5-999 Related University References

Accounting Manual Chapter A-000-7, Official Documentation Required in Support ofUniversity Financial Transactions

External Requirements-Federal

5-F01 2 CFR 215.23, "Cost Sharing or Matching," (OMB Circular No. A-110), Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations

This section provides guidance on the kinds of contributions that satisfy federal agency cost sharing and matching requirements.

The provisions of Section 215.23 are applicable to all federal agencies in their administration of grants to, and cooperative agreements with, public and private institutions of higher education, public and private hospitals, and other quasi-public and private nonprofit organizations.

Summary of Provisions

  1. General
    This section provides guidance on the Allowability of cost sharing costs under federal grants and other assistance agreements. It also establishes criteria for the evaluation of in- kind contributions made by third parties. This section does not mandate cost sharing; statutory requirements for cost sharing (if any) are generally contained in the annual appropriation bills for each federal agency. Agency-specific requirements should be clearly stated in agency Requests for Proposals (RFPs) or Requests for Applications (RFAs).

  2. Definitions

    Cost sharing and matching amounts are the portion of project or program costs not reimbursed by the federal government. Contributions are generally in the form of actual disbursements (cash contributions), non-cash contributions provided by the institution from non-federal sources, or third party in-kind contributions. Property purchased with federal funds may not be included under the definition of in-kind contributions unless authorized by federal legislation.

    External Requirements - Federal

  3. Criteria for Allowability
    Mandatory cost sharing and in-kind contributions must be verifiable, related to program objectives, allowable under the applicable cost principles, not from another federal award (unless the terms of that award specifically permit the funds to be used as cost sharing or matching), and shown in the approved budget. The cost principles applicable to the University are those in 2 CFR 220 (OMB Circular No. A-21).

  4. Valuation of In-Kind Contributions
    In-kind contributions will be evaluated in accordance with the applicable cost principles. In the case of the University, the applicable cost principles are found in 2 CFR 220 (OMB Circular A-21). Generally, according to 2 CFR 220, the valuation of a donated service or item is to be done in a manner that is reasonable and equitable.

    Specific guidelines on the valuation of in-kind contributions from non-federal third parties are organized according to three main categories: volunteer services, expendable personal property, and equipment/buildings/land. Rates for volunteer services should be consistent with those paid for similar work in the recipient's organization. Expendable personal property (e.g., supplies) should be rated at current market value. Equipment/buildings/land should be appraised at their current market or, as appropriate, rental value. In certain cases, the services of an independent market appraiser are required. The full value of volunteer services and expendable personal property may be used to calculate the amount of an in-kind contribution. For equipment/buildings/land, however, the full value may be used only if the purpose of the sponsoring grant or agreement is to assist the institution in acquiring the property. Otherwise, only depreciation or use charges may be counted.

  5. Documentation of Mandatory Cost Sharing
    Volunteer services must be documented and, to the extent feasible, supported by the same methods used by the institution for its employees. The basis for determining the valuation for personal services, material, equipment, buildings, and land also must be documented.

    Primary University Responsibility
    Principal Investigators and unit business offices are responsible for ensuring that the University's cost sharing commitment is fulfilled, for providing the required information for the cost sharing contribution report, and for maintaining information and records that support cost sharing certifications.

    Campus Accounting Officers, department heads, and other appropriate campus or Office of the President administrative offices are responsible for making sure that allowable contributions are evaluated and documented in accordance with the provisions of this section, when the cost sharing or matching terms of a federal award mandate apply.

    University Implementation
    The cost sharing documentation requirements of this section are implemented in 

    Accounting Manual Chapter A-000-7, “Official Documentation Required in Support of University Financial Transactions.”

    Campus Accounting Offices are responsible for mechanisms to identify and maintain documentation of committed cost sharing which ensure that:

    1. proper effort reporting is accurately captured;

    2. cost sharing commitments are fulfilled; and

    3. the total annual value of cost sharing delivered is reported and used in the preparation of the campus F&A rate proposal.