Procedure
To ensure effective management of cost-sharing obligations and avoid audit risks, the procedure should comprehensively cover the following areas:
- Cost Allowability: Clearly define what costs are allowable for cost sharing and ensure compliance with funding agency regulations.
- Accounting for Project Specific Cost Sharing: Establish a robust system within the accounting framework to accurately track and record project-specific cost-sharing contributions.
- Documentation Standards: Implement rigorous documentation standards to substantiate cost-sharing expenditures.
- Monitoring, Certification, and Verification: Ensure ongoing monitoring, certification, and verification of cost-shared expenditures align with project requirements.
- Steps for Unmet Budgeted Cost Sharing: Outline procedures to address situations where budgeted cost-sharing commitments are not met.
- Approval Process for Changes: Establish an approval process for modifying budgeted cost-sharing costs compared to actual contributions, ensuring transparency and accountability.
- Establishment of Cost Sharing Account: Create a dedicated account to track cost-sharing funds.
- Review of Expenditures: Implement processes to regularly review expenditures on cost-sharing accounts to validate their accuracy and compliance.
- Retention of Records: Maintain records for cost-sharing accounts for the same duration as records for related sponsored agreements, ensuring accessibility for audit purposes and compliance with regulatory requirements.
Process
The cost sharing expenses should be charged to an alternative fund source with an assigned class code associated with the related project.
- Creation of New Class Codes: New class codes will be established specifically by SPS for cost sharing within the range of 7200-7999. It's imperative to note that generic class codes such as 1050, 1060, etc., cannot be utilized for cost sharing purposes. Each request for a new class code will be generated to correspond with a sponsored project number that requires committed cost sharing.
- Setting Up New Class Codes: HR requires a chartfield account combination for cost sharing if it involves salary and fringe benefits. The combination must include the chartfield account, such as 100-xxxx-xxxxx or the IDC account 160-. The SPS pre-award administrator will request the chartfield account from the department responsible for the project cost sharing upon receipt of the award. The department must provide the designated operation’s fund chartfield account to SPS at their request.
The Finance Chartfield team will then initiate the setup of the requested new class code & HR combination.
- Notification of the New Class Code: The assigned class code will be on the ASR (Award Synopsis Report) which is emailed to the PIs and their related department staff to notify them of the new award and/or any modifications to the existing award.
- Posting Expenses to the New Class Codes: The department must charge required cost share expenses to the assigned class code associated with the project to the cost share fund, e.g.,100-xxxx-xxxxx, on a regular basis. *
- Submission of ERCR (if applicable): The department must submit an ERCR for position salary distribution with the assigned class code. To clearly identify the class code on the ERCR, an additional 0 (zero) will need to be inserted into a specific part of the chartfield account being entered on the ERCR. The location of the additional 0 (zero) will vary depending on the account structure. Please see the legend below.
- Processing by Payroll: Upon receipt of the ERCR, Payroll will initiate the processing of salary and fringe benefits. The salary and fringe benefits with the newly established combination code will be posted to the relevant class code.
*NOTE: If cost-sharing of salary becomes necessary after a project has already been set up, it must still be captured and tracked (both for cost-sharing tracking and effort reporting purposes). In such an event, the department must notify SPS and provide SPS with the HR combination chartfield so that a new class code can be created. Examples of when this may occur include (but are not limited to):
- An individual (PI, Co-Investigator, etc.) receives a promotion or raise which causes their base salary to exceed the sponsor’s salary cap.
- An unanticipated expense creates a situation where the awarded funds can no longer support the full scope of the project, and the PI decides to cost-share a portion of their effort or the effort of another study team member
ERCR Class Code Chartfield Formats:
Fund/Dept/Prog/Class
100-1320-13200-0-0-7200
Fund/Dept/Prog/Proj/Class
160-4050-81005-500036-0-7200
Fund/Dept/Prog/OU/Class
185-1320-87069-0-98743-7200