This policy was created to:
As one of the nation’s leading research institutions, UW–Madison recognizes the importance of providing good stewardship of institutional and extramural funds. The university’s stewardship includes the responsibility for complying with federal requirements for proposing, managing, and documenting sponsored activities.
Support for the faculty’s research goals is critical to the success of the university. The purpose of this policy is to foster excellence in research by promoting successful support for research activities through institutional investments in sponsored projects. Cost-sharing activities are important at many stages in a research program:
Cost sharing that is offered in a proposal’s budget but not required by the sponsor as a condition of proposal submission. Once offered by the institution and agreed to by the sponsor, it becomes an obligation the university must fulfill.
Voluntary committed cost sharing also can occur when there are changes to the sources that pay for committed effort. For example, an investigator commits 30% effort to an award and intends to charge 30% of their salary to that award. Subsequently, the investigator decides to charge only 20% of their salary to the award. This can occur for a variety of reasons. The result is 10% voluntary committed cost sharing, even though neither the proposal nor the award document indicated an explicit cost-sharing commitment.
In-kind or cash contributions toward a sponsored project's direct costs, supported by University of Wisconsin–Madison funds.
An In-kind contribution is an item of cost for which institutional support is already in place, such as investigator effort; no new cash outlay is required. The most common form of in-kind contribution occurs when salary and fringe benefits paid by the university are committed to a specific sponsored project. By contrast, a cash contribution is a new, incremental cost such as for equipment, travel, or additional staff necessary to conduct the sponsored project, and for which a new funding source must be identified.
Cash contributions from third parties external to the university. Funds from the UW Foundation, the Wisconsin Alumni Research Foundation (WARF), and other state and private organizations may be used to pay the direct costs for a sponsored project.
With this method of cost sharing, the external organization provides a cash contribution to the university, and the cash is deposited into a UW account. This account becomes the funding source for project expenses. All of the associated financial transactions are well represented in the university's accounting systems, making this a relatively easy method to track.
Facilities and administrative costs that are offered to meet a cost-sharing requirement. This can occur in two types of circumstances. First, every direct cost has its associated facilities and administrative cost. When a direct cost is cost shared, the associated indirect cost can (and typically should) be considered part of the university's cost-sharing commitment.
Second, some sponsored project proposals use a facilities and administrative rate that is lower than the university's standard rate. The difference between the diminished facilities and administrative recovery under the proposal's lowered rate and the recovery that would occur with the standard rate may be offered to meet a cost-sharing requirement with the permission of the sponsor.
All faculty and staff who engage in or propose to engage in sponsored projects; all federal and nonfederal sponsored projects.
It is the policy of the UW–Madison that all researchers who engage in sponsored projects will comply with university policies and sponsoring agency regulations regarding the proposing, charging, and reporting of cost-sharing funds on those projects. The university’s policy on cost sharing is applicable to both federal and non-federal sponsored projects.
Generally, the university’s policy is to minimize institutional and third-party cost sharing on sponsored projects. Cost sharing may be allowed when it is mandated by the sponsoring agency or when it is necessary to reflect accurately the resources that must be expended to accomplish the project objectives. It must be noted as well that most cost-sharing resources are supplied by the department, school, or college. In some instances, a school or college may create requirements in addition to this policy regarding cost sharing. Approval of voluntary committed cost sharing rests with the dean's and director's office.
Cost sharing occurs when the institution redirects its resources to support a specific sponsored project beyond the funding level provided by the sponsor. In some cases cost sharing allows the institution to stretch scarce resources. For example, by using cost sharing to match sponsor funds, UW may be able to purchase large, complex pieces of equipment or construct new research facilities. In those examples, UW leverages institutional funds by bringing in sponsored funds to pay part of the costs of the purchase or construction. In other instances, however, the reallocation of funds from institutional activities to a sponsored project can have a detrimental effect on the programmatic, administrative and financial capabilities of the researcher and the University. The consequences of cost-sharing commitments include:
Complete information about the University’s procedures for cost sharing can be found in the document titled Guidelines for Cost Sharing. This document is available on the RSP web site at: RSP Cost Sharing