Effort Training Part III
Cost-Sharing, Salary Caps & Other Concerns
Office of Sponsored Programs
July, 2011
Summer Salary / Calculating Ninths
• Faculty appointments
- Made at college level
- Determine how many extra ninths they
may earn
- Determine if they can earn summer
salary
COST SHARE
• The portion of project costs not funded by the
sponsor. The costs must be clearly defined
and directly allocable to a specific sponsored
project.
• Expenditures that are necessary and
reasonable to accomplish the program
objective
What to call it?
• COST SHARE
• MATCH
• INSTITUTIONAL SUPPORT
Types of Cost Share
• Mandatory (required by sponsor)
• Voluntary Committed
(offered in proposal, becomes binding)
 treat same as Mandatory
• Voluntary Uncommitteed (not reported)
Memo 01-06 Clarification of OMB A-21
treatment of VUCS
 Sources: University, 3rd party,
Subcontractors
 Federal funds may not be used as
match (some exceptions under unusual
circumstances where authorized by
Statute)
 Most common cost shared items are
salaries, fringe, tuition, and equipment
Requirements for Allowability
• Verifiable from recipient’s records
• Not included as cost share for any other project (cannot
use twice)
• Necessary and reasonable to accomplish project
• Allowable under applicable cost principles
• Not paid by Federal funding from another award
• Included in the approved budget when manadatory
• Expended during the performance period
Your Proposal and Cost Share
• Cost share should not be included in the
proposal unless it is required by the sponsor.
• If required, do not exceed the
amount/percentage identified in the RFP or
solicitation.
• Cost Share must be approved by the
Chair/Dean
Other Proposal Considerations
• Third Party cost share requires a signed
commitment letter.
• If submitting a revised budget to reduce
sponsor funding, reduce cost share
appropriately.
• PI effort is required on a project and must be
documented; if not funded directly by the
sponsor, the effort must be Cost Shared
(minimum 1%) –
Exception: equipment & instrumentation
grants, doctoral dissertations and student
augmentation
Your Award and Cost Share
• Once proposed and accepted, cost share
becomes mandatory
• All items cost shared must meet the Cost
Accounting Standards (allowable and
allocable)
• Cost share purposes are established by the
Treasurer’s Office (Ex: Equipment/UDRF
Match)
PI & Dept Responsibilities
 Keep records (use PROJECT ID to identify
cost-shared expenses)
 Meet your Cost Sharing Commitments
 Alert your C&G Specialist if you foresee a Cost
Share issue
Tracking Cost Share
• LAM entries – accurate and timely will avoid
JV’s later
• Confirm cost share for each effort certification
period
• Tuition is not salary cost share, but IS tied to
grad student effort; beware the student on
sustaining status because tuition value is
lower
Reporting Cost Share
• Invoices or interim financial reports may
require cost share reporting
• Transactions for interim reports will be
reported only thru the statement date of the
reporting period
• Transactions tagged with the project are
easily retrieved with queries & reports
Reporting Cost Share
• Cash from any source (UD departments or
colleges, or outside funding) is not cost share
until it is spent!
• Cost share transactions will use fringe and
F&A rates appropriate for the award
• Automated Closeout Report may not show all
required cost share
Closeout with Cost Share
• PI’s/Dept. Administrators should not report cost
share directly to the sponsor without RO input
• Mandatory cost share will be reported by RO as
part of financial reporting
Closeout with Cost Share
• Voluntary committed cost share might be
reported to sponsor, depending on reporting
requirements
• Cost share above the required amount will
not generally be reported
• Voluntary uncommitted cost share is not
documented or reported
Consequences
• If cost share is missing or short-funded in the
LAM, process a JV right away
• If effort certification is already approved,
federal auditors frown on re-certification
• May need a 90 Day JV; there is intense audit
scrutiny in this area
Consequences
• Sponsor funding may need to be returned if not
enough cost share
• Non-compliance with cost share requirements
could jeopardize future funding
Questions: Fact or Fiction
• Once I receive an award, I am not required to
meet the proposed cost share
• Cost share expenses must be documented
• If the cost share is only mentioned in the Project
Narrative, I am not required to document the
expenses
Fact or Fiction:
• Once I receive an award, I am not required to meet
the proposed cost share - FICTION
• Cost share expenses must be documented - FACT
• If the cost share is only mentioned in the Project
Narrative, I am not required to document the
expenses - FICTION
Federal Salary Cap
What does it mean?
• Federal Consolidated Appropriations Act limits the rate at
which salaries can be directly charged to sponsored
projects
• Maximum annual rate of pay at which an individual’s full
time effort can be charged
• Excludes associated fringe benefits and indirect costs
(except DOD)
• Not intended to limit the actual salary paid by the institution
Agencies with Salary Caps
FY2011
• National Institutes of Health
– $199,700: Executive Level I of the Federal Executive
Pay scale
• Department of Defense (Benchmark Compensation
Amount)
– Applicable to contracts only
– $693,951: All forms of remuneration for services, and
related costs that would be considered fringe benefits
• Department of Labor – Employment & Training division
– $179,700: Executive Level II
Salary Cap Implementation
• The effort valued above any salary cap must be tracked in
the financial system by adding the award’s project to salary
transactions paid by the University.
• The mechanism is the same as it is for recording costshare, but this pay is not considered cost-share because it
is an unallowable cost to the award.
• NIH’s salary limitation provision applies to subawards, but
does not apply to consulting fees.
Internally Budgeting the Overage
Dr. Einstein has a 9 month faculty appointment and is committing 1
month of paid academic effort on this NIH project. Dr. Einstein's
contracted salary amount is $160,000
1.
2.
3.
4.
Annualize salary $160,000/9 = $17,778 * 12 = $213,336
Determine 1 month of pay ($213,336 /12 = $17,778)
NIH caps @ $199,700 /12= $16,642
Determine cost share ($17,778 - $16,642 = $1,136)
At the time of proposal, departments should ensure that adequate nonsponsored funding is available to cover the balance when a faculty's
salary is over the cap.
www.udel.edu/research/xls/salary_cap_worksheet.xlsx
Budgeting in PeopleSoft @ Proposal
Two Salary Lines to total 1 month ($17,778):
$16,642
$1,136
SRPERS – Sponsor paid academic salary
SRPERS – Salary over the cap (not listed on NIH
application) *Cost share link should be completed
and approved via the webform.