5.4 - Cost Sharing Procedures


Cost sharing should be included in the budget accompanying the proposal submission only if such arrangements are required or strongly encouraged by the sponsor’s program guidelines. During the early stages of proposal development, prospective Principal Investigators/Project Directors (PIs/PDs) anticipating a need for cost sharing should work closely with ORSP staff to identify sources for cost sharing and should begin the process of securing agreements to cost share and arrangements for documentation. If the project is funded, the cost sharing included in the proposed budget must be carefully documented throughout the program period (see Section 7.10 on cost sharing documentation).

University Cost Sharing

Potential sponsors may require that the expenses of a sponsored program be shared by the university. The university’s agreement to any such cost sharing must be secured by the prospective PI/PD during the proposal development process. Completion of the UM Transmittal Sheet requires signatures confirming any cost sharing agreements (see Section 5.5 on the transmittal process). Common items for university cost sharing include major equipment or infrastructure, salaries, fringe benefits, and indirect costs related to UM direct costs.

Third-Party Cost Sharing

Occasionally guidelines for sponsored programs suggest or mandate the inclusion of a third party (an entity in addition to the university and the sponsor) to share in the costs of the project. At the time of the proposal submission, the prospective PI/PD must have written confirmation from the third party on the amount and nature of cost sharing to be provided. A commitment by the third party to provide appropriate documentation to demonstrate the agreed upon amount of cost sharing to the satisfaction of the funding agency and the UM Accounting Office is also required.