Cost-Sharing Definition
Cost-sharing is most easily defined as “project costs not paid for by the sponsor”*. This includes cost-sharing or matching mandated by a sponsor (“mandatory cost-sharing”), plus any costs promised in a proposal, whether that promise is listed in the budget or budget justification or in the proposal narrative (“voluntary cost-sharing”). The most common type of cost-sharing the University includes in its proposals is unpaid effort – the time of the PI or other project personnel that is promised to the sponsor but not charged to the sponsored project. Cost-sharing (particularly voluntary cost-sharing) is discouraged, because such costs must be added to the University’s research base when calculating our indirect cost rate (which has the impact of lowering the F&A rate.) The University has been at significant risk of compliance with cost-sharing requirements for many years because of the need to manually track cost-sharing. With Peoplesoft, the University is finally able to demonstrate compliance with cost-sharing requirements – by setting up in Peoplesoft a way to track and manage cost-sharing commitments.
*Voluntary uncommitted effort is not considered cost-sharing. See the University policy on cost-sharing for a broader discussion of this topic.
Departmental Tasks before a Cost-Share Budget is Established
Before submitting a cost-sharing budget to SPA, departments should follow University procedures to establish a valid Fund, DeptID and Program combination in KK_Expense table if the desired combination does not already exist (in many cases, the desired combination will already exist and no action is needed.) When SPA sets up the required cost share budget lines on the sponsored project, these budget lines are written to the Project Resource table and the KK_Child ledgers only. This tells the financial system that, of the thousands of valid Fund-DeptID-Program combinations that exist in PS, these are combinations that are appropriate for cost-share/match strings for this particular project.
Requesting SPA to Establish a Cost-Share Budget
Departments should submit a PS-friendly budget form (completing the cost-share column) to let SPA know which accounts should be opened and how much money should be budgeted into each account. If a department is cost-sharing effort, the estimated cost of that salary and fringe benefits should be calculated and listed. SPA cannot finalize budgets that include committed cost-sharing (mandatory or voluntary) until the necessary cost-sharing information has been turned in to SPA. Use of the PS-friendly budget form is requested since it helps to ensure that all necessary information is provided. PS-friendly budgets should be submitted to the Grant Administrator handling your sponsored project.
Account Codes
The vast majority of cost-sharing is used for very limited and specific purposes, such as cost-sharing an individual’s salary or providing matching funds to purchase equipment. SPA will establish budget lines and open account codes for each cost category that a department anticipates actually using (rather than a blanket opening of all account codes that appear on the related sponsored project.) This helps validate allowable cost-sharing expenditures as well as helps to expedite account setup since account codes in PS must be opened one at a time (waiting for the system to process each line before moving on to the next.) A department may request additional account codes to be opened (and funds appropriated into them) if circumstances necessitate a change in the original plan to meet cost-sharing requirements. At that time, any agency-imposed rules on how cost-sharing must be met can be validated before expenditures are incurred.
CF1, CF2 and Fin EmpliD
Effective immediately, SPA will set up budget lines that include CF1, CF2, or Fin EmplID on payroll/fringe benefit account codes on cost-sharing budgets if requested to do so by a department. This will enable the proper HR combo code generation process. Information should be sent to the SPA GA on a PS-Friendly budget form. (SPA prefers the information be sent on the PS-Friendly budget because it helps to ensure that all data elements needed for the setup are provided, expediting setup.) The form has recently been updated to include a space to enter these fields – if you do not have the most recent version of the form, please download a new copy at: http://www.ospa.umn.edu/efs_sp/documents/PS-Friendlybudget-17Sep08.xls
CF1, CF2 and FinEmplID are not required in non-payroll/fringe budget lines (either sponsored or cost-sharing) because Commitment Control does not budget check these chartfields. This means that departments interested in coding expenses using CF1, CF2 or FinEmplID values may add CF1, CF2 or FinEmplID values into their chart string when processing these types of expenses without the budget lines having been previously set up with these values embedded.
Sponsored PS Projects (Use of CF1, CF2 and FinEmplID)
If the desire to use these optional chart fields is to help segregate expenses, we recommend instead that departments ask SPA to establish multiple Projects under an Award. This option will work well with many standard reports that are being produced (whereas the optional chart fields will not.)
Cost-Share and Matching Conversions (and Next Steps in PS)
Cost-sharing accounts that were used in ECRT (the effort reporting system) were captured and PS Fund, Dept, Program, Project, Activity, PCBU, CS and Account were established in Peoplesoft based on the old Fund Area Org combinations in CUFS These strings were converted without CF1, CF2 or FinEmplID values since those values did not exist in ECRT. If a department wishes to include those special values on its cost-sharing accounts, please submit a rebudgeting request asking that those values be added to the chart string.
During the conversion, the budgets for these converted ECRT chart strings were set up with a $0 value, all salary and fringe benefit accounts opened, and applicable HR combo codes were created. To add a budget amount, please submit a rebudgeting request to your Certified Approver to modify the CS budget to add an amount equivalent to the salary and fringe benefit that will be cost-shared on the project. If you do not add the funding into your converted cost-sharing budget, you will not have a basis to compare budgeted versus actual expenses (and thus be more easily able to verify that the amount of effort committed to the sponsor was actually expended on the project.) However, because such accounts were at various stages of completing their cost-sharing at the time of Go-Live, it may be difficult to ascertain a dollar value of cost-sharing still needed. It is therefore permissible that departments to leave converted cost-sharing accounts with $0 budgets should they prefer to track and account for effort on these accounts locally.
No values were converted for matching costs (equipment, supplies, etc.) since there was no existing electronic data source available for such a conversion. To establish a cost-sharing account on an existing project that includes “matching” costs (costs other than salary and fringe benefits), please submit a PS friendly budget form to your SPA Grants Administrator with the cost-sharing column completed. SPA will then modify the existing budget to include the applicable matching cost accounts and budgeted amounts. If a budget is not created, the CS expense will not pass budget check at the time a cost is incurred. Please allow at least two weeks for these budgets to be created. If a cost must be incurred before a budget can be set up, you will need to process the expense as a non-cost-share expense and then do a journal to move the expense onto the CS chart string.
Retroactively Applying Costs to a Cost-Share Budget
If you have already processed transactions that should be cost-share/match transactions, but the transaction was processed without both the Program and Project chartfields and the “CS” value for cost-share, take the following actions:
- Ensure that a valid Fund, DeptID and Program combination exists to hold your cost-share expense
- Ask SPA to establish cost-share budget lines with the applicable accounts opened (if not already done) Ask for CF1, CF2 or FinEmplID values to be added to your budget lines if you wish to use these.
- Process an HAS (payroll) or a JE (non-payroll) to correct the transaction line (reversing it from the chartstring it was originally charged to and adding it to the new chart string which will include Fund-DeptID-Program-Project-CS-Account, and, if you have chosen to use them CF1, CF2, or FinEmplID.
Getting Reports on Cost-Sharing/Matching
The sponsored reports were designed to reflect any cost-share/match activity related to the Project(s) included in the report. For example, if you run the Sponsored Project detail report, the first 5 columns show the sponsored (i.e. reimbursable) budgets, pre-encumbrance, encumbrance, expense and available balance. The other 5 columns display the cost share budget, pre-encumbrance, encumbrance, expense and available balance for that Project. Because the cost-sharing expenses are being paid from a non-sponsored fund source, any reports that you run for that non-sponsored Fund-DeptID-Program combination will also show these transactions. |
EFS: SP Forum
