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Solving the Matching Dilemma

Solving the Matching Dilemma. Rochelle McCrea Team Leader and Towana DeShazo Grants and Agreements Specialist Awards Management Branch Office of Extramural Programs. Solving the Matching Dilemma. Topics Covered Matching/Cost Sharing Fact Sheet Requirements

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Solving the Matching Dilemma

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  1. Solving the Matching Dilemma Rochelle McCrea Team Leader and Towana DeShazo Grants and Agreements Specialist Awards Management Branch Office of Extramural Programs

  2. Solving the Matching Dilemma Topics Covered • Matching/Cost Sharing Fact Sheet • Requirements • Allowable and Unallowable Costs • Matching/Cost Sharing Funds FAQ’s • Matching/Cost Sharing Review (SCRI) • Matching/Cost Sharing Letters • Questions

  3. Matching/Cost-Sharing Fact Sheet • When matching is required: • The RFA contains details whether or not • matching/cost sharing is required. • Matching funds may be cash and/or in-kind • contributions, or third-party contributions. • Examples of qualifying matching contributions • may include direct costs such as: materials • and supplies, duplication or postage costs, and • staff time.

  4. Matching/Cost-Sharing Fact Sheet (Cont’d) • Third Party Matching— • Any contribution to the project by an • organization other than the recipient. • Matching should be explained in the other • direct cost section of the budget narrative.

  5. Matching/Cost-Sharing Fact Sheet (Cont’d) • Cost sharing commitments by a 3rdparty must • include letter signed by the contributing • organization’s Authorizing Representative • (AR) and counter-signed by the recipient • organization’s AR. • This letter should also state whether the • matching is cash or in-kind. If letter is • submitted with the proposal, counter • signature by recipient AR will not be required.

  6. Matching/Cost-Sharing Fact Sheet (Cont’d) • Cash Contributions— • The recipient’s cash outlay, including the outlay • of money contributed to the recipients by non- • Federal third-parties. Some examples of cash • contributions are: • – The salary and fringe benefits of the grantee or • third-party employees in proportion to their • efforts under a project. • – The grantee’s cost to purchase items of • equipment to be used under a project.

  7. Matching/Cost-Sharing Fact Sheet (Cont’d) • In-kind Contributions— • The value of non-cash contributions of • property or services provided by non-Federal • third parties, including real property, • equipment, supplies, and other expendable • property directly benefiting and specifically • identifiable to a funded project or program.

  8. MATCHING/COST SHARING REQUIREMENTS • Third party cash and in-kind contributions: • A separate pledge agreement for each • donation should be submitted on Donor • Organization’s letterhead. • Signed by the AR of the donor organization • and the applicant organization. • Include the title of the person signing as the • AR.

  9. MATCHING/COST SHARING REQUIREMENTS Third party cash and in-kind contributions: • Agreement must include: • The name, address, and telephone number of the donor. • The name of the applicant organization. • The title of the project for which the donation is made. • The dollar amount or good faith estimate of the donation or • contribution. • A statement that the donor will pay the contribution during • the grant period. • The matching amount, the budget category for the match • and detail how the matching support, from each match, and • detail how the matching support, from each source, will be • used (e.g., salary and position supported)

  10. MATCHING/COST SHARING REQUIREMENTS (Cont’d) • The sources and amount of all matching from outside the • applicant organization should be summarized as part of the • Budget Justification. • Grantee cash donations should be shown on the budget form • in the categories where it will be used (i.e., travel, salaries, • etc.) and explained in the budget justification for matching. • All third-party contributions should be shown on the budget • form in the other direct cost section; Other 1, Other 2, or • Other 3 categories and explained in the budget justification • for matching.

  11. MATCHING/COST SHARING REQUIREMENTS (Cont’d) • The same level of details required to be provided for Federal • funds should be provided for any requiredmatching/cost- • sharing. • Generally, any matching from the recipient is considered to be • cash. In-kind (non-cash) contributions usually consist of • property or services (i.e., donations of equipment, use of • facilities etc.).

  12. The following table represents a sampling of generally allowable and unallowable costs. The list is not exhaustive. Please see the referenced OMB Circulars and the Program Request for Application for more information.

  13. Matching/Cost Sharing Funds FAQ’s • Do we have to have all the required matching resources secured prior to issuing the award? • Yes, before the award may be issued, all matching • requirements of the program must be met. • Verification that all matching is secured must be • provided. • (Please note some matching may be deemed unallowable • during the review, and additional matching resources may • be required).

  14. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 2. Can other Federal funds be used as matching on this project? No, matching contributions must come from non-Federal sources unless funds from Federal sources are specifically authorized by Federal statute to be use as matching.

  15. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 3. Can funds provided from a state or local government for another similar project be used as required matching? No, if the funds were provided specifically for another project, they cannot be used as matching for this project regardless of similarities.

  16. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 4. If I anticipate receiving funds from other • sources in the future (i.e., weeks, months, • year,) may I count them as anticipated • matching costs? No, all matching must be secured at the time of award to be considered as a part of the required matching. See Item #1 above.

  17. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 5. What are cash contributions? A cash contribution means the recipient’s cash outlay, including the outlay of money contributed to the recipient by non-Federal third-parties. Some examples of cash contributions are: – The salary and fringe benefits of the grantee or third- party employees in proportion to their efforts under a project –The grantee’s cost to purchase items of equipment to be used under a project – Allowable Indirect Costs

  18. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 6. What are In-Kind Contributions? The value of non-cash contributions of property or services, including real property, equipment, supplies, and other expendable property directly benefiting and specifically identifiable to a funded project or program.

  19. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 7. What are the regulations on in-kind costs? Grantees may refer to the NIFA website for 7 CFR 3019, USDA’s Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations. This document, under Section 3019.23 – Cost Sharing or Matching, explains the requirements for matching. This information also is referenced in OMB Circular A-110, Subpart C, and Section .23 of 2 CFR 215.

  20. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 8. What information should be included in the pledge agreement letter? authorized representative’s signature of the donor organization and the applicant organization; the name, address and telephone number of the donor; the title of the project for which the donation is made; the dollar amount of the cash or in-kind donation; a statement that the donor will make the cash/in-kind contribution during the grant period; whether the applicant can designate the cash donation as they deem necessary or whether the cash contribution has been designated to a particular budget item by the contributor.

  21. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 9. If an item is unallowable for Federal funds, may we use it as a matching cost? No, if it is unallowable for Federal funds, it would also be unallowable as matching.

  22. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 10. May we use equipment donated to our • organization several years ago? No, the donation of equipment must be specifically for the grant and provided within the project period. The value of donated equipment must not exceed the fair market value of equipment of the same age and condition at the time of the donation.

  23. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 11. May we use staff time as a matching • contribution towards the project? Yes, but you must provide the hourly rate of pay applied and the number of hours spent on the project for each individual and the task to be completed.

  24. Matching/Cost Sharing Funds FAQ’s (Cont’d) • Can a volunteer’s time be used as matching and • if so, how do we determine what value the time has? Volunteer services may be counted as cost share or matching if the service is necessary to the project. Costs should be consistent with those paid for similar work in the recipient’s organization. In those instances in which the required skills are not found in the recipient organization, rates shall be consistent with those paid for similar work in the labor market.

  25. Matching/Cost Sharing Funds FAQ’s (Cont’d) Fringe benefits may be included in the costs. When an employer of another organization volunteers third party contributions, these services shall be valued at the employee’s regular rate of pay. If including volunteer time, present the information in the following manner - hourly rate of pay x the number of hours + fringe benefits (if applicable) = the amount to be paid or the value of volunteer time.

  26. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 13. May we include rent under the Federal funds to • help meet our matching requirement? Yes, rent is allowable under both Federal funds and as matching as long as the facility is not owned by the recipient organization, and the rent is not included as part of the organization’s indirect cost pool. If rent is going to be applied as a direct cost item, it must be applied on a pro-rated basis based on project usage.

  27. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 14. Do changes in matching funds such as the expenditures made or the sources of matching funds after the award has been made require approval? No, once the grantee’s matching funds have been approved, the grantee may make changes to their budget, including matching funds, as long as they continue to meet their required level of matching from non-Federal sources. The matching contributions must be allowable, reasonable, and allocable to the project. Accurate records of the matching must be kept and reported during the period of the award.

  28. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 15. Can we use income that we will earn from • participants as matching funds? • If so, how do you recommend we document • this? No, you will not be able to use the earned income towards the match since all matching funds must be secured in advance. The grantee must have a firm commitment of matching funds before any Federal funds are awarded; therefore, an anticipated amount of matching is not allowed.

  29. Matching/Cost Sharing Funds FAQ’s (Cont’d) • 16. Can we use previously approved matching • funds in excess of required percentage of • matching for another program towards a • project? No, it is not allowable to use previously approved matching funds that are in excess of the required percentage of matching for another program towards another project. All matching funds are secured specifically for a project and therefore cannot be re-applied as matching for another project.

  30. Matching/Cost Sharing Funds FAQ’s (Cont’d) • Can the indirect costs be used as • matching funds? Yes, normally, the applicant can claim any combination of percentages on the Federal portion and matching contribution on the budget as long as the combined percentage does not exceed the maximum indirect cost rate permitted by program or the applicant may elect not to charge indirect costs and instead use all grant funds for direct costs, excluding Specialty Crop Research Initiative (SCRI) projects.

  31. Matching/Cost Sharing Review Specialty Crops Research Initiative (SCRI) • The recipient of a grant under the Specialty Crop Research Initiative must provide funds or in-kind support from non-Federal sources in an amount that is at least equal to the amount provided by the SCRI Program. There is no provision for waiver of this requirement. • Applicants may use both the unrecovered indirect costs associated with the Federal Budget and the unrecovered indirect costs associated with the Non-Federal Budget to meet their matching requirements. However, indirect costs may not be recovered on third-party matching contributions. • The next slide is a SCRI matching indirect cost example. An applicant is submitting an application with a total budget of $100,000 and their negotiated indirect cost rate is 55 percent.

  32. Matching/Cost Sharing SCRI Calculations • Federal Budget Non-Federal Budget • Direct costs $78,000 $51,032 • Indirect cost (allowable as • part of the Federal Budget*) $22,000 • Unrecovered indirect costs • attributed to the Federal Budget $20,900 • Unrecovered indirect costs • attributed to the Non-Federal Budget $28,068 • Total Budget $100,000 $100,000 • This example assumes no capital equipment expenditures as part of the Federal Budget or third-party matching contributions as part of the Non-Federal Budget. • *limited to 22 percent of the Federal funds requested

  33. Matching/Cost Sharing SCRI Calculations • Federal Budget Non-Federal Budget • 100,000 (total funds) 51,032 (direct costs) • 22% (multiply) 55% (multiply) • 22,0001 28,0682 • 78,000 (Fed direct cost) 42,900 • 55% (multiply) 22,000 (minus) • 42,900 20,9003 • 1Indirect cost (allowable as part of the 28,068 • Federal Budget) 20,900 • 48,968 Total non-Federal IDC allowed • 2Unrecovered indirect costs attributed • to the Non-Federal Budget • 3Unrecovered indirect costs attributed • to the Federal Budget

  34. Matching/Cost Sharing Letters

  35. (Cont’d)

  36. Matching/Cost Sharing Letters (Cont’d)

  37. Matching/Cost Sharing Letters (Cont’d)

  38. QUESTIONS?

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