The needs of your project should determine your budgetary needs. The key word in budget development is CONSISTENCY. Consistency with the guidelines is absolutely necessary. No unallowable costs or items can be included (remember, the Sponsor is Always Right). Secondly, there must be consistency with your objectives and methods. Each item in the budget must relate to a program detail. No extraneous costs are allowed.
Budget information is generally presented in two different formats:
- Summary by general category of Direct Costs, Indirect Costs and Cost Sharing, and
- Budget justification of narrative, a detailed line-item explanation of all costs showing how each total cost is derived and relating each cost element to a program element. This is also the section of the budget in which any unusual costs associated with the proposed project must be justified. If the proposal narrative is well developed, explaining in detail the activities and anticipated objectives, the justification should be straightforward. Such items as annual salary increases, equipment costs, unusually high supply or travel costs, and stipend costs should be included.
Typical Cost Elements Included in a Budget Narrative:
l. Cost Sharing