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“Cost sharing” is the designation used for the portion of verifiable sponsored project costs contributed by the university/department from its own resources (non-federal funds) or by other outside entities. Many awards, including Environmental Protection agency (EPA), National Oceanic and Atmospheric Administration (NOAA), and some United States Department of Agriculture (USDA), and others require cost sharing.
Cost sharing funds are established for recording these costs. All non-federal expenses must be recorded in cost share funds to be certified for that purpose.
When an agreement is received that has cost sharing indicated (either in the agreement itself, or in the proposal which becomes a part of the agreement), Research Accounting will set up the appropriate cost sharing fund(s), and notify the PI and college/department accountant.
All cost sharing expenses for the project will be recorded in the unrestricted cost share fund. The college/department accountant will complete Labor Distribution forms as needed to reflect appropriate salary. Equipment purchases, travel, or other cost share expenses will be charged directly to the cost share fund. As each expenditure is posted to the cost share fund, a corresponding transfer transaction will be posted moving funds required to cover this expenditure from the designated unrestricted fund’s budget.
The department will notify Research Accounting to set up a cost share fund/index when needed for non-mandatory cost share.
The National Science Foundation has a statutory requirement of cost sharing minimum of 1 percent on the aggregate total costs of all projects. One NSF cost share fund is used for this purpose. Each department which has active NSF awards will receive an FIS Index to record this NSF cost share.
USDA/Pacific Northwest Area (PNW) has determined GRA Fee Remission as an allowable cost share item.
One PNW-GRA Fee Remission cost share fund per department will be established for this purpose. Each department which has active PNW awards will receive an FIS Index for this purpose. Payroll will be instructed to record the GRA fee remission for these employees to this fund.
Any USDA/PNW project which has cost sharing of other than GRA Fee Remission and F&A Cost will have a separate fund established.
Two types of costs, direct and indirect (Facilities and Administrative Costs), are associated with grants, contracts, and cooperative agreements. Direct expenditures which can be charged to sponsored project funds are known as “allowable costs.”
Allowable costs are determined by OMB Circulars A-21, A-110, and/or by the granting agency through grants manuals or contract terms and conditions. The principles published in Circular A-21 are designed to ensure that the federal government bears its fair share of the total cost of a project, except where restricted or prohibited by law.
Allowable costs generally fall within these guidelines:
The administration of a contract or grant project involves identifying all costs associated with it. Cost information is needed both to manage the internal affairs of the University and to satisfy external requirements. Each department/PI is encouraged to use the FIS system to record encumbrances to stay current with commitments made during the project. An account code is assigned to each cost to classify the expenditure according to what is received.
Direct costs are expenditures associated with grants, contracts, and cooperative agreements that are necessary for and can be identified with the performance of a specific sponsored project. Direct costs of a sponsored project include all personnel costs charged to the project; applicable payroll assessments; graduate tuition remissions; expenditures for supplies and equipment; travel expenses; computer usage, printing, and other service department charges; and any other expenses specifically identified with the project.
This is general information. Principal Investigators should refer to the award document for requirements or restrictions specific to the project. Contact Amy Manselle (541-737-1587) for assistance with specific questions.
F&A costs are expenditures associated with a grant, contract, or cooperative agreement that cannot be charged to nor specifically identified with individual sponsored projects. These costs include maintenance of physical facilities, library services, administrative services, and departmental administration. In general, F&A costs involve expenditures necessary for the development and maintenance of an environment conducive to research.
Most grants and contracts provide for the recovery of F&A costs incurred in their execution and management. The recovery is based upon specific F&A cost rates and assessed to individual projects on a percentage basis.
The rates for Oregon State University are negotiated by the OUS Controller’s Office with the U.S. Department of Health and Human Services (the F&A rate negotiator for most federal agencies). The negotiation is basically a review of the University’s costs and an assessment of the reasonableness of the charges.
In most cases, F&A costs for a sponsored project are calculated by multiplying the approved F&A rate and the Modified Total Direct Cost (MTDC) paid on the award. MTDC is determined by subtracting GRA/GTA Fee Remission (10951 account code); equipment (4XXXX); subcontracts over $25,000 (39920 account code); participant costs (5XXXX); and other items from the Total Direct Costs posted on the sponsored project account.
A portion of recovered F&A cost is returned to the colleges.
The 70005 account code is used to record the recovery of F&A costs.
Departments and PIs are encouraged to utilize the FIS encumbrance system so that reports generated from FIS will be a management tool.
Payroll charges made to the wrong index are handled via labor redistribution. Contact the Department Office Manager to initiate the redistribution. Note that any changes or cost transfers must be supported and accounting records, proposal budgets, and progress reports to sponsoring agencies must reflect data reports on effort reports.
Transfer of costs that represent corrections of clerical or bookkeeping errors should be made promptly after errors are discovered. The transfer must be supported by documentation that explains how the error occurred and certifies the correctness of the new charge. A statement that the transfer was made “to correct error” is not sufficient.
Cost corrections of expenses and payroll must be made within 90 days of the original error. Requests for corrections older than 90 days must include a justification as to why the correction was not made within the timeframe.
When closely related work is supported by more than one funding source, a cost transfer between accounts may be made under these conditions: