Handbook
For Medical School Accountants
Cost Sharing & Salary Cap
Last Date Reviewed: 10/5/15
What is cost sharing (includes matching and in-kind contributions)?
Basic definition: COST SHARING is any expense that is attributed to sponsored project costs that is not paid for by the sponsor. These costs can include salary and fringe benefits, allowable F & A, shared cost of equipment and any other direct cost that could have been legitimately charged to the project.
Mandatory cost sharing – required by sponsor/driven by the sponsor and must be reported to the sponsor
Voluntary cost sharing – investigator driven and not a condition of the award. Must be tracked but not reported
Committed cost sharing – mandatory or voluntary – stated in the budget or the narrative and must be tracked
Uncommitted cost sharing – voluntary and off the books. Not tracked/not reported
A best practice is to determine cost sharing requirements and funding sources during proposal preparation. Proposal instructions should be reviewed to determine if cost sharing is a requirement for awarding funding before cost sharing is committed. The University discourages cost sharing because it increases the institutional costs corresponding to funded research and redirects funds from instructional or other activities.
Tracking Cost Sharing –
During project establishment, include committed cost sharing on the PeopleSoft friendly budget that is sent to the Grants Administrator in SPA. The cost sharing budget lines are then set up as part of the award establishment. The function code for the non-sponsored chart string should match the function code of the project. If you determine you need a cost sharing line set up after the award is set up, discuss with your certified approver as they may be able to set this up for you.
For non-payroll activity, use the cost sharing chart string at the time the requisition or voucher is prepared to document the match.
For payroll activity, the cost sharing is tracked as a distribution line on the payroll distribution or after the fact using a retro salary adjustment. If you do not have PeopleSoft HR access, you will need to coordinate this with your payroll person.
Finally, the total salary and effort is confirmed in ECRT during the effort certification reporting for that cycle.
Salary Cap and Cost Sharing –
The Salary Cap is the legislatively mandated provision limiting the amount of salary dollars that can be directly charged to a project. The issue date of the award determines the NIH executive level allowed for that award period.
The difference between the NIH Cap and the institutional base (total UMN compensation excluding bonuses, lump sum payments and overload payments) is an unallowable charge to the sponsored project. NOTE: UNS and UMP salaries are excluded from total institutional salary and for purposes of effort certification. TheUniversity ofMinnesota uses cost sharing to document the difference between the salary cap and total institutional UMN salary for the effort to be attributed to the project.At the end of each effort cycle, the payroll, cost share and total effort amounts are confirmed in ECRT.
Training services has created a good job aid for NIH salary cap questions (see SOP supplemental – NIH Salary Cap Worksheet). SFR has created a useful worksheet to assist with calculations (See SOP supplemental – SFR Payroll and Costshare Calculation).
Resources:
University Policy on Offering Cost Sharing, Matching and In-Kind Contributions
NIH Salary Cap
Training services NIH Salary Cap Job Aid and cost sharing calculations
Spectrum course - Cost sharing SP05
SPA forms including PeopleSoft Friendly Budget
SFR – payroll and cost share calculation worksheetand other useful information
Training Services – for classes for Payroll distributions/Retro Distributions
Access to ECRT and Payroll made using the Access Request Form once all necessary training is completed