1. Budget Preparation Office of Research N O T R E D A M E
U N I V E R S I T Y O F
N O T R E D A M E
Budget Preparation
Office of Research

2. Elements of a Budget
There are a number of elements that are important to building a budget. These include:
Let’s explore each of these…
Direct Costs
Cost Sharing
Indirect Costs

3. Allowable and Allocable Costs
But first, a word or two on allowable and allocable costs…
All costs associated with sponsored research must fall into both of these categories:
Allowable
Those project costs that are eligible, reasonable, necessary, and allocable to the project.
Allocable
Costs that are assignable or chargeable to one or more cost objective in accordance with the relative benefits received or other equitable relationships defined or agreed upon by contractual parties.
Costs
Meaning: The cost has to be clearly related to the scope of the research project within the parameters agreed upon by the researcher and the sponsor.

4. Allowable and Allocable Costs
The following are some examples:
Allowable
Advertising – Recruitment & Procurement
Conference & Convention Registration Fees
Contractual Services/Consultants
Equipment
Express Mail
Freight Related to Goods Purchased
Honoraria Payments to Study Subjects
Laboratory Supplies
Printing, Binding, Publication, Reproduction
Salaries/Benefits of Faculty
Salaries/Benefits of Graduate Assistants
Stipends
Telephone Toll Charges
Travel
Not Allowable
Administrative Costs
Alcoholic Beverages
Covering Overruns on Other Sponsored Projects
Donations and Gifts
Entertainment Costs
Fines & Penalties
First Class Travel
Fund Raising
Goods & Services for Personal Use
Lobbying
Memberships in Social & Civic Clubs
Office Supplies
Official Function – Receptions & Events
Postage
Pre-award Costs (unless approved by sponsor)
Subscriptions
Telephone Equipment, Pagers, Cell Phones

5. Direct Costs Task Definition What this Means Identify Direct Costs
Direct costs are clearly identifiable costs related to a specific project
What this Means
If a cost can be identified specifically with a particular sponsored project, an instructional activity, or another institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy, then it is most likely a direct cost.

6. Participant Support Costs
Direct Costs
General categories of direct costs include but are not limited to:
Salaries and Wages
Equipment
Participant Support Costs
Tuition
Fringe Benefits
Supplies
Publication Costs
Sub-Contracts
Contractual Services
Travel
Computer Costs
Rental Costs

7. Direct Costs Salaries and Wages
The money that is paid to personnel associated with the proposal.
Salaries and wages are related to effort.
Effort is defined as the portion of time spent on a particular activity expressed as a percentage of the individual's total activity for the institution, or as total months (calendar, academic, or summer) spent working on the project.
It’s also related to the appointment of faculty members contributing to the project—whether a faculty member has a 9- or a 12-month appointment impacts the way that salary is calculated.
Faculty on a 9-month appointment generally request summer salary in their grants (for June, July and August)
Examples
PI (Principal Investigator)
Co-PI
Post Doctoral Staff
Graduate Research Assts.
Undergrad Research Assts.
Exempt Staff
Non-exempt Staff
NOTE: Only individuals who are currently on Notre Dame’s payroll would be budgeted under the salaries/wages category. This category would not include extern-
al consultants and sub agreements.

8. Direct Costs Fringe Benefits
Fringe benefits comprise a normal and required direct cost category for most educational institutions. These costs need to be estimated for all employees proposed to work on a project. It comprises the employer-paid portion benefits and taxes for each employee. These costs are listed separately from the personnel salary on the proposal budget.
Notre Dame has specific percentages of salary it uses as fringe benefits rates, depending on the position of the individual. These rates are determined on a yearly basis by the University.
For the most current list of fringe benefit rates, please look at
Examples
FICA/Social Security taxes
Unemployment insurance
Worker’s Compensation
Health, dental, life insurance
Retirement benefits

9. Direct Costs Contractual Services
Contractual services are the money that is paid to individuals who have been contracted to perform certain aspects of the research project
Generally defined as consultative work
Note: Consultants are required to provide their daily rate as part of the budget development process
Examples
Any service directly related
to the project

10. Direct Costs Equipment
Equipment is defined as an item of property that has an acquisition cost of $5,000 or more and an expected service life of more than one year.
It is important to note that the acquisition cost of equipment includes modifications, attachments, and accessories necessary to make the property usable for the purpose for which it was purchased.
Allowable items ordinarily will be limited to research equipment and apparatus not already available for the conduct of the work.
General-purpose equipment, such as a personal computer and office furnishings, are not eligible for support unless primarily or exclusively used in the actual conduct of scientific research.
Examples
Scientific and technical
Computer /software
(dedicated to the project)
Rental costs
Alterations/Renovations for
equipment
Maintenance contract
(dedicated-equipment)
Note: Requires justification explaining the expenditure’s direct application to the federal award.
Indirect Costs are generally not applied to Equipment costs.

11. Direct Costs
Supplies
Supplies (and materials) are defined as tangible personal property, other than equipment, costing less than $5,000, or any other lower threshold consistent with the policy established by the proposing organization, used during the research project.
For some sponsors, cost estimates must be included for items that represent a substantial amount of the proposed line item cost.
Caution: Do not confuse supplies with equipment. While the wording seems similar, they play different roles in the research project and the budget.
Examples
- Research data collection
Chemicals, pharmaceuticals
Glassware
Field supplies
Compressed gases and
liquids
Radioactive material
Software directly associated
with scope of work
Rare and precious metals &
non-precious metals
Animals
Books and reference
materials dedicated to
project
- Non-administrative supplies

12. Direct Costs Travel The estimated travel costs for a proposal budget.
For many agencies, travel costs must be separated into domestic travel and international travel.
Additionally, there may be certain guidelines on what travel costs are allowable, depending on the sponsor. Research administrators should always check the program guidelines or with a program officer if they have questions.
Examples
Airfare
Ground transportation
Fuel costs
Lodging

13. Participant Support Costs
Direct Costs
Participant Support Costs
This budget category refers to costs for participants or trainees (but not employees) in connection with sponsored conferences, meetings, symposia, training activities and workshops.
For some educational projects conducted at local school districts, however, the participants being trained may be considered employees. In such cases, the costs must be classified as participant support if payment is made through a stipend or training allowance method. The school district must have an accounting mechanism in place (i.e., sub-account code) to differentiate between regular salary and stipend payments.
Examples
Stipends
Travel to/from training
Meals during training
Lodging during training
Space rental costs
Materials/supplies for
trainees
Note: Indirect Costs are generally not applied to Participant Support costs. Specific program guidelines should be referenced.

14. Direct Costs Publication Costs
The costs associated with disseminating research results from a particular project
The proposal budget may request funds for the costs of documenting, preparing, publishing or otherwise making available to others the findings and products of the work conducted under the grant.
Examples
Documenting
Printing
Binding
Copying
Journal costs
Necessary illustrations
Data clean-up
Data storage
Indexing of data/databases
Software development, etc
Indexing of physical
specimens, collections, etc

15. Direct Costs Computer Costs
For some sponsors, the cost of computer services, including computer-based retrieval of scientific, technical and educational information, may be requested. Generally, this is acceptable only where it is institutional policy to charge such as direct costs.
General purpose (word processing, spreadsheets, communication) computer equipment should generally not be requested.
Special purpose or scientific use computers or associated hardware and software, however, may be requested as items of equipment or supplies (based on the actual cost of the item) when necessary to accomplish the project objectives and not otherwise reasonably available.
Examples
Mainframe Computer Time
Research Core Services
Leasing equipment
Computer maintenance
and/or repairs
Note: Must be directly related to project only.

16. Direct Costs
Tuition
It is the current policy of Notre Dame to provide tuition waivers (through the Graduate School) for graduate student researchers funded on sponsored programs and may also be shown as cost sharing.
When using the value of a tuition waiver for cost sharing, care should be taken to use a tuition waiver value that accurately reflects the student’s expected course load.
When the sponsor specifically allows the budgeting of a program or institutional allowance that may be used to defray tuition costs (e.g., NSF IGERT) this cost should be included in the sponsor budget.
For more information visit the OR website:
Examples
Undergraduate Tuition
Graduate Tuition
Note: Be careful when using this as cost share because if the University fails to meet the guaranteed amount, severe financial repercussions may result and these must be resolved by the department and college.
Indirect costs are generally not applied to tuition costs.

17. Direct Costs Sub-Contracts
A subcontractor is a sub-recipient of proposal award funds.
To qualify as a subcontractor, the following must be met:
Subcontractor services are uniquely designed in response to each project and not provided commercially;
Subcontractor technical lead is usually a scientific collaborator, or even a co-Principal Investigator ("PI") on a project taking place at Notre Dame;
Subcontractor retains rights to intellectual property;
Subcontractor participates in development and execution of the statement of work;
Subcontractor's results are likely to be published in the scientific literature and/or subcontractor is likely to be co-author on a Notre Dame publication.
Examples
Universities
Other institutions who
meet the subcontractor
guidelines

18. Direct Costs Rental Costs
Rental costs are those that are project-specific and rented off-campus from a 3rd party.
Rental costs include any direct-costed rent of non-University owned space and the cost of maintenance, if it is included in the rental agreement.
This category does not include other kinds of rental or lease costs such as hotel rooms, equipment or automobiles. These other kinds of costs are direct costs subject to overhead.
Rent is automatically included in the On-Campus Facilities and Administration Costs and will be paid out of the Facilities and Administration (i.e., Indirect) Costs recovered.
Examples
Space
Equipment
Vehicles

19. Direct Costs Other Direct Costs
Any other cost directly associated with the project not attributable to the previous categories
Examples
Lease/rental of off-campus facilities
- Consultant fees
Subcontract costs
Printing
Subject pay for survey, project participation
Reprints and page charges
Consortia fees
Photography
Postage / Printing / Copying
Photocopy charges
(if the volume is ‘beyond routine’ it is an unlikely
Repairs/maintenance (related to scientific-technical
circumstance)
equipment)
Freight/express deliveries when needed to transport project
Animal care
material in a timely manner
Lab testing services
Justification/certification form required to be maintained with
Computing network charges of dedicated computing
the invoice in the award file
equipment
Telephone:
Recruitment of approved personnel
Long distance (Project specific)
Promotion of conference, workshop, seminar
Cellular (project specific, rare circumstances)
Long Distance Telephone (including fax) toll charges
Consultants
Lab, scientific, and field non-capital equipment
Service Center Charges
Lease/rental of vehicles and other equipment

20. Participant Support Costs
Direct Costs
Each of these individual costs together equal the Total Direct Costs of the proposal budget.
Direct Costs
Cost Sharing
Indirect Costs
Direct Costs
Salaries and Wages
Equipment
Participant Support Costs
Tuition
Fringe Benefits
Supplies
Publication Costs
Sub-Contracts
Contractual Services
Travel
Computer Costs
Rental Costs
Total Direct Costs

21. Indirect Costs Task Definition What this Means Identify Indirect Costs
Indirect costs are those costs related to expenses incurred in conducting or supporting research, or other externally-funded activities, but not directly attributable to a specific project.
What this Means
If a cost cannot be identified specifically with a particular sponsored project, an instructional activity, or another institutional activity, then it is most likely an indirect cost.

22. Indirect Costs General categories of indirect costs include:
General Administration (accounting, payroll, purchasing, etc.),
Sponsored Project Administration
Plant Operation and Maintenance
Library Expenses
Departmental Administration Expenses
Depreciation or Use Allowance for Buildings and Equipment
Student Administration and Services
Etc.

23. Indirect Costs
Indirect costs cover a variety of different facilities and administrative costs (F&A) including the following examples:
Administrative and clerical salaries, wages,
Dues/memberships
fringe benefits
Recruiting costs
General purpose/admin. equipment
Public relations
Copier, printer
Legal and financial services
Office furniture
Insurance
Computer
Printing/photocopy charges
Software (e.g., Microsoft Office)
Freight
Maintenance contracts (admin. equipment)
Postage (including express couriers)
Maintenance and/or repairs
Computing network charges
Parts and supplies for admin. equipment
Heating
Office Supplies
Lighting
General computer costs
Other utilities
Lab supplies (administrative)
Telephone—basic service, installation, repair, and line
Custodial supplies
charges (including ATS, WATS, fax, pagers, Internet and
Forms
cell phones)
Books and reference materials
General purpose non-capital equipment

24. Indirect Costs
Indirect costs are not figured individually like direct costs, but are figured as a percentage of total direct costs.
Direct Costs
Cost Sharing
General Admin.
Sponsored Project Admin.
Operation and Maintenance
Library Expenses
Dept. Admin. Expenses
Depreciation or Use Allowance
Student Admin. and Services
Etc.
Indirect Costs

25. - - - = Indirect Costs But first:
In order to determine the Indirect costs, the Modified Total Direct Costs need to be figured, as follows:
Direct Costs - - - =
Modified Total Direct Costs
Equipment
Participant Support Costs
Tuition

26. Modified Total Direct Costs
Indirect Costs
The Indirect Costs are then figured as follows:
Modified Total Direct Costs x
F&A
Rate =
Indirect Costs

27. Indirect Costs
F&A
Rate
This rate is a percentage that has been negotiated between Notre Dame and the Department of Health and Human Services—Notre Dame’s cognizant agency
Check to see Notre Dame’s most recently negotiated rate.
Cognizant Agency: To simplify relations between Federal grantees and awarding agencies, the US Office of Management and Budget (OMB) established the cognizant agency concept, under which a single agency represents all others in dealing with grantees in common areas. In this case, the cognizant agency reviews and approves grantees’ indirect cost rates. Approved rates must be accepted by other agencies, unless specific program regulations restrict the recovery of indirect costs. The cognizant agency for non-profit organizations is determined by calculating which Federal agency provides the most grant funding.

28. Indirect Costs

29. Indirect Costs
In some very specific instances, the F&A rate will be different than the negotiated federal rate.
Reference the program guidelines or consult with a program officer to identify these unique situations.
Waiving of Indirect Costs happens very rarely and under very strict circumstances.
Research administrators should speak with Director of Pre-Award regarding the waiving of Indirect Costs.

30. Cost Sharing Task Definition What this Means Identify Cost Sharing
Cost sharing, or "matching,“ refers to that portion of project or program costs is not borne by the funding agency. It includes all contributions, including cash and in-kind, that a recipient makes to an award.
What this Means
Notre Dame will sometimes “share” in the cost and pay an amount of money (or effort) towards a project as part of its funding. This is sharing is sometimes required by the sponsor and sometimes it is volunteered support by Notre Dame.

31. Cost Sharing Some Important Comments about Cost Sharing:
If the award is federal, only acceptable non-federal costs qualify as cost sharing and must conform to other necessary and reasonable provisions to accomplish the program objectives.
Cost sharing effort is included in the calculation of total committed effort.
Cost sharing is auditable and must be allowable under cost principles and verifiable to records.

32. Cost Sharing
Cost sharing can be identified within one of two categories:
Mandatory cost share: Cost sharing by the Notre Dame that is required by the sponsor.
Voluntary cost share: A contribution to a sponsored project or program offered by the PI (or by Notre Dame) but not required by the sponsor as a condition of obtaining the award. Voluntary cost sharing is classified as either committed or uncommitted.
Committed: defined as those resources that are committed and budgeted for in a sponsored agreement
Uncommitted: defined as university faculty effort that is over and above that which is committed and budgeted for but not charged to the sponsored agreement. Voluntary uncommitted cost sharing should not be recorded as organized research.

33. Cost Sharing
All mandatory and voluntary cost sharing is identified in the budget.
Direct Costs
Cost Sharing
Indirect Costs
Cost Sharing
Mandatory
Cost Share
Voluntary

34. Cost Sharing
The Office of the Vice President for Research has established some important policies that act as guidelines to help the research community at Notre Dame determine how to properly allocate and manage cost sharing.
These guidelines can be found at: procedures/procedures/cost-sharing-guidelines/

35. NIH Modular Budgets
Modular budgets are applicable to certain research grant applications to NIH requesting $250,000 or less per year for direct costs.
Modular budgets are simplified; therefore, detailed categorical information is not to be submitted with the application.
For all modular budgets, request total direct costs (in modules of $25,000), reflecting appropriate support for the project. There will be no future year escalations. A typical modular grant application will request the same number of modules in each year. Provide an additional narrative budget justification for any variation in the number of modules requested.

36. NSF Budgets
John Doe
The budget data should then be added for the budget period in the corresponding budget areas…
Note: The internal budget should contain all of the budget areas found in an NSF budget. Be sure to use the internal budget as a guide when entering data into FastLane. This will help to ensure accuracy.

37. NSF Budgets

38. NSF Budgets

39. NSF Budgets

40. NSF Budgets
To properly calculate the indirect costs, the F&A rate and the Modified Total Direct Costs (MTDC) must both be entered in the Indirect Costs section.
MODIFIED TOTAL DIRECT COSTS (MTDC)

41. NSF Budgets
To calculate the total Direct and Indirect Costs, click here…

42. NSF Budgets
When all budget data has been entered, the Calculate & Save button must be clicked in order to save all data. Once it has been saved, click the Go Back button and follow the same process for subsequent budget years.

43. Identify all your options
Managing resources
Identify all your options
Look ahead to deadlines for your next phase or next project
Use the right resource at the right time