Budget Management

Introduction All sponsored projects require a budgetAll sponsored projects require a budget Including modular awards (for Institutional use only)Including modular awards (for Institutional use only) Budgets help ensure that all costs toward completing the project have been anticipatedBudgets help ensure that all costs toward completing the project have been anticipated

OMB Circular A-110 Subpart C – Post-Award RequirementsSubpart C – Post-Award Requirements.25 Revision of budget and program plans.25 Revision of budget and program plans Outlines the requirements for grants and agreements with Institutions of Higher EducationOutlines the requirements for grants and agreements with Institutions of Higher Education

Basic Grant Budgeting Follow the RFP guidelinesFollow the RFP guidelines Know the terms and conditions of your awardKnow the terms and conditions of your award

Basic Grant Budgeting Total Cost = Direct cost + Indirect Cost (F&A)Total Cost = Direct cost + Indirect Cost (F&A) Direct costs are those costs that can be directly attributed to a specific projectDirect costs are those costs that can be directly attributed to a specific project Indirect Costs are those costs that cannot be directly attributed to a specific projectIndirect Costs are those costs that cannot be directly attributed to a specific project

F&A Costs Base X Rate = Indirect Costs (F&A)

NIH Requirements Prior Approval by agency required when:Prior Approval by agency required when: Change in ScopeChange in Scope Transferring amounts from trainee costsTransferring amounts from trainee costs Capital expenditures (construction, land or building acquisition)Capital expenditures (construction, land or building acquisition) Need for additional NIH fundingNeed for additional NIH funding Transfer of funds between construction and non- construction workTransfer of funds between construction and non- construction work

No Cost Extensions Request must be generated by the PI and go through ORSPRequest must be generated by the PI and go through ORSP Provide written justificationProvide written justification ORSP will authorize the No Cost Extension when applicable or contact agency for approvalORSP will authorize the No Cost Extension when applicable or contact agency for approval

Budget Revision Request Budget revisions must be allowed under the terms and conditions of the award document.Budget revisions must be allowed under the terms and conditions of the award document. Any prior approvals must be obtained by the department through the ORSP office prior to submitting the budget revision.Any prior approvals must be obtained by the department through the ORSP office prior to submitting the budget revision.

Budget Revision Be sure to recalculate the F&A rate when transferring funds to and from exempt categories.Be sure to recalculate the F&A rate when transferring funds to and from exempt categories. Transferring funds from an exempt category to a non- exempt category will effect the direct costs available for the project.Transferring funds from an exempt category to a non- exempt category will effect the direct costs available for the project.

Effects of Rebudgets on F&A Expenses Scenario 1Scenario 1 $50,000 budgeted in equipment is to be transferred to supplies. How much can be rebudgeted to supplies and how much is to be rebudgeted to F&A?

Effects of Rebudgets on F&A Expenses Answer:Answer: The amount being transferred from an exempt category (equipment) should be divided by ( F&A rate). This quotient can be moved into other direct non-exempt categories. The balance will be added to the F&A budget.

Effects of Rebudgets on F&A Expenses Example:Example: –$50,000 decrease in equipment –At a 46% F&A rate –50,000/1.46 = 34, –34, is added to supplies –15, is added to F&A

Effects of Rebudgets on F&A Expenses Scenario 2Scenario 2 –The PI needs to purchase an unbudgeted piece of equipment from the grant and wants to use funds from the supply line. How does this rebudget affect the F&A budget line?

Effects of Rebudgets on F&A Expenses Answer:Answer: –The amount being rebudgeted to an exempt line (equipment) should be divided by (1.00+ F&A rate). This quotient is the amount to be reduced in the supplies category. The difference is the amount to be reduced in the F&A category.

Effects of Rebudgets on F&A Expenses Example:Example: –$50,000 increase in equipment –At a 46% F&A rate –50,000/1.46 = 34, –$34, reduction to supplies –$15, reduction to F&A

Questions?