Federal regulations require that specified employees’ activity be periodically reported and certified (Office of Management and Budget Circular A-21).
Cost Sharing - effort contributed towards Sponsored Agreements in which salaries are not borne by the sponsor in part or in total.
It is reasonable for agencies to know what direction their funds are going. The question more simply put is; ‘What did you do with what we gave you?'
The commitment of effort made in proposals is the starting point for a significant amount of project cost. It also has significant implications for cost sharing. The following principles apply:
- At most institutions salaries are allocated on the basis of distribution of TOTAL effort (FTE, or Full-Time Equivalent), including instruction, organized and sponsored research activities, departmental administration, etc...
- No one has more than 100% FTE.
- Any effort committed in a proposal, awarded by the sponsor, and expended on the project must be charged directly to the sponsored agreement account or reported by the department as cost-share as part of the effort certification process. These dollars are included in an institution’s research base and become part of the indirect cost rate (F&A) calculation.
A commitment of effort is usually made in the proposal budget, but it may also be made in the narrative or in conversation with the sponsor (e.g. phone, e-mail). When effort is committed, awarded and expended, corresponding salary must be directly charged or cost-shared.
In January 2001, the Office of Management and Budget issued a clarification of Circular A-21, confirming that voluntary uncommitted effort should NOT be accounted for separately and included in the organized research base for the calculation of indirect costs.
Note: It is not allowable to cost share federal funds without statutory approval to do so. For example, Programs 11 and 12 and Fund 143 all identify accounts where the funding originates from Federal sources, and therefore cannot be re-committed elsewhere as cost share.
Once an expense has been used for cost share, you cannot use that same expense as cost share on another grant (i.e. No DOUBLE –COUNTING).
Proposed voluntary cost share becomes mandatory/committed cost share if accepted as part of the award agreement, so be careful not to over-commit yourself.