Subject:  NSF Institutional Cost Share Rescinded
No.        07-3
Date:    June 6 , 2007

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.

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

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


     Financial Management Services

Phone: (812) 855-4884

Fax: (812) 855-7494


     Sponsored Research Services:  Bloomington

Phone: (812) 855-0516

Fax: (812) 855-9943


     Sponsored Research Services:  Indianapolis

Phone: (317) 278-3473

Fax: (317) 274-5932