What should I consider when developing a budget?

The Principal Investigator (PI) works with the PreAward Administrator in the RAS unit to define the budget and develop and finalize the budget justification for each proposal. The Office of Sponsored Programs (OSP) has the final authority on all budgets being submitted to external sponsors and interpreting all sponsor and federal guidelines and regulations.

Indirect Costs (also known as Facilities & Administration Costs or F&A) ensure the proper indirect cost rate is used.

(Refer to current Emory F&A rates)

Budgets should include direct costs that are reasonably required to support the project and Facilities & Administration (F&A) costs.

Direct costs are directly identifiable project expenses. Major categories include:

·        Personnel    (See Section 9 : Hiring Staff)

·        Fringe Benefits

·        Equipment

·        Travel

·        Subcontracts and subawards   (See Section 6c : Setting up subawards)

·        Materials & Supplies

·        Participant support costs

·        Patient Care costs

·        Other direct costs

o   Publication costs

o   Consultant services

 

Cost sharing should only be included in a proposal when it is required by the sponsor and/or the perceived benefit of the proposed project is of sufficient strategic importance to warrant the commitment of institutional funds.

 

Once cost sharing is mentioned in a proposal, whether it is mandatory or voluntary, it becomes a commitment to the university.  It is important to remember that once the grant is awarded, all cost-sharing amounts are subject to audit; therefore, proper documentation must be kept.

The following items cannot be charged to a federal award and should not be included in the project budget submitted to a federal sponsor:

·        postage unless the project has a separate and extraordinary need for postage, such as a national survey to be conducted by mail;

·        office supplies;

·        personal computers, unless a special scientific justification is provided;

·        individual membership dues to societies;

·        basic telephone service, local line and equipment charges, and local phone calls;

·        clerical/administrative salaries, unless properly justified and documented.

 

The Grant Accounting Office maintains a quick reference for Sponsored Projects Expenditures.

The Budget Justification is a narrative that provides additional detail on line items in the budget. Sections should be included for Personnel, Equipment, Travel, and any other budget categories that may require explanation. If the budget includes costs of questionable items, these must be justified explicitly. Equipment expenses also require careful delineation, since the sponsor approves individual line items in this category.

NIH requires that proposals requesting $250,000 or less in direct costs per year be submitted as “modular grants.” Funds are requested in $25,000 increments, or “modules,” based on an internal detailed budget that is not sent to the funding agency. Ordinarily the same number of modules should be requested in each year of the award period. Additional restrictions and guidelines are outlined on NIH's website.

 

Key points include:

·        The budget narrative must include ALL personnel by position, role, and level of effort. This includes consultants, personnel on any Consortium/Contractual arrangements, and any “to be appointed” positions.

·        Any variation in the number of modules requested must be explained in the budget justification. Equipment costs should not be explained unless they result in a variation in the number of modules being requested.

·        The inclusion of a subaward does not preclude using the modular submission format. In such cases the proposal should include a statement of intent to establish a consortium between the participating institutions. The subawardee should provide the PI sufficiently detailed (non-modular) budget information so that the cost of the consortium agreement (which includes the subawardee’s associated F&A costs) can be estimated to the nearest $1,000.