sponsored project and related cost sharing PTA should be charged the appropriate percentage of his 9-month salary during the academic year.

16. How do we account for effort on NIH grants for faculty over the NIH salary cap?

    Apply the effort percentage to the cap amount to calculate the charge to the project or to a related cost sharing PTA. Use Expenditure Type 51190, "Regular Benefits Eligible (RBE) Unallowed Salary over a Cap," on the Oracle Labor Distribution Labor Schedule, which allocates salary costs for the amount over the cap, and charge it to a non-sponsored PTA. This Expenditure Type should not be used with a cost sharing account. The use of the special Expenditure Type allows these costs to be appropriately included in the organized research base. However, since they are unallowable, they should not be reflected in a cost sharing PTA, as they may not be reported to the sponsor nor used to meet a cost sharing commitment.

    Please refer to Research Policy Handbook 3.8, Salary Cap Administration, and to the cost sharing salary cap examples provided
17. If a graduate student who was committed in a proposal devotes effort to a sponsored agreement and receives salary support from a gift or fellowship PTA, is it cost sharing? Is a distinction made if support is in the form of a stipend versus a salary?

    If the student is being paid a stipend from another source, it should NOT be accounted for as cost sharing because stipends are paid to students for training rather than effort, and are not included in the Modified Total Direct Cost (MTDC) base. If the student has an appointment as a Research Assistant and is being paid a salary from another non-sponsored project source, it IS cost sharing. Salaries are paid for work being performed, and are part of the MTDC base.

18. If a student is participating on a sponsored agreement with no salary requested because he/she is supported partially by a training grant and partially by a gift, is the portion supported by the gift treated as cost sharing?

    YES, it IS cost sharing if the effort was committed. The student has been employed to devote that effort to the project, and the gift PTA is being charged SALARY.

    It is NOT cost sharing if the gift PTA is being charged a STIPEND. Stipends are not considered compensation for effort and are not part of the MTDC base and are never accounted for as cost sharing. Similarly, the portion charged to the training grant is NOT cost sharing. See also question 17, above.

19. What about the portion of an RA's tuition allowance that Stanford provides. Is that cost sharing?

    Tuition allowance is excluded from the MTDC base, so the dollars contributed by Stanford do not have to be accounted for in cost sharing PTAs. However, since it is a payment that Stanford is making, which the sponsor would otherwise have to pay, you can offer it to the sponsor to help meet a cost sharing commitment. For all grad students (who have not yet reached TGR status) funded by PTAs outside the School of Medicine, the university will contribute 35% of the cost of their tuition allowance. For RAs funded by School of Medicine PTAs, the contribution from that school's funds is 19% of the tuition allowance. There are tables showing the dollar value of the university or Medical School contributions to RA tuition allowance linked to https://www.stanford.edu/dept/DoR/TAL_tables/

20. If a proposal states that existing University equipment will be used to complete the project, do we have to account for this as cost sharing?

    No. Stanford does not allow the cost sharing of equipment (already in-house), unless the receipt of the award is contingent upon such cost sharing. This is because removing cost-shared equipment from the equipment depreciation cost pool requires cumbersome accounting procedures.

    As an alternative to offering equipment as cost sharing, you may use the following recommended wording in the proposal's budget justification or "resources and environment" section:
    The equipment is available for the performance of the sponsored agreement at no direct cost to the sponsor.

21. If a project will require the purchase of a new piece of special-purpose equipment, can part or all of its cost be offered as cost sharing?

    Yes. If a project requires the acquisition of new equipment as a condition of an award, it is acceptable to purchase the equipment and cost share all or part of it. For example, in an equipment grant award, the equipment can be accounted for as cost sharing. We would account for the piece of equipment as cost sharing by recording it in a cost sharing PTA. The equipment must be identified as cost sharing in Stanford's capital asset management system, Sunflower Assets.

22. Can University facilities such as laboratory space be offered as cost sharing?

    No, University facility costs are charged to sponsors through the indirect cost rate. Instead of characterizing the use of facilities as cost sharing, the proposal budget justification may state that the facilities are "available for the performance of the sponsored agreement at no direct cost to the project."

23. How do I account for an in-kind or matching requirement?

    In-kind (non-cash) or matching contributions made by a party other than Stanford require documentation from the third party supporting the use of the funds as in-kind or matching contributions and may require a certification of fair market value. The department is required to maintain fair market value certifications for audit purposes.

24. On my proposal for a "major project," I included administrative costs related to the project, but the sponsor disapproved them. Must these costs now be treated as cost sharing?

    Yes, when a sponsor disapproves a proposed administrative expense, AND the cost is still incurred to support the project, the actual amount expended for the project and not funded by the sponsor must be treated like cost sharing and placed in a cost sharing PTA. In this situation, the amount that is cost shared may be less than the amount that was originally proposed. These costs, while disapproved by the sponsor, are not unallowable. Once incurred they must be captured in a cost sharing PTA. They can be used to satisfy a cost sharing commitment. See Research Policy Handbook 3.6, Charging for Administrative and Technical Expenses for more guidance.

25. If the total amount of a proposed budget is reduced by the sponsor when the award is received, is the difference cost sharing?

    No, as long as the reduced award reflects a corresponding reduction in the scope of work. In some cases it may be prudent to prepare and submit a revised budget and scope document.

    In this context, the distinction between a grant and a contract may be relevant. A grant is used when the purpose is to accomplish a "public purpose," including carrying out research, defined in A-110 as "a systematic study directed toward fuller scientific knowledge or understanding of the subject studied." This basic research is not intended to result in a specific product, but rather to follow a general direction. In the case of a grant, a reduction in budget does not indicate an agreement to cost share.

    In contrast to a grant, a contract is a procurement transaction between the sponsor and the recipient. In the case of a contract, the reduction in budget and scope must be clearly documented.

26. If a sponsor provides a portion of funds in support of an existing university program is the balance (University supported) cost sharing?

    No, the University-funded portion of the research program would not represent cost sharing, unless it had been COMMITTED to the sponsor as part of the University's proposal for the sponsored portion of the research program. Absent this commitment, the University-supported effort would be treated as departmental research, and not cost sharing. In this context, it is important to note that space used for departmental research is coded differently than space used for sponsored research. This is also true for non-research programs, such as Sponsored Instruction or Other Sponsored Activities.

27. Are PTAs with cost overdrafts or overruns, that are not reimbursed by the sponsor, accounted for as cost sharing?

    Although overruns were not contemplated during proposal preparation, and were therefore not identified as cost sharing, they need to be included in a cost sharing PTA in order to assure that those costs are included in the Modified Total Direct Cost (MTDC) base.

28. Must I fill out a Cost Sharing Authorization Form to request a cost sharing PTA related to an overdraft?

    No. When an overdraft occurs which must be cleared to a cost sharing PTA, the Cost Sharing Authorization Form is not required. A cost-sharing PTA can be opened based on an Email request from the department. When departments are clearing overdrafts to cost sharing accounts, it is not necessary to open more than one account. Multiple overdrafts can be cleared to a single cost sharing account if desired.

29. I am monitoring my PTA, and anticipate that it might go into overdraft, and therefore want to transfer costs from the PTA before the end of the award. Is that accounted for as cost sharing?

    No. If you anticipate an overdraft, you can legitimately transfer the expense onto another research-related gift, sponsored or other unrestricted PTA which ALSO benefited from the cost. If there is no such PTA, then the costs related solely to that sponsored project and, when transferred, must be moved to a cost sharing PTA.

    Please see the Sponsored Account Cost Transfer Decision Trees.

30. If the overdraft is a small dollar amount, must it be captured in a cost sharing PTA?

    No. If the total overdraft is less than $500, transfer the lump sum (net of indirect costs) using a ijournal and Expenditure Type 56135 (which allows the Cost and Management Analysis group to segregate these costs for purposes of indirect cost calculation). Use the Transferring Small Dollar Overdraft tool [downloadable Excel spreadsheet] to help you.

31. How should departments set up and account for cost sharing when multiple departments, programs and/or schools are involved?

    If an award will be administered through one PTA, it may be easiest to set up one cost sharing PTA.  The cost sharing can be funded from multiple sources.  The department setting up the cost sharing PTA will specify the funding sources on the Cost Sharing PTA Attribute Set Up Request.

    However, if multiple PIs from different departments/programs will be charging expenses separately in order to satisfy the cost sharing commitment, the department administering the project may request multiple cost sharing PTAs, in order to permit the various units to monitor their particular expenses.

32. What kinds of expense can I use to meet a cost sharing requirement that don’t require a cash commitment and do NOT have to be tracked in cost sharing PTAs?

    Some costs are not captured in cost sharing PTAs because they do not affect our organized research base, but they DO benefit the sponsor and may be offered to meet required cost sharing in most cases. These may include the:

    • difference between full tuition and that charged to a sponsored project
    • value of any waived indirect costs or fringe benefits
    • value of the indirect costs associated with any direct costs being cost shared
33. Can funds from either a federal or non-federal source be used to cost share on another award?

    Federal awards: NO, funds from a federal award may NOT be utilized as the source of cost sharing except as authorized by statute. In this rare case, the cost sharing arrangement must be authorized by BOTH sponsors.

    Non-federal awards: Per OMB Circular A-110, funds from non-federal awards may be utilized as the source of cost sharing ONLY if authorized by the non-federal sponsor.

34. Does cost sharing apply to non-federal sponsors?

    Yes, a commitment to cost share made to a non-federal sponsor must follow the cost sharing policy. A cost sharing PTA must be opened to record the activity because the organized research base includes both federal and non-federal research costs.

35. I'm working on a proposal with 30% mandatory cost sharing on total project costs. I have several subcontracts on this proposal. Should we be asking them for 30% cost sharing, too?

    When possible, it is advantageous for the University to share any cost sharing requirements with the other participants on your project, but the program announcement guidelines would take precedence.

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