Building Realistic Budgets

1
Building Realistic Budgets

• Judy Harris, Proposal Processing
• Division of Sponsored Research

2
Course Objectives

• Participants will be able to construct an
  effective budget using their knowledge of
  federal, state, and university requirements.
• Participants will become familiar with the
  Universitys criteria for cost sharing.
• Participants will be able to use the web to
  maintain current regarding any sponsor changes
  that impact budget development.

3
Additional Course Objectives

• Become familiar with the steps that must be taken
  before you begin preparing a proposal budget.
• Be able to develop a proposal budget.
• Become familiar with the major cost categories.

4
What is a Budget?

• An estimate of costs required to perform a
  statement of work with a specific start and end
  date.

5
Proposal Budgets

• Made up of costs that can be explained or
  verified and are reality-based
• No Educated Guesses or Off The Wall estimates
• May require several drafts before it is finalized
• May vary in structure and complexity

6
Why Is a Budget Important?

• It is the second most scrutinized part of the
  proposal
• A clear concise budget supported by a strong
  budget justification can increase the chances of
  a proposal being funded
• The University is held to pricing information
  provided in proposal
• The proposal budget can become the actual award
  budget

7
Budgets are the reality check for the project.
8
Pre-Preparation Steps

• Locate and review agency guidelines
• Identify budget ceiling and any budgetary
  limitations or restrictions
• Identify the start date and/or period of
  performance (If none, establish one)
• Identify differences between general agency and
  specific program announcement budget guidelines
• Identify limitations on overhead (FA costs) or
  administrative fees
• Identify all special forms or formats, schedules,
  required cost breakdowns
• Identify any other special conditions

9

• Read the guidelines for budget preparation
  carefullytheyll become the rules when the
  project is funded

10
Basic Proposal Budget Components

• Direct Costs
• Facilities and Administrative Costs, or FA
  (a.k.a. Indirect Costs)

11
Direct Costs

• Expenses identified specifically with a
  particular sponsored project, instructional
  activity, or other institutional activity
• Must be allowable, allocable, reasonable
  necessary for the program, given consistent
  treatment and conform to sponsor limitations

12
Facilities Administrative Costs

• Costs incurred for common or joint objectives
  which cannot be identified to a specific direct
  cost activity
• Facilities and Utilities
• Administrative and Clerical Salaries
• DSR/Purchasing/HR/Controller
• Postage
• Local Telephone
• Office Supplies
• Data Processing/Computer Supplies
• General Purpose Software
• Memberships
• Subscriptions

13
Major Budget Categories

• Personnel Costs
• Fringe Benefits
• Travel
• Research Supplies and Materials
• Participant Support
• Consultants
• Tuition

• Equipment
• Subcontracts
• Facilities and Administrative Costs (FA)
• Other Direct Costs

14
Personnel Costs

• Personnel Categories
• Academic Personnel (includes Faculty Post Docs)
• TEAMS/USPS
• OPS (includes Graduate Research Assistants,
  Student Assistants Other Temporary Employees)

15
Domestic Travel

• Airfare
• Lodging
• Car Rental
• Per Diem
• Mileage
• Parking Fees
• Registration Fees
• Local Transportation (Taxi, Metro, Shuttle)
• Includes travel to Canada

16
Foreign Travel

• (Generally subject to prior approval from
  sponsor).
• Airfare
• Apartment Rental
• Car Rental
• Local Transportation
• Lodging
• Per Diem (Federal travel subject to GSA Schedule)
• Registration Fees
• Includes travel to Mexico

17
Budgeting Travel

• Should include detailed information in budget
  narrative

18
Equipment

• Costs more than 1,000
• Has a useful life of one year or more
• Some sponsors may require supporting
  documentation/quote at proposal submission

19
Tuition

• All new proposals, including resubmissions,
  competing renewals and supplements, that include
  salary/stipend for graduate assistants and where
  tuition is an allowable cost, must budget
  appropriate amounts for tuition.

20
Consultants

• Non-UF Employees
• Not a subcontractor no substantial programmatic
  involvement
• Normal daily rate
• Supported by letter/quote from Consultant

21
Subcontractors

• Can be
• Other Institutions
• Commercial Companies

• Subcontractor has substantive programmatic
  involvement and may be co-author on resulting
  publications

22
Subcontractors

• Before submitting the proposal obtain
• Letter of Commitment from institutional
  authorized official.
• Written Quotes/Budgets
• Statement of work

23
Participant Support

• Payments to individuals required on the project
  with no obligation to provide work or services
• Typical costs
• Stipends
• Travel-related costs

24
Other Direct Costs

• Student Support for Scholarships/Fellowships
• Tuition, fees, stipends
• Not providing ANY services

25
Other Direct Costs

• Facilities
• Rental Space
• Renovation

26
Facilities Administrative Costs (Indirect Costs)

• Applied to ALL sponsored projects unless sponsor
  policy/program limits indirect recovery
• Following sponsor types have specified FA rates
• State of Florida 25
• Water Management Districts 25 TDC
• Other Florida Governmental Entities 25 TDC
• Clinical Trials 25 TDC

27
Facilities Administrative Costs (Indirect Costs)

• University rates are based on the following
  factors

• Function/Purpose
• Research
• Instruction
• Other
• AREC

• Location of Project
• On-Campus
• Off-Campus

28
Facilities Administrative Costs (Indirect Costs)
Department of Defense
48.5 28.0
29
Calculating FA

• Identify Exclusions
• Equipment
• Capital Expenditures (includes renovations)
• Patient care charges
• Tuition remission
• Rental costs of off-site facilities
• Scholarships
• Fellowships
• Subcontract amounts in excess of first 25,000

• Modified Total Direct Cost Base (MTDC)
• Total Direct Costs minus items not charged with
  FA.
• Total Direct Cost Base (TDC) Total Direct Costs
  x FA rate without any exclusions.

30
Total Budget

• Total Direct Costs
• FA Costs
• Total Budget

31
Cost Sharing in Budgets

• Identifies necessary project costs not requested
  from sponsor
• Should be a sponsor requirement
• Should be referenced in budget as directed by
  sponsor
• Shows UFs/Third Party commitment to Project
• Should follow UF Cost Sharing Policy

32
Charging Costs Directly or Indirectly to
Sponsored Projects

• In order to comply with (OMB) Circular A-21 and
  the Cost Accounting Standards Boards cost
  accounting standards, UFs policy for charging
  costs to federally sponsored projects is
• Clerical and administrative salaries will be
  charged indirectly unless direct charging can be
  justified in accordance with OMB Circular A-21.
• Postage will generally be charged indirectly.
• Basic telephone charges will generally be charged
  indirectly, including cell phones.
• Lab supplies will generally be charged directly.
• Office supplies will generally be charged
  indirectly.
• General purpose software will generally be
  charged indirectly.
• Technical software will generally be charged
  directly.
• Subscriptions will generally be charged
  indirectly.
• Institutional and individual memberships will
  generally be charged indirectly.
• Repair and maintenance charges for equipment
  purchased on the award will generally be charged
  directly.
• Other related costs (photocopies, travel,
  technical and scientific equipment, animal care
  and other services provided by specialized
  service facilities) will generally be charged
  directly.

33
Arithmetic Double Check Budget!

• Fringe Benefit Rates
• GRA Tuition
• FA Rate
• MTDC Exclusions
• On Off Campus
• Budget Total
• Correct?
• Within Sponsor Limits?
• For All Years?

34
Review and Finalize Budget

• Review draft
• ceiling price exceeded?
• Revise
• How much to cut? add?
• Cut logical places
• Should the technical proposal be revised due to
  budget changes?
• Are Cost Share funds required?
• Have cost-share commitments been secured?
• Proposed effort documented?
• Equipment match documented?

35
Final Budget Presentation

• Prepare Sponsor budget forms
• Accurate
• Neat
• Legible

36
Finalizing Budget

• Prepare justification/budget narrative
• Should be arranged in order of Sponsors budget
  form
• Clear Concise
• Explanation of request