The University of Arizona

Procedures for Cost Share

Cost Sharing Incurred by the University

Expenses incurred by the University of Arizona as cost sharing for a project are tracked via cost share subaccounts set up for the project:

  • Subaccounts will be set up for each project account that has cost share.
  • The Sponsored Projects Services (SPS) fund accountant will establish the cost share subaccounts at the time of award.
  • Subaccounts will be funded from a University of Arizona source that funds the cost share. Each cost share subaccount can be funded from one University source. Multiple sources of cost share will therefore require multiple cost share subaccounts.
  • Departments will post all University cost sharing expenses to these subaccounts as they are incurred. Each night during system processing, the subaccounts will incur a fund transfer on cost share object codes from the university source account that is paying the cost share.

The net effect in the financial system is the cost share subaccount holds the detail of expenditure and the University source account pays for the cost share.

Eligible source accounts for cost share include:

  • State
  • Facilities and Administrative Cost
  • Gift
  • Fixed Price Complete
  • Designated Funds

Restricted sources of cost share include:

  • Other Sponsored Project accounts. Non-federal accounts may be used as a source of cost share only with written approval from the non-federal sponsor. In these instances, non-federal funded cost share will be monitored according to the Third Party Cost Share guidelines below. A cost share subaccount will not be setup. Federal accounts may not be used as a source of cost share for another Federal project per 2 CFR §200 . Individual federal agencies may not waive these criteria, as 2 CFR §200.306 specifically restricts prior approval authority to Federal statute only.
  • Service center/auxiliary accounts. Service center accounts are self-sustaining break even accounts that should contain costs only allocable for the specific function of the service center. Therefore, claiming those costs as cost share for a grant activity indicates they do not solely benefit the service center activity and are therefore not allocable to the service account. Additionally, service accounts bill other accounts such as grants and contracts for services rendered. The possibility arises where the claimed cost share on the service account has been billed as a direct charge to the grant itself requiring cost share.  Generally auxiliary accounts also may not be used as cost share, for the same reasons as service centers.

Managing University Cost Share

  • Personnel cost share should be posted to the cost share subaccount by updating each employee's Position Distribution in UAccess Employee Manager Self Service. Salary Expense Transfers may be utilized to transfer personnel cost share onto a cost share subaccount retroactively.  Health and Human Services (HHS) Salary Cap cost share for faculty with salary levels over the HHS Salary Cap must be posted to cost share subaccount(s) for each project subject to the HHS Salary Cap. 
  • Non personnel cost share, such as operational expenses, should be directly charged to the cost share subaccount. General Error Corrections may be used to retroactively transfer cost share to a cost share subaccount that was not charged when the expense was incurred. If the billing entity does not allow the cost share subaccount to be directly charged, the cost share may be placed on the source account and then transferred onto the cost share subaccount with a General Error Correction.

SPS Procedures for Posting and Reconciling Cost Share in UAccess Financials demonstrates how to post cost share expenditures in the UAccess Financials system.  

Third Party Cost Share (Subrecipient and Third Party In-Kind)

Cost sharing records for subrecipient’s contributions should include a subrecipient-signed statement detailing the amount cost shared. If cost sharing is certified on an invoice, a copy of the invoice serves as cost sharing documentation.

Cost sharing records for third party volunteer services or donated supplies should include worksheets to calculate the value of the services or supplies. Rates for volunteer services should be consistent with those paid for similar work at the University of Arizona. If there is no comparable work at the University, rates should be consistent with those paid for similar work in the labor market. Fringe benefits may be added in the valuation. Rates for donated supplies should be consistent with the market value of the supplies.

Managing Third Party Cost Share

Sponsored Projects Services (SPS) will send a certification statement, 3rd Party Cost Sharing Certification, to the principal investigator at the end of each project budget period, requiring the investigator or a representative to certify that the third party cost sharing requirement was met in accordance with the terms of the award agreement. The certification may be sent on a more frequent basis if the terms of the award require detailed reporting more frequently than once a year.

Third party signed statements or worksheets detailing the cost shared amount should be submitted together with the 3rd Party Cost Sharing Certification.

Either the principal investigator or a person who has first-hand knowledge or suitable means of verification of the work performed should sign the 3rd Party Cost Sharing Certification.

The certification and the supporting documentation submitted to SPS serve as the official records of cost sharing documentation. If a due date is not specified, these documents should be submitted within 30 days from the date the certification is printed. SPS will contact department heads, deans, or directors to resolve non-compliance issues within their units.

No Cost Extensions

No cost extensions to projects do not increase the amount of the University's original cost sharing obligation. The no cost extension does, however, extend the time period during which the University may perform the cost sharing.

Reconciling Source Accounts

The cost share expenditures post to the cost share subaccounts. The subaccounts incur a nightly transfer of funds to the source account that pays for the cost share. The source account will then have an expense on specific cost share object codes that reflects the amount of cost share the source account has supported. The object codes on source accounts are as follows:

  • 7932 Cost Share Transfers Personnel
  • 7933 Cost Share Transfers ERE
  • 7934 Cost Share Transfers Other Expenses
  • 7936 Cost Share Transfers Travel
  • 7937 Cost Share Transfers Student Support
  • 7940 Cost Share Transfers Capital

These object codes are assigned to the appropriate financial level code so they will group together with other expense object codes of the same category within UAccess Financials and Analytics reports. When viewing reports such as the Balances by Consolidation report in Financials or the Income/Expense report in Analytics, the cost share balances will display and deduct from the appropriate budgeting pool level such as Personnel or Operations. To view the detail of the specific cost share expenses, you need to view the cost share subaccount as that is where the detailed expense resides.

For a guide of reviewing cost share in UAccess Financials inquiries, please refer to the Guide for reviewing cost share on source accounts in UAccess Financials

For a guide of reviewing cost share in UAccess Analytics reports, please refer to the Guide for reviewing cost share on source accounts in UAccess Analytics.

SPS Procedures for Posting and Reconciling Cost Share in UAccess Financials demonstrates how to post cost share expenditures in the UAccess Financials system.

Budgeting and Reporting

Budgeting: For local budgeting purposes, the individual with cost share should be budgeted on the source account that is funding the individual's cost share salary. That is because the source account funds the salary. The cost share subaccount only holds the expense.

Line item reconciliation: The Budget Dashboard will display the cost share subaccounts within the individual's line. The line total will compute by taking the line budget amount and then subtracting both the local and cost share pay lines.

Reporting: Cost share expenses can be reported as belonging to the grant activities, or to the source account depending on the need of the analysis. To report the expenses as part of grant activity, structure your report to include the grant and grant cost share subaccounts and exclude the source accounts. To report the expenses as part of the source account activity, exclude the grant and cost share subaccounts.

The cost share object codes still retain attributes to allow them to be manipulated in custom reports. They still report to the voluntary transfers object code so high level institutional rollup reports will treat them as transfers of funds, which they are. They also retain a unique object sub-type code of “CX” for “Cost Share Transfers” which allows report builders to manipulate them as they wish for reporting.