|
|
| Proposals must include a budget, a detailed breakdown of the financial support requested from the sponsoring agency. The budget should reflect the best estimate of the costs requested to conduct the work outlined in other sections of the proposal.
Preparation Most sponsors provide detailed instructions for budget preparation; many provide budget forms or require a specific format. Always read the agency guidelines before preparing a proposal budget. Budgets for federal contracts and grants are to be prepared in accordance with Office of Management and Budget (OMB) Circular A-21, "Cost Principles for Educational Institutions." OMB A-21 identifies allowable direct cost categories and prescribes a standard distribution and allocation method for the recovery of F&A costs. Because OMB A-21 also establishes standards for consistency in the treatment of costs for institutional accounting, the A-21 regulations apply to grants, contracts, and other types of awards accepted by the campus. |
| Budget Categories |
|
Cost Categories Proposal budgets generally include two basic categories of costs: direct costs of the proposed project and facilities and administrative (F&A or indirect) costs. Both are real costs. Direct costs plus F&A costs equal total costs. Direct costs Direct costs are incurred in the performance of the project and must be directly attributable to the project and must be considered reasonable, allocable, and allowable. Direct costs include categories such as salaries, fringe benefits, consultant costs, equipment, supplies, travel, subagreements, alterations or renovations, and other costs. Resources Salaries and Wages For each project participant, list the:
For multiple-year budgets, include:
Resources for Salaries and Wages
Fringe Benefits Use either the composite rates compiled by the UC Office of the President or the actual rates if known. State if the budget uses published composites or are based on historical rates for the individual employees. Resources for Fringe Benefits Graduate Student Fees and TuitionGraduate student fees and tuition are considered fringe benefits in budgets to comply with campus cost accounting practices. Under MTDC, no indirect cost is applied. Resources for Fees and Tuition Consultant Costs Consultant fees may generally be paid only to individuals not employed by the campus or other UC campuses or UC labs who can provide special knowledge or advice necessary for the project. For each individual, specify the name, daily rate of pay, and number of days each consultant will be paid. Documentation supporting the reasonableness of the pay rate should be provided. Any costs of travel and per diem should be specified. Resources for Consultant Costs
Equipment The University defines equipment (purchased as of July 1, 1999) as items that cost at least $1,500 and and have a life expectancy of at least one year. The University threshold for equipment is changing from $1,500 to $5,000 effective July 1, 2004, with a two-year phase-in period. Equipment costing $1,500 or more projected to be received before July 1, 2006 should be included as equipment in the budget and excluded from MTDC. Equipment costing $5,000 or more projected to be received on or after July 1, 2006 should be included as equipment in the budget and excluded from MTDC.
Resources for Equipment
Supplies Supplies are expendable items under $1,500, specifically related to the project. The University threshold for equipment is changing from $1,500 to $5,000 effective July 1, 2004, with a two-year phase-in period. Items costing less than $1,500 projected to be received before July 1, 2006 should be included as supplies in the budget and included within the MTDC base. Items costing less than $5,000 projected to be received on or after July 1, 2006 should be included as supplies in the budget and included within the MTDC base.
Resources for Supplies
Travel Specify for each trip:
Resources for Travel Subagreements A subagreement (subcontract, subgrant, or subaward) must be included in the proposal when a portion of the project is to be performed at another institution or organization. The total costs for a subaward (the subrecipient direct costs and indirect (F&A) costs) are considered direct charges to the budget of the prime applicant. The proposal should incorporate documentation from each subrecipient's authorized official, including a complete itemized budget, with justification, a statement of work to be performed, and description of the subrecipient's qualifications to to that work, and include and a letter of commitment signed by the authorized official. The Berkeley campus requires a cover sheet and certifications signed by the subrecipient's authorized official. Subcontracts may require prior written approval of the sponsor.
Resources for Subagreements Alterations and Renovations Budgets may include essential alterations and renovations necessary to convert interior space necessary to adapt an existing facility or to install equipment. Routine maintenance and repair are generally not considered alteration and renovation expenses.
Other Direct Costs Use previous department and investigator experience when available. BAIRS reports can provide comparative data for estimates, and consult with faculty and staff colleagues for assistance. Always follow agency guidelines on direct costs in proposal budgets. Typical categories of other direct costs are listed below. On federally sponsored projects, clerical support, postage, local telephone costs, and memberships cannot be charged unless they are specifically approved by the agency.
Resources for Other Direct Costs
Indirect (Facilities and Administrative) Costs Indirect (or facilities and administrative (F&A) or overhead) costs represent those expenses that cannot be easily identified to any specific project, but that are incurred for common or joint objectives. Indirect cost elements include items such as operation and maintenance of facilities, including building depreciation, library expenses, space, utilities, payroll, accounting, and other services. Different rates are applied to on and off campus research, instruction, and other activities. The rates are negotiated with the federal government (UC Berkeley's cognizant federal agency is the Department of Health and Human Services) and applied to all projects regardless of the sponsor, unless the UC Office of the President has approved an indirect cost waiver. Some sponsoring agencies do not reimburse indirect costs at the full rate. The University will honor these exceptions when the organization has written guidelines or will provide a letter stating agency policy on payment of indirect costs. The Modified Total Direct Cost (MTDC) base upon which the federally negotiated rates are applied is derived by excluding certain costs from the direct cost total. At Berkeley, MTDC excludes equipment and fabrication of equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarship, and fellowships, as well as the amount of each subaward over $25,000. Not all sponsoring agencies may apply all of these categories to the MTDC; check the specific agency guidelines for instructions on budget calculation. Resources for Indirect Costs |
| Cost Sharing and Matching Funds |
Some funding agencies require the grantee institution to demonstrate its financial commitment to the project, or the commitment of other funding sources, by sharing the project costs. Cost sharing should be included in the proposal only when the sponsor requires cost sharing as a condition of applying for an award. Cost sharing must be documented in the same way as other charges. Unfulfilled cost sharing commitments or lack of documentation may result in a reduction of costs allowed against the sponsored project and a return of funds to the agency. Note: By using language in proposals that cites percentage of time, salaries, or specific levels of support, principal investigators can commit to cost sharing, even unintentionally. Any quantifiable cost offered in the proposal becomes a legally binding and accountable commitment of the Universiity upon award. For more information and for examples of language that may be used to address the issue of academic or programmatic contributions or support without creating a contractual and auditable commitment to cost sharing, see Cost Sharing Basics. Cost sharing funds may come from an outside source in the form of cash contributions, volunteer services, or donated property; from the University’s own funds (e.g., personnel effort without salary recovery); or from shared resources or facilities. If the award is federal, only acceptable non-federal costs qualify as cost sharing. Types of cost sharing
Matching funds, if required by the funding agency, are raised from non-federal outside sources to increase the level of support provided by the funding agency. Such funds must be identified by the donor or funding source for use as matching funds. Always follow agency guidelines when preparing budgets with cost sharing or matching funds; formats vary by sponsor. The simplest version of a cost-sharing budget has three columns: amount requested from sponsor, UC contribution amount, and total project costs (the sum of the first two columns). Resources for Cost Sharing
|
| Budget Justification |
The budget justification provides the rationale for proposed expenditures. The primary purpose of a justification is to provide support for the funds requested to ensure adequate funding. Follow agency guidelines to prepare budget justifications; requirements for the amount of documentation to support proposed costs and the detail of cost descriptions vary by sponsor. Major items to include in budget justifications:
|
| Sample NSF Budget |
This sample budget (PDF) for a National Science Foundation proposal includes related UC and NSF guidance for each budget section. Please note that this is provided as an example only and should not be used to prepare an actual budget. (Prepared by Nora Watanabe in the Vice Chancellor for Research Office.) |