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Key Definitions:
- Cost share is the portion of total project costs that are paid from sources other than the sponsor in order to complete the project’s statement of work. MSU cost sharing policy.
- Unrecovered F&A is the difference between the calculated indirect cost based on MSU’s negotiated rate and the rate actually being requested from the sponsor.
- If a sponsor allows for MSU’s federally negotiated rate, then unrecovered F&A would equal $0.
- If a sponsor allows for a lesser percentage than MSU’s federally negotiated rate, then unrecovered F&A would be > $0.
Occasionally, agencies, institutions, or specific programs may limit the amount of F&A that may be charged. Some may require that the university contribute cost share as part of their application. Utilizing unrecovered F&A may open a door to stretching your cost share dollars further to reach that cost share contribution requirement.
As we all know, department funds, start-up funds, and cash are finite resources. When cost sharing is a sponsor requirement, these limited dollars may limit your ability to reach the contribution requirements when considering submitting a proposal application to a desired sponsor. This is where Unrecovered F&A may be able to bridge the gap.
Why would you want to use unrecovered F&A as cost share when permitted?
- F&A costs are real. When a portion of F&A is not reimbursed by the sponsor, the costs of F&A are incurred by MSU otherwise. MSU is clearly contributing non-reimbursed funds to the project.
- Less Documentation Burden. Unrecovered F&A is one of the easiest forms of cost sharing to document and reduces your Administrative Burden as the project PI.
- Less Risk. The more Unrecovered F&A included in the match the better and it decreases the amount of direct costs (department, start-up, or cash) that will need to be included as cost sharing, thereby reducing risk to the University.
Be sure to look to the sponsor guidelines to determine if Unrecovered F&A is an allowable source of cost share. To learn more about MSU Cost Sharing Policy please visit https://osp.msu.edu/PL/Portal/249/CostSharePolicy.
If you have additional questions regarding Unrecovered F&A or other tips to maximize your cost share dollars, please send an email to proposals@egr.msu.edu.
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