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Budget Preparation Office of Research N O T R E D A M E

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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

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