Preparing a Budget
A budget ensures the costs of a research or sponsored activity are reached according to a fair and equitable basis. Budgets and budget narratives demonstrate that estimated costs and effort are related to the proposal's goals and objectives, and show an ability to manage a project award if received. As the budget and its narrative are usually not subject to page limitations, this is an excellent method to relate needs identified to the outcomes expected. The budgeted line items should meet the new cost principles listed in the Uniform Guidance 2 CFR 200 standards.
Budgets should be prepared with great care to provide an accurate approximation of the cost elements to ensure the amount requested from the agency is sufficient to cover the cost of carrying out the proposed research. Investigators should group costs according to the sponsor's requirements. Care must be given to ensure the funding request does not exceed the agency's funding limitation or include items unacceptable to the funding agency. Certain items such as food, clothing, and entertainment are generally unallowable unless specifically stated in the agency guidelines. The purchase of such items without prior agency approval could result in an audit disallowance. Sponsor guidelines are always the final authority in preparing a project budget and should be followed explicitly.
Budgets should be prepared for the entire project period and should include both direct costs and Facilities and Administrative (F&A) or previously indirect costs. Direct costs are typically broken into categories while F&A costs are a percentage of the appropriate base expressed as a lump sum.
The standard for developing a budget is the federal Budget Information - Non-Construction Programs (SF 424A). The RSP Research Project Budget Model and the Information Navigator report Grant-Inception-to-Date report have been developed to follow this model and is the basis for subsequent set up of a grant/fund to allow for capture of expenditures in the report form for federally funded projects.
Budgets requiring approval of department, college, RSP matching fund requests or reduced F&A requests should be submitted to RSP at least 10 working days prior to the proposal due date in order to allow sufficient time for review and processing. RSP Grants Specialists are available to review the budget, assist in its preparation and completion of appropriate forms, and advise about normal university policy.
Types of Budgets
Projects may be budgeted in two primary ways: (a) cost-reimbursable or (b) fixed price (rate or unit). For a cost-reimbursable project, a line-item or category budget is prepared to cover the estimated costs. These line-item budgets will follow the guidelines for budgeting according to Cost Accounting Standards. Funds are expended for authorized purposes and reimbursement is provided by electronic transmission of funds (drawdowns) or as payment for an invoice for expenses incurred. Fixed price (rate or unit) applies when a project is bid on a not-to-exceed basis for specific deliverables or performance. In fixed-price budgets, the sponsor is not usually provided with a line or category-line budget and pays for completion of performance. However, fixed price quotations should be based on a reasonable estimate of the costs to be incurred to complete the performance or deliverables. The PI is expected to use the project funds in the performance of the project. Refer to Contracts/Grants/Cooperative Agreements for more information on contracting and When Your Grant is Ending/Closeout Procedures for additional information.
Many sponsors are moving to a model of performance-based contracting and budgeting. This method requires that the project outcomes be described in specific deliverable terms with a cost estimate for completing each discrete outcome or deliverable. This model requires the investigator to budget with care separately for each outcome or deliverable in order to be able to place a cost value on its completion. Deliverables should be identified that are measureable, achievable, but realistic and within the control of the investigator or costs may not be recoverable from the sponsor. For assistance in this area, contact your RSP Grants Specialist for assistance.
- Personnel or Salaries and Wages
- Fringe Benefits
- Travel (domestic and foreign)
- Supplies (educational, laboratory, equipment maintenance not office or general)
- Contractual (subcontracts, subawards, or major contracts for services)
- Construction (modification or acquisition of space for the project)
- Other Direct Costs
Direct costs are the costs specifically identified with a particular project and should meet the UGC requirements for "reasonable, allocable, allowable, and must be consistently applied" across the institution.
Personnel or Salaries and Wages
Among the various budget components, the salaries and wages category is one of the most crucial. Individuals who are mentioned by name in an agency budget are defined as key personnel. Key personnel are those who have skills, expertise, or knowledge that is an integral part of the work and whose assignment could not be easily duplicated or replaced. Reviewers often request the salary base per annum or period of assignment, the type of appointment (e.g., 9 months and/or summer or 12 months), and the level of effort to be spent on the project by each participant. Effort may be expressed either as a percent of effort or person months and in terms of hours worked and hourly rates for OPS employees.
Salaries and wages should reflect the current compensation level of employees and should build in annual salary increases for multi-year budgets. Summer salaries for faculty should be projected at the rate of one-ninth of their academic year salary for each month. Note that some agencies have restrictions on summer salaries and the maximum allowed salary rate which may be charged against the project. The agency guidelines should be reviewed to determine if such limitations apply to a proposed budget.
The salaries and wages of faculty and staff who are directly associated with the university constitute appropriate direct costs in proportion to the time each expects to spend on a project. Grant funds may not be used to augment the total salary or rate of pay of UWF faculty or staff; they are replacement funds, releasing a percent of time and work assignment of the regular employee for work on the project.
Salaries charged against grant funds must follow a scale that is consistent with the policy and regular practices of UWF. To obtain guidance on pay levels, job categories or employment policy, contact Human Resources at 850-474-2694 or your RSP Grants Specialist.
UWF has two broad employment categories:
- Salaried appointments are used for long-term staffing needs and must be classified in one of two UWF pay plans: General Faculty or University Work Force. These categories may also include persons in visiting appointments. Administrative (support or clerical) staff costs are not usually allowed as direct cost items, as those services constitute part of the institution's F&A cost rate.
- OPS appointments are used for temporary or short-term staffing needs, including faculty, staff and students.
Extra State Compensation
(ESC or overload) is generally not allowable for payment from federal funds and federal flow-through and limitations on the amounts are set by university policy for other types of funding sources. Whenever ESC is included in a budget, it should be specifically approved by the agency as an allowable cost.
Grant budgets should include reimbursement for fringe benefits. Both the salary base and the respective fringe benefits rate should be stated in the budget and in the budget justification. Fringe benefits are budgeted as a percentage rate of salaries and wages. The university’s rates include a fixed annual amount for health insurance (family or individual or no health insurance). For salaried employees, the total benefit package includes:
- Workers' Compensation
- Social Security Benefits (FICA)
- State or Optional Retirement Program (ORP)
- Terminal Leave
OPS employees (non-student) do not receive health insurance and have a separate composite percentage rate based on Workers' Compensation, Unemployment Compensation and Medicare. Students enrolled in less than six (6) semester hours will be assessed this OPS employee rate. Students enrolled in more than six (6) semester hours in any given term will be assessed a minimal rate for student employees to cover only Workers' Compensation.
Visit Fringe Benefit Analysis Charts under Forms for current fringe benefits and health insurance rates or contact your RSP Grants Specialist for assistance.
Travel (Domestic and Foreign)
Agencies typically cover travel costs which has direct relevance to the research project or to allow dissemination of project outcomes and results. Travel charges may include airfare, lodging, meals, registration for conferences/seminars, taxis, visas, passports, entry or exit taxes, and rental cars. Most agencies require the purpose, destination and time span for each trip and the number of individuals for whom funds are requested be identified in proposal budgets. Sponsored research funds are subject to both funding agency and State of Florida rules and regulations. RSP approval for foreign travel or any travel estimated over $1,000 is required as part of the Policy - Signature Policies for Academic Affairs. Domestic and foreign travel regulations have some differences:
- Domestic Travel reimbursements are subject to the state's travel regulations and payment rates. Out-of-state travel should be requested on the basis of actual expenses for lodging and round trip economy airfare. Meals for State of Florida employees are reimbursed using the State per diem rate. In addition, some agencies may have set fixed maximum per diem limits. State of Florida agencies frequently have restrictions on out-of-state travel and funds may need to be estimated as in-state or out-of-state as separate line items.
- Foreign travel requests must specify the destination and the U.S. Department of State's foreign per diem and hotel plus meal payment rates should be used. Typically, for international travel, only American flag carriers may be used.
For assistance, please contact UWF Financial Services Travel at 850.474.3049.
Permanent equipment is defined as non-expendable property having an acquisition cost of $5,000 or more and a useful life expectancy in excess of one year (NOTE: prior to 7/1/2011 the acquisition cost was $1,000). Equipment must be listed in the budget with a justification. Some agencies require price reference and detailed descriptions and cost quotations. Government agencies will normally not approve purchase of general office equipment or furnishings (e.g., calculators, typewriters, desks, chairs, copy machines, and air conditioners). Many agencies will make approval of specialized equipment for scientific purposes dependent on whether it is or is not readily available at the institution.
If freight and installation charges are to be billed on the same invoice as the piece of equipment, these charges should be included in the acquisition cost. Service contracts should be listed in the "other" direct cost category as they are expense items and not part of the equipment acquisition costs.
Supplies (educational, laboratory, equipment maintenance not office or general)
Direct charging of general office supplies should be restricted to projects with a high demand for these items and must be in compliance with the 2 CFR 200. All such charges must be project-specific and justified in the budget. Even though supplies are estimations, it is advisable to have a breakdown of these items by general classification as substantial amounts are usually challenged by agency reviewers.
In federal program budgets, the category of Supplies is usually restricted to specialized needs such as laboratory supplies, educational materials and supplies, maintenance or construction supplies (if applicable), and computer or technology related supplies. Refer to the individual agency guidelines for any items which may be restricted or not allowable in this category.
Contractual (Subcontracts, subawards, or major contracts for services)
Consultant Services: Consultant or lecturer charges for travel, lodging, per diem and professional fees may be included as a single direct cost item. Federal employees may not be paid from grant funds. University faculty may not receive ESC as a consultant and should be included in the salaries portion of the budget.
UGC and some federal agencies may limit for the rates paid to consultants. Paid consultants should be used when the specific expertise does not exist on campus or is not readily available and must be justified in the budget justification. Paid consultants are not considered employees of UWF and will be paid under rules for consultant services for independent contractors. Refer to instructions and forms for Consulting and Professional Services from Procurement and Contracts.
Contractual or Third Party Costs: When subcontracts are planned, the total required dollar amount must include the direct costs as well as F&A costs of the subrecipient at their cognizant agency’s approved rate. These will appear as a direct cost in UWF's budget and are subject to the assessment of UWF’s F&A on the first $25,000 of each subcontract. Usually, all individual line items of the subcontract must be detailed on a separate budget page or outlined as unit deliverables.
The need for subcontracting part of the proposed research must be justified in the narrative. In addition, subcontractors should indicate in writing their intent to provide services. Please refer to Subcontracts for further details. Prior to inclusion of a subcontractor, the investigator should contact his/her RSP Grants Specialist to request a review of the subrecipient’s eligibility to be awarded a portion of the budget. Documentation of a subrecipient’s eligibility must be established before their participation may be included as part of a proposed budget.
Construction (modification or acquisition of space for the project)
Only those programs which specifically allow construction costs or capital improvement costs may include these costs. Consult the sponsor’s guidelines for whether this is an allowable cost. Projects containing funds for construction or capital improvements usually require coordination with both campus Facilities Development and Operations and the State of Florida Clearinghouse Single Points of Contacts. Proposals requesting such funds should allow at least 1 month for this coordination.
Other Direct Costs
Other direct costs include long distance telephone charges, field trips, participant travel to and from institute or conference, equipment maintenance and repair, facilities rental, some types of data processing, postage, freight, computer services, conference fees, participant payments, and/or statistical or technology service center fees. Such fees must adhere to the policies listed in 2 CFR 200.
Investigators may budget the anticipated costs of publishing the results of research such as the cost for reprints, page charges, editorial assistance and illustration costs, if necessary. However, on federal grants, this budget category may not include charges for publication of books, monographs or pamphlets which will need special agency approval.
|Human Research Participant Costs||Tuition Payments for Graduate Students||Training Costs (Training Grants Only)|
|Human Research Participant costs are those charges that are usual and customary for a particular process or precedure. Indicate in detail the basis for estimating costs in this category.||Proposals which include salary for a graduate student should also include appropriate tuition in the budget, if allowed by the funding agency. The Research Project Budget Model provides for a line item to estimate tuition based on in-state tuition rates for an average of 6 semester hours per student per term.||This category may include fees, tuition, trainee travel costs and stipends. While the budget cost category reflects the total required cost, investigators should still provide individualized breakdown of costs for each trainee to allow agency reviewers and independent assessment of the level, scope and need for the training activity. Agencies may have specific rules and regulations for training costs.|