Texas Tech University

Cost Sharing

Cost sharing has a significant financial impact on the department or college providing the funds and the University as a whole. A decision to cost share should therefore be carefully weighed. Commitments should be held to a minimum. The university's position is to provide cost sharing only when required by agency guidelines or delineated in specific program announcements or necessary due to the competitive nature of the proposal. Further information about the university's policy on cost sharing can be found in OP 65.08.

What is Cost Sharing?

Cost Sharing is that portion of total sponsored projects costs that are paid from sources other than the funds provided by the sponsor.

Some agencies make a distinction between cost sharing and matching. Generally, these terms refer to the share of costs not charged to the sponsor. These terms can refer to cash contributions, contributed time, and donated services.


  • Matching usually involves a University contribution of hard dollars/funds specifically appropriated for and allocated to the project.
  • In-kind contributions represent the value of non-cash contributions provided by the University or non-Federal third parties. When such contributions benefit a sponsored project, they generally may be counted as cost sharing. However, property purchased with Federal funds may be contributed to a federally sponsored project only if authorized by Federal legislation. Typical examples of in-kind contributions are services provided by volunteers and contributed time.
  • Third Party cost sharing is that which is provided from entities outside the university.
  • Contributed Effort is the time contributed by the PI to the project for which he/she is not paid. Any percentage would have to be approved by the Chair, Dean, or appropriate administrator.

Types of Cost Sharing

  • Mandatory - Cost sharing imposed by the sponsor as a condition of the award. The requirement for such cost participation will be explicitly set forth in program announcements or guidelines issued by the sponsor. It must be included or a proposal will receive no consideration by the sponsor.
    Mandatory cost sharing also includes any commitment by the university to participate in the cost of the project that is not required by Statute or administrative regulation, but is a part of the University's proposal to the sponsor.
  • Voluntary - That portion of the sponsored project which the University contributes to a project at its own initiative. Voluntary committed cost sharing should be reasonably and prudently offered, considering the PI's other commitments of time. A common example of voluntary cost sharing is a faculty member who works on a sponsored project, but is not paid by the project.

NOTE: In either case (voluntary or mandatory), when an award is received in which cost sharing was proposed, the cost sharing becomes a binding commitment which the university must provide as part of the performance of the sponsored project.

Federal Requirements for Cost Sharing

Federal regulations regarding cost sharing are found in OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations.

Subpart C, Section .23 states in part; (a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipients cost sharing or matching when such contributions meet all of the following criteria.

  • Verifiable from recipient records.
  • Not included as contribution for any other federally assisted project or program.
  • Necessary and reasonable for proper and efficient accomplishment of project or program objectives.
  • Allowable under the applicable cost principles.
  • Not paid by another federal award (except as authorized by statute).
  • Provided for in the approved budget when required by the federal awarding agency.
  • Conform to other provisions in OMB A-110 as applicable.

Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.

Documentation of Cost Sharing

Documentation is required for each proposal that requires cost sharing on the Internal Routing Sheet. The Principal Investigator will provide the source(s) of funding for cost sharing and get approval from the appropriate account manager(s). This form must represent all references to cost sharing found within the budget, budget justification or text of the proposal. If effort or other resources are offered in the proposal narrative or budget justification, the associated costs must be treated as cost sharing even if they are not quantified in the budget.

In accepting an award where the proposal indicated institutional cost sharing, the university is committing itself to formally documenting that the cost sharing was actually applied to the project. Principal Investigators (PIs) are responsible for seeing that the cost sharing commitments are met and providing appropriate documentation to the Sponsored Programs Accounting and Reporting (SPAR) office. The PI is responsible for obtaining appropriate documentation from the providers of third-party cost sharing. This documentation must be sent to SPAR.

Wording Proposals to Avoid Mandatory Cost Sharing

Example 1:

Do Not Use: Dr. I. Needa Grant will be providing five percent of his time to the project at a value of $4,321.

Do Use: Dr. I. Needa Grant will be providing expert advice and consultation to the project as needed.

Example 2:

Do Not Use: The University demonstrates support and will contribute to the multi-state project through partial salary for the project director.

Do Use: The University demonstrates support to the multi-state project through the availability and expertise of the project director.

Example 3:

Do Not Use: Dr. I. Needa Grant is Principal Investigator and will devote 40% effort (30% salary support requested) to the project.

Do Use: Dr. I. Needa Grant is Principal Investigator and requests 30% salary support to the project. He will provide additional support as needed.

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