Cost sharing policy


Effective October 1, 1999, MSU's cost sharing policy for federally funded projects will be the following: cost sharing can only be added to proposals if it is required by the sponsor (i.e. listed in the RFP) as one of the eligibility criteria to apply for the award. The policy change has been reviewed and approved by the PEC and Faculty Council. 

Definition:  Cost sharing is the contribution to a sponsored project that supplements agency funding.  In general, cost sharing, also known as matching, represents the portion of the project costs not borne by the project sponsor.

Written sponsor cost share requirements should be attached to the MSU Proposal Clearance Form



  • Unrecovered indirect costs (also called foregone or waived IDC’s) – The difference between MSU’s negotiated IDC rate and the rate allowed by the sponsoring agency.  For example, the USDA IDC rate is capped at 25% and MSU’s federal research IDC rate is 42.5%, the difference is 17.5% of unrecovered or foregone IDC’S (departments and PI’s do not have to track these).
  • Soft dollar – Typically the salary/benefits of persons involved in the project, such as PI’s, Co-PI’s, Key Personnel, etc.  For example, a lab technician may have 50% of their salary paid from a research project and 50% paid from state funds, but they provide 60% effort on the research project resulting in a 10% soft dollar cost share (tracked by the departmental Time and Effort Reports).
  • Hard dollar – Typically supplies, travel, equipment and other budget categories that are paid from departmental/instructional/other funding sources (tracked by the department through cost share budgets and activity codes that verify cost share expenses in MSU’s accounting system).
  • In-Kind (also known as third party) – Contributions of salary, travel, equipment, supplies and other budget areas that are from non-MSU sources (tracked with a completed and signed In-Kind form available from OSP).


Pertinent Federal Regulations:

OMB Circular A-110 – C23.  Cost sharing or matching.


C23a.  All contributions, including cash and third party in-kind, shall be accepted as part of the recipient’s cost sharing or matching when such contributions meet all of the following criteria.

C23a(1).  Are verifiable from the recipient’s records.

C23a(2).  Are not included as contributions for any other federally-assisted project or program.

C23a(3).  Are necessary and reasonable  for proper and efficient accomplishment of project or program objectives.

C23a(4).  Are allowable under the applicable cost principles.

C23a(5).  Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.

C23a(6).  Are provided for in the approved budget when required by the Federal awarding agency.

C23b.      Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.

Cost sharing is difficult to generalize.  If you think you have a cost share circumstance, please call your Fiscal Manager in the Office of Sponsored Programs.  And please remember cost share situations must be detailed and approved during the proposal process.

Click here for Cost Share Frequently Asked Questions and brief examples.