Basic Budget Building

1
Basic Budget Building

• Research Executive Area

2
Please Note

• Rates used in this Tutorial are for example
  purposes only and may not be up to date.
• For current rates, please see our
• Proposal Fact Sheet

3
Basic Budget Building

• This presentation is available on the www under
  Basic Budget Building Tutorial at
  http//www.umass.edu/research/ogca/proceds.htm
• All underlined entries herein are hyperlinks to
  other resources. You are invited to use and
  share this presentation and to follow the links
  for additional important information

4
First Steps

• Contact OGCA by sending an email to the pre-award
  research administrator responsible for reviewing
  your proposal. Let them know the deadline and
  provide the URL for program guidelines.
• Review Sponsor guidelines for any costing rules
  that could include
• Ceilings on requested amount
• Indirect cost limits
• Cost-share requirements
• Direct cost restrictions (no equipment for
  example)
• Consult OGCA Fact Sheet for current rates
• Identify sponsor forms
• Build your budget using this basic budget
  building tutorial as a starting point. Contact
  OGCA with any questions.

5
Two Major Budget Components

• Direct Costs
• The costs that are directly attributed to the
  project. Examples include salary, supplies,
  equipment, etc.
• Facilities and Administrative Costs (FA).
• (Indirect Costs or Overhead)
• Pooled costs UMass incurs in support of Sponsored
  Activities not directly attributable to any one
  sponsored project. FA is assessed as a
  percentage of direct costs.

6
Two Types of Direct Costs

• Personnel (Salaries and Fringe Benefits)
• Non-Personnel

7
Personnel

• Faculty Salaries
• Academic
• Summer
• Calendar

8
Academic Year (AY) Salary

• Consult with your department head to determine
  how much time you are allowed to dedicate to
  research projects. Personnel effort on all ACTIVE
  awards plus teaching load cannot exceed 100 .
  In other words, 100 summer salary (14 weeks)
  committed academic year research effort (up to
  the maximum percentage allotted for research by
  your department during the academic year)
  Teaching load other obligations 100
• Academic Year (AY) salary is based on a 9 month
  appointment
• AY salary charged to the sponsor is assessed the
  full fringe benefits package. The exception to
  this is the non-tenure track research professor
  -- this can be non-benefited

9
Academic Year Salary (Contd)

• Some sponsors (e.g. NSF) do not allow payment of
  academic year salary without strong justification
  (strictly research appointments, etc.)

10
Academic Year Salary Sample Calculation

• To charge 11 (1 month) of an academic salary of
  65,000
• 11 X 65,000 7,150
• Show basis of effort according to sponsor
  preference, usually represented as either of
  effort or monthly. NSF requires by month, NIH by
  

11
Personnel Budget Detail Academic Salary
Cost Type Cost Fringe
Personnel
Principal Investigator (1 month or 11 academic year) 7,150
Total 7,150
12
Fringe on Academic Year Salary

• Group Insurance Retirement 27.00
• Workers Comp., Unemp., Univ. Health .91
• FICA (Medicare) 1.45
• (applicable only if hired after 4/86)
• Health Welfare 11 per week

13
Academic Year SalarySample Fringe Calculation

• Group Insurance 27.00 X 7,150 1,931
• Workers Comp, etc. .91 X 7,150 65
• FICA (Medicare) 1.45 X 7,150 104
• 38 weeks (AY) X 11/wk X 11 46
• Total Fringe 2,146

14
Fringe Budget DetailAcademic Year Fringe
Cost Type Cost Fringe
Personnel
Principal Investigator 11 academic year 7,150 2,146
Total 7,150 2,146
15
Personnel

• Faculty Salaries
• Academic
• Summer
• Calendar

16
Faculty Summer Salary

• Federal
• Those faculty with Academic Year (AY)
  appointments can receive an additional 33 as
  summer salary. For example if AY pay is
  100,000, then an addition 33,000 can be charged
  as summer salary.
• The summer pay rate is based on the 9 month
  academic year salary.
• NSF permits only 2/9s, the equivalent of 2
  months salary.
• Industrial and Foundation
• Pay rate unrestricted negotiated with sponsor
• Personnel effort on all ACTIVE awards plus
  teaching load cannot exceed 100 . In other
  words, 100 summer salary (14 weeks) committed
  academic year research effort (up to the maximum
  percentage allotted for research by your
  department during the academic year) Teaching
  load other obligations 100

17
Faculty Summer SalarySample Calculation

• Annual salary 54,000
• Monthly salary 54,000/9 6,000/mo
• 2 months of summer salary 12,000 charged to
  the project
• Show basis of effort according to sponsor
  preference, usually represented as either of
  effort or monthly. NSF requires by month, NIH by
  

18
Personnel Budget DetailSummer Salary
Cost Type Cost Fringe
Personnel
Principal Investigator 11 academic year 7,150 2,146
Principal Investigator 2 months summer salary (67 summer) 12,000
Total 19,150 2,146
19
Faculty Summer Salary Sample Fringe Calculation

• If PI hired before April 1, 1986
• Workers Comp. .91(Summer Salary)
• If PI hired after April 1, 1986
• FICA 1.45
• Workers Comp. .91
• 2.36
• For the sample budget, assume the latter
• 2.36 X 12,000 283

20
Personnel Budget DetailSummer Salary Fringe
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Total 19,150 2,429
21
Personnel

• Faculty Salaries
• Academic
• Summer
• Calendar

22
Faculty Calendar Year Appointment

• Some faculty have calendar year appointments 12
  months
• Full fringe is assessed same as academic
  appointments
• Additional compensation can only be charged to
  Non-Federal sources and with Dean and Provost
  written approval - only FICA Workers Comp. are
  charged for fringe

23
Personnel

• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)

24
Other Professional Sample Calculation

• Calendar year employees
• Sample annual salary 30,000
• Calculating effort on a basis
• 30 X 30,000 9,000
• Calculating effort on a monthly basis
• 30,000/12 months 2,500/month
• 9,000/2,500 3.6 months
• Additional compensation professional and
  classified staff can be budgeted up to an
  additional 12 salary from Non-Federal sources on
  top of their base annual with Dept. Head and Dean
  approval. Must be clearly noted in the budget as
  Add comp consult with Human Resources for
  allowability.

25
Personnel Budget DetailOther Professional Salary
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9,000
Total 28,150 2,429
26
Other Professional Sample Fringe Calculation

• Assessed at full fringe rates
• Fringe (27) Workers Comp (.91) 27.91
• 9,000 x .2791 2,512
• Health Welfare 11/week or 572 annually
• 30 effort x 572 172
• FICA (if hired after 4/1/86) 1.45
• 9,000 x .0145 131
• Total Fringe 2,512 172 131
• 2,815 for this example

27
Personnel Budget DetailOther Professional Fringe
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9,000 2,815
Total 28,150 5,244
28
Personnel

• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student

29
Graduate Student Stipend

• Stipend - Minimum Graduate Stipends are set by
  academic areas, per student contracts.  For a
  memo regarding specific minimum student stipends
  click here
• New Recalculated Minimum Graduate Student
  Employee Stipends
• Example for a graduate student hired in 2003 for
  20 hrs per week both academic and summer
• 20 hours per week X 52 weeks 1040 hours
• 1040 X 14.12 14,685

30
Personnel Budget DetailGraduate Student Stipend
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9,000 2,815
Graduate Student (1040 hours or 50) 14,685
Total 42,835 5,244
31
Graduate Student Sample Fringe Calculation

• GEO Health Fee assessed at 2.57 per hour
• The following examples reflect typical
  appointments
• 1,950 20 hours/wk X 38 weeks academic 760
  hrs X 2.57/hr
• 2,673 20 hours/wk X 52 weeks 1,040 hrs x
  2.57/hr
• 3, 392 20 hours/wk X 38 weeks academic 40
  hours/wk X 14 weeks 1,320 hours x 2.57/hr

32
Graduate Student Fringe Sample Fringe
Calculation (contd)

• Health Welfare
• 11/wk per student
• 572 for 52 week year
• 418 for 38 week academic year
• 154 for 14 week summer
• 572 this example

33
Graduate Student Sample Fringe Calculation
(contd)

• Summer Student Payroll FICA
• If not enrolled in classes 1.45 summer payroll
  (14 weeks)
• 14,685/52 wks 282/wk
• 282 X 14 wks 3,954/summer
• 1.45 X 3,954 57
• 57 for this example

34
Graduate Student Sample Fringe Total

• GEO Health Fee 2,673
• Health Welfare 572
• Summer Student FICA 57
• Total 3,302
• NOTE Curriculum fee is assessed on all academic
  year grad student appointments but not budgeted
  as fringe -- see Other for more info

35
Graduate Student Fringe Calculation

• It is important to understand how the fringe
  calculation is done, however we have constructed
  a Graduate Student Fringe Calculator to make it
  easier. It also calculates the Curriculum fee.

36
Personnel Budget DetailGraduate Student Fringe
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9,000 2,815
Graduate Student (1040 hours or 50) 14,685 3,302
Total 42,835 8,546
37
Personnel

• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Postdoctoral Fellow

38
Postdoctoral Fellow

• Salary is determined by what the market will bear
  in a particular field and is usually figured on
  an annual basis. Check with Department Head for
  prevailing rates
• 35,000 per year this example

39
Personnel Budget DetailPostdoctoral Fellow Salary
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9,000 2,815
Graduate Student (1040 hours) 14,685 3,302
Postdoc (12 mos) 35,000
Total 42,835 8,546
40
Postdoctoral Fringe

• UMass requires the budgeting of health insurance
  for postdocs by either providing
• 1) The full benefits package includes group
  insurance and retirement
• 2) Budgeting for the postdoc health plan no
  retirement

41
Post Doc Fringe (contd)

• 1) Full benefits
• Group Insurance Retirement 27
• Workers Comp., Unemployment, Univ. Health
  .91
• FICA (Medicare) 1.45 (applicable if hired
  after 4/86)
• Health Welfare 11 per week
• 27 X 35,000 9,450
• .91 X 35,000 319
• 1.45 X 35,000 508
• 52 weeks X 11/wk 572
• Total Fringe 10,849

42
Postdoctoral Sample Fringe Calculation (contd)

• 2) Postdoc Health Insurance plan
• Fellow only 232/mo
• Fellow and child(ren) 615/mo
• Fellow and spouse 728/mo
• Fellow, spouse child(ren) 1,111/mo
• 12 months X 232/mo 2,784
• Workers Comp and FICA are assessed as well
• .91 X 35,000 319
• 1.45 X 35,000 508

43
Postdoctoral Sample Fringe Total

• Postdoc with health (no-retirement)
• Workers Comp 319
• FICA 508
• Health Insurance 2,784
• Total 3,611

44
Personnel Budget Detail Postdoctoral Fellow
Fringe
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9000 2,815
Graduate Student (1040 hours) 14,685 3,302
Postdoc (12 mos) 35,000 3,611
Total 77,835 12,157
45
Personnel

• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Postdoctoral Fellow
• Secretarial

46
Secretarial

• Secretarial salary can be charged to non-federal
  projects without any restrictions. The direct
  charging of secretarial services on federally
  supported projects is allowed only under a
  limited number of scenarios. See the policy
  statement and consult with OGCA proposal staff
  for guidance.

47
Personnel

• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Post Doctoral Fellow
• Secretarial
• Undergraduate Student

48
Undergraduate Student

• Undergraduate Students are hired for varying
  numbers of hours per week
• The pay scale for undergraduates is determined by
  the job description and Human Resources
  guidelines
• 10 hrs/wk X 38 wks X 10/hr 3,800

49
Personnel Budget Detail Undergraduate Student Pay
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9000 2,815
Postdoc (12 mos) 35,000 3,611
Graduate Student (1040 hours) 14,685 3,302
Undergraduate (10 hrs/wk academic) 3,800
Total 77,835 12.157
50
Undergraduate Fringe

• Undergraduate salary is not charged fringe.
  However, FICA is charged during summer employment
  if the student is not enrolled in summer
  classes.
• Fringe 0 for this example since the student
  is working during the academic year.

51
Personnel Budget Detail Undergraduate Student
Fringe
Cost Type Cost Fringe
Personnel
PI academic, 11 (1 month) 7,150 2,146
PI summer, 2 mos (67 summer) 12,000 283
Other Professional, 30 (3.6 mos) 9000 2,815
Postdoc (12 mos) 35,000 3,611
Graduate Student (1040 hours) 14,685 3,302
Undergraduate (10 hrs/wk academic) 3,800 0
Total 81,635 12,157
52
Non-personnel

• Consultants

53
Non-personnel CostsConsultants

• A consultant lends their expertise and advice in
  their given field without actually working on
  the project
• UMass personnel cannot be paid as consultants on
  UMass grants contracts
• NSF limits consultant daily rate to max of 498
  per day. This rate can be used for guidance on
  other federal projects but is not a requirement.
  Basis for costing on non-federal grants is market
  driven
• Provide daily rate of pay in the budget obtain
  from consultant do not guesstimate, get exact
  rate

54
Non-personnel Budget DetailConsultants

Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
55
Non-personnel

• Consultant
• Equipment

56
Equipment

• Definition
• 1,000 unit cost or more
• Non-expendable tangible property
• Useful life of 2 years or more
• Budgeting
• List pieces of equipment separately showing unit
  cost
• Basis for costing costing can easily be done
  on-line for items from laptops to centrifuges, or
  with familiar vendors. Avoid guesstimates

57
Non-personnel Budget DetailEquipment
Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
58
Non-personnel

• Consultant
• Equipment
• Administrative

59
Non-personnel

• Consultant
• Equipment
• Administrative
• Administrative and Office Supplies

60
Administrative Office Administrative Supplies

• Definition
• Pens, pencils, file folders, paper products,
  including photocopy paper, film, tape, etc., and
  small office machines under 100
• Budgeting
• Federal strict limitations placed on ability to
  budget. NOT ALLOWABLE consult with OGCA. Not
  included in sample budget for this reason
• Non-federal no limits - budget as needed
• Basis of costing experience
• Range 25 - 100, depending on size of project

61
Non-personnel

• Consultant
• Equipment
• Administrative
• Administrative and Office Supplies
• Postage and Telephone

62
Administrative Postage Telephone

• Definition
• Overnight courier services, regular postage,
  telephone
• Budgeting
• Allowable on federal projects but only with
  thorough explanation and justification. Must
  detail project related need and state ability to
  separately track these expenses from routine
  non-project expenses for auditing purposes
• Federal telephone only for long-distance or for
  phone line entirely dedicated to the project

63
Administrative Postage Telephone (contd)

• Limitations on costing are not typically placed
  by non-federal sponsors
• Basis for costing experience in related
  projects with costing scaled up or down depending
  on relative size of project. Check your records
  and/or bookkeepers for prior accounting on
  project of a similar size and type
• Typical range 50 to 500 amounts vary
  depending on nature of the project

64
Administrative Postage TelephoneSample
calculation/justification

• Postage for mailing brochures
• 200 X .25 50
• Justification
• Mailing of brochures to candidates for
  participation in the study. Brochures explain
  guidelines and criteria. They are required to
  properly educate possible participants prior to
  screening. These costs are auditable and
  accounted for separately from non-project costs

65
Administrative CostsPostage TelephoneCalculati
on/Justification (contd)

• Telephone (long-distance)
• 200
• Justification
• Long distance phone calls required for follow-up
  with accepted participants to run initial
  interviews and to schedule and confirm
  appointments for participation. These costs are
  auditable and accounted for separately from
  non-project costs

66
Non-personnel Budget DetailAdministrative
(contd)
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 50 200
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 50 200
67
Non-personnel

• Consultant
• Equipment
• Administrative
• Administrative and Office Supplies
• Postage and Telephone
• Subscriptions, Membership Dues

68
Administrative Subscriptions, Membership Dues

• Definition
• Self-explanatory costs must be allocable to a
  specific project and allowed by the sponsor
• Budgeting
• Federal strict limitations placed on ability to
  budget. NOT ALLOWABLE consult with OGCA. Not
  included in sample budget for this reason
• Non-federal no limits - budget as needed.
  Should be explained/justified
• Basis of costing current vendor rates
• Range variable

69
Non-personnel

• Consultant
• Equipment
• Administrative
• Administrative and Office Supplies
• Postage and Telephone
• Subscriptions, Membership Dues
• Photocopying

70
AdministrativePhotocopying

• Definition
• Both on and off-campus project-related
  photocopying services
• Budgeting
• Federal Allowable on federal projects but only
  with thorough explanation and justification.
  Must detail project related need and state
  ability to separately track these expenses from
  routine non-project expenses for auditing
  purposes
• Non-Federal no limits - budget as needed

71
AdministrativePhotocopying (contd)

• Budgeting (contd)
• Basis of costing experience in related projects
  with costing scaled up or down depending on
  relative size of project. Check your records
  and/or bookkeepers for prior accounting on
  project of a similar size and type
• Range variable

72
AdministrativePhotocopying justification

• Sample explanation/justification
• Funds are budgeted for project-related copying
  expenses incurred in the dissemination of paper
  submissions, documents/reports, and
  meetings/presentations required by the sponsor.
  These costs are auditable and separately tracked
  from routine non-project expenses

73
Non-personnel Costs

• Consultant
• Equipment
• Administrative
• Supplies

74
Non-personnel CostsSupplies

• Consultant
• Equipment
• Administrative
• Supplies
• Laboratory supplies, chemicals

75
SuppliesLaboratory supplies, chemicals

• Definition
• Laboratory supplies and chemicals allocable to
  proposed project
• Budgeting
• List types and give subtotals for major items in
  the budget explanation as applicable
• Basis for costing check with vendors or
  accounting records for prior costing on similar
  projects. If new to budget building, confer with
  more experienced colleagues. Avoid
  over-inflating costs
• Range variable, 100 - 25,000 based on project
  size/type

76
SuppliesLab supplies/chemicalsCalculation

• Lab supplies/chemicals
• Chemicals 5,000
• Reagents 1,000
• Antibodies 2,000
• Enzymes 500
• Disposable lab supplies
• (pipettes, media agents,
• syringes, etc.) 300
• Total 8,800

77
Non-personnel Budget DetailSupplies
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long distance) 50 200
Supplies Lab/chemical supplies 8,800
78
Non-personnel CostsSupplies (contd)

• Consultant
• Equipment
• Administrative
• Supplies
• Laboratory supplies, chemicals
• Computer supplies

79
Supplies -- Computer supplies

• Definition
• Computer paper, diskettes, zip disks, toner, etc
• Budgeting
• Federal
• Allowable with proper explanation and
  justification
• Must detail project related need and state that
  these expenses are separately auditable from
  non-project costs
• Non-federal no restrictions
• Basis for costing
• Check with vendors, accounting records, or
  colleagues for prior costing on similar projects
  
• Avoid over-inflating costs
• Range variable, 50 - 250 based on project
  size/type

80
SuppliesComputer suppliesCalculation/Justificati
on

• Computer supplies
• Cost 200
• Justification
• Computer supplies are required for project
  related sponsor mandated reports. These costs
  are separately auditable from non-project costs

81
Non-personnel Budget DetailSupplies
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 50 200
Supplies Lab/chemical supplies Computer supplies 8,800 200
82
Non-personnel CostsSupplies

• The list of items in this sample budget under
  Supplies are not exhaustive but provided for
  illustrative purposes. Other costs that might
  arise are listed below for convenience. Click
  item for more information if hyperlinked
• Research animals
• Software, Software Upgrades, Software Licenses

83
Non-personnel Costs

• Consultant
• Equipment
• Administrative
• Supplies
• Travel

84
Non-personnel CostsTravel

• Definition
• Airfare (domestic foreign), per diem, hotel,
  conference registration, ground transportation
  (taxi/limo), car rental, mileage tolls
• Budgeting
• Federal
• Cannot charge business class or first class air
  travel
• Must utilize U.S. flag carriers at the lowest
  available rates
• Non-federal No airfare limitations

85
Non-personnel CostsTravel (contd)

• Budgeting contd.
• Basis for costing
• Airfare check with travel agent or on-line
  service.
• Domestic per diem and hotel UMass limits per
  diem (food) charge on domestic travel at 30.00
  per day (35 for MA, NYC, DC). See federal per
  diem site for suggested domestic hotel costs or
  call your travel agent.
• Foreign Use foreign per diem and hotel rates,
  actual expenses based on prior travel or check
  with travel agent and/or bookkeeper.
• Mileage set at the IRS rate, currently (FY 03)
  set at .375 per mile.

86
Non-personnel CostsTravel (contd)

• Range
• 1,200 to 1,600 per domestic conference
• 1,500 to 3,000 per foreign conference
  depending on location/duration
• Non-conference travel costs vary significantly
• Do not guesstimate
• Build budget with information suggested under
  Basis for costing and provide explanation

87
TravelCalculation

• Domestic
• Conferences in DC (two each for PI RA)
• Airfare 550 X 2 (PI RA) X 2 trips 2,200
• Hotel 110 X 3 days X 2 X 2 1,320
• Per diem 3 days X 35/day X 2 X 2 420
• Registration 400 X 2 X 2
  1,600
• Mileage (to/from Bradley) .375 X 70 miles X 2
  53
• Ground transportation (to/from Dulles) 35 X 4
  140
• Total 5,733

88
TravelCalculation (contd)

• Foreign
• Conference in Moscow (PI)
• Airfare 950
• Hotel 5 days X 191 955
• Per diem 5 X 103 515
• Registration 400
• Mileage (to/from Bradley) 53
• Ground transportation 150
• Total 3,023

89
Non-personnel Budget DetailTravel
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 250
Supplies Lab/chemical supplies Computer supplies 10,050
Travel Domestic 5,733 Foreign 3,023 8,756
90
Non-personnel Costs

• Consultant
• Equipment
• Administrative
• Supplies
• Travel
• Subcontracts

91
Non-personnel CostsSubcontracts

• Definition
• Generally, a subcontractor is defined as an
  organization, often another university, who helps
  carry out the activities of the proposed project
  by performing a portion of the research using
  their own facilities. They receive a
  proportional share of funding from the sponsor
  via UMass and will often charge their own
  indirect costs

92
Non-personnel CostsSubcontracts (contd)

• Procedures
• The following items must be provided to OGCA
• A letter signed by the subcontractors authorized
  signatory (OGCA equivalent)
• Statement of work (subcontractor specific does
  not include UMass effort)
• Subcontractor budget
• Indirect Cost Rate Agreement (if subcontractor is
  budgeting indirects in their own budget)
• Sole source justification

93
Non-personnel CostsSubcontracts (contd)

• Procedures (contd)
• The first four items should be handled by the
  subcontractor and forwarded to OGCA
• The sole source justification is completed by the
  UMass Principal Investigator. It explains why the
  subcontractor is uniquely qualified to carry out
  the work. Sole source justifications can be
  forwarded to OGCA via email
• Subcontractors should use all sponsor forms,
  including any required certifications/assurances

94
Non-personnel CostsSubcontracts (contd)

• Budgeting
• The subcontractor typically budgets for both
  Direct Costs (DC) and Indirect Costs (IC). Take
  the total of the DC and IC provided in the
  subcontractor budget and roll that total into
  your budget creating a line item called
  Subcontracts see next slide for sample
  subcontractor budget. The subcontractors total
  costs are then rolled into the UMass budget under
  the Subcontract line item

95
Subcontractor BudgetSample
Wassamatta U. subcontract Cost
1. Salaries 10,500
2. Fringe 2,625
3. Equipment 2,500
4. Administrative 100
5. Supplies 500
6. Travel 2,500
Total Direct Cost 18,725
Total Indirect Cost (67 MTDC) 12,546
Total Cost 31,271

96
Non-personnel Budget DetailSubcontracts
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 250
Supplies Lab/chemical supplies Computer supplies 10,050
Travel domestic foreign 8,756
Subcontract Wassamata U. 31,271
97
Non-personnel Costs

• Consultant
• Equipment
• Administrative
• Supplies
• Travel
• Subcontracts
• Other Direct

98
Non-personnel CostsOther Direct

• Definition the following items are often
  budgeted under Other but for the sample budget,
  only curriculum fee appears.
• Curriculum fee
• Equipment rentals, maintenance repair
• Human subject payment
• Publication costs
• Participant support costs
• Do not use Miscellaneous as a line item
• Above items not intended to be exhaustive but are
  illustrative of common items budgeted in the
  Other category.

99
Other Direct Calculation

• Curriculum Fee
• The rate is 6.31/hr. per Graduate Student (GS)
• 1 GS X 20 hrs/wk X 38 wks X 6.31 4,796
• Note
• No more than 760 hrs or 4,796 per GS will be
  charged in an academic year
• Summer effort is not charged CF
• Curriculum Fee is exempt from FA

100
Non-personnel Budget DetailOther Direct
Direct Cost Type Cost
Consultant ABC Advice, Inc. (498/day, 10 days) 4,980
Equipment Mac Power Book G4, 17 super drive 3,299
Administrative Postage for mailing brochures Telephone (long-distance) 250
Supplies Lab/chemical supplies Computer supplies 10,050
Travel domestic foreign 8,756
Subcontracts Wassamata U. 31,271
Other Direct Curriculum fee on graduate student 4,796
101
Total Direct Cost
Cost type Cost
Salaries 81,635
Fringe 12,157
Consultant 4,980
Equipment 3,299
Administrative 250
Supplies 10,050
Travel 8,756
Subcontracts 31,271
Other 4,796
Total Direct Cost 157,194
102
Two Major Budget Components

• Direct Costs
• Facilities and Administrative Costs

103
Facilities and Administrative Costs (FA,
overhead, indirect costs)

• Definition
• FA is calculated as a percentage of Direct Costs
• Rates vary depending on type of project, sponsor
  type, and project location (on-campus,
  off-campus) see fact sheet for specific rates.
  Consult with OGCA before budgeting either the
  Off-campus or Other Sponsored Activities or
  Instruction rates
• If the sponsors FA rate differs from the
  Universitys, defer to sponsor mandated rates but
  provide OGCA with a copy of the sponsors
  guidelines supporting this restriction

104
Facilities and Administrative Costs (contd)

• Definition (contd)
• FA is assessed either on a Modified Total Direct
  Cost basis (MTDC) or a Total Direct Cost (TDC)
  basis. MTDC simply means -- do not assess FA
  (back them out of total before calculating FA)
  on the following costs
• Equipment (1,000 or more unit cost)
• Tuition (for cost-sharing purposes)
• Curriculum fee
• Rental costs of off-site facilities
• Fellowships
• Subcontractor costs in excess of 25,000

105
Facilities and Administrative Costs (contd)

• Definition (contd)
• Total Direct Cost (TDC) means that the applicable
  FA rate is assessed on the direct cost total.
  Every rule has an exception of course never
  assess FA on the curriculum fee
• Budgeting
• Review sponsor guidelines and assess FA costs as
  instructed. Confer with OGCA if unclear

106
Facilities and AdministrativeCalculation

• Assume an on-campus research project for our
  sample budget with a 55 MTDC FA rate. 55 is
  therefore assessed on the total direct direct
  costs less equipment, curriculum fee, and
  subcontractor costs in excess of 25K. Thus the
  MTDC base
• 157,194 - 3,299 - (31,271- 25K) - 4,796
  142,828 multiply this by 55
• 142,828 X 55 78,555

Cost type Cost
Salaries 81,635
Fringe 12,157
Consultant 4,980
Equipment 3,299
Administrative 250
Supplies 10,050
Travel 8,756
Subcontracts 31,271
Other 4,796
Total Direct Cost 157,194
107
FA Budget Detail
Cost type Cost
Salaries 81,635
Fringe 12,157
Consultant 4,980
Equipment 3,299
Administrative 250
Supplies 10,050
Travel 8,756
Subcontracts 31,271
Other 4,796
Total Direct Cost 157,194
Total Indirect Costs 78,555
Total Cost 235,749
108
Cost-sharingDefinition

• Definition
• Cost-share is that part of the projects costs
  borne by the University rather than the sponsor.
  Many sponsors require cost-sharing, often
  specific matching (such as 11 or 12) is
  required and other times agencies simply indicate
  that cost- sharing is recommended and will be a
  factor in the review and scoring of a proposal

109
Cost-sharingWhen allowable

• When to cost-share
• To include cost-share in your proposal, sponsors
  written guidelines must either require it, or
  strongly suggest its inclusion.
• UMass policy does not allow for voluntary
  cost-sharing. If the sponsor doesnt require it,
  cost-share must not appear in your budget.
• Do not provide shared costs from third party
  sources (Non-UMass, non-subcontractor). Confer
  with OGCA if third party share is required by
  sponsor.

110
Cost-sharingAllowable costs

• What to cost-share
• If established that the sponsor requires or
  recommends cost share, only the following costs
  may be shared regardless of whether sponsoring
  agency is federal or non-federal
• Salaries
• Fringe
• Equipment
• Subcontractor
• Tuition waivers
• Indirect costs
• NOTE Cost share must be from UMass accounts,
  not from other grants or contracts, federal or
  non-federal

111
Cost-sharingProcess

• All cost-shared amounts and their associated
  state ledger account numbers must be listed on
  the second page of the Internal Processing Form
  (IPF). This cost-share must also be authorized
  with a signature in the far right column, by the
  individual authorized to commit the shared funds,
  usually the Department Head

112
Cost-shareBudgeting

• Salaries

113
Cost-shareBudgeting

• Salaries
• Shared salary must derive from UMass funds, not
  matched from other federal or non-federal grants
• Shared salary can be budgeted for UMass personnel
  with paid appointments. Exceptions to this rule
• Faculty summer salary emeritus faculty salary
• Salary is shared only for time specifically
  dedicated to the project during the proposed
  project period

114
Cost-shareSalaries (contd)

• Cost-shared salary is typically shown as a
  percentage of the employees base appointment but
  can also be budgeted in weeks or months following
  the same rules of effort reporting as required
  for reporting time charged to the sponsor
• Keep in mind that personnel effort on all ACTIVE
  awards plus teaching load cannot exceed 100 .
  In other words, 100 summer salary (14 weeks)
  committed (charged and cost-shared) academic
  year research effort (up to the maximum
  percentage allotted for research by your
  department during the academic year) Teaching
  load other obligations 100

115
Cost-share, salariesSample calculation

• Prof. Grant wants to cost-share 1 month (11 AY)
  of his academic salary. Prof. Grant makes
  65,000 per academic year
• 11 X 65,000 7,150
• Show basis of effort according to sponsor
  preference, usually represented as either of
  effort or monthly. NSF requires by month, NIH by
  

Cost Type UM cost-share
PI (11 AY) 7,150
Total Direct Cost 7,150
116
Cost-share, salariesSample Calculation (contd)

• Regardless of whether funding is federal or
  non-federal, secretarial salary can be
  cost-shared
• Secretarys salary is 30,000/calendar year and
  will devote 10 to the project
• 30,000 X 10 3,000

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Total Direct Cost 10,150
117
Cost-shareFringe

• Salaries
• Fringe

118
Cost-share, FringeSample Calculation on PI
Academic

• Same rules apply for budgeting shared fringe as
  for charging to the sponsor
• Group Insurance
• 27 X 7,150 1,931
• Workers Comp, etc.
• .91 X 7,150 65
• FICA (Medicare)
• 1.45 X 7,150 104
• Health Welfare
• 38 weeks (AY) X 11/wk X 11 46
• Total Fringe 2,146

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Total Direct Cost 12,296
119
Cost-share, FringeSample Calculation on
Secretarial

• Same rules apply for budgeting shared fringe as
  for charging to the sponsor. If secretary
  benefited
• Group Insurance
• 27 X 3,000 810
• Workers Comp, etc.
• .91 X 3,000 27
• FICA (Medicare)
• 1.45 X 3,000 44
• Health Welfare
• 11 week X 52 weeks X 10 57
• Total Fringe 938

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Fringe Secretary 938
Total Direct Cost 13,234
120
Cost-shareEquipment

• Salaries
• Fringe
• Equipment

121
Cost-share - Equipment Sample Calculation

• Criteria
• Must be purchased exclusively for use on the
  project from UMass funds
• Must be purchased during the projects
  anticipated period of performance
• Sample budget
• Eye Tracker 7,995

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Fringe Secretary 938
Equipment 7,995
Total Direct Cost 21,229
122
Cost-shareSubcontract

• Salaries
• Fringe
• Equipment
• Subcontract

123
Cost-share, SubcontractSample Calculation

• Subcontractor cost-share must be signed off by
  the subs OGCA. Shared items must be auditable.
• When applying UMass FA on UMass shared direct
  costs, the subcontractors total shared cost,
  like equipment, is exempt. See slide on sharing
  FA costs for further explanation.
• Sample budget Sub contributes salary, fringe,
  and associated FA costs 4,175

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Fringe Secretary 938
Equipment 7,995
Subcontract 4,175
Total Direct Cost 25,404
124
Cost-shareTuition waiver

• Salaries
• Fringe
• Equipment
• Subcontract
• Tuition waivers

125
Cost-share, Tuition Waivers Sample Calculation

• Tuition waivers are budgeted for graduate
  students whose salary is being charged or
  cost-shared to the grant
• Student stipends must be budgeted at a minimum of
  2,682 per semester to receive a waiver
• Tuition waivers 2,705.50 per semester
• Calculation for sample budget
• 1 student X 2 semesters X 2,705.50 5,411

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Fringe Secretary 938
Equipment 7,995
Subcontract 4,175
Tuition waiver 5,411
Total Direct Cost 30,815
126
Cost-share Facilities and Administrative Costs
(FA, overhead, indirect costs)

• Salaries
• Fringe
• Equipment
• Subcontract
• Tuition waivers
• Facilities and Administrative Costs

127
Cost-share, FASample calculation

• Assess FA on shared direct costs using same rate
  charged to sponsor. However, always use MTDC
  basis for sharing of FA equipment and tuition
  waivers are exempt from FA assessment. In
  addition, do not assess FA on subcontractors
  total shared costs.
• Sample calculation 30,815 (7,995 4,175
  5,411) 13,234 X 55 7,279

Cost Type UM cost-share
PI (11 AY) 7,150
Secretary (10) 3,000
Fringe PI 2,146
Fringe Secretary 938
Equipment 7,995
Subcontract 4,175
Tuition waiver 5,411
Total Direct Cost 30,815
Total Indirect Cost 7,279
Total Cost Share 38,094
128
Total BudgetSponsor UMass cost-share
Cost type Sponsor UMass Total
Salaries 81,635 10,150 91,785
Fringe 12,157 3,084 15,241
Consultant 4,980 4,980
Equipment 3,299 7,995 11,294
Administrative 250 250
Supplies 10,050 10,050
Travel 8,756 8,756
Subcontracts 31,271 4,175 35,446
Other 4,796 5,411 10,207
Total Direct Cost 157,194 30,815 188,009
Total Indirect Costs 78,555 7,279 85,834
Total Cost 235,749 38,094 273,843
129
Budget Explanation and Justification

• A well developed budget is accompanied by a
  budget explanation.
• A complete and realistic budget justification
  demonstrates that your project is well conceived.
  It also tends to minimize the chances that
  sponsors will arbitrarily reduce or eliminate
  budget categories. Sponsors have a good idea of
  what a project should cost, and generally know
  when you are over or under budgeting. Follow
  sponsor guidelines on minimum items required.
• Explanation and justification are synonymous
  terms except with federal grants where
  Explanation merely details what the cost item
  is while Justification conveys why a cost item
  particularly Administrative costs are
  allocable and necessary for the successful
  completion of the project.