Text Box: Cost Share / Matching Funds Cost share is defined as the project or programs costs not borne by the sponsoring agency. In order to include an item as a cost sharing it must be: Verifiable Not included as a cost share to another grant or contract account without agency approval Necessary and reasonable for project Allowable and allocable under applicable cost principles Not funded from another grant or contract without agency approval Incurred within the time frame of the project Text Box: Additional Guidelines for Cost-sharing Unrecovered indirect costs (waived IDC) can be used as cost sharing only with agency written approval. Tuition and waived IDC are the preferred methods of cost sharing because they are easily verifiable. Cost sharing should be limited in proposal preparation to only those costs making a direct contribution to the project. Excessive cost sharing causes additional work on everyone’s part in verification increases risk to the department and University, and has an adverse effect on indirect cost rates. Voluntary cost sharing is strongly discouraged. Cost sharing identified in the text of the proposal must be listed in the budget. All sources of university cost share should be easily identifiable in the budget. For example, differentiate between costs contributed by the department versus those contributed by the school or another unit. A letter of support, with specific reference to the cost sharing, from a third party source, must be included with the proposal. Written confirmation of third party support will be required at the time the final cost sharing report is prepared for the agency. Text Box: 8 Text Box: Indirect Costs (IDC) (cont.) To determine IDC rates on a proposal, you must first know the type of basis the sponsor utilizes. The two most common indirect cost bases are: Total Direct Costs (TDC) - All direct costs are added together and then multiplied by the appropriate IDC rate. Modified Total Direct Costs (MTDC) - This basis is modified by excluding some direct costs from being charged IDC. To determine this basis, add together all direct costs (EXCEPT equipment, tuition, and subcontract costs over $25,000) and then multiply by the appropriate IDC rate.