Research Administration Office

University of California

Memo Operating Guidance

No. 87-33

September 15, 1987

Subject: Procedures Applicable in Accounting and Reporting for Mandatory Cost Sharing in Sponsored Projects

This Memo describes the records and reports which must be prepared and maintained to substantiate the University's participation in awards from sponsoring agencies having a cost sharing requirement. General information on the subject of cost sharing is found in Chapter 5 of the Contract and Grant Manual (1983 edition). The material in this Memo restates and updates Appendix B of the old Contract and Grant Manual (1967 edition).

In addition, the Department of Health and Human Services (DHHS) no longer requires cost sharing in its awards. Accordingly, C& G Memos 29-72, Sec. I-1, 6-73, and 23-73--all dealing with the University's cost sharing agreement with DHHS (formerly DHEW)--are canceled by this Memo.

Background

Mandatory cost sharing in Federal awards must be substantiated and recorded for audit and reporting to Federal sponsoring agencies when the agency requires. Ordinarily, the appropriate office to maintain record copies of cost sharing records is the campus Accounting Office. It is emphasized that failure to adequately substantiate contributed costs could result in the disallowance of costs and a loss of University funds.

Although non-Federal sponsoring agency requirements are generally not as rigorous as Federal requirements, it is recommended that the following procedures be used for all awards with cost sharing requirements.

Procedures

1. Cost Sharing Commitment

Because of the financial ramifications, campus procedures concerning the initiation and review of cost sharing proposals may require a formal acknowledgment from departments (or similar organizational unit) and/or Principal Investigators of their responsibilities regarding the attainment of the University's cost sharing commitment.

2. Report Format

Each campus should prescribe procedures for preparation of a record that will satisfy local needs in documenting the University's cost sharing commitment on applicable awards. Attachment I to this Memo contains the original cost sharing contribution form and the instructions for completing it. A newer form, UFIN 118(7/86), is included in Attachment II. Both of the forms have been reviewed by the Office of the President and the campuses to insure all required data are included.

3. Report Procedures

Upon expiration of an award requiring cost sharing, or at such intervals as might be necessary to satisfy reporting requirements of the sponsoring agency, a cost sharing contribution report must be prepared. The record copy of the report should be retained in the campus Accounting Office until disposed of in accordance with 4. below. While this report constitutes the primary auditable record substantiating the University's cost participation, unit Business Offices and/or Principal Investigators may be requested to provide auditors with supplementary information and records to explain the costs certified as having been contributed. Examples of supporting documentation would properly include copies of travel vouchers, listings of paid invoices on file in the campus Accounting Office, and receipts for supplies issued. In most instances, an explanation of the individual's appointment and assigned workload should suffice to support the time reported as having been contributed to the project.

Campuses should also institute procedures to check cost sharing reports for consistency with any relevant Personnel Activity Reports (PARs). PAR reports are discussed in Chapter 7 of the Contract and Grant Manual and Section II.A. of Accounting Manual Chapter P-196-13, "Payroll: Attendance, Time Reporting, and Leave Accrual Records."

4. Record Retention

Business and Finance Bulletin RMP-5, "Records Retention Program for Financial Documents Pertaining to Federal Awards to the University," provides guidance on the retention and disposition of all financial records and reports pertaining to Federal Awards.

5. Exceptions

Certain Federal agencies may permit cost sharing requirements to be satisfied on an aggregate basis, based on the average level of cost sharing for all projects funded by that agency. Such institutional cost sharing, when deemed appropriate, may be satisfied on a campus- or University-wide basis. Specific procedures for collecting the information necessary to substantiate an average level of contributions will be implemented as needed via Contract and Grant Memo.

6. Responsibilities

The following assignment of responsibilities is recommended for adoption at the campus level to insure uniformity in reporting and the accessibility of basic records for audit:

Refer: Deans, Directors and Department Chairpersons to be responsible for supervision of the prescribed reporting procedures which are applicable to activities under their jurisdiction.

2. Principal Investigators and unit Business Officers to be responsible for:

(a) Insuring the University's cost sharing commitment is fulfilled;

(b) Providing the required information for the cost sharing contribution report; and

(c) Maintaining information and records which will support cost sharing certifications and be consistent with other relevant personnel records.

Contract and Grant Officers to be responsible for informing Accounting Officers of the receipt of awards having a cost sharing requirement.

4. Accounting Officers to be responsible for:

(a) Preparing the accounting portion of the cost sharing contribution report, and

(b) Retention of the record copy of the cost sharing contribution report for audit.

Bill Sellers

ATSS 8-582-3045

(415) 642-3045

Subject: 05

Organization: U-115

Cancel: 29-72, Sec. I-1; 6-73; 23-73

David F. Mears

University Contracts and Grants

Coordinator

Enclosures

cc:

Accounting Officers

Steve Selby

Don Alter