Budget Development
Developing Your Proposal Budget
Sample Budget Justification
Cost Share and Matching Funds
What Are Indirect Costs?
Developing Your Proposal Budget
How to Develop a Budget for your Grant Proposal
- First, you will need to prepare expense worksheets:
- A Budget Narrative is usually required:
- Provide support and revenue statements if the project has already received funds or if it is expected to produce funds:
Writing Tips for Budget Proposal Writing
- Sites for writing a grant proposal
- Make your budget realistic (Do not inflate your budget)
- Ask someone else in your organization to review your budget
- Check with the agency to see if it has required budget categories for you to use in your proposal
Basic Budget Elements
- Salaries and Wages – determine total salaries and wages and list the amount of time spent by each person on project
- Fringe Benefits – direct cost to a sponsored project based on salaries and wages to be paid
- Consultants – some sponsors do not permit payments to consultants
- Capital Equipment – an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost of $5000 or more per acquisition
- Expendable Equipment and Supplies – These are items costing less than $5000. Normally, a research project will consume expendable supplies such as laboratory items, teaching aids, computer software, and office supplies. A reasonable amount should be budgeted for these items.
- Publication Costs – Budget the anticipated cost of publishing the results of the research, keeping in mind that page charges may vary from journal to journal. Consider both page charges and reprint costs.
- Travel – If foreign travel is anticipated it must be specified.
- Computer Time – Computer time costs should be included as a budget item, if appropriate. If non-sponsor-funded computer time is needed, arrangements must be made in advance with your academic department or research unit.
- Subcontracts/Sub-recipient Agreements – When a proposal includes a subcontract/sub-recipient agreement to a named subcontractor, the subcontractor’s authorized institutional representative should be provided with the “Proposal Review Form.” If the principal investigator(s) has any direct or indirect financial or other interest in the subcontractor/sub-recipient organization, a disclosing statement must be submitted as well.
- Other Elements – Consider, as appropriate, costs for copying, long-distance telephone calls, postage, reference books and materials, tuition and required fees for participating graduate students, equipment maintenance, and contracted services. Revision of OMB A-21 relevant to office supplies, postage, local telephone costs, and memberships: The principal investigator needs to justify the need for these items in relation to the project.
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Sample Budget Justification
a. Personnel:
Funding in the amount of $XXX is requested to defray the costs of Professor XXXXX who will serve as Principal Investigator. Prof. XXXXX be responsible for general oversight of the project, including organizing and coordinating all interviews, travel and training of the students involved in the project. He/she will dedicate 11.11% of his/her time on this project during the academic year (September-May) and 33.33% of his/her time during the summer term (June-August).
Funding in the amount of $XXX is requested to defray the costs of Professor XXXXX who will serve as Co- Investigator. Prof. XXXXX be responsible for assisting the Principal Investigator in the project coordination, travel and training of the students involved in the project. He/she will dedicate 5% of his/her time on this project during the academic year (September-May) and 50% of his/her time during the summer term (June-August).
Funding in the amount of $XXX is requested to defray the cost of Ms. Jane Doe, who is the administrative assistant for the Department. Ms. Doe will support the project in an administrative capacity and will dedicate 2% of her time on this project during the term of the agreement.
Funding in the amount of $XXX is requested to support two graduate students participating in this project. Graduate students will (add information/task).
b. Fringe Benefits:
Fringe benefits for the salaries of the personnel listed above equal $XXX and were calculated at a rate of 21.74% and 1% for student personnel.
c. Travel:
Two roundtrip tickets, plus 5 days housing and per diem for each traveler at a rate of $XXX.
d. Small Equipment Purchase:
Funding in the amount of $XXX is requested for
e. Materials and Supplies:
Funding in the amount of $XXX is requested for office supplies including, basic supplies, assays, etc.
f. Communication:
Funding in the amount of $XXX is requested for Communication/Postage.
g. Other:
Funding in the amount of $XXX is requested for the development of a web page.
h. Consultant:
Funding in the amount of $1,500 is requested for Ms. (XXX) who will assist the PI and CO-Investigator in their trip to Lima, Peru. Ms. (XX) will consult with the investigators…
i. F&A Costs:
In accordance with the grant guidelines, Facility and Administration costs totaling $16,383 for CCU at the rate of DHHS Approved Rate of 50% of salaries, wages and fringe benefits.
j. In-Kind/Matching:
The College has agreed to provide matching funds in the amount of $XXX in support of this project for…
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Cost Share and Matching Funds
All new grant awards must identify a departmental or other account number for cost share/matching requirements prior to receiving a new account number.
Reassigned time – OGSR will consider two types of reassigned time: a) any employee’s time and effort allocated to a project/grant for which a funding agency sponsor reimburses CCU, and b) any employee’s time and effort allocated to a project/grant but not charged to the sponsor and for which the University pays (hard matching/cash contributions).
Advance reassigned time - Reassigned time can be budgeted for any employee, not just faculty members. Advance reassigned time from normal duties can only be accounted during the academic year. Any reassigned time budgeted by a faculty member on an external funding program/grant must be in accordance with policy. Considering that CCU is financially responsible for the payment of salaries & fringes of an employee’s reassigned time, any such reassigned time allocated to a program/grant shall be considered as “Hard match” or actual cash match from a department’s own general operating funds.
Additional compensation – Additional/supplemental compensation can only be paid if allowed by the Funding Agency/Sponsor and approved by the department in accordance with policy.
Summer time – Summer time can only be budgeted by faculty members/employees with 9 or 10 months appointments. A faculty member/employee may dedicate his/her summer time to a project/grant as in-kind as long as the department is not responsible for any salaries during the summer term. In the event the department is financially responsible for the payment of any funds to a faculty member for any time dedicated to a project/grant during the summer, said payment shall be given the same treatment as advance release time and shall be considered as cash match from the department general operating funds.
Other Direct Costs – Any other direct costs that are paid for from sources other than the funding agency/sponsor and directly attributable to support of the project shall be accounted as actual cash match from a department own general operating monies. (i.e. project-related travel not charged to the project/grant; existing or newly purchased equipment and/or supplies need for the project, not being charged to the project/grant; and contracted consultants who will provide expertise to the project but whose expenses aren’t eligible for grant funding).
In-Kind - In-kind contributions are non-cash contributions in the form of goods or services that can be given a cash value. Examples include the fair market value of project supplies, transportation, and services.
Unrecovered Facilities & Administrative (Indirect) Costs - Some funding agencies limit the amount of F&A cost recovery. Any difference between the CCU's F&A cost rate and the funding agency's limited F&A cost rate (unrecovered indirect costs) may be used as a matching commitment if the Funding Agency/Sponsor agrees. Unrecovered F&A costs will be counted as “Soft match” (i.e. an expense related to the project but not charged to the project).
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What are Indirect Costs?
Costs involved in conducting sponsored projects are categorized in two ways: direct costs or indirect costs. The federal government refers officially to indirect costs as facilities and administrative (F&A) costs, sometimes simply called "overhead" costs. Direct costs are "those costs that can be identified specifically with a particular sponsored project relatively easily with a high degree of accuracy." For example, the salary of a principal investigator (PI), or the purchase of specific supplies for a specific experiment are direct costs. They must be:
- Allowable (as described by federal cost principles in OMB Circular A-21;
- Reasonable (what a prudent person would spend);
- Allocable (limited to that portion of expenses directly benefiting the project and consistently treated as direct charges).
Indirect costs are "those that are incurred for common or joint objectives." In other words, indirect costs cannot be specifically attributed to an individual project. For example, it is difficult to say how much of a PI's lab space is used for a specific research project when multiple projects are being conducted in the same lab. We know the project benefits from the lab space, but how do we calculate the cost associated with that benefit? We arrive at the cost by using formulae that spread the costs of the whole lab across all projects conducted in the lab. The same basic process is used with all indirect costs across all projects.
Examples include the services of the accounting staff and research administrators, the cost of utilities for a building housing several research projects, office supplies, postage, local telephone service and communications infrastructure or salaries of personnel engaged in providing a broad range of departmental support activities.
In unusual circumstances, costs ordinarily claimed as indirect (hereafter referred to as "F&A costs") might be considered direct. The mitigating circumstances relate to the size, nature or complexity of the project. For example, although administrative and clerical staff salaries are ordinarily defined as F&A costs, if the duties required for a project are highly technical, then those salaries might be considered direct costs to the project. Typical F&A costs, like postage, photocopying, office supplies and local telephone service might be considered direct costs if justified by the nature of the project, e.g., mail or telephone surveys or supplies for participants. Within University guidelines, PIs must be able to justify a cost as direct of F&A on a case-by-case basis, and have those justifications reviewed by a research administrator.
How is the F&A Rate Calculated?
The F&A rates that can be charged to federally sponsored projects are compiled and presented to the Department of Health and Human Services (DHHS) in a proposal submitted by the University and audited by DHHS. For these negotiations, the University categorizes all F&A costs as facilities or administrative based on the nature of the cost. Costs for building depreciation, equipment depreciation, libraries, and operation and maintenance are categorized as facilities while costs for general, departmental and sponsored project administrations are categorized as administrative. Once the portion of these costs attributable to the research enterprise is calculated, that amount is converted to an F&A rate, which is usually reviewed and updated annually by DHHS.
What Are Some Examples of Institutional Resources Included in F&A Calculations?
- Affirmative action monitoring
- Animal and human subjects protection
- Building maintenance
- Custodial services
- Deans, department chairs, etc.
- Departmental administrative assistants
- Equipment
- Human resources services
- Laboratory space
- Legal counsel
- Libraries
- Office space
- Office supplies
- Purchasing services
- Research accounting
- Sponsored programs services
- Telecommunications infrastructure
- Utilities costs
This list is not exhaustive, but it provides an idea of the range of costs incurred by an institution in the support of research and sponsored programs.
How are F&A Rates Applied?
When conducting sponsored projects, the University strives to be reimbursed for its full costs. The F&A cost component of a sponsored project is intended to reimburse the University for the costs incurred to support research. Unfortunately, even when the current rate is applied, a portion of the actual costs are not recovered because of limitations created by the federal cost principles. The University further subsidizes the actual costs of research when non-standard F&A rates are applied. Normally, only limited F&A costs are collected from the State of South Carolina and some awarding agencies, including many foundations. The result is that the University collects a little less than 50 cents on every indirect cost dollar spent for sponsored projects.
When Coastal's standard F&A rate is applied, these personnel costs are multiplied by the F&A rate and the resulting F&A costs are added to the direct costs to obtain the total cost for the project. When a non-standard F&A rate is allowed there are usually no deductions from the base; the percent is applied to all direct costs. This is known as the Total Direct Cost (TDC) base.
What Costs Are Reimbursed by F&A Funds?
F&A costs represent a reimbursement for expenses already incurred. All F&A costs recovered are deposited as unrestricted funds (unrestricted meaning not confined to a set budget).
Why Are F&A Funds Important to You?
Whatever we call them, indirect costs are real. The University is dependent upon the recovery of F&A costs in order to maintain the infrastructure necessary to continue to support sponsored projects. Faculty, staff and students involved in research and sponsored programs experience the benefits of the F&A cost recovery every day when they turn on the lights, when they request a research assistant, when they use the telephone or the library and when they use the Internet, and so on.
Sample Budget: Excel Spreadsheet
The Office of Grants and Sponsored Research has provided an Excel worksheet to assist in the budget writing process: Sample Budget Worksheet
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