Budget Basics
for
Administrators
Sean Hine
Branch Chief
Office of Grants Administration
National Cancer Institute
June 2014
What we will be discussing:
 Let’s




discuss some logistics
How do you start the request?
Electronic submission
Discussion of costs
Overarching rules
 Types
of budgets
 Dive into the nitty-gritty – budget specifics
 Pre-award considerations
 After the award
We have an idea for a
project…now what?
 All
applications to the NIH must be in
response to a Funding Opportunity
Announcement (FOA)
 Be sure you understand the specifics of
the FOA

Including: period of support, type of
budget(s), limits in $ levels, additional
reporting, etc.
 Abide
by any provided submission dates
Welcome to the
electronic world!
 NIH
has completed the process of
transitioning all competing applications to
the electronic (SF 424) process


This includes multi-project proposals
More information at the following Guide
Notice:
http://grants.nih.gov/grants/guide/noticefiles/NOT-OD-13-075.html
 The
requirements may change from
mechanism to mechanism – be careful!
All about costs


A grantee is responsible for following and NIH for
ensuring that all cost considerations are met
Ensure your understanding of the applicable cost
principles

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
Particularly with the change to the uniform principles
Grantees may shape their own systems as long as the
principles are followed and the CFR standards are met
for financial management systems
Four tests for determining allowability:
1.
2.
3.
4.
Reasonableness
Allocability
Consistency
Conformance
Costs (cont.)

Differentiation between a Direct Costs and
Facility & Administrative (indirect) Costs



Directs – can be identified to a specific grant,
project, etc.
F&A – common or joint costs that cannot be
readily identified with a specific grant
More information including discussion on cost
transfers, reimbursement of F&A, specific items
of cost, etc. can be found at the following
within the NIH Grants Policy Statement:
http://grants.nih.gov/grants/policy/nihgps_20
13/nihgps_ch7.htm
Costs (cont.)
 It
is NIH’s responsibility as stewards of
Federal funds to ensure that a grantee’s
financial management systems are
adequate to receive support and that all
costs being requested within a proposal
are allowable

If we have any concerns, we will be in
touch!
Salary Cap
 Effective
Jan. 12, 2014, the salary cap for
Executive Level II has increased to
$181,500

Guide Notice announcing the change:
http://grants.nih.gov/grants/guide/noticefiles/NOT-OD-14-052.html
 This
level also applies to consortia
General Rules/Considerations
 Bona

A
Fide Need
In any request, please be sure that the
expenses you are including can be
reasonably expected to be expended in
the request time of support
budget tells NIH what is needed in terms
of $ for the proposed research. It is not
used to assess the merit of that research;
only accounted after the merit has been
established
General Rules/Considerations
(cont.)
 Cost


Sharing
Not required
Is assumed however when an expense is
listed but there is no reimbursement
requested (includes personnel contributing
effort exceeding the level of salary support)
 Application
requesting more than
$500,000 Direct Costs (exclusive of
consortia F&A) must seek permission from
NIH at least six weeks prior to submission

Understand the specifics of the FOA
General Rules/Considerations
(cont.)
 Well-funded
investigators should discuss
appropriateness and specific-Institute
policies prior to submission
 Responsibility for the Fiscal Management
of the award rests with the award
recipient and listed principal
investigator(s)
Types of budgets
 Modular
 Categorical/Itemized
 Inclusion
of consortia (modular &
categorical)
 Program specific:


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SBIR/STTR
Ruth L. Kirschstein National Research
Service Awards – Fellowship & Training
Research Career Development Awards
Modular Budgets



Availability of use is dependent on
mechanism: R01, R03, R15, R21, R34 and
others as identified on FOA
Application and associated review process
does not require a detailed (categorical)
budget
Capped at $250K direct costs per year
(exclusive of consortium F&A costs)


If you exceed $250K directs, you are moving to
the categorical budget request
If mechanism listed above, modular budget
must be used if at or below $250K
Modular Budgets (cont.)

Grantee should begin with a categorical
budget for all years to craft the “module”
request
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

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Module = $25K direct costs
General example: All five years of an R01
budget is $841,432. The average per year is
$168,286. Modular budget request per year
(rounding to next module) would be $175,000.
No escalation per year
Request may fluctuate if appropriate per FOA
or one-time expense (i.e. equipment) but it
should be justified
Modular Budgets (cont.)
 Full


justification on personnel
Personnel should include names, person
months and description of role
Include other information as you deem
appropriate to assist in clarification of
request
 Consortia
costs are calculated separately
but same justification (personnel)
requirements apply
Modular Budgets (cont.)
A



few more things:
If NIH needs further information, even a
detailed budget explanation, we may ask
for it
The NIH Salary Cap should be accounted
for in your calculation/estimate of the
number of modules needed
Be thorough in your personnel justification
Time for the details –
Categorical Budgets

Personnel


Indicate level of effort (calendar months)
Provide institutional base salary up to the NIH
salary cap




If salary exceeds the cap, welcome to include a
statement indicating as such in the justification
Apply applicable fringe benefit for position
Explain fluctuations in efforts!
Equipment


Generally, expected to be a one-time expense
Be sure to comply with institution’s definition of
equipment (NIH defines as $5K or more and an
expected life exceeding one year)
Categorical budgets (cont.)

Travel

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
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Dependent upon the needs of the research but
be sure it provides direct benefit to the project
Must be consistent with institution’s own travel
policies
Comply with Fly America Act:
http://grants.nih.gov/grants/policy/nihgps_2013
/nihgps_ch4.htm#fly_america_act
Participant/Trainee Costs

With exception of Training grants, this section
should be left blank unless specifically identified
within FOA
Categorical budgets (cont.)
 Other



Direct Costs
Highly dependent upon the type of
research being conducted – be realistic!
Must be well justified – explain fluctuations
and atypical expenses in the justification
section
Include tuition remission in this section
Categorical budgets (cont.)
 F&A



(indirect) costs
Be sure to follow the rate agreement in
place at the time of the application
explicitly
NIH will utilize whatever rate is in place at
the time of award
If the indirect cost base calculation is rather
complicated, it may be beneficial to
include a brief explanation in the
justification
Consortia Expenses

Modular budget

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
Categorical budget


May exceed the $250K direct cost limit only for
consortia F&A
May round to the nearest $1,000
Beneficial to explain the direct cost need per
year
Personnel justification still required
Detailed budget and justification similar to the
parent grantee required
Regardless, flow/pass-down rules are in effect!
Some Classic Mistakes
 Did
not request permission for submitting
application greater than $500K directs
 Modular with multiple consortia without a
clear idea as to how much is needed for
each site – we need to reflect their costs
including appropriate F&A too!
 Categorical budget does not justify
fluctuations
 Application indicates that the grantee is
going to take care of the PI’s salary BUT
when the award hits, not so much…
Some Classic Mistakes (cont.)
 The
listed calendar months when applied
to the base salary does not equate to
requested salary
 Base salary exceeds current salary cap
 Calendar months in budget differs from
justification
 Costs in budget differ from justification
 Indirect cost base calculation makes no
sense given rate agreement and costs
Reminder:
 If
you are submitting an R01 and the
request is:



At or less than $250K each year, use a
modular format
Above $250K in ANY year OR a foreign
(non-US) applicant, use a categorical
format
The $250K direct cost limit is exclusive of
consortia F&A
Special Programs
 The
following programs have individual
budgeting requirements:



SBIR/STTRs
NRSA
Career (K) awards
 Be
sure to comply with the specifics of the
FOA and the listed budget requirements
Pre-Award Costs

Costs associated with a project that are
incurred prior to the receiving of the NIH
Award


Allowable up to 90 days prior the start date of
a competing award



Remember – only the award is a guarantee of
the Federal commitment
Beyond 90 days requires prior approval
Cost considerations still apply
Incurred at the grantee’s own risk and
expense – no requirement of the Federal
government!
You got the $!! Now what?
 When




receiving the award, be sure to:
Check that it was sent to the correct
location
Ensure the funds are available in payment
management
Understand the level of support - $ and time
Account for any terms & conditions; keep
an eye out for any special restrictions on
funds
 Any
restricted funds must be tracked by the
grantee separately!
After the award (cont.)
 Funds

not matching what you asked for?
Study section cuts have been applied
 Can
discuss these with your awarding
Institute/Center for reconsideration

Funding policies have been put into place
 Not
appealable and most likely being applied
to all (i.e. you are not the only one!)

If there may be necessary changes, be sure
to discuss any potential changes in scope
to the project with the awarding
Institute/Center
After the award (cont.)




Build an internal budget utilizing the
information provided in the award
Again, be sure to track restricted funds
separately
Follow all regulations and policies
If you are encountering start-up issues that
may result in a large amount being unspent,
have a pro-active discussion with your NIH
staff

We are here to help!!
Last words…
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

This is all of our Federal tax $ at work – we
have a mutual obligation to take care of it
wisely!
There is a lot that goes into putting forward an
application and conducting reviews – ask
questions prior to help the process go
smoothly
For investigators, learn what a great resource
your own sponsored programs office can be
Resources
 NIH
Grants Policy Statement (10/13):
http://grants.nih.gov/grants/policy/nihgps_20
13/
 SF424
(R&R) Application and Electronic
Submission Information:
https://grants.nih.gov/grants/funding/424/
 NIH
Modular Research Grant Applications:
http://grants.nih.gov/grants/funding/modular
/modular.htm
Thank you!!
QUESTIONS???