Budget Information

In this time of extremely competitive research and decreasing funding, an accurate proposal budget with enough detail to demonstrate a clear idea of expenses will be very important in the evaluation process.

Best Practices for Preparing Budgets

  • Requesting funds for nonspecific budget categories such as "other" should be avoided so the budget looks well thought out.
  • The budget should include what is needed to carry out the project - no more and no less.
  • Inflated budgets look "padded" and can harm the chances for funding, while underestimating cost can harm the project if the award is made.
  • The concept of "lowest bidder" only applies to contracts, not grants, and even funding decisions for contracts are based on the overall quality of the proposed project not just the project with the lowest cost.

Budgets are monitored on several different levels. 

Total Cost

Level means that Facilities & Administrative (F&A) costs and direct costs can be rebudgeted without agency approval. For example, if equipment is budgeted in the proposal and then that piece of equipment is bought after the award is made, the cost could end up slightly higher or lower. If this is the case, to have all the funds available to spend, the equipment and F&A lines would need to be rebudgeted and agency approval would not be needed.

Total Direct

Level means all costs except F&A are direct costs so there are really two levels at the total direct level. Costs can be rebudgeted between these direct lines without approval; however, if it is necessary to rebudget F&A to cover some direct costs or for more F&A from the direct costs then agency approval is needed. If that same piece of equipment is bought and it comes out slightly higher or lower, then to have all the funds available, agency approval would be necessary to rebudget the direct costs (in this case the equipment line) and the F&A lines.

Budget Category

Level is the following; Personnel (includes Fringe Benefits), Operating, Waivers/Scholarships/Fellowships, Equipment and F&A. This would mean if more personnel costs were needed and less of the travel budget then agency approval would be necessary to rebudget.

Budget Line

Level means that the budget is monitored on each line. Each of the budget categories listed above have individual lines within those categories. For example, the Operating Category has many different lines some of which are travel, supplies, office supplies, postage, printing, repairs and many more. This would mean that if more travel budget was necessary and less in the supply line then agency approval would be necessary.

More detail on each budget category by budget line along with a budget disclaimer and some budget tips follows below under the Budget Justification section.

The budget justification is a very important part of any proposal budget. The justification explains in detail all of the proposal expenses shown in the proposed budget.

Listed below are budget line items by category with some listing specific wording than can be used and others will have notes and explanations.

Use the following wording at the end of each proposal budget justification. This disclaimer helps with reporting issues that could arise because of the detail submitted. It is to help alleviate work for the department in accumulating expenses at this great detail such as expenses per person, fringe benefits per person and for supplies listed by item etc.

"The Budget Detail is being submitted for proposal evaluation purposes only. Due to limitations within the University's accounting system, the system does not provide for accumulating and reporting expenses at the level of detail submitted."

Detailed Budget Justification Sample

Personnel Category

Personnel

The majority of the proposal budget will most likely be personnel costs, which consist of salaries and fringe benefits. For proposal purposes, salaries are broken into either key personnel or other personnel. If someone is listed as key personnel, any decrease of 25% or more on the project would need agency approval.

Salary costs are the actual expenses for personnel working on the project. These expenses are calculated by taking the employee’s institutional base salary and multiplying it by the percent effort that is proposed for the individual. An employee’s institutional base salary can be found by contacting the department administrator or Grants Management.

Here is a listing of the most common personnel listed in a proposal:

Principal Investigator

The first item under Personnel should be the cost of the time that the Principal Investigator (PI) or Project Director devotes to the project. Every project must have an eligible PI, and that PI must devote a specific amount of time to the project during the entire project period. Only a full-time faculty member or a full-time professional staff member may be named as the Principal Investigator or Co-Principal Investigator of a research proposal. A blank petition form can be found below:

Petition to Appoint Principal Investigator

Co-Principal Investigator

A sponsored project may have a Co-Principal Investigator (Co-PI), although NIH does not recognize a Co-PI. NIH can have a single PI or Multiple PI's and they also recognize a Co-Investigator.

Note: When UND faculty members are involved to a significant degree in the sponsored project they should be considered part of the project team, and their time should be shown in the proposal budget. Employees from entities other than UND should not be listed as personnel, as they are not employed by the University. These costs should be budgeted as either a subcontract or a consultant, both explanations below.

Project Coordinator

At times it is necessary to hire an individual to coordinate the various activities supported by the sponsored project. Many funding agencies will fund such a position if it is in support of programmatic activities. Beware of describing this position as administrative as it may be disallowed because of that description.

Graduate Students

Graduate students can provide valuable assistance to a sponsored project. It is recommended that the graduate student's tuition expense be included in the budget, as well as the graduate student's salary for working on the project.

Undergraduate Students

Students can also provide valuable assistance to a sponsored project, while at the same time being able to participate and learn from real life research, training, and service activities.

Overload

Federal guidelines prohibit grant funds from being used to augment faculty or staff member’s salaries above the level normally paid by the university. Overload is not allowed on sponsored projects at UND.

Listed below is an example of how the positions could be listed in the budget justification.

Name, Degree - Principal Investigator - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties.

Name, Degree – Project Role - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties.

Name, Degree – Postdoctoral Associate - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties.

Name, Degree - Graduate Student - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties.

Name - Undergraduate Student - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties.

Name, Degree – Secretarial/Clerical - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities, coordination duties, and specialties. Note: For an administrative role on a sponsored project there must be specific justification to demonstrate a major project or extraordinary service.

Fringe Benefits

Please use the following in any proposal to describe Fringe Benefits:

"Amounts shown for fringe benefits are estimates determined by historical data and are provided for proposal evaluation purposes only. Actual fringe benefit costs will be charged to the project according to each employee's actual benefits."

Fringe Benefits include worker’s compensation, TIAA & other annuity, health insurance, life insurance, disability insurance, social security taxes, unemployment compensation and the employee assistance program.

For proposal purposes, fringe benefits should be estimated using the following list or by calling Grants Management for an exact figure per person.

Faculty - 25% to 35%

Support Staff - 35% to 50%

Graduate Students - $120 per year

Other - Undergraduate Students are most often 0% due to exempt status and Part-time Temporary Employees are most often 8%.

Note: The estimates have been provided using the Payroll Office calculator and are based on an employee with five years of service to UND. If the employee’s spouse works for UND and pays for the household’s health insurance, the figures shown above are not valid. Keep in mind that even though fringe benefits are proposed based on a percentage of the employee’s salary, during the life of the project the actual fringe benefits for that employee will be charged to the project.

Operating Category

Travel - Domestic and Foreign

Travel to professional meetings and project sites as well as to meet with project partners is usually an allowable cost, but specific program guidelines always should be consulted. The funding agency may require project personnel to attend a meeting convened by the sponsor. These costs should be included in the budget and estimated on the basis of Sponsor and UND employee travel policies

Most often travel costs consist of registration costs, airline costs, vehicle costs, motor pool, lodging, per diem (meals), parking and taxi service. Please note that some agencies are very specific on what detail they want included in proposals and some want travel lined out by trip expenses. For any foreign travel, please be specific and list the possible foreign locations in the proposal because many agencies require specific approval for any foreign travel.

Supplies and Materials along with IT Software

Supplies for your project will generally include lab supplies such as glassware, plastic ware, chemicals, reagents, as well as project specific supplies. Many projects require the use of animals in their research. When animals are used in research, the costs associated with them include the purchasing of the animals as well as their housing per diem. At UND, the housing of animals is done at the UND Center for Biomedical Research; consult their website for current rates. Also included in this area is any software needed for the project and subscriptions. Costs for any subscriptions needs agency approval, so be sure to justify the cost.

Food and Clothing

Food needs specific agency approval and must be listed in BOTH the budget and the budget justification. Explain in detail the estimated expenses which fall in this category, why they are required for this project, as well as the estimated cost for each. Some of these expenses may include banquet and meeting food.

Office Supplies

Office supplies need specific agency approval. Sample wording follows and a justification will need to be added to the sample.

"Office supplies include items specifically related to the proposed project and may be such items as pens, pencils, paper clips, printer paper, toner cartridges, ink cartridges, notebooks, post-it notes, computer jump drives, presentation materials and other miscellaneous items required to complete the project."

Postage

Postage costs need specific agency approval. Sample wording follows and a justification will need to be added to the sample.

"Costs for postage represent regular, air and express mail required for the project."

Printing

Explain in detail the estimated expenses for printing, copying and duplicating costs.

IT Equipment and Minor Equipment < $5,000

Explain in detail the estimated expenses for computer, printer or office equipment less than $5,000 per piece. Be sure to justify the need for these expenses.

Rentals/Leases

Explain in detail the estimated expenses for aircraft rental/lease, equipment rental/lease, office equipment rental/lease, building rental/lease, land rental/lease, booth rental or meeting room rental costs.

Repairs/Equipment Service Contract

Explain in detail the estimated expenses for any repairs or maintenance agreements.

IT Communications

Telephone line charges and cell phone charges need agency approval. Sample wording follows and a justification will need to be added to the sample.

"IT Communication costs include telephone line charges, fax line charges, cell phone charges, other data or document transmission charges and long distance charges."

Dues and Memberships

Dues and memberships need agency approval. Give specific detail and justify the expenses.

Operating Fees

Explain in detail the estimated expenses for advertising, awards, rewards, prizes, freight, IT contractual services, licenses and participant fees. Most of these expenses need agency approval so be sure to give detail and justify the need for these expenses on the project.

Professional Fees

The Professional Fees line includes costs for services, speaker fees, lab work and consultant costs listed in the proposal. Consultants will be an outside party to perform a one-time event for review or analysis, as opposed to an ongoing relationship. These consultant costs will need to be included in the proposal budget. The external consultants are distinguished from project personnel by the limited roll they have on the project. Keep in mind that UND employees cannot be paid as consultants. They need to be paid salary and fringe benefits and shown in the personnel section of the budget.

Subcontracts

The ongoing use of an outside party to perform substantive work on your project is called a subcontract. Explain in detail the proposed subcontractors required to complete the project and show these costs in the proposal budget. Talk about why these particular subcontractors are required for this project, as well as the estimated cost for each subcontractor. If the work being provided by this outside party is not substantive or ongoing the work may be able to be paid as consultant costs. If there is some question, consult the guide titled Consultant vs. Subcontract.

Keep in mind also that if the work is testing or processing of samples and the outside party bills on a fee per sample basis and the work is not substantive, this work belongs in the Professional Fees budget line. Keep in mind that the following documents are required from each subcontractor before this proposal can be submitted by UND:

  • Authorized signature indicating willingness to participate in the project
  • Scope of work for the subcontract portion of work
  • Budget
  • Budget justification
  • Any other agency required forms

The supporting documents may or may not be included in the proposal according to specific agency guidelines. Each subcontract is listed as a separate line in the proposal budget, inclusive of any Facilities & Administrative Costs listed in each subcontract. Remember UND F&A Costs are calculated only on the first $25,000 of each subcontract.

Note: UND employees cannot be paid as a subcontractor. They must be paid through salary and fringe benefits and shown in the personnel section of the budget.

Scholarships and Fellowships Category

The cost of Tuition, Scholarships and Fellowships is budgeted in this area. Explain in detail the estimated expenses and project relevance. Sample wording for Tuition follows.

"Amounts shown for graduate tuition costs are estimates. The actual tuition costs will be charged to the project according to the student's resident status and number of credits taken per semester."

Equipment Category

Major equipment is defined as an individual piece of property owned by the University of North Dakota with a value of $5,000 or greater, which has a useful life of more than one year. This means that a piece of equipment that costs less than $5,000 will be budgeted as "Supplies" in the proposal. Explain in detail the estimated expenses which fall in this category, why they are required for this project, as well as the estimated cost for each piece of equipment. Funding agencies often are willing to fund equipment; however, the program guidelines will state if equipment is an allowable expense. If it is allowable, the equipment requested needs to be for programmatic purposes, not administrative. Generally equipment is requested in the first year of a project to allow for the use of the equipment throughout the length of the project period. Major items of equipment may also require installation and maintenance costs that need to be identified in the budget. Facilities & Administrative Costs are not figured on equipment purchases.

Facilities & Administrative Costs (Indirect Costs) Category

The total amount requested for Facilities & Administrative Costs is budgeted at a percent of the Modified Total Direct Costs (MTDC) according to the function of the project.

Please use the following wording:

"The Indirect Cost Rate included in this proposal is the federally approved rate for the University of North Dakota. Indirect costs are calculated based on Modified Total Direct Costs (MTDC), defined as the Total Direct Costs of the project less individual items of equipment $5,00 or greater, tuition remission, scholarships, fellowships, rental cost of the off-site facilities, patient care costs and subcontracts in excess of the first $25,000 for each subcontract award."

F&A Costs are real costs associated with the facilities and administration of sponsored project activities at UND. These costs are those less visible such as administration (Purchasing, Accounting, Grants & Contracts, Budget Office and more) and facilities (lab space, office space, electricity, heating, air conditioning, water, maintenance and more).

F&A rates are precisely calculated, audited and negotiated between the University and the federal government. F&A rates vary between the function of the project and if the project is on or off campus. For more information on rates, please go to the F&A Rates section under Proposal Resources.

If it is the funding agency’s official policy not to pay F&A Costs, or to pay these costs at reduced rate, UND will accept the agency’s policy on F&A Costs. A copy of their policy needs to be included with the proposal or on file when it is routed for signatures.

Keep in mind that if there are multiple schools within UND involved in the proposal, and F&A Cost is an allowable charge in the budget, an agreement on the distribution of the F&A Cost Rebate will need to be included with the proposal.

F&A Cost Return Distribution Letter Example

  • Make sure that the employee's institutional base salary amount is correct. If the project starts next fiscal year, make sure the salary takes that into account.
  • If you are proposing a multiple year project, make sure to increase the employee’s budgeted salary by 3-5 percent.
  • If you are proposing a project to the National Institutes of Health (NIH), the employee’s effort will need to be listed in terms of “Man-Months” instead of “Effort Percentage.” Here is a quick and easy list:
    • 5% FTE = .6 man months
    • 10% FTE = 1.2 man months
    • 15% FTE = 1.8 man months
    • 20% FTE = 2.4 man months
    • 25% FTE = 3.0 man months
    • 30% FTE = 3.6 man months
    • 35% FTE = 4.2 man months
    • 40% FTE = 4.8 man months
    • 45% FTE = 5.4 man months
    • 50% FTE = 6.0 man months
  • For Graduate Students, ask the Department Administrator for a current listing of Graduate Research Salaries. If not available, please contact Grants Management.
  • The PI may need to show a minimum effort percentage, per sponsor guidelines.
  • Make sure the PI shows an effort percentage, even if no salary is requested.
  • The cost of the PI’s time should be charged to the funding agency. It is not recommended that an employee show effort with no salary dollars associated.
  • Make sure all personnel show the correct fringe benefit rates.
  • UND employees are unable to be shown as consultants or subcontractors in the budget. They need to be budgeted as personnel.
  • If there are multiple departments involved, it is an option to include a split budget showing the budget for each department (this budget would not have to be submitted to the sponsor.)
  • If it is an NIH proposal, some personnel may need to follow the NIH Salary Cap guidelines.
  • If it is an NIH proposal, verify that any graduate students follow the NIH Graduate Student Compensation limitation.
  • If it is an NIH proposal, use the modular budget as required.
  • If there is a potential for program income, discuss this with Grants Management.
  • Expenses such as postage, office supplies, equipment, food, line charges, cell phones, memberships/subscriptions, overload, and administrative clerical salaries are normally unallowable. If these expenses are required for the project, make sure they are shown in both the budget and the budget justification.
  • Items $5,000 and over per piece need to be budgeted as "equipment", not supplies.
  • If equipment is budgeted, include an itemized equipment list.
  • If the project requires a subcontract, make sure that it is budgeted as such and that the subcontract forms have been completed and are included with the proposal.
  • If your project is to include a graduate student, it is recommended that the graduate student’s tuition be included in the budget, as well as their personnel costs.
  • Make sure the correct F&A Cost rate is being used.
  • If the project requires cost share, make sure that these costs are shown in the budget and that they are backed up with commitment letters.
  • Make sure the proposal budget adds up, and that it is rounded to the nearest dollar.

These sample budgets are separated out based upon the length of the project. Use them as a working document or use them as the actual budget if the agency does not have a form.

Detailed One Year Proposal Budget Sample

Detailed Two Year Proposal Budget Sample

Detailed Three Year Proposal Budget Sample

Detailed Four Year Proposal Budget Sample

Detailed Five Year Proposal Budget Sample