Contracts and Grants Policy 9 – Cost Sharing or Matching

Nature of the Agreement

Cost sharing or matching in grants and contracts are terms that are used interchangeably. Cost sharing can either be imposed by a sponsor as a condition necessary to receive their support for research or training, or it can be volunteered on the part of the University to demonstrate its commitment to a project. Once a proposal containing cost sharing, be it imposed or volunteered, is accepted by a sponsor, it is considered binding upon the University and requires written approval from the sponser to change. Cost sharing obligations must be kept within reason and must be capable of being fulfilled from acceptable resources available to the principal investigator such as chair/head of his/her department, dean of his/her academic unit, director of associated center/institute, the Associate Provost for Research and Public/Private Sector Partnerships, or the Provost and Vice-Chancellor for Academic Affairs.

Once an award is accepted by the University, the Principal Investigator is responsible for ensuring that any cost sharing commitments are met, and that all necessary documentation is provided to the Office of Contracts and Grants. Cost sharing or matching expenditures incurred or services rendered must occur during the period of the award and are subject to the same sponsor guidelines and regulations.

As the contribution of resources under an in-kind agreement is not under the control of the University, much care must be exercised before entering into such an agreement. Once in operation, in-kind contribution agreements must be monitored by the researcher on an on-going basis to ensure that the agreement is fulfilled. This is accomplished by obtaining an after the fact certification from the entity. Procedure 12 – Cost Sharing and Matching Funds Report explains this process.

Clarification of Terminology

Cost sharing or matching is that portion of the project or program costs not paid by the sponsor. There are three types of cost sharing.

  • Mandatory Cost Sharing is required either by federal statute or by the established policy of the sponser.
  • Voluntary Committed cost sharing is in excess of any such mandatory cost sharing. It is volunteered to demonstrate the University commitment to a project. Voluntary commitments in proposals become required financial commitments if the proposal is funded.
  • Voluntary Uncommitted cost sharing is defined as over and above that which is committed and budgeted for in a sponsored agreement. More specifically, this is either additional time or resources provided by the researcher, which were not denoted in the proposal, towards completing the project.

Cash and In-Kind Contributions

Cost sharing from a University source is considered a cash contribution.

Examples of cash contributions include the following:

  • Faculty time along with the associated fringe benefits and Facilities and Administrative Costs (if allowable by the sponsor) is the most commonly used matching item.
  • Directly related supplies and services.
  • Equipment
  • Un-recovered Facilities and Administrative Costs, if approved by the sponsor.

Non-cash contributions provided by a third party are considered an in-kind contribution. There are two types of in-kind contributions: internal and external.

An example of an internal in-kind contribution is:

  • A nine-month UNCG faculty member who is voluntarily working on a research project on campus during the summer without compensation.

Examples of external in-kind contributions include:

  • Time donated by advisory council members.
  • The value associated with the use of an off-campus meeting hall.
  • Sub recipient cost-sharing.


Commitments to cost sharing and matching should be held to a minimum and should not, without compelling reason, exceed 5% of total project costs. Regardless of the percentage, the ability of the University to meet the commitment from acceptable resources must be clear.

As part of the proposal review process, when a Principal Investigator (PI) plans to include either UNCG’s resources or external entities’ resources as cost sharing, this information is specifically identified in the budget and in Section 6 on the Internal Processing Form: Application for Grant, Contract, or Cooperative Agreement. It constitutes a formal commitment to the sponsor by the department head/chair, dean of the academic unit, director of the center/institute, the Associate Provost for Research and Public/Private Sector Partnership, or the Provost and Vice-Chancellor of Academic Affairs. In cases where the matching involves external entities, a letter of commitment from each entity and a detailed budget must be submitted with the proposal. Any variation from this process must be approved by the Associate Provost for Research and Public Private Sector Partnerships before the proposal can be processed. In those cases where the subcontractors are providing cost sharing, their budget needs to identify these commitments.

Once the application for grant, contract or cooperative agreement is funded by the sponsoring agency, UNCG is required to provide the stated resources listed as cost sharing and the same fiduciary responsibilities in expending these funds, as is done for the funds from the sponsoring agency.

The Principal Investigator is responsible for tracking and providing matching information to the Office of Contracts and Grants. Guidance, according to Federal regulations, regarding what is considered acceptable tracking and reporting of matching is addressed in Procedure 12 – Cost Sharing and Matching Funds Report.

There are many instances where the cost sharing requirements for an award will be satisfied either in part or entirely by an entity external to UNCG. Appendix 1– External Matching Contributor Certification provides a sample reporting form to be used by entities external to UNCG when generating and reporting matching information to UNCG.

Criteria for Allowability

According to the Office of Management and Budget (OMB) Circular A-110 definitions of cost sharing and matching, all contributions can be accepted as part of the recipient’s cost sharing when such contributions meet all of the following criteria.

  • Are verifiable from the records of the PI.
  • Are not being included as contributions for any other federally-assisted project or program.
  • Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
  • Are allowable under the applicable cost principles.
  • Are not paid by the Federal government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
  • Are provided for in the approved budget when required by the Federal awarding agency.

Please note, in cases involving unrecovered indirect costs, they may be included as part of cost sharing or matching only with the prior approval of the Federal-awarding agency.

Changes in Committed Cost Sharing

When an application or proposal that contains cost sharing is awarded, UNCG is expected to meet the cost sharing requirement in that application or proposal. If at the time of award, the sponsor’s level of support is less than the University’s originally proposed budget, any original matching commitments offered by the University or external entities on behalf of UNCG should be re-considered for possible reduction or elimination from the award. This consideration is handled by the Office of Sponsored Programs. If during the life cycle of a project, conditions arise that make it impossible to satisfy the matching requirements, the Office of Contracts and Grants and the Office of Sponsored Programs should be informed of this fact by the Principal Investigator. The Office of Sponsored Programs is responsible for re-negotiating any reduction in the level of matching required by the sponsor. The Principal Investigator is responsible for eliminating any matching shortfall requirements.

Reporting of Cost Sharing or Matching and In-Kind

In order to assist the Principal Investigator in capturing the cost sharing information in accordance with federal regulation requirements, the Contracts and Grants Specialist Assistant will provide guidance. Please refer to the Contracts and Grants staff webpage for a point of contact. The following forms will be used as necessary: Appendix 1-External Matching Contributors, Appendix 3-Cost Sharing/Matching Brief, Appendix 4-University Salary Cost Sharing Certification, Appendix 5-Summary University Salary Cost Sharing Certification, and Appendix 6-University Non-Salary Cost Sharing Certification.

In cases where the origin of funds is not from a federal source, please consult with the Contracts and Grants Specialist Assistant to determine how the reporting requirements might vary.