Contracts and Grants Accounting


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  1. Roles and Responsibilities
  2. Mandatory versus Voluntary Committed Cost Sharing
  3. Acceptable Cost Sharing Contributions
  4. Sources of Cost Sharing
  5. Allowable and Unallowable Cost Sharing Costs
  6. Effort Reporting and Cost Sharing
  7. Record Retention

1. Roles and Responsibilities

Principal InvestigatorAdministering DepartmentSponsored Projects OfficeContracts and Grants Accounting
Limiting the inclusion of cost share in proposals to situations where it is in the best interest of the University. Advising PIs on the University's cost sharing policies and procedures. Providing guidance to departments on the University's cost share policies and procedures. Providing guidance to departments on the University's cost share policies and procedures.
Ensuring funds and resources being committed for cost share are adequate and available. Ensuring that cost sharing commitments, when appropriate, are properly included in proposals and recorded in Phoebe. Reviewing proposals with cost sharing commitments for compliance with University and sponsor requirements. Examining new awards to ensure that cost share is accurately recorded in the Berkeley Financial System.
Obtaining proper approvals regarding any cost share commitments. Tracking and reporting of cost share commitments, including preparing the Cost Sharing Contribution Report and submitting it to Contracts & Grants Accounting. Submitting proposals with cost sharing to the appropriate sponsoring agency. Advising departments on how to track and report cost share commitments.
Certifying any cost shared effort in the Effort Reporting System. Including cost share in the Effort Reporting System Recording cost share commitments in the Berkeley Financial System. Reviewing cost shared expenditures on the Cost Sharing Contribution Reports submitted by departments.  
Certifying the cost shared expenditures on the Cost Sharing Contribution Report. Retaining all supporting documentation for the reported cost share. Communicating cost share commitments to departments if proposal is awarded. Reporting cost share to sponsors in accordance with sponsor requirements.

2. Mandatory Versus Voluntary Committed Cost Sharing

There are two types of cost sharing that must be documented and tracked:

  1. Mandatory cost sharing is required by sponsor as a condition of obtaining an award. It must be included or a proposal will receive no consideration by the sponsor.
  2. Voluntary committed cost sharing represents resources offered by the university (documented and quantified in the proposal) when it is not a specific sponsor requirement. It becomes a binding commitment which the university must provide as part of the performance of the sponsored agreement.

3. Acceptable Cost Sharing Contributions

Cost sharing is acceptable under the following circumstances:

  • Verifiable from receipt's records
  • Not included as contributions for any other sponsored or federally assisted project or program (cannot be used twice)
  • Necessary and reasonable for proper and efficient accomplishment of project or program objectives
  • Allowable under applicable cost principles (link to OMB Circular A-21)
  • Not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching
  • Included in the approved budget when required by the Federal awarding agency
  • Expended during the performance period

4. Sources of Cost Sharing

  • University funds
  • Unrecovered Facilities and Administration (F&A) costs
  • Third party contributions
  • Other sponsored projects (non-federal)

5. Allowable and Unallowable Cost Sharing Costs

How is allowability determined?

  • Allowable: Acceptable per the agreement, regulations, and public laws
  • Reasonable: A prudent person would have purchased this item and paid this price
  • Allocable: Can be assigned to the activity on some reasonable basis

If a cost cannot meet the above criteria, it is unallowable, no matter what it is for.

The following types of costs are generally allowable for cost share:

  • Faculty, student, staff effort (including fringe benefits) committed to the technical performance of a sponsored agreement
  • Equipment
  • Travel expenses
  • Laboratory supplies
  • Directly-related supplies and services
  • Items that do not meet the capitalization threshold
  • Administrative costs that were proposed and allowable as a direct charge (i.e. met the definition of a major project but not funded by sponsor yet still incurred as expenses in the performance of the project)
  • F&A costs associated with the cost shared direct costs, if approved by sponsor
  • Subrecipient cost sharing

The following types of costs are not allowable for cost share:

  • Items normally treated as indirect (F&A), such as department administration, space, utilities, library resources
  • Specific unallowable costs
  • Items cost shared on other projects

6. Effort Reporting and Cost Sharing

Mandatory and voluntary committed cost sharing in the form of effort are required to be certified in the Effort Reporting System (ERS). Cost shared effort is recorded in the Adjusted Cost Share Percentage column on the effort report and must be manually entered. Read more information on how to record cost shared effort in ERS.

7. Record Retention

The department is required to maintain the supporting documentation for any reported cost share. The supporting documentation must be maintained for six years from the end date of the project or program. The supporting documentation may be subject to review by Federal auditors or investigators or by external auditors as part of the annual OMB Circular A-133.