Budget Development
Any, or all, of the following components may be found in a typical budget. This narrative is meant to be a guide, and the PI is urged to consult the specific sponsor guidelines, or ORSP, if any question remains unanswered.
The proposal budget should be clearly presented, and should reflect UHD accounting categories. For example, major budget categories such as personnel, benefits, travel, supplies, equipment, and indirect costs should be clearly identified. Conformance with UHD accounting categories will ensure that the project, if funded, can be set up in a UHD "cost center" or account easily, accurately, and quickly. In some cases, for presentation purposes to a potential funding source, a program budget showing costs by task may also be appropriate to include.
The following budget categories are typical. They are meant to serve as a guide rather than a template and federal sponsors may vary the order of presentation somewhat.
Personnel: Personnel estimates should describe accurately the amount of time to be spent by project personnel at UHD and the total associated costs, including actual current salaries for the designated personnel (i.e., Project Director or Principal Investigator, 50% for one year at an annual salary of $30,000 = $15,000). If salary costs are computed using an hourly or daily rate, the annual salary and number of hours or days in a work-year should be shown.
The term "senior personnel" means Principal Investigator(s) or the individual(s) designated by UHD and approved by the sponsor who will be responsible for the scientific or technical direction of the project. If more than one, the first one listed usually will have primary responsibility for the project and the submission and signing of reports.
Sometimes sponsors want personnel effort to be listed in "person-months". This term refers to the effort (amount of time) that PI(s), faculty and other senior personnel will devote to a specific project. The effort can be based on the organization's regular academic-year, summer or calendar-year. For example, if the regular schedule is 9 months and 50% effort will be devoted to the project, a total of 4.5 months should be listed in the academic or calendar-year block (9 months x 50% = 4.5 months).
Fringe Benefits - Fringe benefits for full or part-time employees (20 hours or more a week) are based on salary rates. Consult ORSP for the method of calculation.
Consultant Costs - If outside collaborators and consultants are listed, include a description of their role in the research project in the research plan and budget justification. For each consultant, include a vita or resume and a letter of participation. UHD faculty or staff cannot be included in this category.
Equipment - Considered to be items that: 1) cost $5,000 or more; 2) have a life expectancy of more than one year, AND; 3) can be tagged by UHD. Provide justification for the purchase and how it is essential to accomplish the objectives of the project. A vendor quotation is always helpful.
Exceptions to the previously stated definitions of equipment are: 1) items that have a per unit cost of less than $5,000 but will be used to fabricate a piece of equipment that is valued at more than $5,000 and can be tagged, and; 2) items that are included on the State of Texas "Controlled Items List".
*Please note that under 2 CFR 200.216 and FAR 52.204-25 that purchasing on federal funding of telecoms, video surveillance equipment or services from specific Chinese companies and their affiliates (Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology) is prohibited. NIH FAQ."
Supplies - List (i.e. glass/plastics, chemicals, enzymes, etc.) and provide breakdown of costs for categories of $10,000 or more. Estimates for supplies and expenses should be supported by a complete description of the supplies to be used, anticipated long-distance telephone, fax or other common expenditures, with the basis for computing estimates included (i.e., 100 reports at 75 pages each x 0.05/page = $375.00). Supply and expense estimates offered as "based on experience" are sometimes not sufficient for a potential sponsor.
Travel - Provide explanation for purpose of trips, i.e. to a professional meeting to present results of research project. If possible, name the prospective seminars. Transportation costs and per diem rates must comply with the policies of UHD. The budget or the budget narrative should include the number of persons traveling, the number of trips to be taken, and the length of stay. The estimated costs of travel, lodging, and other subsistence should be listed separately. When combined, the subtotals for these categories should equal the estimate given for travel or per diem.
Participant Support Costs - These are direct costs for items such as stipends or subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with meetings, conferences, symposia or training projects. Normally, funds provided for participant support may not be used by UHD for other categories of expense without the specific prior approval of the sponsor.
Other Expenses - Expenses that fall outside of the categories listed above should be both itemized and justified. Examples of itemized "Other Expenses" would include: : Publication cost - $400; Service contract on Electron Microscope - $600; Human Subject payments - $10/subject X 20 subjects. These should be itemized and justified.
Subrecipients or Subcontractors - If investigators from other institutions are participating in the project, the PI at the collaborating institution should submit the following information to the UHD PI:
- A letter of collaboration, co-signed by an institutional authority
- A Scope of Work
- Detailed Budget for Initial Budget Period
- Budget for Entire Proposed Period of Support
- Biographical Sketch of Key Personnel
Indirect Costs (IDC) - The current indirect cost rate should be included in all proposed budgets. Currently, UHD accepts published sponsor restrictions regarding the reimbursement of IDC, i.e., a sponsor may not pay IDC, or may pay at a reduced rate. Any requests for waived indirect costs not imposed by a sponsor must be submitted to the Vice President for Administration & Finance and the Vice President for Academic Affairs & Provost. ORSP can help facilitate this request. The request should be made in writing and justified. For FY2019, the UHD indirect costs distribution is as follows:
Office of Research & Sponsored Programs 50%
College 15%
Department/Center 15%
Principle Investigator 20%
Total 100%
NOTE: The three latter categories may be negotiated between the PI, the Chair, and the Dean.
Summary - Once the budget has been prepared, the PI should make a final comparison of the amounts listed in the budget narrative with the amounts in the budget form. In the rush to complete all parts of the application on time, there may be many last-minute changes. When discrepancies exist between the budget narrative and the budget form, or the total amount of the request listed elsewhere on the proposal, the amount of the request could be in doubt. A final check of all the numbers will preclude such confusion. Budgets included in requests for external funding must be reviewed and approved by ORSP. Budgets may be e-mailed or faxed to ORSP office ahead of time to avoid delays.
Budget Justification
Most federal sponsors require a budget justification, but it is advisable to include one with all proposals, whether required or not. The justification gives the PI an opportunity to provide an explanation of budgetary requests that may not be immediately obvious to a reviewer. For example: a $25,000 request that is described simply as "Computer Equipment" can be amplified to explain that the $25,000 will be used to purchase a critically needed server that will network several computers in the lab and serve as a dedicated repository for project data that will be received from several off-campus collaborators. A clear and focused explanation helps the reviewer understand the need and benefit.
Cost Sharing
This section provides guidance that will facilitate compliance with federal cost sharing requirements as set forth in OMB Circulars A-21 and A-110. This guidance applies to both Federal and non-Federal sponsored programs.
Cost sharing means that portion of project or program costs that are not borne by the sponsor.
Any University commitment to share in the cost of a project, if required by the sponsor, should be identified early in the proposal process. The University commitment and the cost associated with the commitment must be in accordance with University policy and must be approved in advance by the Vice President for Administration and Finance.
There are two types of cost sharing that occur on sponsored projects. The two types of cost sharing are:
Mandatory Cost Sharing: is that commitment to participate in the cost of the project required either by Statute or by Administrative regulation. The requirement for such cost participation will be explicitly set forth in sponsor announcements or guidelines, will be a requirement for eligibility to participate in the project and will be specifically identified within the University's proposal.
Voluntary Cost Sharing: is the University's participation in the cost of a project when there was no commitment within the University's proposal to share in the cost of the project or when the University's actual participation in the cost of the project exceeds the cost sharing commitment made as a part of the University's proposal.
The obligation for cost sharing is predominately associated with Federal grants and cooperative agreements. In accordance with OMB Circular A-110, cost sharing must meet all of the following criteria:
The cost sharing must be verifiable and auditable within the University's accounting system.
The cost sharing must not be included as contributions for any other Federally assisted project or program.
The cost sharing is necessary and reasonable to accomplish project or program objectives.
The cost sharing is allowable in accordance with the applicable cost principles (OMB Circular A-21), the terms of the agreement and UHD policies.
The cost sharing must be funded from non-Federal sources, unless authorized by Federal statute.
The cost must be incurred during the term of the agreement.