Policy on Cost Sharing on Sponsored Projects

I. Policy Statement

New Jersey Institute of Technology (NJIT) is committed to complying with federal regulations regarding the proposing, expending, and documenting of cost sharing. It is the policy of the University to minimize, if not eliminate, all voluntary committed cost sharing.

NJIT will only provide cost sharing when it is:

1. Mandatory: Required by the sponsor as a condition of the award.
2. Statutorily Required: Necessary to meet specific program legislation.
3. Strategic: Deemed essential by the Senior Vice Provost for Research (SVPR) to the success of a highly competitive institutional proposal.

II. Purpose

The purpose of this policy is to ensure compliance with 2 CFR 200 (Uniform Guidance). Improperly documented cost sharing creates significant audit risk and unintentionally increases the University's organized research base, which can negatively impact the University’s F&A (indirect cost) rate.

III. Definitions

• Cost Sharing (Match): That portion of project costs not paid by the sponsor.
• Mandatory Cost Sharing: Required by the written terms of the RFP/RFA. Must be documented and reported.
• Voluntary Committed Cost Sharing: Resources pledged in the proposal (narrative or budget) that were not required by the sponsor. Once awarded, these become legally binding and auditable.
• Voluntary Uncommitted Cost Sharing: Effort or resources which is committed and budgeted for in a sponsored agreement. This is not auditable or reported.
• In-Kind: Non-cash contributions (e.g., volunteer time, donated equipment) provided by third parties.
• Cash Match: Direct funding from NJIT or non-federal third parties for project expenses (e.g., salary/benefits, equipment).

IV. Federal Regulatory Requirements (2 CFR 200.306)

Under Federal research proposals, voluntary committed cost sharing is not expected and cannot be used as a factor during the merit review of applications unless specifically allowed by the agency (e.g., NSF, NIH). To be acceptable, cost sharing must be:

1. Verifiable from the University’s official financial records.
2. Not included as cost sharing for any other federal award.
3. Necessary and Allocable to the project’s objectives.
4. Allowable under Subpart E—Cost Principles.
5. Non-Federal: Not paid by the federal government under another award (unless authorized by statute).

V. Categories of Cost Sharing

1. Personnel Effort (Cash Match)

The most common form of cost sharing is the allocation of NJIT-funded salary and fringe benefits for the PI or senior personnel. This is considered a "cash" transaction because it is documented in the payroll system.

2. Unrecovered Indirect Costs (F&A)

Unrecovered F&A is the difference between NJIT’s federally negotiated rate and the amount allowed by the sponsor. Including unrecovered F&A as cost sharing requires prior approval from the federal awarding agency.

3. Third-Party & In-Kind

Contributions from non-NJIT entities must be documented by a signed letter from the third party at the proposal stage and certified by the third party upon completion of the work.

4. Equipment

University-furnished space or existing equipment cannot be claimed as cost sharing because these costs are already captured in the University’s F&A rate. Only the purchase of new equipment for the project using non-federal funds may qualify.

VI. Required Approvals & Workflow

Because cost sharing represents a redirection of University resources, the following approvals are required before submission in Streamlyne:

• Department Chair & Dean: Must approve the source of funds (e.g., departmental budget) and confirm that the cost sharing will not interfere with the PI’s other academic duties.
• Senior Vice Provost for Research (SVPR): Must approve any "special or unusual" cost sharing or requests for central University funds.
• Timing: Requests for central matching funds must be submitted to the Office of Research at least two weeks prior to the submission deadline.

VII. Documentation and Reporting

Once an award is accepted, the Office of Research and the PI are responsible for:

1. Tracking: Ensuring expenses are charged to the correct cost-share companion account.
2. Certification: Certifying effort via the University’s effort reporting system.
3. Audit Readiness: Maintaining records of third-party contributions, including valuations of in-kind services.

VIII. General Restrictions

• No Double Counting: Funds committed as cost sharing for one project cannot be used for another.
• Federal-to-Federal: Federal funds received by NJIT cannot be used as a match for another federal program unless specifically authorized by federal statute.

Administrative Costs: Costs normally treated as F&A (e.g., clerical support, office supplies) generally do not qualify as cost sharing.