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Basic Budget Building Research Executive Area. Please Note Rates used in this Tutorial are for example purposes only and may not be up to date. For current.

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Presentation on theme: "Basic Budget Building Research Executive Area. Please Note Rates used in this Tutorial are for example purposes only and may not be up to date. For current."— Presentation transcript:

1 Basic Budget Building Research Executive Area

2 Please Note Rates used in this Tutorial are for example purposes only and may not be up to date. For current rates, please see our Proposal Fact Sheet

3 Basic Budget Building This presentation is available on the www under “Basic Budget Building Tutorial” at All underlined entries herein are hyperlinks to other resources. You are invited to use and share this presentation and to follow the links for additional important information

4 First Steps Contact OGCA by sending an to the pre-award research administrator responsible for reviewing your proposal. Let them know the deadline and provide the URL for program guidelines.pre-award research administrator Review Sponsor guidelines for any costing rules that could include: Ceilings on requested amount Indirect cost limits Cost-share requirements Direct cost restrictions (no equipment for example) Consult OGCA Fact Sheet for current ratesOGCA Fact Sheet Identify sponsor forms Build your budget using this basic budget building tutorial as a starting point. Contact OGCA with any questions.

5 Two Major Budget Components Direct Costs: Direct Costs: The costs that are directly attributed to the project. Examples include salary, supplies, equipment, etc. Facilities and Administrative Costs (F&A). Facilities and Administrative Costs (F&A). (Indirect Costs or Overhead): Pooled costs UMass incurs in support of Sponsored Activities not directly attributable to any one sponsored project. F&A is assessed as a percentage of direct costs.

6 Two Types of Direct Costs Personnel Personnel (Salaries and Fringe Benefits) Non-Personnel Non-Personnel

7 Personnel Faculty Salaries Academic Academic Summer Calendar

8 Academic Year (AY) Salary Consult with your department head to determine how much time you are allowed to dedicate to research projects. Personnel effort on all ACTIVE awards plus teaching load cannot exceed 100%. In other words, 100% summer salary (14 weeks) + committed academic year research effort (up to the maximum percentage allotted for research by your department during the academic year) + Teaching load + other obligations = 100% Academic Year (AY) salary is based on a 9 month appointment AY salary charged to the sponsor is assessed the full fringe benefits package. The exception to this is the non-tenure track research professor -- this can be non-benefited

9 Academic Year Salary (Cont’d) Some sponsors (e.g. NSF) do not allow payment of academic year salary without strong justification (strictly research appointments, etc.)

10 Academic Year Salary Sample Calculation To charge 11% (1 month) of an academic salary of $65,000: 11% X $65,000 = $7,150 Show basis of effort according to sponsor preference, usually represented as either % of effort or monthly. NSF and NIH require that effort be reported in months.

11 Personnel Budget Detail Academic Salary Cost TypeCostFringe Personnel Principal Investigator (1 month or 11% academic year) $7,150 Total $7,150

12 Fringe on Academic Year Salary Group Insurance & Retirement: 29.37% Worker’s Comp., Unemp., & Univ. Health: 1.67% FICA (Medicare): 1.45% (applicable only if hired after 4/86) Health & Welfare: $13 per week

13 Academic Year Salary Sample Fringe Calculation Group Insurance 29.37% X $7,150 = $2,100 Worker’s Comp, etc. 1.67% X $7,150 = $119 FICA (Medicare) 1.45% X $7,150 = $ weeks (AY) X $13/wk X 11% = $54 Total Fringe = $2,377

14 Fringe Budget Detail Academic Year Fringe Cost TypeCostFringe Personnel Principal Investigator 11% academic year $7,150$2,377 Total $7,150$2,377

15 Personnel Faculty Salaries Academic Summer Summer Calendar

16 Faculty Summer Salary Federal: Those faculty with Academic Year (AY) appointments can receive an additional 33% of their base Salary as summer salary. For example if AY Base Salary is $100,000, then an additional $33,000 can be charged as summer salary. The summer monthly pay rate is based on the 9 month academic year salary (AY Base/9). NSF permits only 2/9’s, the equivalent of 2 month’s salary. Industrial and Foundation: Pay rate unrestricted – negotiated with sponsor Personnel effort on all ACTIVE awards plus teaching load cannot exceed 100%. In other words, 100% summer salary (14 weeks) + committed academic year research effort (up to the maximum percentage allotted for research by your department during the academic year) + Teaching load + other obligations = 100%

17 Faculty Summer Salary Sample Calculation Annual salary = $54,000 Monthly salary= $54,000/9 = $6,000/mo 2 months of summer salary = $12,000 charged to the project Show basis of effort according to sponsor preference, usually represented as either % of effort or monthly. NSF requires by month, NIH by person-months

18 Personnel Budget Detail Summer Salary Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000 Total $19,150$2,377

19 Faculty Summer Salary Sample Fringe Calculation If PI hired before April 1, 1986 Worker’s Comp. = 1.67%(Summer Salary) If PI hired after April 1, 1986 FICA = 1.45% Worker’s Comp. = 1.67% 3.12% For the sample budget, assume the latter: 3.12% X $12,000 = $374

20 Personnel Budget Detail Summer Salary Fringe Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Total $19,150$2,751

21 Personnel Faculty Salaries Academic Summer Calendar Calendar

22 Faculty Calendar Year Appointment Some faculty have calendar year appointments – 12 months Full fringe is assessed; same as academic appointments Additional compensation can only be charged to Non-Federal sources and with Dean and Provost written approval - only FICA & Worker’s Comp. are charged for fringe

23 Personnel Faculty Salaries Summer Academic Calendar Other Professional (Programmer, Technician, etc.) Other Professional (Programmer, Technician, etc.)

24 Other Professional Sample Calculation Calendar year employees: Sample annual salary = $30,000 Calculating effort on a % basis: 30% X $30,000 = $9,000 Calculating effort on a monthly basis: $30,000/12 months = $2,500/month; $9,000/$2,500 = 3.6 months Additional compensation: professional and classified staff can be budgeted up to an additional 12% salary from Non-Federal sources on top of their base annual with Dept. Head and Dean approval. Must be clearly noted in the budget as “Add comp” – consult with Human Resources for allowability.

25 Personnel Budget Detail Other Professional Salary Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 mos (30% CY effort) $9,000 Total $28,150$2,751

26 Other Professional Sample Fringe Calculation Assessed at full fringe rates Fringe (29.37%) + Worker’s Comp (1.67%): 31.04% $9,000 x.3104 = $2,794 Health & Welfare $13/week or $676 annually 30% effort x $676 = $203 FICA (if hired after 4/1/86) 1.45% $9,000 x.0145 = $131 Sick leave Bank (new).18% $9,000 x.0018 = $16 Total Fringe = $2,794 + $203 + $131 + $16= $3,144 for this example

27 Personnel Budget Detail Other Professional Fringe Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 mos (30% CY effort) $9,000$3,144 Total $28,150$5,895

28 Personnel Faculty Salaries Summer Academic Calendar Other Professional (Programmer, Technician, etc.) Graduate Student Graduate Student

29 Graduate Student Stipend Stipend - Minimum Graduate Stipends are set by academic areas, per student contracts. For a memo regarding specific minimum student stipends click here: Minimum Graduate Student Employee Stipends Example: for a graduate student hired in 2007 for 20 hrs per week both academic and summer: 20 hours per week X 52 weeks = 1040 hours 1040 X $18.25 = $18,980

30 Personnel Budget Detail Graduate Student Stipend Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9,000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,980 Total $47,130$5,895

31 Graduate Student Sample Fringe Calculation GEO Health Fee: assessed at $3.92 per hour The following examples reflect typical appointments: $2,979: 20 hours/wk X 38 weeks academic = 760 hrs X $3.92/hr $4,077: 20 hours/wk X 52 weeks = 1,040 hrs x $3.92/hr $5,174: 20 hours/wk X 38 weeks academic + 40 hours/wk X 14 weeks = 1,320 hours x $3.92/hr

32 Graduate Student Fringe Sample Fringe Calculation (cont’d) Health & Welfare $12/wk per student $624 for 52 week year $456 for 38 week academic year $168 for 14 week summer $624 this example

33 Graduate Student Sample Fringe Calculation (cont’d) Summer Student Payroll FICA If not enrolled in classes: 1.45% summer payroll (14 weeks) $18,980/52 wks = $365/wk $365 X 14 wks = $5,110/summer 1.45% X $5,110 = $74 $74 for this example

34 Graduate Student Sample Fringe Total GEO Health Fee$4,077 Health & Welfare$ 624 Summer Student FICA$ 74 Total$4,775 NOTE: Curriculum fee is assessed on all academic year grad student appointments but not budgeted as fringe -- see “Other” for more info

35 Graduate Student Fringe Calculation It is important to understand how the fringe calculation is done, however we have constructed a Graduate Student Fringe Calculator to make it easier. It also calculates the Curriculum fee.Graduate Student Fringe Calculator

36 Personnel Budget Detail Graduate Student Fringe Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9,000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,980$4,775 Total $47,130$10,670

37 Personnel Faculty Salaries Summer Academic Calendar Other Professional (Programmer, Technician, etc.) Graduate Student Postdoctoral Fellow Postdoctoral Fellow

38 Postdoctoral Fellow Salary is determined by what the market will bear in a particular field and is usually figured on an annual basis. Check with your Department Head for prevailing rates $35,000 per year this example

39 Personnel Budget Detail Postdoctoral Fellow Salary Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9,000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,980$4,775 Postdoc – Calendar Year 12 months (100% CY effort) $35,000 Total $82,040$10,670

40 Postdoctoral Fringe UMass requires the budgeting of health insurance for postdocs by either providing: 1) The full benefits package – includes group insurance and retirement 2) Budgeting for the postdoc health plan – no retirement

41 Post Doc Fringe (cont’d) 1) Full benefits: Group Insurance & Retirement: 29.37% Worker’s Comp., Unemployment, & Univ. Health: 1.67 FICA (Medicare): 1.45% (applicable if hired after 4/86) Health & Welfare: $13 per week Sick Leave Bank (new):.18% 29.37% X $35,000 = $10, % X $35,000 = $ % X $35,000 = $ weeks X $13/wk = $ % X $35,000 = $63 Total Fringe = $11,759

42 Postdoctoral Sample Fringe Calculation (cont’d) 2) Postdoc Health Insurance plan: Fellow only $182/mo Fellow and child(ren) $509/mo Fellow and spouse $636/mo Fellow, spouse & child(ren) $963/mo 12 months X $182/mo = $2,184 Worker’s Comp and FICA are assessed as well: 1.67% X $35,000 = $ % X $35,000 = $508

43 Postdoctoral Sample Fringe Total Postdoc with health (no-retirement): Worker’s Comp$584 FICA$508 Health Insurance $2,184 Total $3,276

44 Personnel Budget Detail Postdoctoral Fellow Fringe Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,890$4,775 Postdoc – Calendar Year 12 months (100% CY effort) $35,000$3276 Total $82,040$13,946

45 Personnel Faculty Salaries Summer Academic Calendar Other Professional (Programmer, Technician, etc.) Graduate Student Postdoctoral Fellow Secretarial Secretarial

46 Secretarial The direct charging of secretarial services on federally supported projects is allowed only under a limited number of scenarios. Secretarial salary can be charged to non- federal projects with less stringent restrictions. See the policy statement and consult with OGCA proposal staff for guidance.policy statement OGCA proposal staff

47 Personnel Faculty Salaries Summer Academic Calendar Other Professional (Programmer, Technician, etc.) Graduate Student Post Doctoral Fellow Secretarial Undergraduate Student Undergraduate Student

48 Undergraduate Student Undergraduate Students are hired for varying numbers of hours per week The pay scale for undergraduates is determined by the job description and Human Resources guidelines 10 hrs/wk X 38 wks X $10/hr = $3,800

49 Personnel Budget Detail Undergraduate Student Pay Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,890$ 4,775 Postdoc – Calendar Year 12 months (100% CY effort) $35,000$3,276 Undergraduate – Academic Year 10 hrs/wk (50% AY effort) $3,800 Total $85,840$13,946

50 Undergraduate Fringe Undergraduate salary is not charged fringe. However, FICA is charged during summer employment if the student is not enrolled in summer classes. Fringe = $0 for this example since the student is working during the academic year.

51 Personnel Budget Detail Undergraduate Student Fringe Cost TypeCostFringe Personnel Principal Investigator – Academic Year 1 month (11% AY effort) $7,150$2,377 Principal Investigator - Summer 2 months (67% Summer effort) $12,000$374 Other Professional – Calendar Year 3.6 months (30% CY effort) $9000$3,144 Graduate Student – Calendar Year 20 hrs/wk (100% CY effort) $18,890$ 4,775 Postdoc – Calendar Year 12 months (100% CY effort) $35,000$3,276 Undergraduate – Academic Year 10 hrs/wk (50% AY effort) $3,800 Total $85,840$13,946

52 Non-personnel Consultants Consultants

53 Non-personnel Costs Consultants A consultant lends their expertise and advice in their given field without actually “working” on the project UMass personnel cannot be paid as consultants on UMass grants & contracts As of 1/1/07 NSF limits consultant daily rate to max of $577 per day. This rate can be used for guidance on other federal projects but is not a requirement. Basis for costing on non-federal grants is market drivenconsultant daily rate Reasonableness of consultant rate of pay –NSF maximum rate –as of March 15, 2006 has been eliminated BUT ONLY on new awards or new increments –if you have a standard grant funded with an earlier appropriation the maximum rate still applies Provide daily rate of pay in the budget – obtain from consultant – do not guesstimate, get exact rate

54 Non-personnel Budget Detail Consultants Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770

55 Non-personnel Consultant Equipment Equipment

56 Equipment Definition: $1,000 unit cost or more Non-expendable tangible property Useful life of 2 years or more Budgeting: List pieces of equipment separately showing unit cost Basis for costing: costing can easily be done on-line for items from laptops to centrifuges, or with familiar vendors. Avoid guesstimates

57 Non-personnel Budget Detail Equipment Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” MacBook Pro$2,799

58 Non-personnel Consultant Equipment Administrative Administrative

59 Non-personnel Consultant Equipment Administrative Administrative Administrative and Office Supplies Administrative and Office Supplies

60 Administrative Office & Administrative Supplies Definition: Pens, pencils, file folders, paper products, including photocopy paper, film, tape, etc., and small office machines under $100 Budgeting: Federal: strict limitations placed on ability to budget. NOT ALLOWABLE – consult with OGCA. Not included in sample budget for this reasonOGCA Non-federal: no limits - budget as needed Basis of costing: experience Range: $25 - $100, depending on size of project

61 Non-personnel Consultant Equipment Administrative Administrative Administrative and Office Supplies Administrative and Office Supplies Postage and Telephone Postage and Telephone

62 Administrative Postage & Telephone Definition: Overnight courier services, regular postage, telephone Budgeting: Must detail project related need and state ability to separately track these expenses from routine non- project expenses for auditing purposes Federal: telephone only for long-distance or for phone line entirely dedicated to the project with justification

63 Administrative Postage & Telephone (cont’d) Limitations on costing are not typically placed by non- federal sponsors Basis for costing: experience in related projects with costing scaled up or down depending on relative size of project. Check your records and/or bookkeeper’s for prior accounting on project of a similar size and type Typical range: $50 to $500; amounts vary depending on nature of the project

64 Administrative Postage & Telephone Sample calculation/justification Postage for mailing brochures : 200 X.41 = $82 Justification Mailing of brochures to candidates for participation in the study. Brochures explain guidelines and criteria. They are required to properly educate possible participants prior to screening. These costs are auditable and accounted for separately from non- project costs

65 Administrative Costs Postage & Telephone Calculation/Justification (cont’d) Telephone (long-distance): $200 Justification: Long distance phone calls required for follow-up with accepted participants to run initial interviews and to schedule and confirm appointments for participation. These costs are auditable and accounted for separately from non-project costs

66 Non-personnel Budget Detail Administrative (cont’d) Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” MacBook Pro$2,799 Administrative – Postage for mailing brochures Telephone (long-distance) $82 $200

67 Non-personnel Consultant Equipment Administrative Administrative Administrative and Office Supplies Administrative and Office Supplies Postage and Telephone Postage and Telephone Subscriptions, Membership Dues Subscriptions, Membership Dues

68 Administrative Subscriptions, Membership Dues Definition: Self-explanatory; costs must be allocable to a specific project and allowed by the sponsor Budgeting: Federal: strict limitations placed on ability to budget. NOT ALLOWABLE – consult with OGCA. Not included in sample budget for this reasonOGCA Non-federal: no limits - budget as needed. Should be explained/justified Basis of costing: current vendor rates Range: variable

69 Non-personnel Consultant Equipment Administrative Administrative Administrative and Office Supplies Administrative and Office Supplies Postage and Telephone Postage and Telephone Subscriptions, Membership Dues Subscriptions, Membership Dues Photocopying Photocopying

70 Administrative Photocopying Definition: Both on and off-campus project-related photocopying services Budgeting: Federal: Allowable on federal projects but only with thorough explanation and justification. Must detail project related need and state ability to separately track these expenses from routine non-project expenses for auditing purposes Non-Federal: no limits - budget as needed

71 Administrative Photocopying (cont’d) Budgeting (cont’d) Basis of costing: experience in related projects with costing scaled up or down depending on relative size of project. Check your records and/or bookkeeper’s for prior accounting on project of a similar size and type Range: variable

72 Administrative Photocopying justification Sample explanation/justification: Funds are budgeted for project-related copying expenses incurred in the dissemination of paper submissions, documents/reports, and meetings/presentations required by the sponsor. These costs are auditable and separately tracked from routine non-project expenses

73 Non-personnel Costs Consultant Equipment Administrative Administrative Supplies Supplies

74 Non-personnel Costs Supplies Consultant Equipment Administrative Supplies Supplies Laboratory supplies, chemicals Laboratory supplies, chemicals

75 Supplies Laboratory supplies, chemicals Definition : Laboratory supplies and chemicals allocable to proposed project Budgeting: List types and give subtotals for major items in the budget explanation as applicable Basis for costing: check with vendors or accounting records for prior costing on similar projects. If new to budget building, confer with more experienced colleagues. Avoid over-inflating costs Range: variable, $100 - $25,000 based on project size/type

76 Supplies Lab supplies/chemicals Calculation Lab supplies/chemicals: Chemicals: $5,000 Reagents: $1,000 Antibodies: $2,000 Enzymes: $500 Disposable lab supplies (pipettes, media agents, syringes, etc.): $300 Total: $8,800

77 Non-personnel Budget Detail Supplies Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” MacBook Pro$2,799 Administrative – Postage for mailing brochures Telephone (long distance) $82 $200 Supplies – Lab/chemical supplies$8,800

78 Non-personnel Costs Supplies (cont’d) Consultant Equipment Administrative Supplies Supplies Laboratory supplies, chemicals Computer supplies Computer supplies

79 Supplies -- Computer supplies Definition : Computer paper, diskettes, zip disks, toner, etc Budgeting: Federal:  Allowable with proper explanation and justification  Must detail project related need and state that these expenses are separately auditable from non-project costs Non-federal: no restrictions Basis for costing:  Check with vendors, accounting records, or colleagues for prior costing on similar projects  Avoid over-inflating costs Range: variable, $50 - $250 based on project size/type

80 Supplies Computer supplies Calculation/Justification Computer supplies: Cost: $200 Justification: Computer supplies are required for project related sponsor mandated reports. These costs are separately auditable from non-project costs

81 Non-personnel Budget Detail Supplies Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” Mac Book Pro$2,799 Administrative – Postage for mailing brochures Telephone (long-distance) $82 $200 Supplies – Lab/chemical supplies Computer supplies $8,800 $200

82 Non-personnel Costs Supplies The list of items in this sample budget under “Supplies” are not exhaustive but provided for illustrative purposes. Other costs that might arise are listed below for convenience. Click item for more information if hyperlinked Software, Software Upgrades, & Software Licenses

83 Non-personnel Costs Consultant Equipment Administrative Administrative Supplies Supplies Travel Travel

84 Non-personnel Costs Travel Definition: Airfare (domestic & foreign), per diem, hotel, conference registration, ground transportation (taxi/limo), car rental, mileage & tolls Budgeting: Federal:  Cannot charge business class or first class air travel  Must utilize U.S. flag carriers at the lowest available rates Non-federal: No airfare limitations

85 Non-personnel Costs Travel (cont’d) Budgeting cont’d. Basis for costing:  Airfare: check with travel agent or on-line service.  Domestic per diem and hotel: UMass limits per diem (food) charge on domestic travel at $40.00 per day ($50 for MA, NYC, DC). See federal per diem site for suggested domestic hotel costs or call your travel agent.per diemfederal per diem  Foreign: Use foreign per diem and hotel rates, actual expenses based on prior travel or check with travel agent and/or bookkeeper.foreign per diem and hotel rates,  Mileage: set at the IRS rate, currently (1/1/07) set at per mile.

86 Non-personnel Costs Travel (cont’d) Range:  $1,200 to $1,600 per domestic conference  $1,500 to $3,000 per foreign conference depending on location/duration  Non-conference travel costs vary significantly  Do not guesstimate  Build budget with information suggested under “Basis for costing” and provide explanation

87 Travel Calculation Domestic: Conferences in DC (two each for PI & RA)  Airfare: $550 X 2 (PI & RA) X 2 trips = $2,200  Hotel: $110 X 3 days X 2 X 2 = $1,320  Per diem: 3 days X $40/day X 2 X 2 = $480  Registration: $400 X 2 X 2 = $1,600  Mileage (to/from Bradley): X 70 miles X 2= $68  Ground transportation (to/from Dulles): $35 X 4 = $140 Total: = $5,808

88 Travel Calculation (cont’d) Foreign: Conference in Moscow (PI)  Airfare: $950  Hotel: 5 days X $191 $955  Per diem: 5 X $103 $515  Registration: $400  Mileage: (to/from Bradley): $68  Ground transportation: $150 Total: $3,038

89 Non-personnel Budget Detail Travel Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” Mac Book$2,799 Administrative – Postage for mailing brochures Telephone (long-distance)$282 Supplies – Lab/chemical supplies Computer supplies$10,050 Travel – Domestic: $5,808 Foreign: $3,038$8,846

90 Non-personnel Costs Consultant Equipment Administrative Administrative Supplies Supplies Travel Travel Subcontracts Subcontracts

91 Non-personnel Costs Subcontracts Definition: Generally, a subcontractor is defined as an organization, often another university, who helps carry out the activities of the proposed project by performing a portion of the research using their own facilities. They receive a proportional share of funding from the sponsor via UMass and will often charge their own indirect costs

92 Non-personnel Costs Subcontracts (cont’d) Procedures The following items must be provided to OGCA:  A letter signed by the subcontractor’s authorized signatory (OGCA equivalent)  Statement of work (subcontractor specific – does not include UMass effort)  Subcontractor budget and justification  Subcontractor Indirect Cost Rate and Fringe Rate Agreements (if subcontractor is budgeting them in their own budget)  Sole source justification

93 Non-personnel Costs Subcontracts (cont’d) Procedures (cont’d) The first four items should be handled by the subcontractor and forwarded to OGCA The sole source justification is completed by the UMass Principal Investigator. It explains why the subcontractor is uniquely qualified to carry out the work. Sole source justifications can be forwarded to OGCA via OGCA Subcontractors should use all sponsor forms and include any required certifications/assurances

94 Non-personnel Costs Subcontracts (cont’d) Budgeting: The subcontractor typically budgets for both Direct Costs (DC) and Indirect Costs (IC). Take the total of the DC and IC provided in the subcontractor budget and roll that total into your budget creating a line item called “Subcontracts” – see next slide for sample subcontractor budget. The subcontractor’s total costs are then rolled into the UMass budget under the “Subcontract” line item

95 Subcontractor Budget Sample Wassamatta U. subcontractCost 1. Salaries$10, Fringe$2, Equipment$2, Administrative$ Supplies$ Travel$2,500 Total Direct Cost$18,725 Total Indirect Cost (67% MTDC)$12,546 Total Cost$31,271

96 Non-personnel Budget Detail Subcontracts Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” MacBook Pro$2,799 Administrative – Postage for mailing brochures; Telephone (long-distance) $282 Supplies – Lab/chemical supplies; Computer supplies $10,050 Travel – domestic & foreign$8,846 Subcontract – Wassamata U.$31,271

97 Non-personnel Costs Consultant Consultant Equipment Equipment Administrative Administrative Supplies Supplies Travel Travel Subcontracts Subcontracts Other Direct Other Direct

98 Non-personnel Costs Other Direct Definition: the following items are often budgeted under “Other” but for the sample budget, only curriculum fee appears. Curriculum fee Equipment rentals, maintenance & repair Research animals and animal care charges Research animals Human subject payment Publication costs Participant support costs Do not use “Miscellaneous” as a line item Above items not intended to be exhaustive but are illustrative of common items budgeted in the “Other” category.

99 Other Direct Calculation Curriculum Fee The rate is $7.76/hr. (FY’08) per Graduate Student (GS)  1 GS X 20 hrs/wk X 38 wks X $7.76 = $5,897 Note:  No more than 760 hrs or $ 5,897 per GS will be charged in an academic year  Summer effort is not charged CF  Curriculum Fee is exempt from F&A

100 Non-personnel Budget Detail Other Direct Direct Cost TypeCost Consultant – ABC Advice, Inc. ($577/day, 10 days)$5,770 Equipment – 17” MacBook Pro$2,799 Administrative – Postage for mailing brochures; Telephone (long-distance) $282 Supplies – Lab/chemical supplies; Computer supplies $10,050 Travel – domestic & foreign$8,846 Subcontracts – Wassamata U.$31,271 Other Direct – Curriculum fee on graduate student$5,897

101 Total Direct Cost Cost typeCost Salaries$85,840 Fringe$13,946 Consultant$5,770 Equipment $2,799 Administrative $282 Supplies $10,050 Travel $8,846 Subcontracts $31,271 Other $5,897 Total Direct Cost$164,701

102 Two Major Budget Components Direct Costs Direct Costs Facilities and Administrative Costs Facilities and Administrative Costs

103 Facilities and Administrative Costs (F&A, overhead, indirect costs) Definition: F&A is calculated as a percentage of Direct Costs Rates vary depending on type of project, sponsor type, and project location (on-campus, off-campus); see fact sheet for specific rates. Consult with OGCA before budgeting either the “Off-campus” or “Other Sponsored Activities” or “Instruction” ratesoff-campusfact sheet OGCA If the sponsor’s F&A rate differs from the University’s, defer to sponsor mandated rates but provide OGCA with a copy of the sponsor’s guidelines supporting this restriction

104 Facilities and Administrative Costs (cont’d) Definition (cont’d) F&A is assessed either on a Modified Total Direct Cost basis (MTDC) or a Total Direct Cost (TDC) basis. MTDC simply means -- do not assess F&A (subtract them from the total before calculating F&A) on the following costs: Equipment ($1,000 or more unit cost) Tuition (for cost-sharing purposes) Curriculum fee Rental costs of off-site facilities Fellowships Subcontractor costs in excess of $25,000

105 Facilities and Administrative Costs (cont’d) Definition (cont’d) Total Direct Cost (TDC) means that the applicable F&A rate is assessed on the direct cost total. Every rule has an exception of course: never assess F&A on the curriculum fee Budgeting: Review sponsor guidelines and assess F&A costs as instructed. Confer with OGCA if unclear

106 Facilities and Administrative Calculation  Assume an on-campus research project for our sample budget with a 57% MTDC F&A rate. 57% is therefore assessed on the total direct direct costs less equipment, curriculum fee, and subcontractor costs in excess of $25K. Thus the MTDC base:  $164,701 - $2,799 - ($31,271- $25K) * - $5,897 = $149,734; multiply this by 57%:  $149,734 X 57% = $85,348 * some people find it easier to subtract the full subcontract amount and add $25k back in: -$31,371 + $25,000 Cost typeCost Salaries$85,840 Fringe$13,946 Consultant$5,770 Equipment$2,799 Administrative$282 Supplies$10,050 Travel$8,846 Subcontracts$31,271 Other$5,897 Total Direct Cost$164,701

107 F&A Budget Detail Cost typeCost Salaries$85,840 Fringe$13,946 Consultant$5,770 Equipment$2,799 Administrative$282 Supplies$10,050 Travel$8,846 Subcontracts$31,271 Other$5,897 Total Direct Cost$164,701 Total Indirect Costs$85,348 Total Cost$250,049

108 Cost-sharing Definition Definition: Cost-share is that part of the project’s costs borne by the University rather than the sponsor. Some sponsors require cost-sharing, often specific matching (such as 1:1 or 1:2) is required and other times agencies simply indicate that cost- sharing is recommended and will be a factor in the review and scoring of a proposal

109 Cost-sharing When allowable When to cost-share: When to cost-share To include cost-share in your proposal, sponsor’s written guidelines must either require it, or strongly suggest its inclusion. UMass policy does not allow for “voluntary” cost- sharing. If the sponsor doesn’t require it, cost-share must not appear in your budget. Do not provide shared costs from third party sources (Non-UMass, non-subcontractor). Confer with OGCA if third party share is required by sponsor.OGCA

110 Cost-sharing Allowable costs What to cost-share: If established that the sponsor requires or recommends cost share, only the following costs may be shared regardless of whether sponsoring agency is federal or non-federal: Salaries Fringe Equipment Subcontractor Tuition waivers Indirect costs NOTE: Cost share must be from UMass accounts, not from other grants or contracts, federal or non-federal

111 Cost-sharing Process All cost-shared amounts and their associated state ledger account numbers must be listed on the second page of the Internal Processing Form (IPF). This cost- share must also be authorized with a signature in the far right column, by the individual authorized to commit the shared funds, usually the Department HeadIPF

112 Cost-share Budgeting Salaries

113 Cost-share Budgeting Salaries: Shared salary must derive from UMass funds, not matched from other federal or non-federal grants Shared salary can be budgeted for UMass personnel with paid appointments. Exceptions to this rule: Faculty summer salary & emeritus faculty salary Salary is shared only for time specifically dedicated to the project during the proposed project period

114 Cost-share Salaries (cont’d) Cost-shared salary is typically shown as a percentage of the employee’s base appointment but can also be budgeted in weeks or months following the same rules of effort reporting as required for reporting time charged to the sponsor Keep in mind that personnel effort on all ACTIVE awards plus teaching load cannot exceed 100%. In other words, 100% summer salary (14 weeks) + committed (charged and cost-shared) academic year research effort (up to the maximum percentage allotted for research by your department during the academic year) + Teaching load + other obligations = 100%

115 Cost-share, salaries Sample calculation Prof. Grant wants to cost- share 1 month (11% AY) of his academic salary. Prof. Grant makes $65,000 per academic year 11% X $65,000 = $7,150 Show basis of effort according to sponsor preference, usually represented as either % of effort or monthly. Both NSF and NIH require effort shown in months. Cost TypeUM cost-share PI (11% AY)$7,150 Total Direct Cost$7,150

116 Cost-share, salaries Sample Calculation (cont’d) Regardless of whether funding is federal or non- federal, secretarial salary can be cost-shared at a minimum effort of 25% CY Secretary’s salary is $30,000/calendar year and will devote 25% to the project $30,000 X 25% = $7,500 Cost TypeUM cost- share PI (11% AY)$7,150 Secretary (25% CY)$7,500 Total Direct Cost$14,750

117 Cost-share Fringe Salaries Fringe

118 Cost-share, Fringe Sample Calculation on PI Academic Same rules apply for budgeting shared fringe as for charging to the sponsor: Group Insurance 29.37% X $7,150 = $2,100 Worker’s Comp, etc. 1.67% X $7,150 = $119 FICA (Medicare) 1.45% X $7,150 = $104 Health & Welfare 38 weeks (AY) X $13/wk X 11% = $54 Total Fringe: $2,377 Cost TypeUM cost-share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe PI$2,377 Total Direct Cost$12,577

119 Cost-share, Fringe Sample Calculation on Secretarial Same rules apply for budgeting shared fringe as for charging to the sponsor. If secretary benefited: Group Insurance 29.37% X $3,000 = $881 Worker’s Comp, etc X $3,000 = $50 FICA (Medicare) 1.45% X $3,000 = $44 Health &Welfare: $12 week X 52 weeks X 10% = $62 Sick Leave Bank (new):.18% X $3000 = $5 Total Fringe: $1,042 Cost TypeUM cost-share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe: PI$2,377 Fringe: Secretary$1,042 Total Direct Cost$13,569

120 Cost-share Equipment Salaries Fringe Equipment Equipment

121 Cost-share - Equipment Sample Calculation Criteria: Must be purchased exclusively for use on the project from UMass funds Must be purchased during the project’s anticipated period of performance Sample budget: Eye Tracker: $7,995 Cost TypeUM cost- share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe: PI$2,377 Fringe: Secretary$1,042 Equipment$7,995 Total Direct Cost$21,564

122 Cost-share Subcontract Salaries Fringe Equipment Subcontract

123 Cost-share, Subcontract Sample Calculation Subcontractor cost-share must be signed off by the sub’s OGCA. Shared items must be auditable. When applying UMass F&A on UMass shared direct costs, the subcontractor’s total shared cost, like equipment, is exempt. See slide on sharing F&A costs for further explanation. Sample budget: Sub contributes salary, fringe, and associated F&A costs: $4,175 Cost TypeUM cost-share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe: PI$2,377 Fringe: Secretary$1,042 Equipment$7,995 Subcontract$4,175 Total Direct Cost$25,739

124 Cost-share Tuition waiver Salaries Fringe Equipment Subcontract Tuition waivers Tuition waivers

125 Cost-share, Tuition Waivers Sample Calculation Tuition waivers are budgeted for graduate students whose salary is being charged or cost-shared to the grant Student stipends must be budgeted at a minimum of $2,682 per semester to receive a waiver Tuition waivers: $2, per semester Calculation for sample budget: 1 student X 2 semesters X $2, = $5,411 Cost TypeUM cost-share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe: PI$2,377 Fringe: Secretary$1,042 Equipment$7,995 Subcontract$4,175 Tuition waiver$5,411 Total Direct Cost$31,150

126 Cost-share Facilities and Administrative Costs (F&A, overhead, indirect costs) Salaries Fringe Equipment Subcontract Tuition waivers Facilities and Administrative Costs Facilities and Administrative Costs

127 Assess F&A on shared direct costs using same rate charged to sponsor. However, always use MTDC basis for sharing of F&A: equipment and tuition waivers are exempt from F&A assessment. In addition, do not assess F&A on subcontractor’s total shared costs. Sample calculation: $31,150 – ($7,995 + $4,175 + $5,411) = $13,569 X 57% = $7,734 Cost-share, F&A Sample calculation Cost TypeUM cost-share PI (11% AY)$7,150 Secretary (10%)$3,000 Fringe: PI$2,377 Fringe: Secretary$1,042 Equipment$7,995 Subcontract$4,175 Tuition waiver$5,411 Total Direct Cost$31,150 Total Indirect Cost$7,734 Total Cost Share$38,884

128 Total Budget Sponsor & UMass cost-share Cost typeSponsorUMassTotal Salaries$85,840$10,150$95,990 Fringe$13,946$3,419$17,365 Consultant$5,770 Equipment$2,799$7,995$10,794 Administrative$282 Supplies$10,050 Travel$8,846 Subcontracts$31,271$4,175$35,446 Other$5,897$5,411$11,308 Total Direct Cost$164,701$31,150$195,851 Total Indirect Costs$85,348$7,734$93,082 Total Cost$250,049$38,884$288,933

129 Budget Explanation and Justification A well-developed budget is accompanied by a budget explanation. A complete and realistic budget justification demonstrates that your project is well conceived. It also tends to minimize the chances that sponsors will arbitrarily reduce or eliminate budget categories. Sponsors have a good idea of what a project should cost, and generally know when you are over or under budgeting. Follow sponsor guidelines on minimum items required. Explanation and justification are synonymous terms except with federal grants where “Explanation” merely details what the cost item is while “Justification” conveys why a cost item – particularly “Administrative costs” – are allocable and necessary for the successful completion of the project.


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