“Cost sharing” or “matching’ means the portion of project costs not paid by Federal awards (unless otherwise authorized by Federal statute). Effective October 1, 1999, MSU’s Cost Sharing Policy for Federally funded projects will consist of the following: cost sharing will only be added to proposals if it is required by the sponsor as stipulated in the Request for Proposals (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. Cost sharing can be difficult to generalize and if a PI suspects that cost sharing may be involved in a proposal, they should notify the OSP Fiscal Manager as well as disclose this requirement in the OSP Electronic Clearance Form (ePCF). Any and all written sponsor cost sharing requirements should be attached to the OSP Electronic Clearance Form (ePCF). A Cost Share FAQ exists on the OSP Website.

Types of Cost sharing or match include but are not limited to:

  • Unrecovered indirect costs (also known as “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 30% of all project costs and MSU’s Federal research IDC rate is 44%, with the difference of 14% of unrecovered or foregone IDC’s (departments and PI’s do not have to track these);
  • Soft dollars – 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);
  • 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;

Pertinent Federal Regulations

Uniform Guidance, Section 200.29 and Section 200.306 provide further detail on cost sharing on Federal awards. In summary, under Federal research proposals, voluntary cost sharing is not expected and cannot be used as a factor during the merit review of applications or proposals. For all Federal awards, any shared costs or matching funds and all contributions, including cash and third party in-kind contributions, must be accepted as part of the non-Federal entity’s cost sharing or matching when such contributions meet all of the following criteria:

  1. Are verifiable from the non-Federal entity’s records;
  2. Are not included as contributions for any other Federal award;
  3. Are necessary and reasonable for accomplishment of project or program objectives;
  4. Are allowable under Subpart E – Cost Principles of this part;
  5. Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made Last Update: October 2016 35 | PI Guide available for such program can be applied to matching or cost sharing requirements of other Federal programs;
  6. Are provided for in the approved budget when required by the Federal awarding agency; and
  7. Conform to other provisions of this part as applicable.