Preparing a Proposal Budget
PAD Seminar
Jim Barbret
November 2010
Today’s Objectives/Agenda
• Discuss principles around building a proposal
budget
• Provide some tips for the standard categories
and “forgotten” costs
• Discuss how and when cost sharing comes into
play
• What rules govern my proposal budget?
• Demo WSU’s eProp application to develop the
proposal budget
Budget Building Principles
A budget should
• flow logically from the proposal's research and
methodology plans with a breakdown of costs per
year;
• accurately fit the work to be conducted; an
unrealistically lean or unduly inflated budget can
count heavily against a favorable review;
• be both an estimate and a firm offer on the part
of the University. After an award has been made,
renegotiation is difficult.
Budget Building Principles
• The proposal budget section has two
components: a financial budget and budget
justification.
• The financial budget presents each line item or
budget category
• The justification explains why each item is
necessary for the project.
Budget Building Principles
• Primary principle and driver – what do you need
to complete the proposed work?
• Build a budget based on this fact …. then apply
appropriate constraints/guidelines
• Remember – few Federal agencies define what is
allowable and the one that does define doesn’t
give grants!
• So it is up to you to “make the case” for your
costs
Constructing a Budget
Primary Categories
• Personnel – the salary, wages and fringe benefits
of the WSU staff working on the project
• Consultants – the costs of key experts (nonWSU) that will provide advice/consultation
• Equipment – what equipment must be procured
for this project
• Travel – what funds are needed to support the
travel associated with the project
Constructing a Budget
• Subawards and Consortiums – will a portion of
the work be awarded to a collaborator at a
different institution or entity
• Other – materials, supplies, publications, animals
and related costs, tuition for supported graduate
students, use of institutional cores or service
centers
• And, lastly, the Facilities and Administrative
(indirect) costs
The Personnel Section
• Salary should be calculated according to
proposed effort of the individual over the course
of the budget period.
• If there are significant fluctuations throughout
the budget period, they can be identified
• Otherwise, it is best to budget the effort based
on the entire budget period, normally a year.
• For nine-month employees, summer salary can
be requested for the effort planned for the
summer period.
Personnel Section
Include in the salary information:
• the individual's name and project role; TBN’s
are allowable for non-key personnel
• percentage of time that will be spent on the
project,
• present WSU base salary; for summer pay of 9month staff, use 1/3 of academic salary, and
• the amount to be charged to the grant. (a
calculation of bullets 2 and 3)
Personnel Section
• Fringe benefits are applied for all staff
• WSU uses a “composite rate” based on
employee class
• Rates are calculated and approved by DCA
annually
• There are currently 6-7 different rates, most
sponsored programs use 3-4 unique rates
• Rates can be found on the SPA website as well
as applied in eProp
Equipment
• First question – does what I want to buy fit the
classification of equipment?
• A cost greater than $5,000 and a usable life
greater than two years
• The budget should list the specific equipment
items and their estimated purchase
• Shipping and installation should be budgeted. If
installation involves substantial structural
changes, these costs should be budgeted as
renovations and alterations.
Equipment
There are two types of equipment:
•General purpose equipment refers to items not
limited to scientific or other technical use such as
office equipment, office furnishings, computers,
etc.
•Specialized equipment can be used only for
specialized scientific or technical purposes and is
allowable if it is needed to conduct the project.
The need should be fully explained in the budget
justification.
Equipment
• General purpose equipment typically is used for
multiple activities so it is inappropriate to charge
its entire cost to a single project. If it is
determined this type of equipment is required,
the need should be fully explained in the budget
justification.
• Equipment usage fees are considered “Other
Expenses” and should be captured in that
section of the budget
Travel
• Travel is allowed if it directly benefits the
project. Travel to research sites, sponsor
meetings, or conferences.
• When budgeting for travel, you should list the
trip purpose, destination, and number of
travelers as well as airfare, transportation, meals,
lodging, and registration fees.
• If your plan includes foreign travel, include
countries to be visited along with considerable
justification of the trip.
Other Direct Costs
• Materials and supplies encompass all
consumable or disposable items. Included in
this category are lab supplies, chemicals, etc.
• Printing and publications costs associated with
the dissemination of project results should be
budgeted. Tuition for graduate students can be
budgeted for when students are employed by the
project.
• For laboratory animal purchases, list the animal
species and number required. Costs of caring for
the animals should also be listed.
Facilities & Administrative Costs
• The F&A costs are expressed as a percentage of
the direct costs of the project.
• The appropriate rate and basis to be used is
driven by two characteristics of the program.
• First Characteristic - Is the project is conducted
“on-campus” or “off-campus”? The driving
factor here is where is the majority of the WSU
costs incurred.
• Second Characteristic – Is the activity to be
undertaken: 1) Instruction, 2) Research, or, 3)
Other Sponsored Activity
Applying Constraints and
Restrictions
• Does the program have a “cap” on the direct
costs? Revisit costs to get under the cap or,
perhaps “right size the work”
• Does the program have a cap on indirect costs?
Apply the programs indirect cost rate.
• Perhaps, we need to use cost sharing …
Cost Sharing
• Cost sharing (C/S) are real costs of the project
for which WSU will not be reimbursed
• Some programs require cost sharing or a
“match”
• The most common type of C/S is the effort of
the PI or other key personnel
• Second most common – the institution shares in
the acquisition of a piece of equipment
• If C/S is associated with a project, SPA will
establish a second index to capture the costs
Cost Sharing Myths
• Does it really help your proposal?
• If cost sharing is a requirement (mandatory), you
must in order to be eligible
• When it is “encouraged” (voluntary), be
reasonable. Remember, it is a cost to the
University and must be paid one way or another.
• Any commitment made in the proposal for
which reimbursement is not expected is cost
sharing
Who Makes the Rules
• For Federal projects, OMB Circulars A-21 and
A-110 are the driving costing principles
– All Federal agencies prescribe/abide to these
circulars … with their own nuance
– Example – NSF salary policy
• Circular A-21 does rely on institutional policy to
establish specific guidelines
• As part of WSU’s stewardship role, we interpret
the principles to meet our specific rules
The NIH Modular Budget
• In the 90’s, NIH introduced the modular
budget; it broke budgets into $25K modules
• Along with “expanded authorities”, it said that
they trust us to “do the right thing”
• To develop a modular budget, you must define
in the budget justification key personnel and
their level of effort; any equipment you wish to
purchase, and any subawardees you plan to use
• It did not remove budget rules; at award time
you must develop a category budget
WSU’s eProp
• eProp was implemented during the last year to
process proposal across campus
• One feature is a budget building tool
• The application calculates fringe and indirect
cost using institutional or program rates
• Upon completion, proposal is routed to
designated approvers for processing
• On to a demo …