Northern Michigan University Guidelines on Match/Cost Share of Sponsored Programs

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Oswald Ferguson
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1 Nrthern Michigan University Guidelines n Match/Cst Share f Spnsred Prgrams TABLE OF CONTENTS A. Plicy Statement, Descriptin f Prcess, and Mandatry Requirements Plicy Statement Backgrund Definitins Respnsibilities Criteria fr M/CS Cmmitments Types f M/CS Allwable Frms f M/CS Unallwable Frms f M/CS M/CS Cmmitment Apprval Prcess Prcedures Exclusins frm this Plicy Related Dcuments Plicy Apprval...7 Guideline Statement This dcument sets the prcedures and standards t versee and regulate the use f matching funds/cst sharing (M/CS) fr all spnsred prgrams at Nrthern Michigan University (NMU). This plicy fr M/CS is in accrdance with 2 CFR 220 (OMB Circular A-21) and 2 CFR 215 (OMB Circular A-110), sets guidelines fr when M/CS is apprpriate and allwable fr NMU spnsred prgrams, and sets prcedures fr budgeting and apprval f M/CS. NMU will authrize M/CS cmmitments nly when required by the spnsring agency and nly t the extent necessary t meet the spnsr's requirements. All M/CS cmmitments must be included in the prpsal budget and must be apprved by the dean r directr f the NMU unit r department respnsible fr these funds, r by the apprpriate fficial f a third party. After that apprval, all M/CS cmmitments must be apprved by the Prvst, Cntracting Official (Vice President f Finance and Administratin via his designated review prcess) and the AOR (Assistant Prvst fr Graduate Educatin & Research) befre they will be binding. All cmmitted M/CS must cnfrm t NMU and federal guidelines regarding allwability, allcability, and reasnableness (cst accunting standards) and must be verifiable thrugh dcumentatin and NMU s financial accunting system. NMU authrizes M/CS cmmitments nly t the extent necessary t meet a spnsr's requirements. The university's financial resurces are limited, and it is essential that the use f M/CS des nt verburden these resurces. NMU strives t prtect the integrity f the prcess by which it is reimbursed fr F&A csts and maximize the amunt f F&A recvery. Excessive r unnecessary M/CS cmmitments have the effect f reducing the indirect cst rate since cmmitted M/CS must be included in the determinatin f the negtiated F&A rate. Spnsrs and auditrs must be able t verify that M/CS funds have been cmmitted and expended tward

2 a prject. This plicy has been develped t help faculty and staff prperly dcument and reprt M/CS cmmitments. Backgrund The terms matching, cst sharing, and in-kind cntributins (all referred t here as M/CS) refer t the prtin f allwable prject csts nt paid by the spnsring agency. These prject csts are paid by NMU r thrugh cntributins by rganizatins utside NMU (third parties). There is n distinctin between the terms in federal law, 2 CFR 220 (A-21) and 2 CFR 215 (A- 110). Histrically, matching and cst sharing are the same principle expressed differently. Matching means t match cncurrently during expenditure f funds. Cst sharing means that bligatin must be met by the end f the prject. Cmpliance with federal cst accunting standards requires that M/CS expenses be treated in a cnsistent and unifrm manner in prpsal preparatin, in award negtiatin, and in the accunting f these expenses in financial reprts t spnsrs. Spnsrs als require that any M/CS included in an award budget is a cnditin f the award and subject t audit. All NMU spnsred prgrams invlving M/CS cmmitments must be executed in accrdance with university plicies and prcedures, applicable state and federal laws, regulatins, plicies and guidelines. Applicable laws, regulatins, plicies and guidelines include, but are nt limited t, 2 CFR 220 (OMB Circular A-21), 2 CFR 215 (OMB Circular A-110), OMB Circular A-133, OMB Memrandum M-01-06, the federal cst accunting standards, and NMU s established Disclsure Statement. Definitins Federal Cst Accunting Standards: Federally mandated accunting standards intended t ensure unifrmity in budgeting and expenditure f funds. Matching Funds/Cst Sharing/In-Kind Cntributins (M/CS): Fr the purpse f this plicy, M/CS is the prtin f allwable prject csts nt paid by a spnsring agency. These prject csts are paid by NMU r thrugh cntributins by third parties. M/CS may cnsist f direct csts and/r unrecvered F&A csts (a cash match) r the value f dnated services and real r persnal prperty (in-kind). Matching Funds: T match funds cncurrently during the expenditure f federal funds. Cst Sharing: The bligatin t share prject csts must be made by the end f the prject. In-Kind Cntributin: A nn-cash cntributin f the fair market value f gds r services prvided t a prject. Office f Management and Budget (OMB): A federal ffice attached t the White Huse that assists the President in the develpment and implementatin f budgets, prgrams, management, and regulatry plicies.

3 Spnsr/Spnsring Agency: An entity, usually external t NMU, which funds a spnsred prgram. Spnsred Prgram: A research, training, r educatinal prject that is funded by a spnsr, generally ne utside NMU. Activities funded thrugh grants, cntracts, and cperative agreements are spnsred prgrams. A spnsred prgram is traditinally initiated with a prpsal t a spnsr and fllwed by an award with specific terms, bjectives, rights, and reprting requirements. The spnsr, whether it is federal, state, r private, hlds NMU accuntable t meet designated requirements in exchange fr prject funding. NMU Cntrller s Office: This ffice versees develpment f NMU s cst accunting plicies and practices t ensure cmpliance with state, federal, and university rules and regulatins. NMU Grants and Cntracts Office: Organized under the Office f Graduate Educatin and Research, this ffice manages and mnitrs all pre- and pst-award activities fr NMU spnsred prgrams. Respnsibilities It is the respnsibility f the Grants and Cntracts Office and all unit faculty and deans/directrs wh cmmit t furnish M/CS t fllw all applicable laws, regulatins, plicies, prcedures, and guidelines that gvern these funds. Respnsible University Officers: The Grants & Cntracts Directr is respnsible t perfrm final reviews f M/CS cmmitments n all spnsred prgrams t ensure they are cmpliant with the law and this plicy and t grant r deny institutinal apprval f these cmmitments. The Assistant Prvst fr Graduate Educatin & Research (als the Authrized Organizatinal Representative r AOR) shares the respnsibility fr final M/CS review and apprval authrity; the Cntracting Official, whse apprval is part f the designated prpsal submissin prcess and must review any prpsal with M/CS included, has the authrity t authrize funds fr equipment purchase match. The CO, AOR and NMU Prvst are respnsible fr final certificatin t the spnsr f apprved and allwable charges attributable and verifiable as M/CS. Grants & Cntracts Office: This ffice is respnsible fr reviewing M/CS cmmitments n all spnsred prgrams t ensure they are cmpliant with the law and this plicy and t advise the AOR abut such cmmitments. The ffice is respnsible fr assigning unique fund identifiers (Fund(s) 14) t track university-cmmitted funds and t ensure that unrecvered F&A and certified third party match amunts are recrded in the Banner Finance System. Unit/Department: The initial respnsibility fr M/CS cmmitments rests with the prpsing unit/department. The unit dean r directr must authrize and apprve M/CS cmmitments if departmental resurces are ging t be used. Units are respnsible fr all M/CS cmmitments, including btaining third party cntributins. Principal Investigatr: It is the respnsibility f the Principal Investigatr (PI) t seek ut and secure surces f all M/CS cmmitments and btain necessary apprvals befre the prpsal is submitted t Grants & Cntracts. PIs shuld discuss prpsed M/CS

4 cmmitments with their unit research administratrs well in advance f the submissin deadlines t avid last-minute prblems and misunderstandings. Third Parties: Third parties must certify their M/CS cmmitments prir t submissin f the prpsal t the Grants & Cntracts Office. Such third parties are subject t audit. The university is held accuntable fr all cmmitted M/CS funds regardless f the surce. If the M/CS cannt be paid r tracked in accrdance with federal standards as was riginally anticipated, r the third party is unable t meet its bligatin, the bttm line value declared in the terms f the award must be met by the prpsing unit(s) respnsible fr the prject and award. Criteria fr M/CS Cmmitments Federal regulatins in 2 CFR 215 (OMB Circular A ), state that all cntributins, including cash and third party in-kind, shall be accepted when such cntributins meet the fllwing criteria: Are verifiable (thrugh effrt reprts r ther apprpriate dcumentatin); Are nt included as cntributins fr any ther federally assisted prgram; Are nt charged t the federal gvernment directly r indirectly under any ther grant r cntract; Are necessary and reasnable fr prper and efficient accmplishment f prject bjectives; Are allwable under applicable cst principles defined in OMB Circular A-21 (reasnable, allwable, allcable, cnsistently treated); Are prvided fr in the apprved budget and cnfrm t ther prvisins f OMB Circular A-110 (r in the terms f the spnsred agreement); Are nt charges als claimed as part f the institutin s F&A csts (duble dipping); Are nt csts financed by prgram incme generated by activities f the prject, unless the funding agency expressly permits such use f such incme; and Are incurred during the same funding/budget perid as the spnsred prject. Types f M/CS Mandatry: Mandatry M/CS is a cmmitted level f M/CS that is required by the spnsr in its general guidelines r in a specific prgram annuncement. Vluntary Cmmitted: Vluntary cmmitted M/CS is nt required by the spnsr, but wuld be ffered by NMU and quantified in the prpsal budget. If accepted by the spnsr, vluntary cmmitments are reflected in the final budget agreement between NMU and the spnsring agency. As a cnditin f the award, these cmmitments must be tracked in UAF's financial system and are subject t audit. NMU has a strict plicy against authrizing vluntary cmmitted M/CS; authrizatin culd happen in extenuating circumstances but is rare. Vluntary Uncmmitted: Vluntary Uncmmitted M/CS is defined as university faculty (including senir researchers) effrt that is ver and abve the effrt cmmitted and budgeted fr in a spnsred agreement. (A-21 Mem M-01-06) Vluntary uncmmitted M/CS is nt required as a cnditin f the award. These cmmitments will

5 nt be reflected in the final budget agreement between NMU and the spnsring agency. This treatment is cnsistent with 2 CFR 220 (OMB Circular A-21) in that precise dcumentatin f faculty effrt is nt always feasible and is nt expected because f the inextricably intermingled functins perfrmed by the faculty in an academic setting. Applicable and allwable csts in verrun f the allcated budget are als t be recgnized as Vluntary Uncmmitted M/CS. Allwable Frms f M/CS Faculty Time: A faculty member's salary, in which an attributable and verifiable prtin f their cmpensated time is devted t a spnsred prject, with related staff benefits and the assciated F&A n the salary and benefits. In-Kind (NMU and Third Party):In-kind cntributins are nn-cash cntributins in the frm f gds r services that can be given a cash value. Examples include the fair market value f prject supplies, transprtatin, and services. Other Direct Csts (NMU and Third Party): Other direct csts that are paid fr frm surces ther than the spnsr and directly attributable t supprt f the prject may be used as M/CS. Examples include travel r equipment. Unrecvered Indirect Csts (NMU): Sme spnsrs limit the amunt f indirect cst recvery NMU can receive n a prject. The difference between the NMU s federally negtiated indirect cst rate and the spnsr s limited indirect cst rate (unrecvered indirect csts) may be used as a M/CS cmmitment, but nly with advance written apprval frm the spnsr. A third party's indirect csts may nt be used as M/CS. Unallwable Frms f M/CS Certain cntributins are unallwable frms f M/CS. Expenses listed in 2 CFR 220 (A-21, Sectin J.) as unallwable csts cannt be listed as M/CS cntributins, either in the prpsal r in the award. Examples f Unallwable M/CS Cmmitments: Csts used t meet a M/CS cmmitment n anther prject. Since these funds have already been cmmitted and pssibly expended, they cannt be used again. Using federal funds t meet a M/CS cmmitment n anther federally-funded prject unless specifically allwed by statute r by the federal spnsr's prgram guidelines. Other unallwable M/CS includes csts that are part f NMU s F&A rate calculatins, such as: NMU-wned space, buildings, and equipment. Administrative salaries such as thse f a dean, department chair r clerical psitin. Any cst that duplicates the type f csts in the campus indirect cst rates. Vlunteer Effrt: Time dnated by an individual cannt be tracked and certified, s NMU des nt allw the use f time dnated by vlunteers r emplyees t meet a M/CS cmmitment.

6 Additinally, NMU emplyees may nt dnate services fr which they wuld nrmally be entitled t cmpensatin frm NMU r any ther entity. M/CS Cmmitment Apprval Prcess If the prject spnsr requires M/CS, dcumentatin must accmpany the prpsal when it is submitted t AOR fr apprval. The Grants & Cntracts Directr and AOR will evaluate M/CS dcumentatin prir t prpsal submissin. M/CS dcumentatin must include: An Authrizatin fr Matching Funds/Cst Sharing Frm signed by the dean r directr f the unit which authrized departmental resurces t be used as M/CS. The spnsr's instructins detailing the terms f the M/CS requirement (cmmnly fund in prject guidelines, requests fr prpsals, and prgram slicitatins r annuncements, r in an frm the prgram manager verifying the M/CS requirement). If there are third party M/CS cntributins, cmmitment letters frm the third parties describing the resurces and fair market value f their cntributins. The letters must be signed by representatives f the rganizatin with the authrity t bligate the resurces described. The third party's M/CS cmmitment must be dcumented n M/CS frm. If there is a request fr equipment matching funds, the signed written apprval f the Assistant Prvst fr Graduate Educatin and Research n M/CS frm. Prcedures Prcedures t implement this plicy are established and set by Grants & Cntracts Office in cnsultatin with the Cntrller s Office and the Office f Finance & Administratin. This plicy will be reviewed at least annually and mdified if necessary t reflect applicable changes in federal and state laws and regulatins, and NMU plicies, regulatins, and business practices. Exclusins These exclusins are subject t the prcedures specified as t each: Indefinite Match/Cst Share: Indefinite M/CS ccurs when a spnsr des nt explicitly state that M/CS is a requirement, but the applicatin guidelines indicate that increased M/CS will enhance a prpsal s cmpetitiveness in the funding agency's review prcess. In such cases, the prpsing unit must cntact Grants & Cntracts immediately and the Directr f Grants & Cntracts will determine the apprpriateness f a M/CS cmmitment befre the prpsal is submitted t the spnsr. The ffice must receive additinal infrmatin t justify the suggested M/CS cmmitment. Questins the prpsing unit must address include: Hw did the spnsr indicate r demnstrate that M/CS wuld be valuable t the prpsal? What is the ttal cst t NMU cmpared t the gain This infrmatin must be included in writing in the prpsal packet alng with the M/CS frm.

7 Leveraging/Leveraged Resurces: Leveraging ccurs when a spnsr requests the applicant t demnstrate additinal resurces, including c-funding, that are available t the applicant fr the prject. Sme spnsrs require enumeratin f these resurces (listing a dllar value), and sme spnsrs d nt require enumeratin. When pssible, leveraged resurces shuld nt be enumerated. While leveraging is nt technically M/CS, enumeratin requires that NMU track these funds. Spnsr-required enumeratin f leveraging will be treated the same as regular M/CS in the pre-award and pst-award stages. The M/CS frm must be submitted with the prpsal at the pre-award stage. At the pst-award stage, an M/CS fund will be established and expenditures will be tracked in accrdance with federal regulatins. Nn-enumerated leveraging (where resurces r c-funding are listed withut a dllar value) des nt cnstitute a M/CS cmmitment and des nt require either the M/CS frm. Related Dcuments M/CS FORM: Authrizatin fr Matching Funds/Cst Sharing 2 CFR 220 OMB Circular A-21: Cst Principles fr Educatinal Institutins 2 CFR 215 OMB Circular A-110: Unifrm Administrative Requirements fr Grants and Agreements With Institutins f Higher Educatin, Hspitals, and Other Nn-Prfit Organizatins OMB Circular A-133: Audits f States, Lcal Gvernments, and Nn-Prfit Organizatins

University of Central Florida

University of Central Florida Guidance & Directive N: ORC-05 Subject Authrity University f Central Flrida Guidance & Directive Direct Cst Charging Date f Adptin/Revisin: September 2006 OMB Circulars A-21 and A-110; CASB Disclsure Statement