1. Creating a Budget for a Sponsored Research Project
Division of Sponsored Programs

2. *These terms are taken from the Uniform Guidance:
What is a Budget?
Best estimate of financial resources needed to accomplish a project
Includes a Budget Justification which provides an explanation of included costs
Allowable means the costs are:
Reasonable*
Allocable*
Consistently applied*
Agreeable with Sponsor specifications
Allowable Direct Costs
+ Allowable Indirect Costs (F&A)
= Total Project Costs
*These terms are taken from the Uniform Guidance:

3. Creating a Budget
Review solicitation and guidelines from the Sponsor
Determine and compute the allowable direct costs
Calculate the allowable indirect costs
Develop and format the budget
Create a Budget Justification 1 2 3 4 5

4. Review Solicitation and Guidelines
Sponsor Guidelines
The Solicitation
Request for Proposal (RFP)
Look for:
Min./Max. duration of the project
Floor/Ceiling for budget
Budget limitations and restrictions
Specific Sponsor/application questions?
Utilize the appropriate DSP contact:
It is helpful to note the specific proposal you are applying for in the internal budget

5. Review Solicitation and Guidelines
Keep in Mind:
You will need to create and submit any budget that is necessary for the Sponsor (formats/specifications vary from Sponsor to Sponsor)
A Budget Justification will most likely need to be included with the budget.
Check to see if the solicitation requires mandatory cost share; if not do not include cost sharing as part of the budget
An internal budget provides an opportunity to include more details that a Sponsor budget may not require
An internal budget may also need to be prepared alongside the Sponsor budget
Why?

6. This list is not all-inclusive
Direct Costs
Determine and specify what direct expenses fit within the Sponsor guidelines and are necessary to complete the project
Common Direct Costs
Other Direct Costs
Tuition
Salary/wages and fringe benefits for all personnel (including students)
Participant support costs
Travel costs (both domestic and foreign)
Research subject compensation
Publication
Equipment ( ≥ $5,000)
Consultant services
Materials and supplies
Patient care costs
Subawards (direct and indirect costs)
Computer service center charges
This list is not all-inclusive

7. Direct Costs Personnel Costs – Salary/Wage Expenses
Salary is calculated using
3 basic salary/wage bases:
Calendar Year (CY) – 12 months
Academic Year (AY) – 9 months
Summer Term – 1-3 months
Seek assistance from your HR rep. in determining salary base
Sponsors may impose a salary cap
A salary and effort conversion
table is available here:

8. Direct Costs Personnel Costs – Effort Calculations
(1) Principal Investigator (PI)
AY appointment, Salary of $63,000
Monthly salary of $7,000 (one-ninth of the AY)
25% of the AY effort would equate to AY person months (9x.25=2.25)
The budget figure for that effort would be $15,750 (7,000 multiplied by 2.25 AY months)
(2) Principal Investigator (PI)
CY appointment, Salary of $72,000
Monthly salary of $6,000 (one-twelfth of total CY salary)
25% of the CY effort would equate to 3 CY months (12x.25=3)
The budget figure for that effort would be $18,000 (6,000 multiplied by 3 CY months)

9. Direct Costs Example Personnel Costs – Salary Cap
PI salary: $200,000/year
Salary Cap =$189,600 (subject to change)
If the effort on the project is 25%, determine the amount of salary based on the Salary Cap, not the actual salary of the PI
$189, x 25% = $47,400
$200,000 x 25% = $50,000
 The difference of $2,600 would need to be covered by the individual’s UI Department
Specific Sponsors or awards may limit personnel salaries
It is recommended that salaries be increased at a rate of 3% per year when making future year budget estimates
This rate is consistent with the rate established by NIH and is considered an acceptable rate to most federal agencies.
When dealing with the NIH salary cap in particular, DSP will accept budgets that abide by the salary cap as well as those that choose to escalate the salary cap over the project period. Be aware that if the proposal is funded, NIH will look at the current salary cap and fund no more than the effort needed for the current salary cap.
NIH Salary Cap Information can be found here:
($189,600 as of 1/7/18)**

10. Current/Projected Fringe Benefit Rates can be found at
Direct Costs
Contact your HR representative for help with determining appropriate fringe “rate pools”
Personnel Costs – Fringe Benefits
Fringe benefits include:
Social Security
University Retirement Programs
Life Insurance
Health Insurance
Disability Insurance
Etc.
Rate Pools
FY 2019
Approved
 FY 2020
Proposed
 FY 2021
Estimated
FY 2022
Clinical Faculty
22.60%
23.60%
24.60%
25.00%
Professional & Scientific
39.00%
41.20%
42.00%
42.50%
Post Docs
18.50%
18.00%
18.60%
19.10%
Update to remove 2017?
Example of some rate pools and rates
Current/Projected Fringe Benefit Rates can be found at

11. Direct Costs Travel – Domestic and Foreign
Keep in Mind:
Allowances for air travel should not exceed round trip coach accommodations.
Generally, only persons participating directly in the research may travel on award funds.
Sponsors require adequate justification on requested travel expenses – foreign travel, especially.
Sponsor guidelines may establish rates for specific costs. Use the more restrictive rate when UI rate differs.
The budget should specify the:
# of trips/days/people
per diem rates for food and hotel
transportation costs
destination(s)
Note: Specifics may be unknown at time of proposal
More information about specific costs, rates, etc. can be found directly from the Sponsor or at

12. Direct Costs Equipment – $5,000 or more Materials and Supplies
Equipment costs include expenses for equipment items (useful life: 2 years) that individually cost $5,000 or more. Only allowable if it will be dedicated solely to the project. (Not intended for general desktop and laptop computers, office equipment, copiers, office furniture, etc.)
The expendable equipment (equipment costing less than $5,000) and supplies required for the project should be indicated with estimated costs.
There should be a breakdown of these items by general classification.
Sponsor guidelines usually indicate what needs to be itemized and justified.
UI policy prohibits the recovery of indirect costs (F&A) on
direct costs classified as equipment
More information on Equipment can be found on the Capital Asset Management (CAM) website or the DSP website:

13. Subaward Direct Costs + Subaward Indirect Costs = Total Subaward
Subawards:
A subaward is needed when the UI Department or Principal Investigator would like to collaborate with a colleague at a different entity to complete the goals of the project
See Sponsor guidelines or policy for any restrictions on F&A
The UI is allowed to recover indirect costs (F&A) on the first $25,000 of each individual subaward for new and competitive proposals
Once the subaward’s total costs (which includes direct and indirect costs) reaches $25,000 the remaining subaward costs will be removed from the modified total direct costs bases (MTDC) in subsequent years for the UI
Subaward Direct Costs + Subaward Indirect Costs = Total Subaward
The total subaward costs are included in the UI Direct Costs
Indirect costs recovered against first $25,000 of each new/competitive subaward

14. Direct Costs Year 1: $12,000 Year 2: $15,000 Year 3: $17,000
Subaward Example:
A subaward has the following total amounts in the first 3 years of a Sponsored Project:
Year 1: $12,000
Year 2: $15,000
Year 3: $17,000
What amounts would be included in the UI MTDC?
In year 1 the full $12,000 is included in the UI MTDC, but in year 2 only the first $13,000 is included in the UI MTDC, and none of year 3 subaward costs would be included in the UI MTDC
More information regarding subawards can be found here:

15. Consultants
Compensation for a Consultant on a project may or may not be budgeted
If the person is a UI employee they will not receive any additional funding as a consultant
If the UI employee is integral to the research or if they would like publication recognition, then the employee should be included in the Personnel section where the appropriate salary and fringe rates apply
**This applies to all UI employees, including those from other departments**
External consultants are allowable under most circumstances
Refrain from mentioning consultant compensation as an “honorarium”
For more information on how to determine if a person should be paid through a Professional Services Agreement (PSA) or a subaward please see the link below:

16. Direct Costs Participant Support Costs
Includes costs for non-UI participants to attend a sponsored training, symposium, meeting, or workshop
Costs may include stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of the participants such as for a NSF Research Experiences for Undergraduates (REU) program
Participant Support Costs are not to be included as part of the MTDC base for calculating F&A
Participant support costs do not include patient
care costs or research subject compensation

17. Direct Costs Patient Care Costs
These are costs of routine and ancillary hospital services provided to individuals participating in research programs
These are not costs of care that are specifically requested for the project (e.g. lab fees for special screenings)
Patient Care Costs are not to be included as part of the MTDC base for calculating F&A
Note: Research scans performed at the MR Research Facility are not considered patient care costs and are subject to F&A. (Clinical scans are considered patient care costs)
Patient care costs are separate from
research subject compensation

18. Direct Costs Subject Compensation
These are reimbursements given to human subjects for participating in a research project/study. Human subjects are defined as living individuals about whom an Investigator conducting research obtains data or identifiable private information through an intervention or interaction with the individual.
Payments may be made via check, cash, gift cards or any other item of value.
Reimbursements for travel or other costs are not considered compensation and are not covered under the Grant Accounting Office (GAO) policy for Subject Compensation.
Note: These costs are included
in the MTDC.

19. Direct Costs
Tuition
Tuition costs for most Sponsors can be charged to a funding source up to 100% of the full amount of graduate tuition (this includes both grants and contracts)
For graduate students, UI departments are required to budget at least the minimum levels for stipend and tuition costs established by departments.
Tuition costs are excluded from the MTDC
More information regarding tuition:
Registrar office schedule with fees:
UI policy prohibits the recovery of indirect costs (F&A)
on tuition-

20. Indirect Costs
Indirect costs are those costs that cannot be directly traced to a part of the project. These costs are also known as Facilities & Administrative (F&A) costs or overhead.
F&A or indirect costs are REAL costs that the UI incurs in order to operate.
Allowable Direct Costs
+ Allowable Indirect Costs (F&A)
= Total Project Costs
Indirect Costs = Modified Total Direct Costs (MTDC) x Appropriate F&A Rate

21. Indirect Costs Determining the MTDC
The first step in calculating total indirect costs (F&A) is to determine the MTDC base
Indirect Costs = MTDC x Appropriate F&A Rate
Exclusions x
Equipment ( ≥ 5,000)
Student tuition remission
Subaward costs above $25,000
Participant support costs
Scholarships and fellowships
Patient care costs
Rental costs of off-site facilities
Capital expenditures
MTDC = Total Direct Costs - Exclusions

22. Indirect Costs $45,750 MTDC Example
A budget is broken down as follows for a one year project.
What is the MTDC base?
  Answer:              
a) $64,250            
b) $45,750           
c) $54,250
d) $55,750
Remember: tuition, equipment, participant support costs, patient care costs, and subawards greater than $25,000 of each subaward are excluded from MTDC, subject compensation is included.
Personnel                 $37,000
Travel                                    $3,000
Equipment                          $10,000
Research Subject
Compensation   $750
Materials/Supplies          $5,000
Tuition                                  $8,500
$45,750   

23. Indirect Costs F&A Rates
F&A (Facilities and Administrative) rates are established for reimbursing institutional overhead and other expenses associated with Sponsored Projects
PROJECT CATEGORY
F&A  RATE*
BASIS
Organized Research
54.5%
MTDC
Instruction
45%
Other Sponsored Activities
25%
Off-Campus – Organized Research & Instruction
26%
Off-Campus – Other Sponsored Activities
17%
Corporate Funded Clinical Trials
TDC
F&A Rates
Indirect Costs = MTDC x Appropriate F&A Rate
Check to see if the Sponsor limits
or restricts indirect costs from
anything other than the UI
federally negotiated rates.
For more help on which F&A rate to use:
*Federally Negotiated F&A Rates as of 12/11/18

24. Contract Budgets
Contract budgets follow the same University budgeting guidelines as grant budgets. Here are a few things to keep in mind:
Calculate the Direct Costs needed to complete the project by preparing an internal budget spreadsheet.
When working with industry, contract budgets require the full 54.5% F&A rate. Use the F&A Rate Decision Tool to determine any exceptions.
A fully-burdened budget can be presented to the Sponsor.
Include the internal budget on the UIRIS Proposal routing form.
A fully-burdened budget is a budget where F&A is already included in the cost for each budget category. Therefore, there will be no F&A category in the budget.
Do not forget to budget fringe benefit costs and F&A costs
Total Request from Sponsor = Direct Costs + Indirect Costs

25. Fully Burdened Budget Example

26. Format the Budget
Different Sponsors require different formats for budgets
Check the solicitation and general guidelines to determine if a specific program, form, or system is required for submission
Internal Budget
Remember:
Apply correct fringe and F&A rates to both the Sponsor and internal budgets
An internal budget should match Sponsor budget categories
The DSP website has several budget templates for your convenience:
If the Sponsor’s budget is not detailed, an internal budget should be prepared because it is helpful for DSP and Grant Accounting during the review/post-award management
An internal budget is required if submitting a contract or a fully-burdened budget
During the post award phase, GAO will use the internal budget to check allowable costs.

27. Common Program Applications
Format the Budget
Common Program Applications
R&R budget
DHHS agencies and other federal agencies (NIH, AHRQ, DOE, etc.)
Cayuse
Modular budget
NSF
Research.gov
/Fastlane
Other DHHS agencies:
NASA
NSPIRES
IDPH
Iowagrants.gov
Foundations/Private Funding
Various forms and systems

28. Budget Justification
Budgets usually require justification that is a narrative explanation designed to help the Sponsor evaluate the expenses proposed for the project
Budget Justification writing tips:
Follow the Sponsor proposal instructions closely
Organize and align budget items for ease of review
Provide adequate detail for items on the budget
Explain why every cost/cost category on the budget
is needed to accomplish the proposed project
Make it clear that all budget requests are reasonable
and consistent with Sponsor and University guidelines
Budget Justification Template:

29. When can you use the NIH Modular budget format?
NIH Modular Budgets
When can you use the NIH Modular budget format?
R01, R03, R15, R21, and R34 programs allow modular budgets (however, AHRQ does not accept modular budgets)
Project direct costs must be $250,000/year or less
How to budget?
Request DIRECT costs in $25,000 increments
Subaward/Consortium direct costs are included in these increments
Subaward/Consortium indirect costs are shown separately on the modular budget
INDIRECT costs are calculated based on the MTDC
Open modular template
If the budget is less than $250,000 per year and using R&R, check the solicitation/FOA to make sure R&R may be used.
For help with modular budgets, use this template:

30. NIH Modular Budgets https://dsp.research.uiowa.edu/budget-templates-0
Go to Cayuse and show an actual modular application AND modular template
Modular Budget Template.xlsx

31. NIH Modular Budgets
Go to Cayuse and show an actual modular application AND modular template

32. NIH Modular Budgets
Go to Cayuse and show an actual modular application AND modular template

33. NIH Modular Budgets
Go to Cayuse and show an actual modular application AND modular template

34. Budget Justification Modular Budget Justification
Personnel Justification is required for ALL modular budgets. This includes listing all personnel (names, person months, and roles). Salary information should not be included
An additional narrative should mention any MTDC exclusions
Subaward/consortium (if applicable)
The justification for modular budgets with subawards should include an estimate of total costs (direct and F&A), list of individuals and organizations, and the personnel justification for that institution.

35. Routing Form Initial Year ALL costs for ALL budget years
These are the amounts of funding requested from sponsor (not including cost share)
ALL costs for
ALL budget years

36. Cost Share
*Salary covered by the department due to the NIH Salary Cap is NOT cost share

37. Summary 5 Steps for Creating a Budget
1. Review solicitation and guidelines
from the Sponsor
2. Determine and compute the
allowable direct costs
3. Calculate the allowable
indirect costs
4. Develop and format the budget
5. Create a Budget Justification
More information regarding the MTDC basis and the University’s F&A Rate Agreement:

38. Resources Fringe Rates DSP Policies and Procedures
F&A Rate Decision Tool
Cayuse
F&A Rates
Research.gov
UIRIS (University of Iowa Research Information System)
Fastlane
NSPIRES
SPRIE  (Sponsored Projects Research Information Electronically)
Other e-Systems
Budget Templates
Budget Justification Template

39. Resources DSP is located in: Main Office Hours:
Further questions? Start at the DSP website: \
DSP Office Phone #:
DSP
DSP Staff Contact List (specific agency questions)
DSP Frequently Needed Information
DSP Budget Preparation Information
Grant Accounting Office Staff Contact List
Grant Accounting Office Phone #: (319)
DSP is located in:
2 Gilmore Hall
112 N. Capitol St.
Main Office Hours:
Monday through Friday
8:00 a.m. - 5:00 p.m.
Gilmore Hall

40. Thank You