This Important Notice replaces Important Notice 02-11 dated November 22, 2002 entitled NSF Institutional Cost Share Requirement.

The National Science Foundation (NSF) has removed the requirement for 1% institutional cost share effective June 1, 2007. Previously, the NSF required that each grantee institution share in the cost of research projects resulting from unsolicited proposals. The Congressional appropriations providing funds to NSF no longer contains this language and therefore, the statutory cost sharing requirement of 1% is eliminated.

The NSF announcement is in the NSF “Proposal and Award Policies and Procedures Guide” published April 2007, effective June 1, 2007, Part 1 (Proposals) Chapter II – Section C.2.g (xi), Cost Sharing, and in Part II (Awards) Chapter II – Section D., Cost Sharing. http://www.nsf.gov/pubs/policydocs/papp/nsf07140.pdf

Generally, in the past IU has met the 1% institutional cost share requirement by cost sharing the effort of the Principal Investigator on research projects. With awards effective June 1, 2007 or later, IU will no longer track NSF institutional cost share. Fiscal Officers will no longer be asked to provide a departmental source account for institutional cost share and Contract and Grant Administration (C&G) Financial Administrators will no longer be creating cost share sub accounts labeled “INST1” to track NSF institutional cost share.

This long awaited change by NSF reflects the continued move away from a requirement for cost share. NSF language on cost share has also been substantially revised to reflect the National Science Board’s (NSB) decision to eliminate NSF program-specific cost sharing. In accordance with the NSB policy, there is no expectation by the Foundation that new proposals submitted for funding will include cost sharing. When cost sharing is included on Line M, 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 on Line M, and accepted by the Foundation, the commitment of funds becomes legally binding and is subject to audit.

Cost Share on Existing Awards

• NSF Institutional cost share will continue to be tracked on awards that were in place before June 1, 2007 until their completion.
• Our obligation to track and report program-specific cost share on existing awards has not been waived. Program-specific cost share will be tracked and reported as required by the terms of the award until award completion.

Please address any questions or concerns to the C&G Financial Administrator of your account.