Chapter 5 - The Proposal Budget
Intent of the Budget
The budget (also called the cost or business proposal by some sponsors) is the Principal Investigator's best estimate of the total cost to conduct the proposed project. Upon submission of the proposal, the budget becomes a firm commitment on the part of the University to perform the proposed work at the proposed cost. The budget must, therefore, reflect all of the activities included in the technical proposal.
Principal Investigator's should consult with the appropriate Grant Specialist at SPS when developing proposal budgets. They should submit a draft budget to SPS as a first step in the proposal review and approval process. A draft budget checklist is available to assist in this process. The budget will be reviewed in detail by SPS and must comply with the policies of the sponsor, University, and fiscal administrator/agent. Required last minute changes to the budget could put timely submissions in jeopardy; therefore, proposal budgets should be submitted to SPS for review and approval no less than ten (10) working days prior to the submission deadline.
Budget Forms and Formats
When preparing a proposal budget always review of the application materials and guidelines provided by the sponsor. Budget forms or formats provided by the sponsor should always be used. In the absence of guidance from the sponsor regarding form or format, the format presented in The Project Director's Handbook is recommended.
Sponsor guidelines will provide information concerning limitations, if any, on funds which the sponsor will provide, specifically allowed costs, requirements for cost sharing or matching, and any other special financial information. Failure to adhere to these guidelines may jeopardize funding of the proposal.
NIH Modular Grants
All basic research grants submitted to NIH (R-series) with direct costs totalling no more than $250,000 per year submitted The National Institutes of Health must use the Modular Research Grant Application procedures. For more information on modular grants, see Information on NIH Modular Grants.
To determine if your application should be submitted in modular format complete the details NIH budget forms. The Grant Specialist will still assist Principal Investigator's in completing these forms.
Costs of Sponsored Programs
When preparing the proposal budget, it is important for Principal Investigators to remember that two distinctly different types of cost comprise the total cost of any sponsored program: direct costs and F&A (or indirect) costs. Direct costs are those costs which are required to conduct the project. F&A costs are the costs to provide facilities and support services to sponsored programs.
Direct Costs Include
- Salaries and Wages - Salaries and wages of faculty and staff are a direct cost of the proposed project and should be budgeted in proportion to the fraction of full time effort each faculty and staff member will devote to the project. Only project staff who are or will be employees of the University RF or UBF should be included in this section of the budget. Other types of project staff are discussed under independent contractors and subcontracts. All personnel who will work on the project should be listed in this section of the budget, with the Principal Investigator appearing first, followed by all remaining persons or positions. In most cases, the budget should include the total amount of effort expected to be committed to the project, expressed either as number of months or a percentage of the full appointment, along with the corresponding salary amount for such effort. For academic year employees, salary requested for the academic year and summer months should be listed separately. Anticipated annual increases and discretionary increases should be factored into salary estimates.
- Salary Rates/Summer Salary/Extra-Service - Faculty members holding academic year appointments may request up to 2 months (22.22%) of their academic year base salary as summer salary. Requests beyond 2 months, up to a maximum of 3 months (33.33%), are subject to sponsor policy and prior approval of the Provost. Academic and professional staff may receive extra-service compensation for work beyond the normal professional obligation as permitted by sponsor policy and the University's Policy on Extra-service Compensation. Funds provided in a sponsored program award may not otherwise be used to augment the salary of any person employed by the University or any of its fiscal agents.
- Fringe Benefits - Fringe benefits provided to project employees are included in project budgets as a direct cost. Fringe benefit charges should appear in a separate budget category from salaries. Fringe benefit rates for project staff vary depending upon the appointment (i.e., faculty or staff vs. graduate student) and fiscal agent (RF vs. UBFS). For RF-administered projects, information concerning RF fringe benefit rates is available on the SPS home page. Assistance in calculating fringe benefit charges may be obtained by calling SPS. For projects to be administered by UB Foundation Services, Inc. (UBFS), the applicable fringe benefit rate is more flexible. Fringe benefits for UBFS employees are selected as needed and appropriate, and project employees may have different fringe benefit packages. For information about budgeting fringe benefit charges for projects to be administered by UBFS, contact UBFS at 645-3011.
- Other Agents - If a fiscal agent other than RF or UBFS (i.e., CUBRC) is to administer a sponsored program, the Project Director should consult that organization's business office about fringe benefit charges prior to preparation of the budget. *
- Equipment - Equipment is defined as all items of tangible property having an acquisition cost of $5,000 or more and a useful life expectancy of two or more years. Equipment is divided into two broad categories. Special purpose equipment is useful only for scientific, medical, or other technical activities. General purpose equipment may be used for scientific, medical or other technical activities, but is also useful for non-technical activities. Office furniture, motor vehicles, photocopiers, personal computers, and cameras are examples of general purpose equipment. Most sponsors, and especially federal sponsors, are reluctant to fund the purchase of general purpose equipment. Funds requested for general purpose equipment must, therefore, be well justified. Each item of equipment should be identified in the proposed budget by type, number of units to be purchased, estimated cost, and the basis for the estimate (vendor quotation or catalog price). In some cases manufacturer and model number is requested. The cost estimate should be supported by written documentation which should be retained by the Project Director in the event of a pre-award audit.
- Materials and Supplies - Included in this category are two classes of tangible property: 1. Inventoried Supplies - items with an acquisition cost of $1,500 - $4,999.99 and a useful life expectancy of two or more years; 2. Supplies - items with an acquisition cost of less than $1,500 and a useful life of less than two years. This category includes the purchase of laboratory animals. The cost of animal care, however, should be budgeted in the "Animal Care" category. Supplies should be listed in the budget by type (i.e., chemicals, glassware, etc.) and estimated cost. Any supply item which is unusual in type or amount should be listed separately.
- Computer Programs/Software - Operating systems and other computer programs which must be loaded in a computer's memory before any application or task can be performed are classified as "equipment." Application software is classified as "supplies."
- Travel - A current best estimate of cost of travel by project staff to meet the aims, objectives and/or performance requirements, or to disseminate the results of the project should be included in the budget. Each trip should be listed separately and include the destination, duration and purpose of the trip, the persons traveling, round trip coach airfare, surface transportation charges, per diem or actual hotel and meal costs as allowed by sponsor or RF travel policy, and any other related expenses such as conference registration costs. Domestic and foreign travel should be grouped separately. Most sponsors are reluctant to fund foreign travel and some have special approval procedures for foreign travel even if it is included in an awarded budget. Foreign travel must, therefore, be very well justified. Note: The RF Travel Policy, listing current allowable per diem charges and method of calculation, is provided in Section 5:2 of The Project Director's Handbook.
- Independent Contractors/Consultants - Independent contractors are engaged to provide essential services to a sponsored program which cannot be provided by an employee. Generally, the services are to be provided either during a short period of time or intermittently throughout the project. However, whatever the exact nature or timing of the services provided by an independent contractor, such services are always provided without direct, day-to-day supervision by the PD. Tax and labor laws make it essential that employees not be classified and compensated as independent contractors or vice versa. Additional guidance to be used to determine whether a person providing service is appropriately classified as an employee or independent contractor is found in Section 4:9.2 of The Project Director's Handbook. Independent contractors and their specialty should be identified in the budget. The budget should also detail the individual's daily or hourly rate, number of days or hours employed, travel costs, and any related expenses. Some federal sponsors have established the daily rate of pay for a GS-18 federal employee as the maximum daily rate which may be paid to an independent contractor/consultant. Federal sponsors also expect that consultants will be retained only when the needed services are short term and cannot be provided by an employee. Selection of consultants through an open and objective process is required by the federal government and the University's fiscal agents. Fees of $10,000 or greater require a specific Independent Contractor agreement which is negotiated and executed through Grants and Contracts Services. University employees may act as independent contractors (including consultants) to sponsored programs only under limited circumstances, which are detailed in the Policy on Extra-Service Compensation, and only with prior approval. See also Section 4:9.3 The Project Director's Handbook.
- Subcontracts - If any organizations other than SUNY units will conduct and have direct oversight of a significant portion of the proposed project, the projected costs for this work should be included on the "Subawards" or "Consortium/Contractual" line of the budget. Costs for routine services provided by organizations outside SUNY that might be required for a project should be included in the "Other Costs" or "Miscellaneous" category. Examples of routine services are fabrication services, surveys, special testing services, etc. Each organization serving as a subcontractor must submit a detailed annual and cumulative budget on the prime agency forms. These forms will be included in the proposal to the prime agency. UB F&A (indirect) costs will be assessed at the prevailing rate against the first $25,000 of each subcontract included in the budget (or against the full amount of the subcontract if the F&A costs are calculated on the Total Direct Costs of the budget).
- Other Direct Costs - Included in this budget category, also referred to as Miscellaneous Direct Costs, are all direct costs which do not fit into the six previous categories. Some costs commonly included as Other Direct are:
- Publication Costs - These costs, which are placed in a separate budget category by some sponsors (i.e., Air Force Office of Scientific Research [AFOSR]), are limited to the costs of printing, distribution, etc. of technical reports. They should not be confused with the cost of manuscript preparation. Estimate the number of pages, the cost per page, and the total cost. Include the names of journals which are proposed for each publication whenever possible. (These costs are subject to detailed pre-audit verification in all contract proposals.)
- Manuscript Preparation - These costs include any special costs related directly to preparation of reports on the results of the sponsored program. These might include cost of preparing illustrations or other graphics, special editing requirements, etc.
- Animal Care Costs - Include the species, the total number of care days, the cost per day, and the total cost. Consult the current cost schedule published by the Laboratory Animal Facility. Project Directors should contact the Laboratory Animal Facility, 829-2919 for the latest schedule. The cost of purchasing animals is to be budgeted in the supply category.
- Subject Fees - Payment of reasonable fees to human subjects is allowable and should be budgeted if the subjects will be paid. Fees should cover costs incurred by subjects (i.e. transportation, inconvenience pay, etc.), but may not be set at a level which could be considered an inducement to participate in the study (see Section 3:1.2 of The Project Director's Handbook for payment procedures).
- Communication Costs - May include long distance telephone charges, postage, photocopying, network communication charges, etc., necessary for performance of the project.
- Disposal of Radioactive or Other Hazardous Waste - The University charges for disposal on a direct cost basis. Current costs are available from Environmental Health and Safety (EHS) at 829-3301. (As in the case of animal care, current cost schedules should be consulted.)
- Equipment Repair and Maintenance - The costs of repairing and maintaining equipment which is used in performance of a sponsored program is an allowable cost. The cost of maintenance and repair should be allocated pro rata over the period of use of each item of equipment. For example, if the project being budgeted will use approximately one third of the in-service time of a piece of equipment, not more than one-third of the repair and maintenance cost should be charged to the project.
- Freight and Delivery Charges - Costs for delivery of equipment or shipping of materials.
- Memberships/Subscriptions - Special memberships or subscriptions which are required to meet the project objectives or which will clearly benefit the project are allowable and should be specifically budgeted. Memberships and subscriptions of a general nature are not allowable.
- Alteration and Renovation - The costs associated with altering or renovating University space or facilities is allowable only under exceptional circumstances and subject to sponsor guidelines. Alteration and/or renovation costs are not usually included in research proposals but rather only in proposals specifically for renovation, development, or improvement of a University facility. Consultation with and approval by Facilities and Planning, in addition to the usual approvals, is required prior to submission of a proposal which includes renovation or alteration costs.
- Patient Care - Costs associated with either in- or out-patient care which is directly related to the project are allowable under some circumstances. Details concerning the allowability of and budgeting for these costs are available from SPS.
- Insurance - Insurance against loss or damage to equipment resulting from fire, theft, or most other perils is charged as a direct cost. If equipment is to be insured, premium coverage should be budgeted according to the current rate which can be found at http://www.rfsuny.org. When an award is made, the Principal Investigator should contact Grants and Contracts Services to arrange for coverage of specific items purchased.
- Administrative Fee - UBFS charges an administrative and accounting fee to each sponsored program for which it acts as fiscal administrator. The UBFS fee is 10%. None of the University's indirect costs are recovered through the UBFS administrative fee.
Total Direct Costs
The sum of the subtotals of each of the preceding budget categories. For UBFS projects, this will include the administrative fee.
Facilities and Administrative (F&A or Indirect) Costs
Among the University's F&A costs are personnel and purchasing services, accounting services, operation and maintenance of the physical plant, library acquisitions and operations, etc. Project Directors are required to budget the full applicable F&A cost rate, unless an F&A waiver has been requested and approved by the Vice President for Research (see Chapter 3), or if the non-profit sponsor has a published, consistently-applied policy limiting or excluding payment of F&A costs. (Note: sponsor F&A cost policies must be reviewed by SPS to determine if they are published and consistently applied.)
F&A costs are charged as a fixed percentage (the F&A cost rate) of all or a portion of a project's direct costs (the F&A cost base). The F&A cost charge is calculated by multiplying the applicable rate times the appropriate base.
Information on current F&A cost rates and the bases to which they are applied can be found on the F&A Cost Rates section of the SPS home page.
Budget Justification
A budget justification should accompany each proposal budget. The budget justification ties each cost element to a specific aspect of the proposed program and provides a bridge between the proposal narrative and the budget. Drawing such connections is critical since personnel, equipment, supplies, and other cost items which appear in the budget but are not tied to the technical program, may be eliminated in the review process.
The following are examples of types of information and degree of detail appropriate for a budget justification.
Personnel:
- Jones (Project Director): 30% effort, 20% salary reimbursement requested (10% University cost share). Dr. Jones will direct all aspects of the project, including supervision of all project staff and will be responsible for collecting and analyzing membrane electrical responses to hormones, as well as agonist and antagonists.
- Zee (Co-Investigator): 10% effort, 10% salary reimbursement requested. Dr. Zee will be responsible for collecting, establishing and maintaining in culture pituitary and gonadal cells, and for preparation of cells for electrophysiological experiments.
- Research Associate: 100% effort, 100% salary reimbursement requested. The research associate will be responsible for conducting experiments on single membrane channels isolated in patch clamp.
- Graduate Research Assistant: 50% effort academic year, 100% effort summer; salary corresponding to effort requested. Under the direction of Dr. Jones, preparation and purification of specific membrane channels and characterization of channel subunits.
- Graduate Research Assistant: 50% effort academic year, 100% effort summer; salary corresponding to effort requested. Under the direction of the Dr. Jones, preparation of fluorescent monoclonal antibodies to membrane channel subunits and studies of distribution and density of channels during cycles of hormonal activation of pituitary and gonadal cells.
- Technical Specialist: 100% effort, 100% salary requested. Responsible for preparation of reagents for electro-physiological, immunological and tissue culture procedures; will assist with maintenance of cultures. Responsible for maintenance of laboratory equipment.
- Salaries are escalated in accordance with the negotiated union contract.
Consultant: Dr. Wizard is expert in techniques of separation of proteins in micro-samples. She will assist the project staff in modifying existing large sample methods for working with proteins from small numbers of cells. Cost comprises two round trips between Chicago and Buffalo ($630), 4 days @ $277/day, and 2 days @ $100 per diem.
Equipment: The super-fast megamachine will be used for online acquisition of electrophysiological data, for storage of electrophysiological and morphological data, and for data analysis. The lab is currently equipped with one microcomputer which will support only one experimental station at a time and cannot be programmed for online data analysis. The megamachine will support three stations simultaneously and will perform both data acquisition and online analysis.
The lab currently shares a CO2 incubator owned by a nearby lab. That incubator will not accommodate the number of cultures required by this study. Therefore, funds for the purchase of a Forma Model 3030 are requested.
Supplies: The A/D conversion system will allow analog membrane voltage and channel current signals to be acquired, stored, and analyzed more quickly and precisely. Considerably more data will, therefore, be collected from each cell.
Travel: Funds are requested to support travel of one member of the project staff to present results of this study at the annual meetings of the American Physiological Society. Funds in the second year are requested to support attendance by the Project Director at the International Congress of Marsupial Neuroendocrinology in Sydney, Australia.
University Cost Sharing
The University shares in the cost of a sponsored program whenever there is a difference between the total cost of performing a project and the funding provided by the sponsor, with the difference of cash or in-kind support made up by the University. Cost sharing may be in either direct or F&A costs, or both.
Cost sharing should be proposed only when required by the sponsor and should not exceed the levels required by the sponsor. Voluntary cost sharing should be avoided. Cost sharing consumes scarce University resources and also places a heavy administrative burden on the University and its fiscal agents as cost sharing must be documented.
Whenever possible, cost sharing should be limited to salaries and wages and the fringe benefit and F&A costs attributable to those salaries and wages. Items of equipment which are purchased for and used exclusively by the project may be used as cost sharing with appropriate supporting documentation. Other types of costs may not be included in a proposal unless a method for documenting the cost has been approved in advance by the cognizant Grant and Contract Administrator.
Organizations other than the University may cost share in a project, i.e., make up the difference between the total project cost and the funding provided by the sponsor. If cost sharing is to be provided by an outside organization, SPS must receive a written commitment from a person authorized to commit the organization financially before the proposal is submitted.
Matching Funds
Sponsors occasionally award funds for a project in fixed multiples of funds provided for the project by other funding sources. The funds provided by the other funding sources are then referred to as matching funds. When required by a sponsor, matching funds become a condition of any award which is made based upon the proposal. If the matching funds do not materialize after the award is made, the award may be canceled or expenditures disallowed. In either of these circumstances, the financial consequences for the University and/or its fiscal agent can be dire. Thus, proposals which require matching funds will not be submitted before SPS receives a written commitment from persons authorized to commit financially the organization(s) which will provide the matching funds.