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Cost Sharing Basics

Cost Sharing Basics. Professional Development Institute January 2010. Cost Sharing Definition. Portion of total project costs not borne by the sponsor Direct Cash In-kind Facilities and Administrative Cost OVPR approval required Sponsor approval required Types of cost sharing

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Cost Sharing Basics

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  1. Cost Sharing Basics Professional Development Institute January 2010

  2. Cost Sharing Definition • Portion of total project costs not borne by the sponsor • Direct • Cash • In-kind • Facilities and Administrative Cost • OVPR approval required • Sponsor approval required • Types of cost sharing • Mandatory • Required by the terms of the sponsor agreement • Salary Cap • Institutional vs. Project • Voluntary • Committed • Uncommitted

  3. Federal Guidance OMB Circular A-21 OMB Circular A-110 Administrative Guidance Cost Share Language Subpart C_23 Verifiable from recipient records Not included as contribution to another federal project Necessary and reasonable Allowable under cost principles (see above) Not paid from another federally-sponsored project (unless approved) Provided for in the budget Conform to other provisions of A-110 • Cost Accounting Principles • Allowable, Allocable, Reasonable

  4. CSU Guidance • PI Manual Section VIII • Keep cost share at lowest level possible • Process Considerations – Proposal Stage • ASAP • Contact your Senior Research Administrator • Indicate on SP-1 (PASS) • http://web.research.colostate.edu/osp/pdf/sp-1.pdf • Obtain necessary approvals • Department Head, Dean, Director, OSP, VPR • Identify sources

  5. CSU Guidance • Process considerations – Proposal • SP-8 (F&A Waiver) • http://web.research.colostate.edu/osp/pdf/sp-8.pdf • Institutional Commitment Form • http://web.research.colostate.edu/osp/pdf/costshare.pdf • Documentation from 3rd Parties • Process considerations – Award • Creation of cost share account (SP-9) • http://web.research.colostate.edu/osp/pdf/sp-9.pdf

  6. CSU Guidance • Process considerations – Award • Creation of cost share accounts • Done after 53 account is set up • Accuracy • Process or changes should be coordinated through OSP • Cost share account coordinator (Clint McBlair) • Unrecovered F&A • Account not needed

  7. Cost Share Issues and Misconceptions • Cost Sharing is not “Real Money” • Direct Cost • F&A Costs • Effective rate much less than 47% • Utilities, maintenance, construction, equipment • Human Resources, Department Administration, OSP • Double “Whammy” • F&A rate calculation • Bigger base = lower recovery rate • Competitiveness • Leverage vs. cost sharing

  8. Example Proposal Language • Effort equivalent to $25,000 in salary and benefits will be provided to the project by Professor Roy Hinkley • Professor Longhair will act as principal investigator and requests 30% salary support. He will provide additional support as needed. • Dr. Christmas Jones will have access to addition resources such as a Large Hadron Collider to complete the work of the project

  9. Valuation Examples • To demonstrate the value of the energizer battery consumption algorithm we will subject three electric cars (MSRP $25,000 each) to various operating scenarios. The cars will be provided to the project by their owners for the test period free of charge. • Ray Kinsella will provide a 3 acre tract of land for a period of 1 year to test the efficacy of new field lights at no cost to the project. The fair market value of the land is $5,000 per acre.

  10. Valuation Examples • To accomplish the renovation of the homeless shelter Mr. Perry Mason, Esq. will provide 60 hours of general construction work. A noted attorney, Mr. Mason’s billable rate is $500 per hour. • Mr. Tony Stark will donate 10 copies of his system control software (MSRP $50 each) to the project.

  11. Valuation Examples • To celebrate the successful completion of the project the School of Applied Fermentation will sponsor a Beer Pong competition for the faculty and staff associated with the project. • The sponsor requires 5% cost share for a project and considers tuition an unallowable cost. Since my graduate student worked on the project and my department supported the tuition I can count the tuition toward my requirement.

  12. Documentation • Professor “Wrong Way” Feldman neglected to set up the required cost share account to collect the voluntary committed cost share for her project on topography. A memo from her stating that 10 volunteers worked on the project is sufficient support. • A letter from a corporate sponsor stating, “We support the project by committing goods and services up to $5,000” is sufficient support.

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