Budget Preparation

Types of Sponsor Budgets

  • Two types of budgets – itemized or modular
  • Itemized budget
    • Most sponsors require
    • Specific amounts for each budget category, including indirect costs
    • Sponsor approves the detailed budget which must be followed
  • Modular budgets
    • Required for some projects with the National Institutes of Health
    • Usually in $25,000 increments
    • Request the number of modules in the proposal
    • Indirect cost is not included in the module amount – it is added to the module amount
    • Sponsor approves the module number and indirect amount – PI must not spend more than the modular amount
    • The Office of Research and Sponsored Programs requires detailed budget before approving the routing form
      • Shows the proper number of modules have been requested – thought about what was needed for the project to avoid overruns
      • Used to properly calculate the amount of indirect cost to request
      • Allows the department and college to properly review and authorize the project
    • Sample detailed budget for one $25,000 module
Budget Category Amount
Salary $10,000
Fringe Benefits 3,200
Supplies 2,600
Equipment 9,200
Subtotal $25,000
Indirect Cost 6,590
Total Budget $31,950

General Budget Guidelines

  • Factor in inflation
    • Proposal may be submitted up to a year before the project is to begin
    • If historical data is available, analyze price changes to determine inflation factor for some items
    • Sponsor generally allow a 3% cost of living increase in salary
      • Difficult to cover a salary increase if the cost of living increase is not included
      • If funded and no salary increase, can request to move the budget to another category
        • May need sponsor approval
    • Include a 10% annual increase in tuition
    • Increase the fringe benefit rate by 1 point each year of a multi-year proposal
    • Include a nominal increase in other categories such as supplies or travel
    • Do not include an increase in the indirect cost rate since the rate is set for multiple years
  • Amounts must correlate to projects tasks
    • Demonstrates PI's full understanding of the project – what it takes to complete it
    • Proposal may be discarded if budget is not proper
    • Too low budget – UNO will have to cover the excess costs
    • Too high budget – may be interpreted as intentionally excessive
  • Sources to determine budget amounts
    • Examine current actual cost of items
    • Contact a vendor to receive a quote, look at a vendor website, or obtain vendor price sheets
      • Include shipping and handling in the quote
      • Keep any document from the vendor to show how the budget amount was established
      • Keep in mind inflation
    • Investigator's or a peer's past experience
  • Use recent awards from the sponsor to determine typical budget amounts – check sponsor websites
  • Follow the general sponsor budget guidelines and any specific guidelines identified in the request for proposal (or other similar documents)
    • Proposals may be discarded if guidelines are not followed
    • Some budget items may not be allowed
      • Louisiana Board of Regents does not allow tuition in their portion of the budget (tuition is allowed as cost share)
    • Restrictions on indirect cost rate and indirect cost base (indirect cost is discussed later)
  • As per the Office of Management and Budget Circular A-21, costs need to be:
    • Allowable – certain expenditures, such as alcohol, are never allowed to be paid with federal funds
    • Allocable – expenditures can be clearly identified as benefiting the project
    • Reasonable – incurred cost is what a prudent person in a similar situation would do
    • Consistently applied – costs in like situations are treated the same (i.e. a cost cannot be part of indirect cost in one situation but directly charged to a grant in a similar situation)
  • Amounts should be in whole dollars
    • Unless otherwise specified by the sponsor
    • If already know the award amount from the sponsor, the budget should match that amount

Budget Components

Overview

  • Four parts:
    • Direct costs – costs specifically identified as benefiting the project
    • Indirect costs – costs that are generally shared among several projects and cannot be easily allocated to a particular project
    • Cost sharing/matching – project costs not paid by the sponsor
    • Budget justification – written explanation for each budget item
  • Budget template
    • One year, three year and five year project periods templates created by The Office of Research and Sponsored Programs
    • Calculates fringe benefits and indirect costs automatically
    • Formatted to match the UNO financial system
    • Found on the Office of Research website (www.orsp.uno.edu) and SharePoint site (https://sharepoint.uno.edu/research) under the Proposal Development section
    • May not match the sponsor format
      • If different, must complete the sponsor format
      • Complete the Office of Research template as well to minimize delays in entering the award in the UNO system and in approving purchases
    • Screen shots and descriptions provided later in this document

Direct Costs

Salary

  • Salary categories and budget number in UNO financial system
    • Faculty and Non-Classified Employees, Regular Pay (UNO budget # 601000)
    • Faculty and Non-Classified Employees, Additional Compensation (UNO budget # 601300)
    • Classified, Wage Employees, Regular Pay (UNO budget # 602000)
    • Classified, Wage Employees, Overtime (UNO budget # 602500)
    • Transient/Intermittent Employees, Regular Pay (UNO budget # 603000)
    • Transient/Intermittent Employees, Overtime (UNO budget # 603500)
    • Graduate Student Employees, Regular Pay (UNO budget # 604000)
    • Student Employees, Regular Pay (UNO budget # 606000)
  • Categories marked with an asterisk may not be allowed on federally funding projects either direct or passed through a state agency or private company
    • Specific sponsor approval
  • Additional compensation and overtime pay will need UNO approval if funding
    • Academic Affairs – additional compensation
    • Employee's supervisor – overtime pay
  • While writing the proposal, identify the type of personnel and an estimated time to complete the project tasks
  • The U.S. Department of Health and Human Services (which includes the National Institutes of Health) has a salary cap
    • Individual's salary in budget cannot be over the cap
    • If the individual's effort is less than 100% and their salary is over the cap, the budget amount is calculated based on the cap:
Salary Amount $200,000
Agency Salary Cap $190,000
Effort % on project 50%
Salary amount in budget $95,000 (50% of salary cap)
    • If the individual's effort is less than 100% and their salary is below the cap, the individual's budget amount is calculated using the actual salary:
Salary Amount $150,000
Agency Salary Cap $190,000
Effort % on project 50%
Salary amount in budget $75,000 (50% of salary)
    • Based on the Executive Level I pay of the Federal Executive Pay Scale – check the website for current rate: http://grants.nih.gov/grants/policy/salcap_summary.htm
  • Graduate students can either be budgeted in Graduate Assistant (GA) or Student Employee category
    • GA Employees (hired via the Personnel Action Form – 101) are paid a set amount and are required to work 20 hours per work
      • Tuition also needs to paid, see the discussion under tuition for more information
    • Student Employees (hired via the Student Employment Form) are paid a set rate per hour worked
    • Choose the best option for the project and the students involved
  • Most sponsors allow or even encourage a cost of living adjustment in yearly salaries
    • Include a 3% increase in salaries – may not have enough budget in other categories to cover an unplanned salary increase
    • Excess budget can be moved to another category if no raise was received
      • May need approval from the sponsor – check award document

      Fringe Benefits

      • Budget category and budget number in UNO financial system
        • Fringe benefits (UNO budget # 619000)
      • Federally negotiated rate based on actual payments the university makes for employees' retirement, insurance, etc.
        • Two approved rates based on type of salary payment:
          • Faculty and non-classified employees' regular pay & additional compensation, and the classified, wage employees' regular pay
          • Transient or intermittent employee's regular pay
        • Rates change periodically
          • Current rate on the Office of Research website or the Office of Research SharePoint site
          • Look under Proposal Development on both locations
          • Current rate is on the Office of Research budget template
        • If the rate changes after the proposal was submitted or during the award period, the new rate will be used
      • Calculate by multiplying the rate by the salary budget amount for the appropriate salary categories – automatically done by the Office of Research budget template
        Calculate by multiplying the rate by the salary budget amount for the appropriate salary categories – automatically done by the Office of Research budget template

      Travel

      • Two categories to remain compliant with federal regulations on international travel
        • Domestic (UNO budget # 620100)
        • International (UNO budget # 627000)
          • Needs prior sponsor approval on federally funded projects
      • Must follow state travel regulations
        • UNO follows PM-13, University Travel Regulations as published by the LSU System Office
        • Restrictions related to hotel rates, meal reimbursement, rental car, and others
        • Consult the UNO travel website
      • Include expenses for airfare, lodging, food, car rental, and other allowable incidental expenses as applicable

      Operating Services

      • Budget category and budget number in UNO financial system
        • Operating Services (UNO budget # 630100)
      • Includes such expenses as copying, binding, postage, advertising, equipment leases, and telephone lines
      • Most need prior written approval from the sponsor especially if there are federal funds involved
        • Some items, such as telephone lines and leases, usually can't be easily allocated to a particular project – would be considered an indirect cost instead
        • Allowed if can show the particular expense is only used for that particular project

        Supplies

        • Budget category and budget number in UNO financial system
          • Supplies (UNO budget # 640100)
        • Includes:
          • Material needed in the laboratory or the field
          • Equipment less than $1,000
          • Software and licensing less than $1,000
          • Sometimes general office supplies if allocable and approved by the sponsor
        • Equipment issues
          • Federal sponsors consider equipment purchases less than $5,000 as supplies
          • Louisiana guidelines consider equipment purchases less than $1,000 as supplies
          • Causes problems with indirect cost calculation – equipment budget amounts are not included in indirect cost calculation
          • Contact the Office of Research for assistance if needed

          Professional Services

          • Budget categories and budget number in UNO financial system
            • Professional Services (UNO budget # 650100)
            • Professional Services budget and Subcon > 25,000 (UNO budget # 650200)
          • Professional Services, #650100 includes:
            • Professional service agreements
            • Honorariums
            • First $25,000 of each subcontract
          • Professional Services, #650200 used for subcontract amount over $25,000
            • Allow the financial system to properly assess indirect cost
            • Indirect cost is only allowed on the first $25,000 of each individual subcontract
            • The Office of Research budget template includes a worksheet to calculate the amount in each category

            Other

            • Budget category and budget number in UNO financial system
              • Other Charges (UNO budget # 660100
            • Includes:
              • Stipend and tuition amounts for fellowships
              • Participant stipends (participant expenses will be discussed later in this document and more in depth in the Participant Cost document)
              • Registration fees for local conferences or seminars
            • May not be assessed indirect cost
              • Participant costs usually not assessed indirect cost or has reduced rate
              • Fellowship amounts are never assessed indirect cost
              • Label any item that is excluded from calculation
              • Review sponsor guidelines for restrictions

              Scholarships and Awards

              • Budget category and budget number in UNO financial system
                • Scholarships and Awards (UNO budget # 668000)
              • Used when UNO students receive a stipend for participation in a project
                • If based on or includes the actual tuition amount, include an annual 10% increase
              • Indirect cost may not be assessed
                • Review the sponsor's guidelines
                • If classified as a scholarship, always excluded from the indirect cost calculation

                Graduate Assistant Tuition

                • Budget category and budget number in UNO financial system
                  • Graduate Assistant Tuition (UNO budget # 668010)
                • Used when Graduate Assistants/students are included in the budget, if the student does not have a scholarship
                  • UNO policy
                  • Can be part of the sponsor budget or cost share (by the department, college, or the Office of Research)
                  • Will be checked by the Office of Research when the proposal is reviewed
                • The Office of Research budget template includes a tab with the tuition amounts for the next several years
                  • Includes an annual 10% increase in tuition
                • Not included in the indirect cost calculation

                Equipment

                • Budget category and budget number in UNO financial system
                  • Equipment (UNO budget # 670100)
                • Includes any piece of equipment or software that costs more than $1,000
                  • Federal sponsors have a $5,000 threshold
                  • See the discussion under supplies for more details
                • Indirect cost is not assessed
                • Include the cost of component parts, installation, and shipping & handling
                  • Use vendor's quote sheet, especially if the piece of equipment is large
                  • If a quote sheet is not available, determine best estimate based on prior experience or speaking with colleagues

                  Participant Costs

                  • Participants - trainees, interns, study/research subjects, or event attendees for UNO project
                  • Allowed on some proposals – refer to proposal or sponsor guidelines
                  • Specifically identified on sponsor budget
                    • Must identify specific UNO budget categories for all participant expenses
                    • The Office of Research budget template has a separate column for participant expenses
                  • Refer to the Participant Cost document for more details on the expense categories
                  • Will be issued a speed key number for the participant cost portion and for the non-participant cost portion
                  • May have special treatment for indirect costs
                    • Not assessed at all
                    • Assessed at a lower rate

                  Indirect Costs

                  • Budget category and budget number in UNO financial system
                    • Indirect Cost (UNO budget # 690100)
                  • Office of Management and Budget Circular A-21 indirect cost definition:
                    • "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity."
                  • Typically include:
                    • General department staff or supplies
                    • Office/lab electricity
                    • Building maintenance and depreciation
                    • Basic telephone services
                    • Etc.
                  • Not directly budgeted in a proposal
                    • Calculated by multiplying the indirect cost base amount by UNO's approved rate
                  • Indirect cost base is all budget items except:
                    • Graduate assistant tuition
                    • Scholarships
                    • Fellowships
                    • Equipment
                    • Individual subcontract amounts over $25,000
                    • Student awards, usually
                    • Participant costs, usually
                    • Other categories as dictated by the sponsor
                  • Two approved rates – on-campus and off-campus
                    • Off-campus rate used when more than fifty percent of the UNO employee's work is done off-campus
                    • Must provide justification for using the off-campus
                    • Approved by the U.S. Department of Health and Human Services (HHS)
                      • Based on completed space survey and expenditure calculations
                    • Rates change periodically
                      • Current rate on the Office of Research website or the Office of Research SharePoint site
                      • Look under Proposal Development on both locations
                      • Current rate is on the Office of Research budget template
                    • If the rate changes after the proposal was submitted or during the award period, the new rate will NOT be used
                  • Sponsor may cap the indirect cost rate/amount or not allow indirect cost
                    • Must be approved by the Vice President of Research
                    • Must provide proper justification for the reduction
                    • UNO is paying for part of the project in the form of administrative costs
                  • Review award documentation to make sure the indirect cost is calculated correctly
                  • The Office of Research will perform the indirect calculation based on information in the budget
                    • If your budget has unusual issues, contact the Office of Research for assistance.

                  Cost Sharing/Matching

                  • Portion of the project's expenses not paid by the sponsor
                    • Paid by UNO or a third party
                    • Must have approval from appropriate department
                    • Third party must provide a letter of commitment
                  • Some sponsors require mandatory cost share
                    • Set percent of the total or a set amount
                  • May also be voluntary cost share
                    • Include in budget by PI
                    • The Office of Research generally does not approve
                    • The National Science Foundation prohibits, see their policy guide for details
                  • Can be cash, in-kind (volunteers, donate space, etc.), or waived indirect cost (lower indirect rate or no indirect cost allowed on sponsor budget)
                  • Cash cost share is treated the same as the regular budget:
                    • Meet the same the requirements (allowable, allocable, reasonable, and consistently applied)
                    • Use the same budget categories
                    • Same start and end date as the sponsor's budget
                    • If funded, assigned a separate speed key
                  • Separate column on the Office of Research budget template
                  • More details on cost sharing is provided on the Cost Share document

                  Budget Justification

                  • Written explanation for each of the budget amounts, including participant costs and cost share
                  • Must match the budget and written proposal
                  • Should be clear and concise
                    • Easier for the Office of Research and the sponsor to review the budget
                  • Include known details, such as:
                    • Type of supply items
                    • Number of copies to be made
                    • Specific pieces of equipment to purchase
                    • Names of individuals working on project
                      • If they don't work on the project, may need to obtain sponsor approval for change in personnel
                    • Travel length, destination, purpose, and timeframe of the trip as well as the number of travelers
                    • Consulting and/or subcontracting description of duties
                      • Include names if known – would need sponsor approval if do not utilize them for the award
                      • Include procedure for selecting the consultant or subcontractor
                        • May need to go through the bid process
                  • Describe how the indirect cost amount was calculated
                    • Include the rate and the base amount used in the calculation
                  • Include participant details
                    • Number expected to take part in the project
                    • Expected cost per participant
                  • Explain cost share, if applicable, in the same manner

                  Final Points

                  • Follow sponsor guidelines
                    • Stay within any budget restrictions
                      • Salary cap
                      • Overall dollar amount
                      • Indirect cost rate or amount
                    • Use the proper format
                  • Make sure the numbers add up
                  • Make sure amounts correspond to the proposal narrative and budget justification
                  • Submit a budget to the Office of Research for review as soon as possible

                  Budget Template

                  • The Office of Research has three budget templates available for use based on the number of years of the project:
                    • One year
                    • Up to three years
                    • Up to five years
                  • The three and five year templates include a summary budget spreadsheet
                  • Several tabs on template:
                  Several tabs on template

                  Budget Year Tab

                  • Enter the budget amounts in the appropriate locations and column(s):
                  Enter the budget amounts in the appropriate locations and column(s)Enter the budget amounts in the appropriate locations and column(s)

                  Subcontract Tab

                  • Calculates the amounts to include in the two subcontract budget categories for each year based on the values entered above – these amounts will automatically populate the correct year's budget
                  Subcontract Tab

                  Tuition Tab

                  • Second table gives the tuition amount with the extra graduate enhancement fee
                  • Amounts include a 10% increase
                  Tuition Tab

                  Salary Rates Tab

                  • Calculates daily, weekly and monthly rates
                  • Use the appropriate table based on the type of appointment
                  Salary Rates Tab

                  Justification Tab

                  • Use this format if desired and the sponsor does not dictate a certain format
                  Justification Tab

                  Responsibilities

                  Principal Investigator

                  • Properly identify and budget project expenses
                  • Prepare a budget justification

                  The Office of Research and Sponsored Programs

                  • Review proposal budget and justification
                  • Provide assistance to the investigator as needed

                  Sponsored Programs Accounting

                  • Ensure budget is properly setup in financial system if proposal is awarded