Budget Development
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F&A Cost Rates Fringe Benefit Rates FY24 Institutional Profile
Budgets for sponsored projects require detailed costs to show a funder the financial plan to cover the costs necessary to completing the proposed scope of work. Developing a budget can be a challenge and take a significant amount of time in the proposal preparation process. In addition to being compliant with sponsor requirements, state and federal laws and university policies, the university is required to observe the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance 2 CFR Part 200) issued by the Office of Management and Budget (OMB), which requires that all costs are allowable, allocable, reasonable and treated consistently.
When building a project budget, it’s important to keep in mind that there are two types of costs, direct and indirect. Direct costs can be specifically identified relatively easily and with a high degree of accuracy, as being attributable to a particular sponsored activity. This would include such items as salaries, travel or equipment. Indirect costs are expenses associated with doing business that are not be readily identified as belonging to a particular sponsored activity, but are necessary for the general operation of the department, college and/or university. This would include such items as rent, utilities, professional or administrative personnel.
In addition to the checklist detailing required proposal elements and supporting documents, the Pre-Award Coordinator will provide PIs with a line item internal budget template that calculates salaries and fringe benefits, provides travel projections and applies indirect costs. This will be either a standard budget, where 100% of the project costs are requested from the sponsor or a cost-share budget when the sponsor requires matching funds to be included. The Pre-Award Coordinator will provide the applicable version based on the funding solicitation and will assist in the creation of your project-specific budget and justification, which will ultimately be submitted to the sponsor.
Budget Categories
Generally, but not always, the following expense types are included in a project budget.
Salaries and Wages
Salaries and wages are paid to university employees (faculty, staff or students) and must be consistent with university compensation policies. This cost category does not include consultants, external collaborators or contractors.
- Effort for nine-month faculty PI, Co-PI or other Key Personnel will be either a number of months or a percentage of effort and calculated using base pay in the academic year and a maximum daily rate during the three summer months.
- Effort for 12-month faculty, administrators or university staff in FTE positions will be a percentage of their annual effort devoted to the project and calculated using base pay with a 30% maximum allowed.
- Unless unallowable by the sponsor, salaries for faculty or staff in FTE positions should be budgeted with an escalation of 3% per year of the project.
- Course buyouts are calculated as $4,116 per three-credit course and are excluded from salary escalation.
- Wages for employees paid by the hour, including temporary (part or full-time) hires and students, should be included in this cost category, but also excluded from salary escalation.
Fringe Benefits
Fringe benefits rates at Coastal are the costs that the university incurs as a result of paying salaries or wages to its employees and includes payroll taxes, retirement contributions, worker’s compensation and unemployment insurances.
- Full-time faculty, FTE staff, course buyouts and non-FTE employees who elect to participate in the retirement system fringe benefit rate is 33.36% and includes retirement plans, FICA, worker’s compensation and unemployment insurances.
- Non-FTE employees who do not elect to participate in the retirement system and for students working more than 20 hours per week is 8.45% and includes FICA, worker’s compensation and unemployment insurances.
- Students who are enrolled and working less than 20 hours per week have a fringe benefit rate of 0.7% for worker’s compensation insurance.
- Temporary positions established for, and funded by, grants, contracts or cooperative agreements may be subject to a higher fringe benefit rate for the costs associated with health and dental plans. This does NOT apply to faculty, staff in FTE positions or students and is very rare.*
*The OSPRS will provide the fringe rates and check all fringe calculations for accuracy.
Equipment
Equipment is defined as tangible, non-expendable, personal property having an anticipated life of one year or more with a per unit acquisition cost of $5,000 or greater and includes, but is not limited to, furnishings, scientific apparatus, machinery, library volumes, artwork, motor vehicles, boats and livestock. You will need to identity the individual piece(s) of equipment requested, the importance to the project and why, if available, existing equipment is not sufficient. Price quotes, or the basis for projected prices, are required and should include shipping or freight charges, set-up and training costs.
Fabricated Equipment is an item of capital equipment that has been constructed at Coastal by Coastal personnel specifically for a Coastal project, as opposed to being purchased "off the shelf"; from a vendor. To be in this cost category, fabricated equipment still must satisfy the definition of equipment noted above.
NOTE: If your budget will include a single piece of equipment with a cost of $10,000 or more, you should first search the South Carolina Procurement database (https://procurement.sc.gov/contracts) to see if the item can be purchased from a state contracted vendor. If so, obtain the quote and attach to your budget justification.
If there is no state contracted vendor that can deliver the equipment needed for your project and you have found it with another vendor, a Grant Specified Exemption request MUST BE prepared, including all required documentation, routed for applicable signatures and approved by the Chief Procurement Officer, currently Dean Hudson, PRIOR to the proposal being submitted to the sponsor.
PIs are encouraged to familiarize themselves with all sponsor-specific guidance, federal, state and university policies and procedures regarding grant equipment purchases.
Travel
Travel costs are classified as those expenses for transportation, lodging, subsistence and related items that would be incurred by employees traveling for activities related to the work of the proposed project. Domestic and foreign travel should be separated. Unless otherwise stated by the sponsor, domestic travel is considered to be travel among any of the 50 United States or territories.
Travel justifications should include:
- Name/role of person(s) traveling;
- Location to which they will travel;
- Purpose and number of trip(s);
- Registration fees (if applicable); and
- Costs for:
-Airfare
-Mileage
-Lodging
-Ground transportation
-Per diem.
Participant Support
Participants are not university employees or paid interns and do not perform work or services for the project other than for their own educational benefit. Participant support costs are those paid to, or on behalf of, trainees and include stipends, subsistence, travel expenses, tuition assistance and registration fees to attend educational events in connection with the project. Unlike salaries or wages, participant stipends are not assessed fringe benefits and are not included in the indirect cost base.
Participants are not contractors or guest speakers and do not conduct trainings, workshops, lectures, conferences, seminars, symposiums or other information sharing activity events for the benefit of the university. In addition, expenses connected to holding events (meeting rooms, AV equipment, speakers fees, honoraria or any incentives/gifts are not allowed as participant support costs.
NOTE: When included in a federal award budget, participant support costs cannot be reallocated for any other purpose without the sponsor’s prior approval, so it’s important to carefully consider the types of expenses you will cover for your project participants when developing your budget.
Materials and Supplies
Materials and supplies is a broad cost category that includes any consumable item having a per-unit cost of less than $5,000, such as computers, laboratory materials and other research-related supplies. The costs should be project-specific, reasonable and based on actual or historical use. It is not necessary to break down each individual item, but a general description and amount by general classification should be provided (e.g. glassware, test tubes, or chemicals).
Publication Costs
Publication costs consist of the documenting, preparing and publishing, disseminating, reprinting and sharing of project findings.
Consultant Services
Consultants are independent contractors, not university employees, who can provide special knowledge, advice or services (such as program evaluation) that cannot be performed by existing Coastal personnel. Consultants will sometimes be required to provide a letter of support to be submitted with the final proposal.
Consultant justifications should include:
- Description of the work to be performed;
- Dates of service or total number of days on the project;
- Rate for the days/hours/servce(s);
- Travel expenses; and
- Other related expenses.
NOTE: If consultant services will be paid to a single entity or person in excess of $10,000 over the life of the project, a Grant Specified Exemption request MUST BE prepared, including all required documentation, routed for applicable signatures and approved by the Chief Procurement Officer, currently Dean Hudson, PRIOR to the proposal being submitted to the sponsor.
Contractual Services
Contractual services are provided by an individual or company that provides similar goods or services to a number of entities. A contractor engages in “work for hire” and requires little, if any, instruction as to how to go about producing the good or delivering the service. Contactors are paid when the product or service is accepted by the Coastal PI and should not have copyrights and/or other intellectual property rights related to any materials, inventions, works of authorship, software, information or data conceived or developed by Coastal employee’s student or subawardees in the performance of the project.
NOTE:If contractual services will be procured at a cost that exceeds $10,000 over the life of the project, a Grant Specified Exemption request MUST BE prepared, including all required documentation, routed for applicable signatures and approved by the Chief Procurement Officer, currently Dean Hudson, PRIOR to the proposal being submitted to the sponsor.
Computer Services
Computer services are costs related to computer-based retrieval of scientific, technical and educational information or leasing automatic data-processing equipment.
NOTE: This cost category is not for the purchase of computers or associated hardware and software. Those items should be requested as either supplies (<$5,000) or equipment (>$5,000).
Subawards
Subawards are included in a project budget when an outside entity, usually another university, will be responsible for independently performing a portion of the funded scope of work using their own human resources, equipment and/or facilities. Unlike a contractor, who may carry out a task in support of the project, a subawardee (also called a subrecipient) must: meet performance targets tied to project objectives; be responsible for compliance with applicable sponsor requirements, program statutes, regulations, rules, policies (including local policies) and guidance; submit required closeout materials and documents; and provide cost-based invoices on a regular schedule. In addition, subawardees may be entitled to assert copyrights and/or other intellectual property rights related to the work performed.
Subawards on proposals require the following from the external organization:
- Coastal Subrecipient Commitment Form;
- Indirect Cost Rate Agreement;
- Scope of work;
- Required sponsor forms, templates or certifications.
NOTE: If a subaward to a single entity will exceed $10,000 over the life of the project, a Grant Specified Exemption request MUST BE prepared, including all required documentation, routed for applicable signatures and approved by the Chief Procurement Officer, currently Dean Hudson, PRIOR to the proposal being submitted to the sponsor.
Equipment or Facility Rental/User Fees
Rental or user fees are included in a project budget when they are for project-specific rental of off-campus equipment or facilities from a third party.
Alterations and Renovations
Essential alterations and renovations to convert interior space or to adapt an existing facility or to install equipment would be included in this cost category. The justification should include detailed plans and specific costs.
Maintenance and Support Plans
Maintenance or support plans are generally related to equipment and require justification that the expenditures are directly related to the specific award. Service agreements related to the delivery of a product could also be included in this cost category if they are not included in the purchase price of the item.
Other
The other cost category should be used to include those items that can be directly tied to the sponsored projects, but not readily ascribed to one of the previous categories. This could include things such as graduate tuition assistance, telecommunication charges or animal care costs.
Indirect Costs (IDC)
Indirect costs (also called facilities and administrative (F&A) or overhead) are expenses associated with doing business that are not be readily identified as belonging to a particular sponsored activity, but are necessary for the general operation of the department, college and/or university. These would include things such as facility costs (maintenance, utilities, space, etc.) and university administration (grants, financial services, payroll, etc.).
These recovered IDC funds are allocated to support colleges (25%), departments (25%) and PIs (25%) to fund expenses related to research and other scholarly activities, such as travel or equipment purchases. In addition, a portion (25%) of the recovered IDC goes into the Research Incentive account, which supports things like special projects, research-related travel and the electronic grants management system.
The university has a from the US Department of Health and Human Services (DHHS) that is updated every four years. Currently, the on-campus rate is 49.59% of salaries, wages and fringe benefits and the off-campus rate is 30.58% of salaries, wages and fringe benefits. All projects are considered to be subject to the on-campus rate unless the project meets the criteria for use of the off-campus rate. The off-campus rate is applied when the project is conducted at facilities not owned or leased by the University. If leased space and associated costs are charged directly to the project, the off-campus rate must be used. The off-campus rate does not apply to field work or in cases where a PI chooses to conduct their project away from campus for convenience when university facilities are available.
NOTE: The university policy is to collect the full amount of IDC from all funding sources, but some funders do not allow indirect costs at the full rate (or at all). In these cases, Coastal will honor these exceptions when the funder has existing written policies or guidelines or when they will provide notice in writing from an authorized official (email is acceptable) stating their organizational policy on payment of indirect costs. Only the Office of Sponsored Programs and Research Services (OSPRS) has the authority to accept a reimbursement rate other than our negotiated rate and that request must be made using the Request for Indirect Cost Recovery Reduction or Waiver form.
Cost-Share
Cost-share (also called matching funds or ”match”) on grants and contracts reflects the contribution to a sponsored project, either by the university or a third-party, that is not covered by the funder, whether contributed as cash or in-kind (goods, services or space).
Budgets that include cost-share should be limited to only those with a requirement from the sponsor. Any cost-sharing proposed in the budget, MUST BE APPROVED by the Department Chair/Director, Dean/VP and the OSPRS Director before the proposal is submitted to an external funding agency. For this reason, a PI should refrain from making any voluntary commitments of cost-share, even if it’s only mentioned in the project narrative and not specifically outlined in the budget documents.
To be allowed as cost-share, the goods, services, space or funds must:
- Be necessary and reasonable to accomplish the project's objectives;
- Be provided for in the approved budget;
- Be verifiable from the pledged entity's records;
- Not be derived from other federal funds (except where authorized); and
- Not be included as cost-share for any other project.
In rare cases, a PI may wish to offer cost-share as a way to help ensure the success of a competitive proposal, but it’s important to keep in mind including cost-share in a proposal that doesn’t expressly require it, will not necessarily help the proposal and may only be considered in the evaluation of a funding proposal in cases where the solicitation guidelines required it. In addition, it’s very rare that any federal agency even allows cost-share to be offered.
NOTE: Once awarded, a project with cost-share commitment(s) will have to be tracked, monitored and reported by the PI to the OSPRS and Grants Accounting as it is subject to audit. Failure to comply with the cost-sharing commitment may result in a loss of funding.
Unallowable Costs
Unallowable costs are expenditures that cannot be recovered, either in whole or in part, from the federal government. The following are costs considered unallowable and should not be included in your proposal budget.
- Alcoholic beverages*
- Alumni activities
- Bad debts
- Commencement and convocation costs
- Donations and contributions
- Development/fundraising costs
- Entertainment costs*
- Employee morale
- Excessive employment recruitment costs
- Fines and penalties
- Goods and services for personal use
- Housing and personal living expenses
- Investment management costs
- Lobbying costs
- Memberships
- Moving costs
- Student activity costs*
- Travel costs in excess of commercial coach airfare
*Private funders may allow the expense. Please reach out to the OSPRS with any questions on a specific cost.
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Internal Budget Templates
These are documents that will provide the details required to fit most sponsor-specific budget and justification formats. Any necessary deviations from these internal templates will be provided to the PI by the Pre-Award Coordinator.
Standard Budget
A standard budget workbook should be used for those projects that will last less than one year up to five years and will request 100% of the project funds from an external sponsor.
Cost-Share Included Budget
A cost-share budget workbook should be used for those projects that will last less than one year up to five years and will request some of the funds from an external sponsor and provide matching funds/goods/services from a university or other third-party source.
Budget Justification
A justification is required for any budget, but the formatting and level of detail will vary by sponsor. This template is standard for most federal agencies, but may be more, or less, than what is required for other funders. The Pre-Award Coordinator will work with PIs to craft a sponsor-compliant justification.
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For forms and templates associated with the proposal preparation process, please see the university forms page under "Sponsored Programs and Research Services".
For policies associated with the proposal preparation process, please see the university policies page under policy management area "RSCH (Research)”.
For a glossary of research administration terms, training materials and other resources, please see the OSPRS Resources and Training page.
Grant Specified Exemption
Subrecipient Commitment Form