Budget Preparation

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Budget Preparation

• Pre-Award Budget Issues
• SESSION 22
• Brett Henry bhenry24_at_tamu.edu
• Freddie Hunter fhunter_at_tamu.edu
• NCURA Region V May 2007

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B.O.R.B. (BASICS OF RESEARCH BUDGETS)POP TEST

• KEY/SCORE RANKINGS (Base on of Correct
  Answers)
• 10You place out of this session and receive the
  B.O.R.B. designation
• 9.. You receive the B.O.R.B. designation
• 8.. You receive an honorary B.O.R.B.
  designation with an asterisk
• 7. Study again tonight and re-take the test
  tomorrow
• 6. Good for your first try
• 5. Youre on the right track
• 4. Request mentoring by a veteran NCURA member
• 3. You have PI approval
• 2. You have only been at this job for one month
• 1. You exceeded your curfew and drink limit last
  night !

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ANSWER EACH QUESTION EITHER TRUE OR FALSE

• 1. All research proposals should include cost
  sharing to be competitive and increase chances
  for funding
• 2. Overhead/Indirect Costs are also referred to
  as Facilities Administrative Costs (FA)
• 3. Graduate student tuition is an allowable
  budget item on research proposals
• 4. PIs are allowed to commit more than 100 of
  their time to research provided they are willing
  to work longer hours
• 5. A computer would be an example of Capital
  Equipment
• 6. Conference registration fees are not
  allowable expenses on a proposal budget
• 7. All budget items are subject to FA
  (Indirect) cost on a research proposal budget.
• 8. When Cost Sharing is required in a Federal
  solicitation, it is acceptable to use funds from
  another Federal project for Cost Sharing
• 9. OMB Circular A-21 (Cost Principles) applies
  to educational institutions
• 10. FA Costs are charged on the total dollar
  amount for sub-awards on for-profit companies

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Proposal Budget - Purpose

• Major proposal component
• Indicator of PI ability to manage project
• Tied directly to Scope of Work
• Allows PI and Organization to convey specific
  project costs

5
Proposal Budget Direction

• Review Sponsor Guidelines
• Comply with Federal Standards (OMB Circulars)
• Documentation/justification to convey reasonable
  cost
• Costs must be commensurate with proposed research

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Costs are required to be

• Reasonable
• Allowable
• Allocable
• Consistently Treated

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Multi-Year Projects

• Year 1 Year 2 Summary
• Personnel 25,000 25,750 50,750
• Fringe Benefits 3,500 3,605 7,105
• Group Insurance 840 840 1,680
• Permanent Equipment 0 0 0
• Travel 2,500 2,500 5,000
• Other Direct Cost 0 0 0
• Total Direct Costs 31,840 32,695 64,535
• Modified Total Direct Costs 31,840 32,695
  64,535
• Facilities Administration 14,487 14,876
  29,363

• Budget for each year prepared
• Cumulative budget prepared for entire proposal
  period
• Salary adjustments and inflation can be added

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Where do I find Cost Regulations?

• Office Management and Business (OMB) Circulars
• grants
• Federal Acquisition Regulations (FAR)
• contracts
• Agency specific examples
• NSF Grant Proposal Guide
• NIH Grants Policy Statement
• NASA NASA Research Announcement

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Which OMB Circular Do I Follow?
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Direct Costs

• Cost directly associated with a sponsored project
• Personnel
• Capital Equipment
• Travel
• Patient Care Costs
• Participant Support Costs
• Subcontracts
• Other Direct Costs

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Personnel

• Salary and Wages
• For each person listed on the budget, the detail
  should include
• Name and position title
• Percentage of time/number of months
• Summer or academic time designation
• If personnel is not known use pay consistent with
  division
• Annual escalation is added to all salaries each
  year
• Students are not allowed to work more than 50
  during the academic year
• Fringe Benefits
• calculated according to the Rate Agreement
  negotiated with
• a cognizant government agency
• includes FICA, unemployment and workman's
  compensation, retirement and group health
  insurance

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Personnel
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Capital Equipment

• an item of property having an cost of 5,000 or
  more and a useful life of two years or more
• Add a minimum 10 for shipping, handling,
  installation and training charges (if not
  included in quote from vendor)
• Give detail on the equipment
• Manufactures name
• Model number
• Amount needed

14
Travel

• Information Needed
• Destination and duration
• Number of trips planned per year
• Number of persons per trip
• Cost
• Transportation
• Lodging
• Per Diem
• Foreign Travel?
• Foreign travel may require approval from sponsor
• Foreign travel must be budgeted separately
• Must use approved U.S. airline carrier (or
  affiliate) on all Federal funded projects

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Patient Care Costs

• Costs directly related to treatment required for
  research
• Does not include personal expense reimbursement
  (such as travel, per diem, lodging)
• Details needed
• Outpatient or Inpatient?
• Number of patients
• Frequency and number procedures performed

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Participant Support Costs

• costs for participants or trainees but not
  employees
• Transportation
• Per diem
• Stipends
• NSF does not allow FA to be charged on these
  costs

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Sub-Awards

• Agreement where a third party will perform part
  of the activities defined in the proposal
• TEES Sub-Awardee Certifications
• Debarment, lobbying, drug-free certification,
  conflict of interest, human and animal subjects,
  recombinant DNA, selective agents
• Statement of Collaboration (Commitment Letter)
• Statement of work to be performed by sub-awardee
• Budget

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• Sub-Recipient (Sub-Awardee)
• The Sub-recipient will be included as a co-author
  on any publications
• Formal proposal signed by authorized
  representative with a statement of work and
  budget are required
• FA Cost of 45.5 is charged on the first 25,000
• Year 1 Year 2 Year 3
• Sub A 10k 5k 15k
• Sub B 0k 25k 5k .
• FA Sub A 4,550 2,275 4,550
• FA Sub B 0 11,375 0

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• Subcontractor
• Providing goods and services
• Formal quote for services needed
• FA charged on full amount

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Other Direct Costs

• Materials and Supplies
• Equipment under 5,000
• Publication Costs
• Professional/Consultant Services
• Conference Fees
• Computer Services
• Tuition

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Modified Total Direct Costs
Subset of direct costs in which FA Cost is
charged

• Direct Costs that DO NOT get charged Indirect
  Costs
• Capital equipment
• Patient Care Cost
• Support Participant Costs
• Tuition
• Rent (off-site locations)
• Scholarships and fellowships
• Subrecipent charges after first 25k

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Facilities Administrative Cost(FA or Indirect
Costs)

• Overhead expenses indirectly associated with a
  project
• Utilities, library fees, administration
• Rate determined by cognizant government agency
• Generally applied to Modified Total Direct Costs

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Cost Sharing

• Portion of project or program costs not paid by
  the sponsor
• May be any amount required by sponsor
• Types of cost sharing
• Cash contribution
• In-kind contribution
• Service or item given to the project (ex
  tuition, salary)

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• Sample Budget
• Year 1 Year 2 Summary
• 1. Personnel
• PI (0.5- P-Mos) 5,000 5,150 10,150
• Grad Student (6 P-Mos) 18,000 18,540
  36,540 (works at 50 time, 12-Mos _at_
  50 time 6-Mos)
• 2. Fringe Benefits 1,021 1,051 2,072
  (16.1 for faculty and staff, 1.20 for
  students)
• 3. Group Insurance 2,558 2,558 5,116
  (459/month for faculty and 194/month for
  students)
• 4. Permanent Equipment 20,000 0 20,000
• 5. Travel 3,720 3,720 7,440
• 6. Other Direct Costs (Included in MTDC)
• Materials Supplies 2,000 2,000 4,00
  0
• Conference Reg. 1,000 1,000 2,000