Cost Sharing Approval

Source for most of the information on this page: OSP Website

Page Contents

Background

Cost sharing is any project cost that is not reimbursed by the sponsor to support the scope of work defined by the federal or non-federal sponsored award. 

Harvard strongly discourages cost sharing, unless it's a commitment required by the federal or non-federal sponsor. If cost sharing is quantified in the budget and/or budget justification, it becomes committed (a binding requirement of the award), which must be tracked in GMAS and may require reporting. Failure to appropriately document cost sharing commitments from verifiable official University records could result in audit findings and require the return of funds to the sponsor.

Research administrators are responsible for reviewing the University’s cost sharing policy and detailed guidance

Cost Sharing Types

Use the Cost Sharing Decision Tool to identifying the Cost Sharing Type, which will help determine if the cost sharing commitment has to be recorded in GMAS, included in the proposal budget, and if expenses have to be tracked and reported to the sponsor. 

Table 1: Cost Sharing Types and Descriptions
Cost Sharing Type Description GMAS Proposal Track
Expenses
Report
Expenses
Mandatory Cost sharing commitment that's a mandatory requirement per the sponsor’s guidelines, written communication, or terms & conditions ✔   ✔   ✔   ✔  
Voluntary Committed Cost sharing commitment that's NOT a mandatory requirement per the sponsor BUT will be included in the proposal budget and/or justification* ✔   ✔   ✔   ✔  
Voluntary Uncommitted Cost sharing commitment that's NOT a mandatory requirement per the sponsor AND will NOT be included in the proposal budget and/or budget justification* ❌  ❌  **   ❌ 
Over-the-Cap Salary Cost sharing commitment that's ONLY a portion of a faculty or staff member’s salary and associated fringe benefits that exceed regulatory maximum imposed by the sponsor (e.g., NIH’s salary cap) ❌  ❌  **   ❌ 

* Per the Cost Sharing Policy, "Harvard strongly discourages cost sharing, unless it's a commitment required by the federal or non-federal sponsor. Voluntary cost sharing should not be included in a federal proposal."
** For Harvard Chan School, only salary-related expenses MUST be tracked via a companion account for the School’s F&A rate calculation and effort reporting purposes but do NOT have to be tracked in GMAS  

Cost Sharing Sources

Use the Cost Sharing Decision Tool to identifying the Cost Sharing Source, which will help determine how the commitments will be made. For Mandatory & Voluntary Committed cost sharing types, it will also help determine how to complete the cost sharing details in GMAS, including which documents & prior approvals to upload to the GMAS document repository.

Table 2: Cost Sharing Sources and Descriptions
Cost Sharing Source Description
University/School Funds Commitments that are paid from University funds using gift, endowment, or other non-sponsored sources (represented by the 000001- 054999 and 300000-699999 fund ranges).
Sponsored Contributions (or Matching Funds) Commitments that are paid from non-federal sponsored awards at Harvard (represented by the fund range 200000-299999). Prior approval or authorization must be obtained from non-federal sponsor providing the cost sharing commitment. These types of commitments must be tracked manually by the department or local unit managing the award.
In-Kind Cost Sharing In-kind cost sharing are those contributions wherein the value can be readily determined, verified, documented, and justified but where no actual cash is transacted in securing the good or service comprising the contribution. When applicable, an estimated value of the in-kind cost sharing should be determined and documented based on the fair market value at the time of the accepting award. In-kind cost sharing must be tracked manually by the department/local unit managing the award.
Subrecipient Cost Sharing Commitments, expenses, or in-kind cost sharing made by subrecipients where Harvard is the prime awardee. Cost share is included in the subrecipient’s proposal and documented in the subaward agreement. These types of cost sharing commitments cannot be tracked in Harvard’s systems; therefore, the commitments must be verified manually by the department or local unit managing the award through subrecipient invoices.

Companion Accounts to Track Cost Sharing

When a sponsored project is awarded, a 33-digit sponsored account string is set up in GMAS and the general ledger. To track cost sharing, the department creates a companion account in the Account Maintenance module of WasabiA companion account is required for all committed cost sharing direct expenses associated with a sponsored award. 

A companion account is an account that shares the same sponsored activity and subactivity value with a non-sponsored fund value in the Harvard Chart of Accounts. By transacting to a companion account, users can track and access the related financial expenditures in the GL that are not posted to the sponsored award. Companion accounts are used for University contributions to costs sharing and to capture over-the-cap salary for effort reporting purposes. and should be coded using a sponsored activity and subactivity value with a non-sponsored fund.

Companion Account Example

The 33-digit sponsored account string is set up in GMAS and the general ledger, using sponsored fund 123456. To track cost sharing expenses, the department creates a Companion Account using a non-sponsored fund and the sponsored activity-subactivity combination.

  • Sponsored Account String: 275.45300.XXXX.123456.377171.0001.15399 
  • Non-Sponsored Account String (Companion Account): 275.45300.XXXX.000001.377171.0001.15399

Companion Account Decision Chart

Table 8: Decision Chart for Cost Sharing Companion Account Coding

 

Mandatory Committed Cost Sharing

Voluntary Committed Cost Sharing

Voluntary Uncommitted Cost Sharing

Over-the- Cap Salary

University Contributions are: University Funds (gift, endowment, or other unrestricted non- sponsored sources in the fund range of 000001-054999 and 300000-699999)

Required*

Required*

Not required for non-salary expenses**

Required*

Sponsored Contributions are:

Non-federal sponsored awards (in the fund range of 200000-299999)

Not required

Not required

Not required

N/A

In-Kind Cost Sharing is:

Non-cash contribution of goods and services from the University or donations from third parties

Not required

Not required

Not required

N/A

* There may be exceptional cases in which a companion account cannot be used to track cost sharing. Therefore, a detailed listing must be provided at interim reporting periods and at award closeout.
** For Harvard Chan School, only salary-related expenses MUST be tracked via a companion account for the School’s F&A rate calculation and effort reporting purposes but do NOT have to be tracked in GMAS.

Allowable Cost Sharing Expenditures

Cost sharing commitments can be met using direct or indirect costs that are allowable, allocable, reasonable, and consistently accounted for in accordance with University and sponsor policies.

Direct Costs

1. Committed Effort

Salary and fringe benefits associated with faculty and staff committed effort. Note that over-the cap salary, or salary paid to an individual in excess of a sponsor-designated limit, cannot be used to meet a cost sharing commitment.

2. Other Direct Costs

Direct costs that are considered allowable on a sponsored award could be cost shared. Some examples include the following:

  • Travel expenses (Note: Cost sharing for a federal award must comply with federal travel regulations including lowest economy airfare and the Fly America Act as outlined in the University Travel Policy.)
  • Laboratory and other supplies
  • Consultant costs and other professional services
  • Equipment items that do not meet the capitalization threshold

The purchasing of goods and services as cost sharing expenses must comply with federal procurement requirements including use of the vendor justification form and debarment certification, as outlined in the University Procurement Policy.

3. Equipment

Moveable, tangible personal property with a useful life of one year or more and a per-unit acquisition cost of $5,000 or more. Capital equipment includes scientific equipment, fabrications, and software. Capital equipment is recorded on the University’s general ledger as a capital asset and expensed to the appropriate capital equipment object code.

Existing capital equipment cannot be offered as cost sharing. Rather than committing the use of existing Harvard-owned equipment as cost sharing, proposals should characterize the equipment as "available for the performance of the project at no direct cost to the sponsored award.”

Indirect Costs or Facilities and Administrative (F&A) Costs

Indirect costs or F&A are costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, instructional activity, or any other institutional activity.

Indirect costs may be offered in a proposal to meet cost sharing requirements imposed by the sponsor and must be approved by the sponsor in order for the amount to be included as part of a cost sharing commitment.

Specifically, in the case of a federal award, the federal agency’s approval can be based on the acceptance of a budget that clearly includes F&A as part of cost share or a specific approval by the agency. Without such approval the indirect costs cannot count toward cost sharing requirements.

1. Unrecovered Overhead

The amount of indirect costs not recovered from a sponsor due to a sponsor funding an award with an indirect cost rate below the University’s federally negotiated F&A rate. This type of unrecovered overhead cannot be included as part of cost sharing or matching without the prior approval of the sponsor.

2. Overhead on Cost Shared University Resources

When direct costs using the University funds are included as cost sharing commitments, the associated indirect cost is not visible in General Ledger. Overhead on cost shared University resources may be included as part of the University cost sharing commitment only if it is approved by the sponsor.

Cost Sharing Changes Requiring a GMAS Request

Table 3: Types of Cost Sharing Changes Requiring a GMAS Request

#

Type of Change

GMAS Cost Sharing Request

Dept Approval Required?

1

Change in total cost sharing amount

Required

Yes

2

Change from One Source to Another (to or from University, Sponsored, In-kind, sub recipient)

Required

Yes

3

Change from one sponsored fund to another sponsored fund

Required

Yes

4

Change from one University fund to another University fund

Recommended

No

5

Change to budget line items (no change to total)

Recommended

No

6

Change from one sub-recipient to another

Required

Yes

7

Change of In-Kind source and/or description

Required

Yes

8

Change to or from Voluntary / Mandatory

Required

Yes

Supporting Documentation Required in GMAS 

Table 4: University Contributions Documentation

Document

Description

At Proposal Phase

At Award Phase

During Award Phase

At Closeout Phase

Repository

Budget
(See 
Note 1)

Included in proposal package

Required

 

 

 

Request

Revised Budget (See Note 1)

Included in proposal package

 

Required (if changed from proposal)

Required (if changed from awarded amt)

 

Request

Transaction Listing

HART Report

 

 

Required (at reporting)

Required

Cost Sharing

Table 5: Sponsored Contributions (Matching) Documentation

Document

Description

At Proposal Phase

At Award Phase

During Award Phase

At Closeout Phase

Repository

Sponsor Approval

Approves use of funds for cost sharing

Required

 

Required (if changed from Awarded amt)

 

Cost Sharing

Revised Budget (See Note 1)

For sponsored matching fund

 

Required (if changed from proposal)

Required (if changed from awarded)

 

Cost Sharing

Acknowledgement of reduced commitment

Provided by sponsor, if commitment is not met

 

 

Required (if reduction is known during the award)

Required

Cost Sharing

Table 6: Sub-Recipient Documentation

Document

Description

At Proposal Phase

At Award Phase

During Award Phase

At Closeout Phase

Repository

Cost Share Commitment

Sub-recipient commitment to cost share

Required

 

 

 

Subagreement

Budget (See

Note 1)

Included in subagreement

Required

 

 

 

Subagreement

Revised Budget (See Note 1)

Included in Subagreement

 

Required (if changed from proposal)

Required (if changed from award)

 

Subagreement

Confirmation of Cost Share commitment

From sub- recipient indicating commitment was met.

 

 

Required (at reporting)

Required (may be noted on invoice)

Cost sharing

Table 7: In-Kind Documentation

Document

Description

At Proposal Phase

At Award Phase

During Award Phase

At Closeout Phase

Repository

Value & Description of In-Kind Commitment

Provided by entity best able to identify the value of the goods or services

Required

Required (if changed from proposal)

Required (if changed from award)

 

Cost Sharing

Confirmation In-Kind commitment was met

Provided by entity best able to identify the value of the goods or services

 

 

May be required at reporting

Required

Cost Sharing

Note 1: Budget & Revised budgets containing cost share information are noted here for consistency, but they are typically included in the proposal package (or subagreement for subrecipient cost sharing) and can be uploaded as they currently are in the Request or Subagreement document repositories. There should be no duplication of uploaded documents.

In addition to the documentation noted above that is uploaded by the department/local level managing units, OSP Research finance uploads all approved invoices and reports to the financial deliverables repository which include cost sharing information when applicable.

Cost Sharing Procedure for Harvard Chan School

Please refer to the HSPH Cost Sharing Approval Process page for detailed instructions. HSPH created a Cost Sharing Decision Tool to help guide our administrators identify the Cost Sharing types and sources.

Resources

University-wide Resources

Related Policies

Related Documents

School Contact 

Harvard Chan School's Cost Share Approver: Catalina DiazAssociate Director, Research Finance & Compliance