Oregon State University

212: Cost Share

Grant, Contract & Gift Accounting Manual
Section 212: Cost Share
Effective: 03/01/2000
Revised: 10/13/2008



To ensure that cost sharing requirements of sponsored agreements are proposed, accounted for, and reported in a manner consistent with the requirements set forth in federal regulations, primarily the Office of Management and Budget (OMB) Circulars A-110 and A-21, as well as Cost Accounting Standards. 


Background Information

Once an award is made, ALL cost sharing commitments are considered to be mandatory and represent binding obligations by the university regardless of whether cost sharing is mandated by the sponsor or it is voluntarily offered by the university or principal investigator.  Therefore, the use of cost sharing should be kept to a reasonable level because of the burden that cost sharing places on university and departmental resources.



Cost Sharing

That portion of a project or program cost that is not reimbursed by the sponsor, but is nonetheless part of the costs of that project or program.  Cost sharing represents a commitment by the university or third party and may be in the form of dollars, commitment of effort or in-kind contribution.  The sponsor, as a condition of the award, may require cost share or the university may voluntarily offer it. 



The amount of cost sharing should be balanced between what is mandated by the sponsor, what is necessary for the proposal to be competitive, and what can be committed and accounted for after an award is made.  If cost sharing is not required by the sponsor, necessary for completion of the project, or to ensure the competitiveness of a proposal, principal investigators should refrain from making such commitments voluntarily.

Where cost sharing is not required as a condition of the award, mandated for the competitiveness of the proposal, and if the effort expected to be contributed to the project is less than 5 percent of an individual’s total effort, the following statement should be inserted in the text of the proposal or on the budget justification:

"Oregon State University assures that the faculty member will make a contribution to this project, but the expected level of effort is not a significant portion of the individual’s overall effort."



Typical Categories of Cost Sharing

Cost Share Category


How Tracked by University

Effort of Principal Investigator and/or employees devoted to sponsored agreements, including employee benefit costs.

All activities including cost share may not exceed 100% total effort.  Activities include instruction, research, Dept. Admin. and public service.

Charged to cost sharing index specifically established for project.

Equipment purchased for use by the project.

Equipment must be titled to OSU and must be purchased between the start and end dates.

Charged to cost sharing index specifically established for project.

Supplies and services purchased for the project.

Must be purchased between the start and end dates.

Charged to cost sharing index specifically established for project.

Travel when related to project.

Must be purchased between the start and end dates.

Charged to cost sharing index specifically established for project.

Indirect costs on cost share salaries, benefits, supplies and services.

Only if proposed and allowed by sponsor.

Calculated and reported by accountant in the Office of Post Award Administration.

Volunteer services.

Hours and value must be documented.

Documented and certified by PI Form available in the Office of Post Award Administration.

Subcontractor's portion of cost sharing.

Same type of costs as allowed by OSU.

Reported with subcontractor's invoices.

Unrecovered indirect cost - the difference between what the sponsor allows and what the university is authorized to charge.

Sponsor must allow using this as cost sharing (not allowed on US-ED or USDA / CSREES awards).

Calculated and reported by accountant in the Office of Post Award Administration.

Fee Remissions for Graduate Assistantships when sponsor will not allow as direct cost against project.

Sponsor must state in written policy that these charges will not be paid.

GTA / GRA salary setup using account code 10622 or 10632.  Fee remissions are charged to department's CSxxxS index by Payroll; The Office of Post Award Administration accountant reports amount specific to grant.

Expenditures recorded as cost share must be:

  • necessary and reasonable for the project’s objectives,
  • incurred during the effective dates of the award,
  • verifiable, either within the university’s accounting system or properly documented, if provided by sources outside the university, and
  • (for federal awards) allowable under OMB Circular A-21 and guidelines of the funding agency .

Expenditure categories that CANNOT be used for cost share include:

  • use charges for equipment, computers, or networks that already exist,
  • use charges for land or buildings owned by OSU,
  • salaries and fringe benefits of administrative/clerical personnel (unless these costs have been approved in the proposal process as cost share and would be allowed as a direct project expense),
  • funds received from a federal source (unless the federal agency agrees to cost share with another federal sponsor), and
  • expenditures that have previously been reported as cost share.

Mandatory Cost Share
When an agreement is received that has cost sharing indicated (either in the agreement itself, or in the proposal, which becomes a part of the agreement), The Office of Post Award Administration will set up the appropriate cost sharing fund(s), and notify the PI and college/department accountant.

All cost sharing expenses for the project will be recorded in the unrestricted cost share fund.  The college/department accountant will complete Labor Distribution forms as needed to reflect appropriate salary. Equipment purchases, travel or other cost share expenses will be charged directly to the cost share fund. As each expenditure is posted to the cost share fund, a corresponding transaction will be automatically posted moving funds required to cover this expenditure from the unrestricted fund budget that has been designated for cost share recovery.

If mandatory cost share is not met, the award will be reduced in proportion to the amount of cost share not met. The proportional amount of cost share not met will be charged to the department as a cost overrun. The same amount will be returned to the sponsor.

Non-Mandatory Cost Share
The department will notify The Office of Post Award Administration to set up a cost share fund/index when needed for non-mandatory cost share.

Grant Specific Cost Share Documentation
When an award requires cost sharing, documentation will be posted in Banner FIS through use of an unrestricted fund, which will be set up for each agreement which requires cost sharing. The grant roll-up and index will identify the cost sharing with the sponsored grant and fund in the following manner.

Sponsored Grant:
Sponsored Fund:
Sponsored Index:
Cost Share Grant:
Cost Share Fund:
Cost Share Index:
ED003S (for share)


A matrix has been established which identifies a single “general fund” index for each department or organization as the most likely to cover the costs for cost sharing. Cost share methods have been established through a Banner FIS table which links the cost share fund to that organizational general fund index. As each charge is posted to the cost share index, Banner FIS automatically makes a corresponding transfer to credit the cost share index and debit the general fund index for the expenditure. These transfers appear as account 9xxxx entries. The result is that the cost share index always maintains a “zero” bottom line, and year-end adjustments are unnecessary.

No budgets are applied to the cost share indexes.  Instead, the information is entered into an Access database that is linked to OSU’s data warehouse. The resulting cost share report displays the beginning budget that has been committed, as well as picking up any costs which have been posted through the Banner FIS System and calculating a remaining balance spread out over the life of the award. Copies of the updated cost share reports are distributed to all departments twice per year.

NSF—Minimum 1% Cost Share Documentation

The National Science Foundation has a statutory requirement of cost sharing a minimum of 1% of the aggregate total costs of all projects funded. Each department that has active NSF awards has been assigned a cost share index to record expenditures toward meeting this requirement.

Any NSF project that has specifically required cost sharing will have a separate cost sharing grant, fund, and index established for documentation of those costs. These projects are exempt from the 1% requirement.

Also exempt are:

  1. Awards for international travel only (usually related to sabbatical leave).
  2. Awards for construction, improvement or operations of facilities.
  3. Awards for purchase of equipment only.
  4. Awards for Ship Operations (COAS).
  5. Awards for education and training; this includes individual fellowships.
  6. Awards for purpose of publication and translation of scientific data.
  7. Awards for workshops.

USDA/PNW GRA Fee Remission Documentation

USDA/Pacific Northwest Area (PNW) has determined that GRA Fee Remissions are an allowable cost share item. Each department has been assigned a cost share index designated to receive these charges. When GRA salaries are budgeted to the sponsored index, account code 10632 is used to pay these costs which alerts the Payroll Office to record the corresponding fee remission to the cost share fee remissions index.

General GRA Fee Remissions

When graduate research assistants’ salaries cannot be charged directly to the project (per sponsoring agency’s written policy), they should be charged to the cost share index.  The corresponding fee remissions will be posted by Payroll to special cost share indexes that have been set up for each department. The process is triggered by the use of account code 10632 used when paying the GRA salaries on the cost share index.

To document cost share from outside sources, please use the "Cost Share from Outside Sources" form available on the forms online web page maintained by the Office of Post Award Administration.

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