Allowable Cost Sharing
Definition: Allowable cost sharing includes those costs, such as salaries and equipment, that actually benefit the project; they are eligible to be charged to the project, but are charged to the Institute as a commitment to the project by the Institute.
Costs that are not allowable to be charged to the sponsor are not allowable as cost sharing. As with costs directly charged to the sponsor, allowable cost sharing must be reasonable, allocable, and consistent with the terms of the award.
Examples of unallowable cost sharing include:
- Alcoholic beverages
- Faculty salary on NIH awards over the prescribed NIH cap
Eligible Cost Sharing
Requirements: OMB Uniform Guidance or Circular A-110 spells out the administrative requirements for cost sharing eligibility on federal grants and cooperative agreements.
Cost sharing is eligible when all of the following criteria are met:
- Verifiable from Institute records
- Not included as contribution for any other federally assisted program
- Necessary and reasonable for proper and efficient accomplishment of the project or program objectives
- Allowable as a direct cost under applicable cost principles
- Not paid by another federal award (except as authorized by statute)
- Provided for in the approved budget when required by the federal awarding agency
- Conforms to other provisions in OMB Uniform Guidance or Circular A-110 as appli cable
Using donated supplies, materials, and volunteer services
Third parties may contribute cost sharing to an award. Because this is not an expenditure made by MIT, documentation that includes the value of the donated supplies, materials, and/or volunteer services from the third party should be provided to OSP to substantiate the basis of the commitment. During and by the close of the award, DLC administrators must obtain documentation that substantiates that the commitment has been fulfilled.
- Values for contributions of services and property are established in accordance with OMB Uniform Guidance or A-21 Cost Principles for allowability, the appropriate administrative requirements (see above), and the terms of the federal award
- All documentation should include a brief statement describing the basis for determining the valuation of materials, supplies, or volunteer services
- Detailed Valuation and Documentation Guidelines are described in the Reference document Cost Sharing Primer for DLC Administrators
Costs that are not eligible for cost sharing include:
- Other federal awards – The PI may not utilize funds from one federal award as cost sharing on another federal award. When specifically allowed by the federal sponsor, the PI may utilize funds from non-federal awards as the source of cost sharing on federal awards when specifically allowed by both the non-federal and federal sponsor.
- Use of MIT-owned equipment – Cost sharing of equipment in MIT’s current inventory is not allowed. The reason for this is twofold: (1) The sponsor is already paying for a portion of it through the F&A rate calculation; and (2) the equipment was not purchased for use on this project.
- Institute facilities such as laboratory space – The use of MIT facilities is recovered from sponsors through the application of the F&A cost rate. Therefore, offering Institute space or facilities as cost sharing is not permit ted as these costs are F&A, not direct costs.
- Unallowable costs as defined in OMB Uniform Guidance, Subpart E
- Unallowable costs as defined in OMB Circular A-21, Section J
- Salary dollars above a regulatory cap. As an example, the NIH has a salary cap that limits the salary amount that may be awarded and charged to NIH grants and contracts. The Institute may pay an individual’s salary amount in excess of the salary cap with departmental or discretionary funds. However, this differential cannot be used for cost sharing.