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Budget Basics for Administrators Sean Hine Branch Chief Office of Grants Administration National Cancer Institute June 2014.

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Presentation on theme: "Budget Basics for Administrators Sean Hine Branch Chief Office of Grants Administration National Cancer Institute June 2014."— Presentation transcript:

1 Budget Basics for Administrators Sean Hine Branch Chief Office of Grants Administration National Cancer Institute June 2014

2 What we will be discussing:  Let’s discuss some logistics  How do you start the request?  Electronic submission  Discussion of costs  Overarching rules  Types of budgets  Dive into the nitty-gritty – budget specifics  Pre-award considerations  After the award

3 We have an idea for a project…now what?  All applications to the NIH must be in response to a Funding Opportunity Announcement (FOA)  Be sure you understand the specifics of the FOA  Including: period of support, type of budget(s), limits in $ levels, additional reporting, etc.  Abide by any provided submission dates

4 Welcome to the electronic world!  NIH has completed the process of transitioning all competing applications to the electronic (SF 424) process  This includes multi-project proposals  More information at the following Guide Notice: files/NOT-OD html files/NOT-OD html  The requirements may change from mechanism to mechanism – be careful!

5 All about costs  A grantee is responsible for following and NIH for ensuring that all cost considerations are met  Ensure your understanding of the applicable cost principles  Particularly with the change to the uniform principles  Grantees may shape their own systems as long as the principles are followed and the CFR standards are met for financial management systems  Four tests for determining allowability: 1. Reasonableness 2. Allocability 3. Consistency 4. Conformance

6 Costs (cont.)  Differentiation between a Direct Costs and Facility & Administrative (indirect) Costs  Directs – can be identified to a specific grant, project, etc.  F&A – common or joint costs that cannot be readily identified with a specific grant  More information including discussion on cost transfers, reimbursement of F&A, specific items of cost, etc. can be found at the following within the NIH Grants Policy Statement: 13/nihgps_ch7.htm 13/nihgps_ch7.htm

7 Costs (cont.)  It is NIH’s responsibility as stewards of Federal funds to ensure that a grantee’s financial management systems are adequate to receive support and that all costs being requested within a proposal are allowable  If we have any concerns, we will be in touch!

8 Salary Cap  Effective Jan. 12, 2014, the salary cap for Executive Level II has increased to $181,500  Guide Notice announcing the change: files/NOT-OD html files/NOT-OD html  This level also applies to consortia

9 General Rules/Considerations  Bona Fide Need  In any request, please be sure that the expenses you are including can be reasonably expected to be expended in the request time of support  A budget tells NIH what is needed in terms of $ for the proposed research. It is not used to assess the merit of that research; only accounted after the merit has been established

10 General Rules/Considerations (cont.)  Cost Sharing  Not required  Is assumed however when an expense is listed but there is no reimbursement requested (includes personnel contributing effort exceeding the level of salary support)  Application requesting more than $500,000 Direct Costs (exclusive of consortia F&A) must seek permission from NIH at least six weeks prior to submission  Understand the specifics of the FOA

11 General Rules/Considerations (cont.)  Well-funded investigators should discuss appropriateness and specific-Institute policies prior to submission  Responsibility for the Fiscal Management of the award rests with the award recipient and listed principal investigator(s)

12 Types of budgets  Modular  Categorical/Itemized  Inclusion of consortia (modular & categorical)  Program specific:  SBIR/STTR  Ruth L. Kirschstein National Research Service Awards – Fellowship & Training  Research Career Development Awards

13 Modular Budgets  Availability of use is dependent on mechanism: R01, R03, R15, R21, R34 and others as identified on FOA  Application and associated review process does not require a detailed (categorical) budget  Capped at $250K direct costs per year (exclusive of consortium F&A costs)  If you exceed $250K directs, you are moving to the categorical budget request  If mechanism listed above, modular budget must be used if at or below $250K

14 Modular Budgets (cont.)  Grantee should begin with a categorical budget for all years to craft the “module” request  Module = $25K direct costs  General example: All five years of an R01 budget is $841,432. The average per year is $168,286. Modular budget request per year (rounding to next module) would be $175,000.  No escalation per year  Request may fluctuate if appropriate per FOA or one-time expense (i.e. equipment) but it should be justified

15 Modular Budgets (cont.)  Full justification on personnel  Personnel should include names, person months and description of role  Include other information as you deem appropriate to assist in clarification of request  Consortia costs are calculated separately but same justification (personnel) requirements apply

16 Modular Budgets (cont.)  A few more things:  If NIH needs further information, even a detailed budget explanation, we may ask for it  The NIH Salary Cap should be accounted for in your calculation/estimate of the number of modules needed  Be thorough in your personnel justification

17 Time for the details – Categorical Budgets  Personnel  Indicate level of effort (calendar months)  Provide institutional base salary up to the NIH salary cap If salary exceeds the cap, welcome to include a statement indicating as such in the justification  Apply applicable fringe benefit for position  Explain fluctuations in efforts!  Equipment  Generally, expected to be a one-time expense  Be sure to comply with institution’s definition of equipment (NIH defines as $5K or more and an expected life exceeding one year)

18 Categorical budgets (cont.)  Travel  Dependent upon the needs of the research but be sure it provides direct benefit to the project  Must be consistent with institution’s own travel policies  Comply with Fly America Act: /nihgps_ch4.htm#fly_america_act /nihgps_ch4.htm#fly_america_act  Participant/Trainee Costs  With exception of Training grants, this section should be left blank unless specifically identified within FOA

19 Categorical budgets (cont.)  Other Direct Costs  Highly dependent upon the type of research being conducted – be realistic!  Must be well justified – explain fluctuations and atypical expenses in the justification section  Include tuition remission in this section

20 Categorical budgets (cont.)  F&A (indirect) costs  Be sure to follow the rate agreement in place at the time of the application explicitly  NIH will utilize whatever rate is in place at the time of award  If the indirect cost base calculation is rather complicated, it may be beneficial to include a brief explanation in the justification

21 Consortia Expenses  Modular budget  May exceed the $250K direct cost limit only for consortia F&A  May round to the nearest $1,000  Beneficial to explain the direct cost need per year  Personnel justification still required  Categorical budget  Detailed budget and justification similar to the parent grantee required  Regardless, flow/pass-down rules are in effect!

22 Some Classic Mistakes  Did not request permission for submitting application greater than $500K directs  Modular with multiple consortia without a clear idea as to how much is needed for each site – we need to reflect their costs including appropriate F&A too!  Categorical budget does not justify fluctuations  Application indicates that the grantee is going to take care of the PI’s salary BUT when the award hits, not so much…

23 Some Classic Mistakes (cont.)  The listed calendar months when applied to the base salary does not equate to requested salary  Base salary exceeds current salary cap  Calendar months in budget differs from justification  Costs in budget differ from justification  Indirect cost base calculation makes no sense given rate agreement and costs

24 Reminder:  If you are submitting an R01 and the request is:  At or less than $250K each year, use a modular format  Above $250K in ANY year OR a foreign (non-US) applicant, use a categorical format  The $250K direct cost limit is exclusive of consortia F&A

25 Special Programs  The following programs have individual budgeting requirements:  SBIR/STTRs  NRSA  Career (K) awards  Be sure to comply with the specifics of the FOA and the listed budget requirements

26 Pre-Award Costs  Costs associated with a project that are incurred prior to the receiving of the NIH Award  Remember – only the award is a guarantee of the Federal commitment  Allowable up to 90 days prior the start date of a competing award  Beyond 90 days requires prior approval  Cost considerations still apply  Incurred at the grantee’s own risk and expense – no requirement of the Federal government!

27 You got the $!! Now what?  When receiving the award, be sure to:  Check that it was sent to the correct location  Ensure the funds are available in payment management  Understand the level of support - $ and time  Account for any terms & conditions; keep an eye out for any special restrictions on funds  Any restricted funds must be tracked by the grantee separately!

28 After the award (cont.)  Funds not matching what you asked for?  Study section cuts have been applied  Can discuss these with your awarding Institute/Center for reconsideration  Funding policies have been put into place  Not appealable and most likely being applied to all (i.e. you are not the only one!)  If there may be necessary changes, be sure to discuss any potential changes in scope to the project with the awarding Institute/Center

29 After the award (cont.)  Build an internal budget utilizing the information provided in the award  Again, be sure to track restricted funds separately  Follow all regulations and policies  If you are encountering start-up issues that may result in a large amount being unspent, have a pro-active discussion with your NIH staff  We are here to help!!

30 Last words…  This is all of our Federal tax $ at work – we have a mutual obligation to take care of it wisely!  There is a lot that goes into putting forward an application and conducting reviews – ask questions prior to help the process go smoothly  For investigators, learn what a great resource your own sponsored programs office can be

31 Resources  NIH Grants Policy Statement (10/13): 13/  SF424 (R&R) Application and Electronic Submission Information: https://grants.nih.gov/grants/funding/424/  NIH Modular Research Grant Applications: /modular.htm

32 Thank you!!  QUESTIONS???


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