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.
Use the below 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
"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
The majority of a proposal budget will often be personnel costs, which consist of
salaries and fringe benefits. For proposal purposes, salaries are broken into either
key personnel or other personnel.
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:
The first item under Personnel should be the cost and percent effort 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 PI of a research proposal.
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. Like PIs, only full-time faculty or Ful-time professional staff
may be listed as Co-PIs.
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.
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 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.
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
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%.
PLEASE 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.
PLEASE NOTE: 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 - Position / Role - 0% FTE
Explain what this employee will do during this project. Focus on responsibilities,
coordination duties, and specialties.
Other Direct Costs
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 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 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 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."
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.
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.
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.
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 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.
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 that if the subcontract project is testing or processing 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
- Authorized signature indicating willingness to participate in the project
- Scope of work for the subcontract portion of work
- 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
"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."
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
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 $5,000 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
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.
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
Keep in mind that if there are multiple schools within UND involved in the proposal,
and F&A Cost is allocated to the department that has the expense. Separate department
budgets or columns should be shown in an internal budget to be included with the proposal.
Other Tips for Budget Justification
- 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 justified in 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.