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Grant Development - Budgets
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Overview
Proposal budgets are carefully reviewed to determine funding. Make sure your budget is reasonable. Only ask for the amount of funding you need to get the job done. Reviewers will know if you are padding the budget and won’t hesitate to cut it out. Similarly, if your budget is under-estimating the costs, reviewers will know it and likely assume you are not experienced enough to carry out the project. When in doubt, ask your colleagues who have successfully run similar projects regarding estimating costs. In addition, do not hesitate to consult your Fiscal Officer if you have questions regarding indirect costs, fringe benefit rates, subcontracts, or cost sharing. As always, the more time you give them the easier it is for them to help you. Finally, you should always provide a clearly written and well-justified budget narrative. The budget narrative should include a brief description of key personnel and their responsibilities. The goal is to make it easy for the reviewers to understand and agree with your budget.
Content
Most agencies have required budget forms that must be submitted with the proposal narrative. The RFP will describe any budget restrictions and limitations that you need to adhere to when generating your budget. If you took the time to generate a table with objectives, activities, outputs, outcomes, responsible personnel, and a timeline, as suggested in the proposal section, then generating the budget will be straight forward.
Some things to remember are:
  • Equipment refers to items >$5000 that will last more than 2 years
  • Include salary increases each year
  • Break down your supply costs into categories
  • Computers must be for project use only
  • Don’t cost share unless required
  • Use the correct F&A rate; if restricted include proof for ORS
  • OMB A-21 lists allowable and unallowable costs
  • Travel from Hawaii costs more than from mainland universities, make this point clear in your budget narrative
  • Use whole dollar amounts
Budget categories commonly found in RFPs are listed below. You may not have all categories in your budget. For example, it is unlikely that you will publish anything in Year 1; thus, do not include any charges for it. However, many agencies require that the Principal Investigator attend an annual meeting, starting in the first year. Do not forget to include the trip in the budget.
  • Salaries and Wages
  • Fringe Benefits
  • Non-expendable Equipment
  • Materials and Supplies
  • Travel
  • Publication Costs
  • Computer Costs
  • Stipends
  • Other Costs
  • Indirect Costs
Resources
Useful inks for budget preparation are listed below.
Definitions

Grant- purpose is to transfer money, property, services, anything of value to recipient in order to accomplish a public purpose. No substantial involvement of sponsor during performance of activity is anticipated.

Contract- purpose of the instrument is the acquisition, by purchase, lease, or barter of property or services for the direct benefit or use of the federal government.

Cooperative agreement- purpose is to transfer money, property, services, anything of value to recipient in order to accomplish a public purpose. Substantial involvement of sponsor during performance of activity is anticipated.

F&A (indirect) costs- facilities and administration costs are the non-direct costs. The F&A costs are calculated using a federally negotiated rate for the institution multiplied by the MTDC.

On-campus rates- are used when the majority of the project activities are performed at facilities owned and operated by the university.

Off-campus rates- are used when the majority of the activities of the project are performed at facilities outside of the university.

Fringe benefits

Modified total direct costs (MTDC)- consists of all salaries and wages, fringe benefits, materials and supplies, services, travel, and the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract).

MTDC excludes equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, charges for service centers, scholarships and fellowships, and the portion of each subgrant or subcontract in excess of $25,000.

Cost sharing- the portion of a budget that is not paid for by the sponsor. Whatever commitments are in the budget are auditable and should only be what is minimally required by the sponsor.

OMB A-110- Administrative Requirements for Institutions of Higher Education. Contains financial systems and financial reporting; procurement standards; and project administration.

OMB A-21- Cost Principals for Educational Institutions. Defines allowable and unallowable costs; defines methods of F&A cost rate identification and calculation.

Subcontract- assigns part of the projects technical duties to another institution that assists in achieving the goals of the project.

Service contract- general services provided by specialized agent.

Allowable costs- a cost that is eligible for reimbursement by the sponsor.

Unallowable costs- a cost that is not eligible for reimbursement by the sponsor.

Allocable costs- a cost that can be assigned to the activity on some reasonable basis.

Per diem- a daily allowance to cover travel expenses.

M&IE- a portion of the per diem for meals and incidental expenses; excludes lodging.
Need Help?

Contact your Fiscal Officer or Grant Specialist. (Keith Suyat-Terauchi ; Alan Shinsato ; Brian Turano)
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Last updated on 6/2/2006