What is the recommended action when cost-sharing contributions are missing?

• A. Ignore it.
• B. Reclassify other costs to cover shortfall.
• C. Attempt to reconstruct contributions from internal records, ensure eligibility, and document gaps and corrections.
• D. Increase the grant amount.

Answer: (C)

When cost-sharing contributions are missing, the correct action is to reconstruct the contributions from internal records, verify eligibility, and document gaps and corrections. Start by gathering internal documentation—ledger entries, payroll timekeeping, invoices, receipts, and any third-party contribution records—to determine what was actually contributed and by whom. Then confirm the costs meet the program’s cost-sharing rules, ensuring they are allowable, reasonable, and properly allocable to the project and that the recipient’s share is accurately calculated. Finally, document any gaps, identify what is missing, note the corrective actions taken, and record approvals, updating the cost-sharing schedule and financial records so there’s a clear audit trail. This approach preserves accuracy, transparency, and compliance with grant terms, and avoids hiding or misrepresenting costs. Ignoring the issue would violate requirements; reclassifying costs would distort the financials; increasing the grant would not address the missing contributions.