GRANTS MADE EASY:

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• GRANTS MADE EASY
• THE BUDGET
• FUNDAMENTALS FOR PREPARING A GRANT BUDGET
• Facilitated by
• Candice Caraco
• Maryland Higher Education Commission

Governors Grants Office www.governor.maryland.go
v/grants.html
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Governors Grants Office Objectives

• Develop opportunities to further the goals of the
  agencies through for grants, cooperative
  agreements, and programs funded by non-general
  fund sources
• Insure the integrity of sponsored projects and
  their associated funds by ensuring compliance
  with rules and regulations so that both legal and
  ethical requirements are met
• Protect and enhance the integrity and image of
  the State through good grant management and good
  communication with funding sources
  
• Promote an atmosphere conducive to developing and
  sustaining staff interest and involvement in
  grant proposal preparation and program support
  activities

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Todays Objectives (I)

• IDENTIFY
• Basic components of a grant proposal
• Awarding agency expectations for project costs
• Cost categories for budgets
• UNDERSTAND
• The role of the budget in a grant application
• Why a team approach is needed to develop a
  proposal its budget
  
• The importance of identifying the organizations
  financial capabilities (to applicant and to
  funder)

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Todays Objectives (II)

• LEARN
• What types of information are needed to develop a
  budget
  
• How to prepare a budget justification
• How to determine allowability and allocability
• How to manage agency budget adjustments when a
  grant is received
  

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The Role of Grants

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The Role of Grants

• To assist an agency in meeting its present needs
  and preparing for its future needs by securing
  external funds that will move the agency towards
  fulfilling its mission, goals, and objectives.

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Impact of Grants

• Expand existing programs
• Develop and implement new programs
• Supplement costs of operation and services
• Replace or acquire equipment
• Enhance personnel resources

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• A successful grant proposal is

Thoughtfully planned (Focused) Well-prepare
d (Follows directions)
Carefully packaged (Flows clearly)
Attention and effort must be given to all
components of the grant proposal.
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Skeletal Anatomy of an RFA

• Funding Source
• Purpose (are you a good fit?)
• Funding availability (is it worth your while?)
• Requirements for the application
• Eligibility
• Types of allowed activities, expenditures
• Page limits, attachments, forms
• Deadlines
• Where how to submit the application

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• Basic Grant Proposal Components

Face Page or Cover Sheet Cover Letter (usually
in most federal apps.) Table of Contents Abstrac
t (oftenand its a good exercise)
Program Narrative Budget Budget Justification
Current Pending Support (letters, cooperative
agreements etc.) Appendices (references, document
ation etc.) Certification Assurances
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A Program Narrative (4) usually includes

• Statement of need
• Project goals and outcomes
• Plan of Operation
• Timeline
• Usually, a management plan
• Usually, an evaluation plan
• Often, a plan for sustainability post grant
• These all have budget implications!

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A budget has 2 parts

• 1. Summary
• This is in table form. Some federal
  applications put the budget summary on page 1 or
  2 of the applicationwhere reviewers see it right
  away!
• 2. Justificiation (or budget narrative)
• This is a line-by-line explanation of how
  you
  
• came up with those numbers in the table.
• Reviewers STUDY these.

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Project Narrative Project Budget

• It is critical to the success of the proposal
  (and the project) for the budget to reflect and
  support statements made in the project narrative.
  
• The budget should assure the grantor that the
  budget will support ALL activities proposed in
  the narrative.
  

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A grant proposal budget . . .

• . . . helps determine proposal and project
  success!
  

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A thorough proposal budget will

• Demonstrate your agencys credibility
• Increase chances of obtaining project funding
• Produce a better program in the long run
• Set the stage for a smooth audit
• Help establish capacity for future grants

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Awarding Agency Budget Review
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Budget reviewers ask . . .

• Are the budget and narrative CLEARLY aligned?
• Are the costs allowable?
• RFA, OMB Circulars et al.
• Are the costs reasonable?
• Market rates
• Adequate to get the job done?
• Are the costs necessary to get the project done?
• Are costs allocable? (traceable to project
  action)
  
• Does the budget add up correctly?
• And there might be questions about match.

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• NIH Review Criteria (example)
• When assessing the scientific merit of an
  application, all NIH review committees use the
  same criteria
  
• Significanceability of project to improve
  health
  
• Approachfeasibility of methods appropriateness
  of the budget
  
• Innovationoriginality of approach
• Investigatortraining experience of
  investigators
  
• Environmentalsuitability of facilities and
  adequacy of support from institution
  

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Wholl be impacted by the grant project?

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Quick Group Exercise Whos the team?

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Use a team approach.

• As with all components of the grant proposal,
  the development of the project budget should be a
  team effort.
  
• Hold an initial and follow-up meetings with
  your project team to discuss strategies,
  progress,
  
• and problemsand related BUDGET
• strategies, progress, and problems.

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Developing the Budget

• When does the process start?
• Is the budget team the same group as the project
  team?
  
• Carefully read the budget derections that are
  included with grant application packet or
  instrucsions.
  
• Carefully read the budget directions that are
  included with grant application packet or
  instructions.
  

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Huddle the grant team

• A good starting point for determining
  project-needed items is to review of the project
  narrative.
  
• Brainstorm a list of must-haves for project
  success.
  
• Make rough cost estimates costs togetherand then
  leave with a list of items to research further.
  

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Budgets are cost projections.

• Start with a broad outline.
• Remember the award limit and other guidelines in
  the RFA (matching requirement? no equipment?).
  
• Review.
• Refine.
• Revise.
• Repeat 2-5 as the proposal develops.

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• Brainstorm needs in the broad categories.

Personnel Employee Fringe Benefits Travel Equi
pment Materials and Supplies Construction Consu
ltants and Contracts Other Indirect Costs (a o
f direct costs)
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Identify primary and secondary sources for items
in all budget categories.

• Does the agency have these resources?
• Can they be used for this program?
• For how long?
• At what cost?
• Does it need to acquire additional resources?
• Can this be done from the grant? A match?

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• Establishing Financial Capability
• Does the grant team think it worthwhile for the
  agency to go after the grant?
  
• Can you demonstrate to the funder that the agency
  will be a good steward of the grant funds?
  
• No one can afford to waste time or money!

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• What do you need to make the project a
• success?

In government, as in most human
enterprises, projects are either labor- or
capital-intensive . . .
and sometimes BOTH!!
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Reality Checks

• Will the proposed project serve the needs to be
  addressed by the funders program?
  
• Is the proposed project tied to the agency
  mission?
  
• Completely? Partially? A s-t-r-e-t-c-h?
• Should the agency be the lead or a partner with
  another entity?
  
• Does the agency have the resources to conduct the
  project?
  

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Resource (capacity) checks

• Staff time to develop the proposal and carry out
  the work if the grant is awarded
  
• Expertise in the field
• Accounting
• Procurement
• IT
• Other equipment
• Legal advice
• Match (cash or in-kind)

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Do I need a match? (And where can I find a
match?)

• Agency budget (cash, in-kind)
• Other agencies
• Other partnerships (stakeholders)
• How can we document the match?

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• Re-affirm the dollar amount
• your agency is seeking from the grant.

Is this a firm amount?
What is the MOST that can be awarded?
What is the least amount that my agency could
receive?
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Is everyone on board?
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• Obtaining (Internal) Technical Assistance

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From program managers/specialists

• Discuss the project goals, objectives, and
• methods. Discuss staffing.
• From financial specialists
• How is the agency operating budget prepared?
• Who in the agency has internal budget preparation
  experience? Procurement experience?
  
• Identify what is necessary to
  perform
  
• the stated tasks and achieve the
• desired outcomes. Be specific.

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Enlist the help of someone with accounting or
financial experience who has successfully
prepared budgets. This person should either
prepare or at least review in detail the project
budget.
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Remember . . .

• To communicate frequently with members of
  your project team to discuss strategies,
  progress, and problems--keep track of budget
  implications.
• KNOW the need served by the project
• KNOW the organization
• KNOW the project narrative
• (activities, methods)
• KNOW the project partners roles

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You have a program strategy you should have a
costing strategy.
Grant proposal budget preparation takes time.
Dont wait until the last minute to begin
gathering cost information that you need to
prepare your budget!
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• Budget Categories
• Or, what information the budget team needs to
  gather and where to put it on the budget
  
• Remember for every item in the budget table,
  there is at least one lineand possibly pagesof
  budget justification

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Salaries and Wages (Personnel)

• Grant-funded compensation must be comparable to
  that paid by applicant institution for similar
  work.
  
• SUMMARY sometimes lump amount, sometimes list
  each grant-related position by title and name of
  employee (or this goes below).
  
• JUSTIFICATION
• Show each persons annual salary rate and of
  time to be devoted to the grant project.
  
• Make time commitments clear plausibleyou
  should be able to document them as necessary
  (including for match).
  

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Employee Benefits (Fringe Benefits)

• Based on known costs or established formula
  indicate these assumptions in the justification
  
• Are for personnel listed in the budget summary
  and are paid only for the of time dedicated to
  the grant project
  
• For overtime, are limited to FICA, Workmans
  Compensation, and Unemployment Compensation

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Travel

• Itemize travel expenses for project personnel by
  purpose
  
• Show the basis of computation
• Identify the location of travel as much as
  possible
  
• Indicate the source of travel policies applied
  (Federal or applicant)
  
• State mileage rates
• Agency policies on travel

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Equipment

• In table, may appear after direct and indirect
  costs
  
• Some grants preclude equipment purchases
• List non-expendable items that are to be
  purchased (under a certain amount, an item is
  listed under supplies)
  
• Justification should indicate why purchase rather
  than lease is appropriate
  
• Justification should indicate why needed for
  project success
  
• Describe procurement method to be used

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Materials and Supplies

• List items by type
• Show basis for computation
• Materials are to be used during the course of the
  project
  
• Be reasonable hereleave yourself some margin of
  error but dont pad the budget here (the
  reviewers are looking for it)
  

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Construction

• Construction costs are generally not allowable
  for Federal grants.
  
• Minor repairs or renovations may be possible.
• Consult the grant application
  instructions
  
• and/or contact the grantor agencys
  program
  
• contact before budgeting funds in this
• category.

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Consultants and Contracts

• Consultant fees
• For each consultant, enter name (if known),
  service to be provided, hourly or daily fee, and
  estimated time on the project.
  
• Consultant expenses
• List all expenses to be paid from the grant to
  the individual consultant in addition to their
  fees.
  
• Contracts
• Provide a description of the product or
  services to be procured by the contract and the
  estimated cost. (procurement method)

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Indicate whether your agencys formal, written
procurement policy or the Federal Acquisitions
Regulations are followed.Consult the RFA or the
grantor to determine if there is a dollar limit
per day on consultant fees or if additional
justification/prior approval is required for
amounts in excess of the per day limit.A
separate justification may be required for
sole-source contracts in excess of a specified
dollar amount.
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Other Costs

• List items by type and the basis of the
  computation
  
• Examples
• Office space rental in the field (off-site)
• Copying and reproduction for manuals to be
  distributed
  
• Snacks for long meetings

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Indirect Costs

• Indirect costs are those costs incurred by an
  applicant agency in operating a project that
  cannot be attributed solely to the activities of
  the grant project (e.g., heating the office
  building).
• Indirect cost rates are calculated annually by
  the cognizant agency.
  
• Indirect cost rates may be capped below that rate
  for some projects (e.g., in education).
  
• If an item was used to calculate an indirect cost
  rate, it cannot appear as a direct cost on a
  grant application.
  
• Calculate this as a of the direct cost items.

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• Key Questions for Negotiating Budgets
• (with the grantor contactif you won the grant)
• Did we receive our full budget request?
• If not, how much can we reallocate funds within
  categories?
  
• When will the grant funds be available to the
  agency?
  
• Do the grant funds expire? (yes) How soon do
  they have to be obligated?

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Key Questions about Internal Budgets

• What are internal agency requirements for using
  grant funds? (PCA codes, documentation etc.)
  
• Will other agencies be involved in the project?
  Do funds need to be transferred to them? How and
  when does that happen?
  
• Go back to the grant project team and check on
  questions, updated info etc.
  

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• Appropriation Authority
• How soon after the grant is awarded will the
• funds be available for use by the agency?

Budget Year Timing If the grant funds are receive
d in the 12th month
of the fiscal year ?
Hiring Process Must the agency wait until the gra
nt funds are available to begin the hiring proce
ss?
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• Procurement Process
• What are the agencys procurement rules and
  regulations?
  
• Are there existing contracts in place?
• Does the grant specify certain items for
  purchase?
  
• How do I establish prices this far in advance?

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• Budget Checklist

Contains no unexplained amounts or items
Every budget summary item has a
corresponding budget justification entry
Tells the same story as the proposal narrative
Includes only costs to be incurred during grant
period Includes all items contributed by other so
urces, including volunteer time
Details costs in all budget categories
Adds up follows the rules
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• Before you think its done . . .

Review the grant packet and the budget to
ensure that all the items you are requesting are
allowed by the grant program.
It is extremely important that you are
familiar with the grant requirements and the
Federal government circular and CFA requirements
applicable to the Federal grant for which you are
applying.
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• You should have a thorough knowledge of
• those Federal government circulars that
• are applicable to your grant and your
• application agency.

This knowledge is essential in determining
items such as cost principles conforming
with the Federal government guidelines
(allowability).
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• Federal Government Circulars
• Instruments or information issued by the
  Federal Office of Management Budget (OMB) to
  Federal agencies. They are expected to have a
  continuing effect of two years or more.
• www.whitehouse.gov/omb/circulars

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• OMB Circular A-87
• Cost Principles for State, Local, and Indian
• Tribal Governments
• This Circular establishes principles standards
• for determining costs for Federal awards carried
• out through grants, cost reimbursement
• Contracts and other agreements with State,
• Local, and Federally recognized Indian Tribal
• Governments.

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• OMB Circular A-87
• Attachment A General Principles for Determining
  Allowable
  
• Costs
• Attachment B Selected Items of Cost
• Attachment C State/Local Wide Central Service
  Cost
  
• Allocation Plans
• Attachment D Public Assistance Cost Allocation
  Plans
  
• Attachment E State and Local Indirect Cost Rate
  Proposals
  

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• OMB Circular A-102
• Grants and Cooperative Agreements with
• State and Local Governments
• This Circular establishes consistency and
  uniformity among Federal agencies in the
  management of grants and cooperative agreements
  with State, Local, and Federally recognized
  Indian Tribal Governments.
• Attachments have been replaced by Grants
• Management Golden Rule

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• OMB Circular A-110
• Uniform Administrative Requirements for
• Grants and Agreements with Institutions
• of Higher Education, Hospitals, and Other
• Non-Profit Organizations
• This Circular sets forth standards for obtaining
  
  
• consistency and uniformity among Federal
• agencies in the administration of grants and
• agreements with institutions of higher
  education,
  
• hospitals, and other non-profit organizations.

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• OMB Circular A-110
• Subpart A General
• Subpart B Pre-Award Requirements
• Subpart C Post-Award Requirements
• Property Standards
• Procurement Standards
• Reports and Records
• Termination and Enforcement
• Subpart D After-the-Award Requirements
• Appendix A Contract Provisions

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• OMB Circular A-133
• Audits of States, Local Governments, and
• Non-Profit Organizations
• This Circular set forth standards for obtaining
  
  
• consistency and uniformity among Federal
  agencies for the audit of States, Local
  Governments, and non-profit organizations
  expending Federal awards.

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• OMB Circular A-133
• Subpart A General
• Subpart B Audits
• Subpart C Auditees
• Subpart D Federal Agencies Pass-Through
  Entities
  
• Appendix A Data Collection Form (Form SF-SAC)
• Appendix B Circular A-133 Compliance Statement