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Cost Sharing

Cost sharing (HOOP 75) typically occurs when a funding agency requires that UTHealth contribute funds or other resources to their sponsored project over and above the support provided by the funding agency. This type of cost sharing is referred to as mandatory cost sharing.

Sometimes cost sharing is not required by the funding agency, but the University offers to contribute funds or resources in order to make the grant application more appealing to the funding agency. This type of cost sharing is referred to as voluntary committed cost sharing.

The most common form of cost sharing is contributed effort. This typically includes faculty and other employees’ salaries and benefits, including their related indirect costs. According to federal guidelines, any time that a UTHealth grant application includes (either in the line-item budget or in the budget justification/narrative) faculty members contributing effort on the project without requesting an equal amount of salary support for that effort, then UTHealth has entered to voluntary committed cost sharing.

The decision whether to commit to cost sharing with a funding agency resides with the University and its fiduciary agents (e.g., department heads, deans, vice presidents). The University and its fiduciary agents will generally approve cost sharing only when it is required by the funding agency and, more importantly, when the research is deemed to be of sufficient potential and/or quality to warrant the commitment of University resources. The university actively discourages voluntary cost sharing on the part of Principal Investigators.

There is a third kind of cost sharing, referred to as voluntary uncommitted cost sharing. Examples of this type of cost sharing include the portion of a faculty member’s salary that exceeds the funding agency’s salary cap, or the portion of indirect costs that will not be recovered because a funding agency either does not allow such charges or limits the recovery rate to one that is lower than the University's established recovery rate.

Both mandatory and voluntary committed cost sharing require that the University maintain sufficient supporting documentation to satisfy an external auditor. The responsibility for obtaining and maintaining that documentation rests with the PI and departmental staff. Effort reports for employees whose effort involves either mandatory or voluntary committed cost sharing must be manually modified to include notations that identify the cost sharing effort and the projects to which it is shared.

For more information about cost sharing, see the University's policy under HOOP 75.