Cost Share

Cost share on contract and grant awards

Cost share is a portion of project or program costs that is not borne by the sponsoring agency.

Cost share should be included in proposal submissions only when it is required by agency policy or guidelines. Any cost share included in a proposal must be approved by appropriate university offices (departments, responsibility centers, and/or campuses) and must meet the regulatory requirements, as appropriate, of the funding agency, the university, and Uniform Guidance.

Read IU's policy on cost sharing on sponsored programs

Cost share expenses must be separately budgeted and recorded in cost share subaccounts associated with the main grant account(s). Your department is required to maintain documentation of cost share allocations.

To be recorded as cost share, an expense must be allowable under the terms and conditions of the award. Cost share cannot be funded from another grant or contract without both agencies' approval.

Cost share commitments can be funded either through university funding or through an external entity. There are three types of cost share:

Mandatory cost share:

  • Required by the sponsor
  • Must be documented
  • Identified in the funding announcement, award terms and conditions, or within the policies or guidelines

Voluntary committed cost share (not recommended):

  • Not required by sponsor but included by the university in the proposal submitted to the agency.
  • If the proposal submission results in an award, the cost share included in the proposal becomes a part of the award and is therefore committed by the university.

Voluntary uncommitted cost share:

  • Costs provided during the life of the project by university.
  • It wasn't committed in the proposal.
  • It wasn't required by the awarding agency.
  • Voluntary cost share will not be budgeted nor expenses recorded in cost share subaccounts within the Kuali Financial System.

About third-party cost share

Third-party cost share is when a non-IU entity contributes cash or services (i.e., material, personnel, equipment, service) or other allowable items to the project.

  • The fiscal officer is responsible for obtaining documentation from the third party to support the cost.
  • Documentation must include the value of donated materials and supplies to substantiate that the commitment has been fulfilled.
  • Documentation should reflect the name of the third-party contributor, statement of services, date(s) of service, the valuation of services, material or equipment, and be presented on business letterhead with appropriate signatures.
  • Documentation should include a certification that the expenses are applicable to the grant.

NIH Salary Limitation

The National Institutes of Health (NIH) has placed a limitation on the salary rate that can be charged to NIH grants and contracts. For employees earning an annualized salary above the limitation, the unallowable portion of salary above the cap must be recorded in a cost share subaccount labeled INST in order to abide by the NIH policy and properly document effort on the NIH project.

Learn more about the NIH Salary Cap


After a funding agency awards the grant to Indiana University, IU is required by federal guidelines to document mandatory and voluntary committed cost share. Cost share expenses must be separately budgeted and recorded in contract and grant cost share subaccounts.

  • For each award, the fiscal officer is responsible for supplying the Office of Research Administration (ORA) with a valid departmental account number that serves as the source account for cost share expenditures. Multiple source accounts are permitted. To expedite set-up, it is preferred that these account numbers be provided in the original proposal budget.
  • Cost share subaccounts are created by ORA for each source account identified by the department.
  • The fiscal officer is responsible for ensuring that allowable cost share expenditures are applied to the cost share subaccount(s) in a timely manner. Salary should be distributed to the cost share subaccount(s) using the HRMS Maintain Funding e-doc or payroll voucher.
  • The source account provided will be debited for all expenditures booked against the cost share subaccount. A transfer of funds is generated nightly to cover the expenses hitting the cost share subaccount.


  • Failure to apply applicable costs to the cost share subaccount in a timely manner could portray project activity in a negative manner on financial reports submitted to the awarding agency.
  • Failure to meet the required match dollar threshold could result in loss of grant funds.
  • Failure to adhere to policy and procedure may result in the administrative suspension and/or termination of a sponsored program agreement and other actions.