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Cost Sharing
Cost sharing is that portion of the project’s costs which the university provides.
Cost sharing is usually contributed in one of four ways:
- Specified percentage of total project costs
- Equipment costs
- Reduced F&A cost rate for the project
- Contributed effort by the principal investigator
Limited F&A rate: Another method of cost sharing by the institution is used when the sponsor places a limit on the compensated F&A rate. The difference between the allowed F&A rate and Texas A&M’s actual rate is considered cost sharing, and is documented as such.
Cost sharing is defined by the federal government as “any project cost not borne by the sponsor”. This includes any cost identified and quantified in the narrative or budget that will support the project and is not paid for by the sponsor.
When faculty propose effort on research projects, even if they are NOT charging their salary to the project, their effort related to the project must be accounted for (cost shared) in the accounting system.