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How do I account for COST SHARING ON EXTERNALLY FUNDED GRANTS AND CONTRACTS?
FUND TRANSFER METHOD - Currently we are funding and accounting for mandatory cost sharing via a transfer of funds from the cost sharing source into the restricted fund established for the contract/grant project account. Specific steps under this method are as follows.
1. Cost Share Budget - If there is mandatory cost sharing required, it will be identified in the approved budget which is typically incorporated into the contract/grant agreement. The cost share budget will be incorporated into the sponsor budget and loaded onto the restricted fund as a total project budget.
2. Fund Transfer - In order to fully fund the restricted fund, the home department which is the recipient of the contract/grant initiates a fund transfer into the restricted fund. A "Request for Budget Transfer" form must be completed. The forms should be sent to the Budget office, Mail Stop 9602. If the department cost shares from a general fund it will be a two part entry. For example, if $10,000 is required for cost sharing the following entries are required:
| Fund | Org | Account | Program | Amount | |
| Transfer From | 100000 | xxxxxx | 401000 | 011000 | $10,000 |
| Transfer To | 100000 | xxxxxx | 409000 | 011000 | $10,000 |
| Transfer From | 100000 | xxxxxx | 409101 | 011000 | $10,000 |
| Transfer To | 30xxxx | xxxxxx | 359101 | xxxxxx | $10,000 |
If the department cost shares from a designated fund the following entries are required:
| Transfer From | 25xxxx | xxxxxx | 409101 | xxxxxx | $10,000 |
| Transfer To | 30xxxx | xxxxxx | 359101 | xxxxxx | $10,000 |
3. Project Expenditures - Total project expenditures, to include those funded by the sponsor and those committed by the University as mandatory cost sharing, are expended from the restricted fund established for the project. If funds are expended in accordance with the budget and required cost sharing transfers are made, the restricted fund project account should close to a zero balance.
4. Restricted Fund Closeout - There is almost always a variation between actual expenditures and budget. This is to be expected since budget is a best estimate of expenditures often well in advance of the actual expenditures. Listed below are the methods by which expired project funds will be closed.
a. Overexpended or Underfunded - After full funding is received into the fund from the sponsor source there will likely be a negative cash balance in the restricted fund as a result of either overexpending the budgeted amount or previous underfunding of the cost share commitment.
1. Sponsored Programs Accounting will send a notice to the home department requesting a transfer of funds in an amount sufficient to cover the negative cash balance.
2. If the cash deficit has not been funded within 45 days of the notice to the home department, Sponsored Programs Accounting will initiate a transfer against funds assigned to the home department in an amount sufficient to cover the deficit and provide notice to the home department.
3. If the home department desires that the transfer come from another fund they may request that the transfer be reassigned by written request to the Sponsored Programs Accounting Department.
b. Underexpended or Overfunded - Either underexpending the budgeted amount or overfunding the cost share commitment will result in an excess cash balance in the restricted fund. The following procedures will be utilized to close the restricted fund and transfer excess cash.
1. Sponsored Programs Accounting will initiate a fund transfer to refund the excess cash to the exact fund and budget category from which the original cost share transfer was made. The department will be notified in writing that this transaction has taken place.
2. If the department decides that these funds could be better utilized in another budget category, a transfer may be requested through normal administrative channels.
