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Cost Sharing Policy for Sponsored Programs

Cost Sharing Policy for Sponsored Programs

Purpose

This policy sets forth the requirements for the approval, administration, and accounting of cost sharing on sponsored programs awarded to the University of Dayton.  This policy is intended to both encourage the thoughtful allocation of University resources in support of research and scholarly activity as well as to ensure compliance with Federal regulations and cost accounting standards.  This policy applies to cost sharing of both direct and indirect costs.  The transparent and equitable return of indirect cost recovery is critical in supporting and promoting research and scholarly activity.  Therefore, this policy also addresses how cost sharing of indirect costs impacts departmental, unit and University resources.

Scope

This policy applies to University of Dayton faculty and staff who participate in or support sponsored programs.

Policy History

Effective Date:  May 24, 2016

Approval: May 24, 2016

Policy History: 

  • Approved in original form: May 24, 2016

Maintenance of Policy:  Vice President for Research

Policy

The University of Dayton’s commitment to research and scholarly activity may include an agreement to provide cost sharing for a particular sponsored program.  The decision to provide cost sharing is normally made to enable eligibility for a particular award or improve competitiveness.  Cost sharing occurs when a sponsor agrees to award only a portion of the total allowable costs of a sponsored program and the awardee is required to secure the funds for the remaining portion of the program.  For Federal awards, cost sharing or matching means the portion of project costs not paid by Federal funds (see 2 CFR 200.29).  Compliance with Federal cost accounting standards requires that cost sharing be proposed, accounted for and reported in a uniform manner.  Cost sharing by the University, if a term of an award, represents a legally binding financial commitment.   Therefore, cost sharing must support University objectives and not overburden University resources or compromise Facilities and Administrative (F&A) cost recovery, also referred to as indirect costs.  Excessive or unnecessary cost sharing may cause a reduction in the University’s indirect cost rate or otherwise negatively impact the University, such as limiting resources for support of research and scholarship.  

Cost sharing may be any combination of departmental or unit resources, waived indirect costs, third party resources or other university resources.  Sponsored programs which include cost sharing require an extra level of administrative burden upon the principal investigator (PI), performing unit and research administration to ensure compliance.  Therefore, programs with cost sharing require approval by all relevant budget authorities for identified sources of cost sharing, including the Vice President for Research and the Provost for cost sharing of indirect costs, before proposal submission or acceptance of award (in cases where there is no proposal or award requirements differ substantially from the proposal).

The following criteria apply when determining if cost sharing will be approved.

1. The sponsored program must align with the University’s mission and strategic goals for research and scholarship.  Programs that meet this criteria may include those that will allow the University to:

           a.   Build upon an area of research or scholarship identified as a strategic priority,

           b.   Procure a large asset or piece of equipment that will improve the University’s competitiveness in pursuing future programs,

           c.    Support a junior faculty member in growing a research area,

           d.   Develop a relationship with a foundation or government agency that is likely to fund future efforts that align with strategic goals, or

           e.   Conduct a program that will significantly enhance the University’s reputation.

The amount of cost sharing should be commensurate with the degree of alignment of a program to the mission and goals outlined above.  In addition, programs that require significant subcontracting and/or utilize significant administrative support will require greater justification for approval.  Cost sharing that subsidizes activities that are expected to be self-sustaining is strongly discouraged.

2.  The sponsor has a published indirect cost rate lower than the University’s federally negotiated indirect cost rate, which appears in the sponsor’s guidelines, i.e., request for proposal, grant application, broad agency announcement, or other solicitation or website.  The lower rate must apply universally to all proposals submitted for that particular program or that agency.  The PI is responsible for furnishing evidence of the published rate as part of the approval process.  If such documentation cannot be provided, the PI must include the full applicable indirect cost rate in the proposal or the unit must fund the full amount of any waived indirect costs.

3.  Non-academic units, such as the Research Institute, will be responsible for funding the full amount of all cost sharing, including cost sharing of both direct and indirect costs.  For these units, approval of cost sharing will reside with the budget authority for that unit.

4. Academic units will be responsible for funding all direct cost sharing.  Approvals will be required of the budget authority for each identified source of direct cost sharing.  The PI will be responsible for identifying the sources of, and securing approvals for, direct cost sharing.  Approval of waived indirect costs will depend on the amount budgeted in the proposal and whether it exceeds the Discretionary Approval Amount (DAA) as follows:

           a. Below the DAA, the academic dean(s) of the unit(s) performing the research will have approval authority for waived indirect costs, provided that the criteria outlined above are met.  The PI will be responsible for providing a justification for waived indirect costs to support the Dean’s decision. The Provost Office will be responsible for funding all of the waived indirect costs.

           b. Above the DAA, approval by the Provost and Vice President for Research is required.  The Vice President for Research will make a recommendation to the Provost, who has final approval authority.  If approved, the requesting academic unit(s) will be responsible for funding half of any amount of waived indirect costs in excess of the DAA.  The dean(s) of the performing academic units are responsible for identifying and approving the source(s) of funds.  The PI will be responsible for providing a justification for waived indirect costs to support the request for approval by the dean(s), Vice President for Research and Provost.

The DAA amount is established by the Provost and Vice President for Research and will be adjusted on an annual basis as necessary to balance University resources allocated for cost sharing of indirect costs with other resources that support research and scholarship. Direct cost sharing necessarily incurs waived indirect costs and approval of both will be required as stated above.

In recognition of the need for the University to recover indirect costs to support research administration and fund other activities that further the University’s commitment to research and scholarship, there will be no return of indirect costs to academic units on programs with waived indirect costs.

Responsibilities for Enforcement, Remedies, Sanctions

The Vice President for Research is responsible for administering this policy, developing procedures for implementation of this policy, and resolving issues related to the application of this policy.  The Provost has final authority for approving cost sharing of indirect costs. 

Appeal Process

It is understood this policy cannot foresee all issues which may arise in the future; in such cases, the Vice President for Research, Provost, and/or the Vice President for Finance and Administrative Services, as appropriate, will consult to resolve such issues within thirty working days after the issues are brought to their attention.

Reference Documents

  1. University of Dayton Distribution of Indirect Cost Recovery to Academic Units from Sponsored Research Programs Policy
  2. University of Dayton Policy on Unallowable Costs
  3. University of Dayton Procedures to Implement Cost Sharing Policy

Applicable Regulations

  1. 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
CONTACT

For questions relating to the University policies of Research, please contact:


Kelli Tittle, Research Compliance & Export Control Administrator
937-229-3515
Email