University resources may only be considered cost share if they meet the following criteria:

• The cost share amount must be verifiable.
• It is not included as cost share to another grant or contract account without agency approval.
• It is necessary and reasonable for the project and includes only expenses directly related to the project.
• It is allowable and allocable under applicable cost accounting principles.
• It is not funded from another grant or contract without agency approval.
• It is incurred within the time frame of the project

After the funding agency awards the proposal to Indiana University, the university is required by Federal guidelines to document mandatory and committed cost share. Cost share expenses must be separately budgeted and recorded in Contract and Grant cost-share sub-accounts.

It is the responsibility of the department to ensure that the appropriate cost share expenses are booked to the cost-share sub-accounts in a timely manner.

The university identifies cost share within two basic categories of mandatory or committed.

Mandatory Cost Share is required by the sponsor and must be documented. The requirement may be identified in the Request for Proposals, in the Award terms and conditions, or within the agency’s policies or guidelines. Examples of mandatory cost-share include:

• National Science Foundation requires a minimal cost share commitment of 1% of project costs on most unsolicited proposals.
• National Endowment for the Humanities typically requires a 1:1 cost-share match (or something similar) from institutions requesting funding.

Committed Cost Share is not required by the sponsor, but is included by the university in the proposal budget or proposal narrative submitted to the agency. If the proposal wins funding by the agency, the cost share included in the proposal becomes part of the award, and is therefore committed by the university. An example of committed cost share is a proposal listing the PI’s effort at 50% but only requesting the agency pay for 30% of the PI’s salary. The remaining 20% becomes committed cost share.

Cost share that is provided during the life of the project, but was not committed in the proposal or required by the agency, is considered voluntary cost share. An example of voluntary cost share is when the PI proposes to spend 20% effort on the project, but actually spends 50% effort. The additional 30% is voluntary cost share. Voluntary cost share does not need to be separately budgeted or recorded in cost-share sub-accounts.

http://www.fms.indiana.edu/cg/imp_notice/03-4.asp, Accounting for Cost Share

http://www.fms.indiana.edu/cg/imp_notice/02-11.asp, NSF Institutional Cost Share Requirement

http://www.fms.indiana.edu/cg/imp_notice/03-2.asp, Justification/Documentation of Cost Transfers

OMB Circular A-110, Section 23

OMB Circular A-21, Appendix A (Cost Accounting Standards for Educational Institutions)