Presentation on theme: "Budget Preparation Office of Research N O T R E D A M E"— Presentation transcript:
1Budget Preparation Office of Research N O T R E D A M E U N I V E R S I T Y O FN O T R E D A M EBudget PreparationOffice of Research
2Elements of a BudgetThere are a number of elements that are important to building a budget. These include:Let’s explore each of these…Direct CostsCost SharingIndirect Costs
3Allowable 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:AllowableThose project costs that are eligible, reasonable, necessary, and allocable to the project.AllocableCosts 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.CostsMeaning: 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.
4Allowable and Allocable Costs The following are some examples:AllowableAdvertising – Recruitment & ProcurementConference & Convention Registration FeesContractual Services/ConsultantsEquipmentExpress MailFreight Related to Goods PurchasedHonoraria Payments to Study SubjectsLaboratory SuppliesPrinting, Binding, Publication, ReproductionSalaries/Benefits of FacultySalaries/Benefits of Graduate AssistantsStipendsTelephone Toll ChargesTravelNot AllowableAdministrative CostsAlcoholic BeveragesCovering Overruns on Other Sponsored ProjectsDonations and GiftsEntertainment CostsFines & PenaltiesFirst Class TravelFund RaisingGoods & Services for Personal UseLobbyingMemberships in Social & Civic ClubsOffice SuppliesOfficial Function – Receptions & EventsPostagePre-award Costs (unless approved by sponsor)SubscriptionsTelephone Equipment, Pagers, Cell Phones
5Direct Costs Task Definition What this Means Identify Direct Costs Direct costs are clearly identifiable costs related to a specific projectWhat this MeansIf 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.
6Participant Support Costs Direct CostsGeneral categories of direct costs include but are not limited to:Salaries and WagesEquipmentParticipant Support CostsTuitionFringe BenefitsSuppliesPublication CostsSub-ContractsContractual ServicesTravelComputer CostsRental Costs
7Direct 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)ExamplesPI (Principal Investigator)Co-PIPost Doctoral StaffGraduate Research Assts.Undergrad Research Assts.Exempt StaffNon-exempt StaffNOTE: 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.
8Direct 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 atExamplesFICA/Social Security taxesUnemployment insuranceWorker’s CompensationHealth, dental, life insuranceRetirement benefits
9Direct Costs Contractual Services Contractual services are the money that is paid to individuals who have been contracted to perform certain aspects of the research projectGenerally defined as consultative workNote: Consultants are required to provide their daily rate as part of the budget development processExamplesAny service directly relatedto the project
10Direct 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.ExamplesScientific and technicalComputer /software(dedicated to the project)Rental costsAlterations/Renovations forequipmentMaintenance 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.
11Direct CostsSuppliesSupplies (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 collectionChemicals, pharmaceuticalsGlasswareField suppliesCompressed gases andliquidsRadioactive materialSoftware directly associatedwith scope of workRare and precious metals &non-precious metalsAnimalsBooks and referencematerials dedicated toproject- Non-administrative supplies
12Direct 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.ExamplesAirfareGround transportationFuel costsLodging
13Participant Support Costs Direct CostsParticipant Support CostsThis 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.ExamplesStipendsTravel to/from trainingMeals during trainingLodging during trainingSpace rental costsMaterials/supplies fortraineesNote: Indirect Costs are generally not applied to Participant Support costs. Specific program guidelines should be referenced.
14Direct Costs Publication Costs The costs associated with disseminating research results from a particular projectThe 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.ExamplesDocumentingPrintingBindingCopyingJournal costsNecessary illustrationsData clean-upData storageIndexing of data/databasesSoftware development, etcIndexing of physicalspecimens, collections, etc
15Direct 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.ExamplesMainframe Computer TimeResearch Core ServicesLeasing equipmentComputer maintenanceand/or repairsNote: Must be directly related to project only.
16Direct CostsTuitionIt 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:ExamplesUndergraduate TuitionGraduate TuitionNote: 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.
17Direct 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.ExamplesUniversitiesOther institutions whomeet the subcontractorguidelines
18Direct 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.ExamplesSpaceEquipmentVehicles
19Direct Costs Other Direct Costs Any other cost directly associated with the project not attributable to the previous categoriesExamplesLease/rental of off-campus facilities- Consultant feesSubcontract costsPrintingSubject pay for survey, project participationReprints and page chargesConsortia feesPhotographyPostage / Printing / CopyingPhotocopy charges(if the volume is ‘beyond routine’ it is an unlikelyRepairs/maintenance (related to scientific-technicalcircumstance)equipment)Freight/express deliveries when needed to transport projectAnimal carematerial in a timely mannerLab testing servicesJustification/certification form required to be maintained withComputing network charges of dedicated computingthe invoice in the award fileequipmentTelephone:Recruitment of approved personnelLong distance (Project specific)Promotion of conference, workshop, seminarCellular (project specific, rare circumstances)Long Distance Telephone (including fax) toll chargesConsultantsLab, scientific, and field non-capital equipmentService Center ChargesLease/rental of vehicles and other equipment
20Participant Support Costs Direct CostsEach of these individual costs together equal the Total Direct Costs of the proposal budget.Direct CostsCost SharingIndirect CostsDirect CostsSalaries and WagesEquipmentParticipant Support CostsTuitionFringe BenefitsSuppliesPublication CostsSub-ContractsContractual ServicesTravelComputer CostsRental CostsTotal Direct Costs
21Indirect 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 MeansIf 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.
22Indirect Costs General categories of indirect costs include: General Administration (accounting, payroll, purchasing, etc.),Sponsored Project AdministrationPlant Operation and MaintenanceLibrary ExpensesDepartmental Administration ExpensesDepreciation or Use Allowance for Buildings and EquipmentStudent Administration and ServicesEtc.
23Indirect CostsIndirect costs cover a variety of different facilities and administrative costs (F&A) including the following examples:Administrative and clerical salaries, wages,Dues/membershipsfringe benefitsRecruiting costsGeneral purpose/admin. equipmentPublic relationsCopier, printerLegal and financial servicesOffice furnitureInsuranceComputerPrinting/photocopy chargesSoftware (e.g., Microsoft Office)FreightMaintenance contracts (admin. equipment)Postage (including express couriers)Maintenance and/or repairsComputing network chargesParts and supplies for admin. equipmentHeatingOffice SuppliesLightingGeneral computer costsOther utilitiesLab supplies (administrative)Telephone—basic service, installation, repair, and lineCustodial suppliescharges (including ATS, WATS, fax, pagers, Internet andFormscell phones)Books and reference materialsGeneral purpose non-capital equipment
24Indirect CostsIndirect costs are not figured individually like direct costs, but are figured as a percentage of total direct costs.Direct CostsCost SharingGeneral Admin.Sponsored Project Admin.Operation and MaintenanceLibrary ExpensesDept. Admin. ExpensesDepreciation or Use AllowanceStudent Admin. and ServicesEtc.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 CostsEquipmentParticipant Support CostsTuition
26Modified Total Direct Costs Indirect CostsThe Indirect Costs are then figured as follows:Modified Total Direct CostsxF&ARate=Indirect Costs
27Indirect CostsF&ARateThis rate is a percentage that has been negotiated between Notre Dame and the Department of Health and Human Services—Notre Dame’s cognizant agencyCheck 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.
29Indirect CostsIn 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.
30Cost 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 MeansNotre 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.
31Cost 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.
32Cost SharingCost 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 agreementUncommitted: 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.
33Cost SharingAll mandatory and voluntary cost sharing is identified in the budget.Direct CostsCost SharingIndirect CostsCost SharingMandatoryCost ShareVoluntary
34Cost SharingThe 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/
35NIH Modular BudgetsModular 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.
36NSF BudgetsJohn DoeThe 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.
40NSF BudgetsTo 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)
41NSF BudgetsTo calculate the total Direct and Indirect Costs, click here…
42NSF BudgetsWhen 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.
43Identify all your options Managing resourcesIdentify all your optionsLook ahead to deadlines for your next phase or next projectUse the right resource at the right time