Some sponsored programs require the University to participate in funding the costs of a project. The University's participation in funding the costs of a project is referred to as "cost sharing." Cost sharing expressed as a ratio is sometimes referred to as matching. The terms cost sharing and matching are used interchangeably and are subject to the same federal regulations. Reference: OMB Circular A-110 , Subpart C.23 . Unless waived by the terms of the program, federal cost principles require that cost sharing contributions meet all the following criteria:
The cost sharing requirement can be expressed as (1) percentage of the principal investigator's level of effort, (2) number of hours of the principal investigator's time, (3) percentage of total sponsor-funded costs, or (4) as an absolute dollar amount. Usually, the University meets its cost sharing requirement by contributing direct labor and associated fringe benefits, plus indirect costs. It is strongly recommended that level of effort cost sharing be expressed as the specific number of hours to be contributed rather than the percentage of effort. For projects awarded at less than the negotiated indirect cost rate, the University may include the difference between the negotiated and the awarded indirect cost rate as cost sharing, with the prior approval of the Federal agency. Meeting the cost sharing requirement by contributing supplies, equipment, or travel is discouraged because maintaining the documentation required for audit purposes is cumbersome and often overlooked.
On proposal budgets, the promised contribution of level of effort must be consistent with the cost sharing amount. The budget period for most sponsored projects is twelve months. Unless otherwise indicated the assumption is that the contributed percentage of level of effort applies to the twelve month budget period. If the contributed effort applies to the academic period only, the budget line item should be clearly stated as "academic period."
Proposals should include cost sharing only to the extent required by the program. Some investigators believe that they will improve the competitive advantage of their proposal if they promise generous amounts of cost sharing. The investigator must consider that, if an award is made on the basis of a proposal that includes excess cost sharing, the proposed cost sharing in excess of the required amount becomes a legal obligation. After the award, failure to deliver the promised cost sharing may cause the Federal sponsor to demand a refund for the unmet cost sharing and may constitute a violation of the terms of the award so serious as to provide grounds for debarment or suspension.
Out-of-state tuition waivers for graduate research assistants may not be shown as a cost sharing item in the budget. Tuition waivers do not meet the standards for "cost basis" and are not verifiable in the University financial records; therefore, tuition waivers do not qualify as cost sharing under OMB Circular A-110. Tuition waivers may be displayed as a footnote to the budget or mentioned in the narrative.
The cost of University equipment purchased before the start date of the project, made available for use on the project, may not be included as cost sharing. It is appropriate to describe University equipment available for use on the project in the Facilities section of the proposal.
The source of funding for the proposed cost sharing should be identified before the proposal is routed. If the Vice President for Research is expected to be the source for the matching funds, then arrangements should be made with the Research Office before routing the proposal, and the proposal routing sheet should clearly indicate Research Office approval of the funding arrangements.
See the " Sample One-Year Budget " for an example of the presentation of cost sharing in the proposal budget.
Some applications Аск the investigator to describe and estimate expected program income. Program income refers to income generated by activities of a project, where part or all of the cost of the activity is either borne as a direct cost of the grant or counted as a direct cost towards meeting a cost sharing or matching requirement of a grant. Examples of program income include: collection of fees for services performed during the grant, proceeds from sale of property (e.g., tee shirts, instruction materials), usage or rental fees, and conference fees. There are several options for the accounting treatment of program income. The award document will identify which option applies to your project.
If additional space is needed to conduct the project, the investigator must make arrangements at the departmental/college level for the additional space before the proposal is routed. If off campus space is required, and, if no space is available on campus, the project may be proposed at the off campus indirect cost rate and the budget should include a line item for rental of facilities. In rare circumstances it is preferable for central administration to cover the facilities rental if there is a significant cost advantage to the University in proposing the project at the on campus indirect cost rate. Please contact the Research Office (621-3512) for more information.
Employees of the University must be aware that outside obligations, financial interests, or other employment may result in a conflict of interest and affect the objectivity of their decisions and effectiveness of their performance. A conflict of interest exists when an employee is in a position to influence any University business transaction, research activity, or other decisions in ways that could lead to any manner or form of personal gain for the employee or for his/her family members, other than salary from the University, regardless of source. A conflict of interest exists when a significant financial interest could directly and significantly affect the design, conduct, or reporting of funded research.
The principal investigator and co-principal investigators of a proposed project must determine whether a potential or actual conflict of interest exists. If a potential or actual conflict of interest exists, as defined by University policy, the Conflict of Interest Disclosure Form must be completed and forwarded to the Research Office. Disclosure forms and the complete conflict of interest policy are available in the office of your department head.
Proposals involving a potential or actual conflict of interest are routed according to the normal procedure, independent of the conflict of interest disclosure process. Funded activity will proceed only after resolution of the conflict. Examples of conditions or restrictions that might be imposed to manage conflicts of interest include: public disclosure of significant financial interests; monitoring of research by independent reviewers; modification of the research plan; disqualification from participation in all or a portion of the research funded by the sponsor; divestiture of significant financial interests; or severance of relationships that create actual or potential conflicts.
Representations and certifications that are required to be submitted with the proposal vary, depending on the Federal agency and the contract amount. Generally, the grant application or the RFP will clearly specify which certifications are required. Examples of commonly required certifications and the appropriate University signatory are:
Certificate of Current Cost and Pricing Data (ORCA)
Statement of Intent to Establish a Consortium Agreement (PI and SPS)
Short Form Research Contract-Research Proposal Cover Page (ORCA)
Certificate of Environmental and Safety Compliance (Risk Management)
Small Business and Small Disadvantaged Business Subcontracting Plan (Purchasing)
For projects with more than one principal investigator and/or more than one department, credit for the award will be distributed according to the second page of the Proposal Routing Sheet. If left blank, 100% of the credit for the award will go to the first investigator and department appearing on the Proposal Routing Sheet.
For projects involving more than one department, indirect cost revenue will be allocated according to page 2 of the Proposal Routing Sheet. If left blank, 100% of the indirect cost revenue will be allocated to the college associated with the first investigator appearing on the Proposal Routing Sheet.
Occasionally, a Federal agency will audit a proposal before negotiating the contract. The auditor will verify the ERE and indirect cost rates, labor rates, and will review quotes and other documentation supporting the proposed costs. The audit report will be sent to the appropriate Federal contracting officer for purposes of negotiating the contract with the University. The proposal audit report will not be distributed to the University. The investigator may request a copy of the audit report from the awarding office.
If a representative from the sponsoring agency contacts you to schedule a site visit, notify your department head and Аск about the proper procedure for setting up the visit. Sometimes the sponsor will want to talk to an administrator about the financial capabilities of the institution. A representative from Sponsored Projects or the Office of the Vice President for Research is available to address these issues.
When a faculty member transfers to The University of Arizona from another institution, the former institution will closeout its grant with the sponsoring agency. The sponsoring agency will then award a new grant to The University of Arizona. The first step in transferring a grant is for the relinquishing institution to notify the sponsor of the remaining balance and the new end date. The investigator should work with their former institution to determine the remaining balance of the grant. The investigator will submit a proposal from The University of Arizona to the sponsoring agency in the amount of the remaining balance. Many Federal agencies have special forms for both the relinquishing institution and the institution to which the grant is being transferred.
Frequently a sponsor needs additional information or wants to award a grant to the University at an amount lower than proposed. The sponsor's grants office will call the principal investigator or Sponsored Projects to negotiate the grant. Actually, there is very little negotiation involved. Rather, the University has the choice to either accept the award at the lower amount or not accept it. If the sponsor reduces the budget, the investigator must determine whether the originally proposed scope and objectives of the project an be met under the revised budget. If not, the investigator and sponsor must redefine the scope and objectives in writing before the University accepts the award. The Sponsored Projects administrator will act as the single point of contact, coordinating the communication between the sponsor and the principal investigator.
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