Betty Farbman, Associate Director, Office of Sponsored Programs
Nancy Daneau, Associate Director of Research Administration Training &
Institutional Liaison
What we’ll cover….
 Resources and budget categories
 What can (or can’t) be charged to a sponsored project?
 Making the calculations
 How to treat and incorporate a budget from collaborator(s)
 F&A: what is it and why do we care?
 Cost sharing
 Justifying the cost estimate
 Tools and references
Common Budget Categories
 Direct Costs
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Salaries and Wages
Fringe Benefits
Equipment
Materials and Supplies
Travel
Consultant Services
Participant Support Costs
Patient Care Costs
Subcontracts
Other Direct Costs
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Tuition remission
Stipends
Rent
Human Subject Payments
 Facilities and Administrative (F&A)/Indirect Costs
Salaries and Wages
 Principal Investigator (PI) and Senior/Key Personnel
 Technicians (programmers, scientists)
 Post docs
 Graduate Research Assistants
 Undergraduate Students
 Administrative support (direct charge only when
allowable and justifiable)
Salaries and Wages
(cont’d)…
 To charge salary, individuals must be NYU employees
 External collaborators are not employees; correctly identify as consultants or
subawards
 PI must commit effort to conduct research or oversee project activities
 $’s requested for faculty and other key personnel must be in proportion to the
effort devoted to the project
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For key personnel, entering $0 dollars and no effort is unacceptable
Total dollars, equivalent to 100% effort may not exceed annualized salary
 Define effort in person months
 To convert percent of effort to person months:
 Utilize person-months/percent effort calculator found at:
grants.nih.gov/grants/policy/person_months_conversion_chart.xls
 On internal budgets, note both person months and percent effort
Salaries and Wages
(cont’d)…
 Check for agency limitations
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Ex: For NSF, no academic year salary may be charged
Summer salary across all NSF-funded grants may not exceed
two-ninths of academic year salary (2 summer months)
NIH imposes a cap on salaries charged to awards; refer to
http://grants.nih.gov/grants/policy/salcap_summary.htm for
current rates
Salaries and Wages
(cont’d)…
 To calculate amount of salary to be requested: multiply
person months x monthly base salary
 9 month appointments
 Divide 9 month base salary by 9, then multiply by the # of person
months devoted to project
 11 month appointments
 Divide 11 month salary by 11, then multiply by the # of person
months devoted to project
 12 month appointments
 Divide 12 month salary by 12, then multiply by the # of person
months devoted to project
 Salaries that span fiscal years should be “weighted” to
incorporate increases
Calculating salary across fiscal
years
 Project period 1/1/2008-12/31/2008
 Base Salary in FY’08 = $50,000
 Base Salary in FY’09 = $51,500 (3.5% increase)
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(12 month employee)
 Salary calculation
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Jan – Aug
= $33,336
 Calculation - 8 mos @ $4,167/mo
Sept – Dec
= $17,168
 Calculation – 4 mos @ $4,292
 Budget for project period = $50,504
Salaries and Wages
(cont’d)…
 To calculate salary on NIH proposals subject to the cap
 Salary for 9 month appt = $160,000
 Annualize to 12 months
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$160,000 / 9 = $17,777/month x 12 = $213,333
With salary for FY 07 capped at $186,600, monthly rate is
capped at $15,550 ($186,600 / 12)
Salary request for 2 person months in summer totals $31,100
($15,550 x 2)
Salaries and Wages
(cont’d)…
 Post-docs
 Years of experience in field typically drives rates for postdocs
 Check with Administrator or HR personnel for salary
rates specific to your school/dept
 For NIH NRSA institutional training grants and
individual fellowship applications
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NIH sets rates, based on years of experience, for post-docs
http://grants2.nih.gov/grants/guide/notice-files/NOT-OD07-052.html
Salaries and Wages
(cont’d)…
 Graduate Research Assistants
 Check with Administrator or HR personnel for salary
rates specific to your school/dept
 NIH maximum: zero level postdoctoral stipend
 In addition to salary, GRA’s entitled to tuition remission
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Goes in “Other Direct Costs” budget category
Rates
 FAS & CIMS: 37% of salary
 All Other Units: 51% of salary
Salaries and Wages
(cont’d)…
 Undergraduate Students
 Check with departmental administrator or HR
personnel
 Hourly rate must be at or above minimum wage
 Number of hours per week limited to 15-20 for enrolled
students
 May work full-time (35 hours) during breaks and
summer
 Not entitled to fringe benefits
Salaries and Wages
(cont’d)…
 Administrative Support
 Salaries of admin and clerical staff
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Generally part of the administrative portion of the
F&A/indirect cost pool and therefore not direct-charged
Exceptions:
 Major projects or center grants (defined in Exhibit C of OMB
Circular A-21, Cost Principles for Educational Institutions)
http://www.whitehouse.gov/omb/circulars/a021/a21_2004.htm
l#exc
 Projects requiring extensive data collection and analyses
 Conference grants requiring administrative support for making
extensive travel arrangements
Fringe Benefits
 Includes social security (FICA), retirement, unemployment, worker’s
compensation, health/life/disability insurance
 Fringe benefit rate applied to salary dollars requested for full-time, eligible
NYU personnel in proposed budget
 Portion of fringe benefits estimated in proposal budget tied to person-months
committed
 NYU’s federally negotiated fringe benefit rates
 9/1/2007 to 8/31/2008: 27%
 9/1/2008 to 8/31/2009: 27.5%
 Increases by .5 points per year thereafter
 Fringe should be weighted across fiscal years
 Ex: PI salary request = $25,000
 Fringe Benefits request = $6,750
 $25,000 x 27% = $6,750
Equipment
 Defined at NYU as:
 Acquisition cost of $3,000 or more per unit with at least one year
useful life
 Include fabricated items (even if individual components cost under
$3K)
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Defined as sum of individual parts to procure and build workable
equipment item
 On proposals to *federal sponsors*, do not request funds for
desktop computers, laptops unless justifiable due to nature of
project
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Deemed to be part of F&A/departmental research support
 Exclude from F&A/indirect cost assessment
Materials and Supplies
 Laboratory supplies
 Animals
 http://www.nyu.edu/uawc/doc/animalperdiemrate.pdf
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Software
Training/curricula/workbook materials
Publication/reprint costs
On proposals to *federal sponsors*, do not request funds
for general office supplies, local telephone charges,
postage, etc. unless justifiable due to nature of project
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Deemed to be part of F&A/departmental research support
Travel
Airfare, lodging, car rental, mileage if using personal automobile, per
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diem for meals
 Foreign travel: Fly America Act—use of U.S. air carriers required except
in exceptional circumstances
 Refer to Fly America Act:
http://acquisition.gov/far/current/html/Subpart%2047_4.html
 Provide detailed estimate
 Number of trips, number of days per trip
 Number of individuals traveling
 Destination and purpose
 NYU reimbursement rates
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Maximum Per Diem for Meals (unsubstantiated): $50 per day
Maximum Expenses for Lodging & Meals (substantiated): $350 per day
Business Mileage Rate: 48.5 cents per mile
Refer to guidance on travel reimbursements:
http://www.nyu.edu/cdv/site20/policies/busexp.html#travperm
Consultant Services
 External collaborators
 Provide expertise, service and support, and/or skills not found within
NYU’s permanent staff
 Do NOT utilize NYU resources, space, facilities, etc. to conduct work
 No employer/employee relationship exists
 Identify name, affiliation, hourly or daily rate
 No maximum, but must be reasonable, based on market value
 Estimate number of hours or days necessary
 Budget for travel costs if applicable, i.e. airfare, mileage, lodging, per diem
for meals, etc.
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Use NYU reimbursement rates
Participant Support Costs (specific to NSF)
 Transportation, per diem, stipends and other costs of
trainees for:
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Conferences
Meetings
Symposia
Workshops
 Trainees may NOT be employees
 Exception for NSF proposal budgets
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Local school districts where teachers are trainees
In this case, stipends may be categorized as participant support as long
as school district has accounting mechanism in place to track and report
stipends separate from salary
 Exclude from F&A/indirect cost assessment
Patient Care Costs
 If inpatient and outpatient costs are requested,
separate and provide detail for both
 Include
 Number of participants
 Estimated cost per day/per patient
 Expected number of visits/tests/trials
 Estimated cost per visit/test/treatment
Subawards and Subcontracts with
Collaborators
 Transfer of a substantive portion of the programmatic
effort to another organization/institution
 Statement of Work drives the budget
 Determine $ amount required by subrecipient to conduct assigned
portion of the work
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Include direct and indirect costs at subrecipient organization’s rates
 Collaborating institution’s total budget estimate (direct and indirect
costs) is shown as a direct cost on NYU’s proposed budget
 Assess NYU’s F&A/indirect rate on only the first $25K of
each subaward; remainder is excluded from indirect cost
assessment
Other Direct Costs
 Tuition Remission
 FAS & CIMS
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9/1/97 to (until further notice): 37% of salary
 All Other Units
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9/1/90 to (until further notice): 51% of salary
 Stipends
 NOT allowed on research grants
 Permitted on training grants and/or fellowships
 Different from salaries in that fellows are not NYU employees; they
are NYU trainees
 A set rate, no fringe benefits charged, no taxes withheld (yet income
reported via 1099)
 Used for living allowance
Other Direct Costs
(cont’d)…
 Rental expense (only if off-site facility is to serve as
project site)
 Specify rate per square foot and size of space needed
 Specify lease amount per month, annualize
 Human Subject Payments
 Funds given to subjects for following protocol
 Set amount for each visit
 Can be lump sum based on completed participation
Facilities and Administrative
(F&A) Costs
 Costs that can’t readily be identified with one specific
project
 Called F&A, Indirect, Overhead
 Cover a portion of institution’s operating costs including,
but not limited to:
 maintenance and management of research laboratories, libraries,
and other facilities
 departmental administration and support
 central administrative support including payroll, OSP, SPA,
University Animal Welfare Committee (UAWC), and University
Committee for Activities Involving Human Subjects (UCAIHS)
Facilities and Administrative
(F&A) Costs (cont’d)…
 Indirect cost rates are negotiated with NYU’s cognizant
agency DHHS and based on costs for research operations
incurred during the previous FY
 Rate applied to a modified total direct cost (MTDC) base
 MTDC = Total direct costs less:
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Capital equipment
Tuition remission
Subawards beyond the first $25,000
Participant Support Costs
 Apply stated rate to all proposal budgets unless F&A/indirect cost
limited to a set amount or percentage in sponsor guidelines
(sponsor policy must be in writing)
Facilities and Administrative
(F&A) Costs (cont’d)…
 On Campus
 Off Campus
 9/2005 - 8/2007 53.0% MTDC
 9/2005 - 8/2007: 26% MTDC
 9/2007 - 8/2008 53.5% MTDC
 9/2007 - 8/2008 26% MTDC
 9/2008 - 8/2009 54.0% MTDC
 9/2008 - 8/2009 26% MTDC
Per federally negotiated rate agreement with NYU’s cognizant
agency DHHS, dated July 2, 2007
Off-site rate used only when a preponderance of work is
taking place off-site and no NYU space or resources being
utilized
Refer to OSP website to obtain current rates
http://www.nyu.edu/osp/policies/basicinfo.php
Two Cents About Cost Sharing
 Costs of conducting a project borne by NYU and not charged to the
sponsor
 Most often in form of time and effort (salaries, fringe benefits, unrecovered
indirect costs only when approved by sponsor)
 NYU policy
 Cost sharing allowed only when mandated by sponsor in written guidelines
 Quantified
 Specified as percentage or person months in proposal
 = Voluntary committed cost sharing
 Must be tracked in separate cost sharing account, reported to sponsor and
included in organized research base for F&A calculation
 Unquantified
 Referenced in proposal or justification but not quantified
 =Voluntary uncommitted cost sharing
Two Cents About Cost Sharing
(cont’d)…
 Voluntary committed cost sharing
 Requires approval by Chair, Dean
 Has negative impact on NYU’s F&A rate
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Costs included in the organized research base portion of F&A
Results in lower F&A rate recoverable
 Voluntary uncommitted cost sharing
 Does not need to be quantified, tracked, or reported
upon
 No impact to the F&A base
Outside Support
 Third Party Contributions
 Cash
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Document commitment of financial resources by letter of
support stipulating amount and any restrictions
 In-kind
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Value of non-cash contributions
 Ex: value of volunteer services
Budget Justification
 Narrative to accompany the cost estimate
 Breaks down each category of cost
 Provides detailed explanation of how costs derived
 Quantify total costs of each line item and document cost
calculation
 Specify line items for each year and time frame during which you
expect they’ll be expended
 Elaborate on line items—use narrative form to justify necessity;
how costs will be used for successful project implementation
Hints and Tips
 Costs must be allowable, allocable, and reasonable
 A-21, Cost Principles for Educational Institutions
http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html#j
 NYU and sponsor policies
 Read the guidelines as they relate to budget development
 Comply with sponsor-imposed limits based on funds available
 Specify the budget period start and end dates
 Budgeting in the out-years
 Personnel (Salaries and Wages): Increase 3.5% each year
 Other than Personnel Services (OTPS): Increase 4% each year
 Tuition: Increase 5% each year
Hints and Tips
(cont’d)…
 Rules for federal sponsors differ from rules of foundations,
corporations, others
 Provides flexibility; it may be possible to direct charge items not
normally allowable under a federal award
 Agency specific instructions take precedence
 Put cost estimates into agency specific language or budget
format and forms as necessary
 Justification of costs should follow the order listed on
budget sheet
 Make it easy for reviewers to understand how cost estimate
derived by walking through details
Reference for Unallowable
Costs
 Per A-21, following are unallowable:
 Alcoholic beverages
 Alumni activities
 Bad debts
 Commencement or convocation costs
 Charitable contributions, donations, remembrances
 Development/fundraising costs
Unallowable Costs
(cont’d)…
 Entertainment costs: tickets to shows or sporting events,
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meals, lodging, rentals, transportation, and gratuities
associated with entertainment
Fines and penalties
Goods or services for personal use of employees
(including gifts)
Housing and personal living expenses of University
officers
Investment management costs
Lobbying
Unallowable Costs
(cont’d)…
 Cost overruns on other sponsored agreements
 Pre-award costs (unless approved by the sponsoring
agency or permitted under expanded authorities)
 Selling and marketing costs of any products or services
of the institution
 Student activity costs incurred for intramural activities,
student publications, student clubs
 Travel: First class tickets (unless extenuating
circumstances)
Questions?
Contact your Projects Officer in OSP
or
Betty Farbman – betty.farbman@nyu.edu
Nancy Daneau – nancy.daneau@nyu.edu
Permission granted for use
By Betty Farbman