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tennessee technological university

Research & Economic Development

Under certain circumstances, the University is required either by federal statute or program guidelines to share in the total cost of conducting a research project, or otherwise performing or participating on a contract or grant. The amount (percentage) of cost sharing depends on the particular funding agency, and whether the project is solicited or unsolicited. With some agencies, such as the National Science Foundation, there is rarely the expectation that proposals submitted for funding will include a cost sharing component. When cost sharing is included, but not required, it is solely at the discretion of the proposing institution and will not be a factor in the Foundation's decision to make an award. However, once cost sharing is proposed and accepted by the agency, the commitment of funds becomes legally binding and is subject to audit. Failure to provide the level of cost sharing reflected in the approved grant budget may result in termination of the grant, disallowance of grant costs and/or refund of grant funds to the agency by the grantee [1].

Cost sharing is either voluntary (optional) or involuntary (mandatory). Voluntary cost sharing may be used when a faculty member is trying to attract sponsorship from a new agency, begin a new area of research investigation, or when the project has measurable benefits to the faculty and the University. Examples of measurable benefits are when a faculty member desires to "break into" a new area of research or when equipment is purchased where the University retains the title. Involuntary cost sharing is when the funding agency mandates cost sharing. Cost sharing may be accomplished by a contribution to any of the cost elements (budgeted items) of research projects supported by federal research agreements, either direct or indirect costs, provided that such costs would otherwise be allowable in accordance with any cost principles applicable to the research agreements and that the costs are not charged to the federal government under any other grant or contract [2].

There has also been concern expressed about the record keeping for cost sharing. The University is now mandated by OMB Circular A-133, "Audits of Institutions of Higher Education and Other Nonprofit Organizations," to maintain documentation on all contract charges including cost sharing.


Cost sharing is basically the responsibility of the University unit generating the project. Anytime cost sharing is budgeted (either voluntary or involuntary), every legitimate direct cost is to be included in the budget, i.e., secretarial time, graduate assistants, copying, supplies, computer, etc. Voluntary cost sharing is strongly discouraged. The acceptable categories for sources of both voluntary and involuntary cost sharing are:

  • Department/Center
    • In-kind services (such as faculty or secretarial assistance, graduate assistants, computers, supplies, telephone, etc.)
    • Released time (including associated indirect costs and fringe benefits on salaries and wages)
    • Cash
  • College/School
    • Released Time
    • Cash
  • Office of Research
    • Indirect Costs
    • Matching Fund
  • Others
    • In-kind Services
    • Cash

Institutional Agreement

The University has only two institutional agreements: the tripartite agreement between USFWS, TWRA, and TTU, which established the Cooperative Fishery Research Unit, and the agreement with the National Park Service. In the tripartite agreement, the University is obligated by contract to share in the cost of the Unit being on campus (refer to Policy 3.0--Indirect Costs on Contracts/Grants for details).



It is to be indicated on the project proposal endorsement and activation forms whether cost sharing is required (involuntary) or not required (voluntary) by the funding agency. It is the responsibility of the University unit generating the project to keep records of cost sharing. The records are to be maintained for availability to federal/state auditors. Copies of cost sharing records (i.e., time sheets, etc.) are to be sent on an as needed basis to the Grants Accountant for contract/grant financial files at the time the project is closed.

Any time cost sharing (either involuntary or voluntary) from a Center of Excellence is shown in a project budget, records regarding the cost sharing must be maintained in the Center's office. Copies of the records are to be sent to the Grants Accountant at the time the project is closed.

Cost Sharing (Involuntary)

Involuntary cost-sharing is generally limited to a maximum of fifty percent (50%) of total funds requested from the agency. Cost-share in excess of fifty percent (50%) must be strongly justified and prior approval obtained from the respective units providing the cost-share, colleges, schools and the Office of Research.

The Grants Accountant will take any involuntary cost sharing directly from the University unit providing the cost share and will place it in a separate account. All requisitions for cost sharing items, such as in-kind services, released time, or cash, will then be requisitioned from the identified account.

Cost Sharing (Voluntary)

Voluntary cost-share is strongly discouraged, and must be kept to a minimum if used. In exceptional cases, such as those described in this document, cost-share up to a recommended maximum of twenty-five percent (25%) of total funds requested from the agency may be acceptable if adequate justification is provided and prior approval is obtained from the respective units providing the cost-share, colleges, schools and the Office of Research.

If a University unit decides to voluntarily share in the cost of a project, the funds must come from sources within the unit and cannot involve indirect costs without prior approval. It is inappropriate to voluntarily cost share in any category if full indirect costs are not claimed.

NSF, Proposal and Award Policies & Procedures Guide, April, 2007 NSF-07-140

OMB Circular A-110, 1999

Updated February 5, 2009