2. From Proposal to Closeout

3. Understand the implications of poor budget planning Understand the rules governing budget management Understand the budget revision process

4. All sponsored projects require a budget Budgets help ensure that all costs toward completing the project have been anticipated OMB Circular A-110, Subpart C.25, “Post-award requirements, revision of budget and program plans” outlines the requirements for grants and agreements with Institutions of Higher Education

5. Total Cost = Direct cost + Facilities and Administration costs (F&A) + Match costs Direct Costs are those costs that can be directly attributed to a specific project F&A Costs are those costs that cannot be directly attributed to a specific project Match Costs are those costs borne by the Institution which are not reimbursed by the sponsor, also called cost share

6. Is there a limit to the maximum costs? Are there exclusions of specific categories? Are there exclusions of specific entities to be funded? Are there exclusions of specific individuals to be funded? Is there a cap on F&A costs allowed? Is there a salary cap? Is there a mandatory cost share requirement? Are there any other crazy requirements we haven’t thought of before?

7. Disclosure Statement (OMB Circular A-21 C.14) Charges to Sponsored Agreements Cost Transfers Extra Compensation and Outside Employment Institutional Base Salary Incentive Pay Subagreements Issued to a Third Party

8. The budget should flow logically from the proposal narrative. Does the budget narrative include quantified project costs that are specifically excluded by the sponsor? If so, these costs will become cost share to the Institution. Does the budget narrative include quantified project costs that will not be borne by the sponsor? If so, these costs will become committed cost share to the Institution.

9. I. Salaries and Wages II. Fringe Benefits III. Travel IV. Supplies V. Equipment VI. Subcontracts VII. Tuition/fees for graduate students VIII. Other IX. Indirect Costs

10. Total Project Costs - Proposed Budget for PI:nameProject Period Start: Sponsor: Project Period End: Project Title: Budget Period Start01/00/00 Project Number:S-Budget Period End12/29/00 Budget prepared by:

11. Banner Code Base Salary% Effort Sponsor UM Sponsor UM Sponsor UM I.Salaries and Wages Salaried (monthly) Employees A.Principal InvestigatorPI Name Please indicate all effort on the project regardless of funding source. 612661. Acad yr $ -0% - - - - 612542. Summer (9 month appointments only) -0% - - - - B.Co-Investigator 612661. Acad yr $ -0% - - - - 612542. Summer (9 month appointments only) -0% - - - - C.Other (monthly)Personnelspecify $ - 0% - - - - - - D.Hourly (bi-weekly) Employeesspecify $ -0% - - - - - - E.Temporary Employees - - - - - F.Student Employees # stdRate/mo - - 61257Graduate Assistants (include tuition amount below) - - - 1. Acad yr (9 mos) $ - - 2. Summer (3 mos) $ - - 61410Student Workers - hourly - - - Total Salaries & Wages - - - - - - - - II.Fringe Benefits - - 33.7%salaried employees (monthly) - - - - - - 57.1%hourly employees (bi-weekly) - - - - - - 7.6%temporary employees - - - - - - 62000Subtotal II - - - - - - - -

12. III.Travel - Domestic or International (select) - - 73000Subtotal III - - - - - - - - IV.Supplies < $5000 - - 74500Supplies Prepare “Unlike Circumstance” justification for office supplies - - 74504Non-capitalized equipment < $5,000 - - Subtotal IV - - - - - - - - V.Equipment >$5000 Prepare “Unlike Circumstance” justification for general purpose equipment - - Subtotal V - - - - - - - - VI.Tuition/fees for graduate assistant(s) @ 9,612 - - - - 79713est for 2011-12Subtotal VI - - - - - - - - VII.Consultant NIH Definition: An individual who provides professional advice or services for a fee, but normally not as an employee of the engaging party. In unusual situations, an individual may be both a consultant and an employee of the same party, receiving compensation for some services as a consultant and for other work as a salaried employee. To prevent apparent or actual conflicts of interest, grantees and consultants must establish written guidelines indicating the conditions of payment of consulting fees. Consultants also include firms that provide professional advice or services. - - Subtotal VII - - - - - - VIII.Subawards NIH Definition: A party that receives a subaward from a recipient or another subrecipient under a Federal financial assistance award and is accountable to the recipient or subrecipient for the use of the Federal funds provided by the subaward. 77830Subcontracts $25,000 or less - 77840Subcontracts over $25,000 - Subtotal VIII - - - - VIV.Other (list) - - - - Subtotal VIII - - - - - - - - Total Direct Costs - - - - - - Year 1Year 2Total Banner Code Sponsor UM Sponsor UM Sponsor UM

13. For Research Support Services completion - - IX.Facilities and Administration Costs* - - Choose MTDC or TDC. Enter rate in one box and 0 in other box MTDC0.0%Full rate charged to sponsor - - - - MTDC0.0%University contribution - - - TDC0.0%Reduced rate charged to sponsor - - - - MTDC41.0%University contribution - waived F&A - - - - 79800Subtotal IX - - - - - - - - Total Project Costs - - - - - - * F&A: Exception to the full federal indirect cost rate is requested for the following reason: Please provide an index number for all direct costs State of TN agency @ 15% TDC borne by the University at the time the budget is submitted. Prime sponsor allows a maximum of _____% as verified by Multiple index numbers should be provided if portions of the sponsor guidelines (provide reference) budget will be charged to different accounts. Research Support Services Other exceptions require approval by Vice Provost for Research. Please provide justification.

14. To get the F&A costs, you must first find the base Base = Direct Costs – Exempt Items TDC – Total Direct Costs MTDC – Modified Total Direct Costs Exempt Items under MTDC Include = Equipment, subaward amount over 25K, patient care costs, rent, tuition, scholarships, and fellowships

15. Research On Campus 41% Off Campus 26% Instruction On Campus 55% Off Campus 26% Other Activities On Campus 35% Off Campus 26% TN State Agencies and Local Governments: 15% Off-campus rate is applied in cases where rent for off-campus facilities is budgeted as a direct cost.

16. Email budget request to Researchsupportservices@memphis.edu Researchsupportservices@memphis.edu Submit at least 10 working days prior to submission deadline Include scope of work and Sponsor guidelines Budget will be reviewed, modified, approved, and emailed back to the PI/PD Submit approved budget with the Proposal Routing Form

17. Budget revisions for individual grants are processed on-line in self service and Grants Accounting will approve or disapprove. Budget revisions must be allowed under the terms and conditions of the award document. Any prior approvals must be obtained prior to submitting the budget revision. There must be sufficient funds within the value category in order to transfer the funds 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.

18. All budget revisions between salary account codes are to be discussed with the Grants Accountant and they will do the budget revision Forms for budget revisions for base/current year along with information about basic budget revisions are available on the Financial Planning website.

19. Sponsor terms and conditions dictate Change in scope of work Transferring amounts from trainee costs Capital expenditures (construction, land or building acquisition) Need for additional funding Transfer of funds between construction and non- construction work

20. Scenario 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?

21. Answer: The amount being transferred from an exempt category (equipment) should be divided by (1.00 + F&A rate). This quotient can be moved into other direct non-exempt categories. The balance will be added to the F&A budget.

22. Example: $50,000 decrease in equipment At a 46% F&A rate 50,000/1.46 = 34,246.57 34,246.57 is added to supplies 15,753.42 is added to F&A

23. Scenario 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?

24. 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.

25. Example: $50,000 increase in equipment At a 46% F&A rate 50,000/1.46 = 34,246.57 $34,246.57 reduction to supplies $15,753.43 reduction to F&A

26. OMB A-21 Section J

27. Understand what are allowable and unallowable costs to Federal grants Understand the importance of properly budgeting for costs on Federal grants Understand the consequences of improperly documenting costs on Federal grants

28. Lists 54 items of cost Failure to mention a particular item of cost is not intended to imply that it is either allowable or unallowable; rather, determination as to allowability in each case should be based on the treatment provided for similar or related items of cost.

29. Allowable (A-21 C.2) Reasonable (A-21 C.3) Allocable (A-21 C.4) Consistent Treatment (A-21 C.11) Conform to limitations set forth in A-21 or in the sponsored agreement as to types or amounts of cost items

30. Prudent person rule Necessary for the operation of the Institution or performance of the sponsored program Consistent with regulations, state and federal laws, and institutional policies and procedures

31. It is incurred solely to advance the work under the sponsored agreement It benefits both the sponsored agreement and other work of the institution proportionately Cost principles, internal controls, direct cost allocation principles, and documentation Documented in accordance with the Procurement Standards in OMB Circular A-110, Subsections C.40 – C.48

32. A cost is either Allowable or Unallowable And Direct or Indirect

33. F&A costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. Items of cost must be treated consistently across the Institution with respect to direct or indirect application

34. Allowable Charges Allowable F&A Charges Unallowable Equipment Administrative Support Entertainment F&A Allocation

35. In case of a discrepancy between the provisions of a specific sponsored agreement and the provisions of the OMB, the agreement should govern. Note: the program officer does not determine allowability of a cost. The Grants Management Specialist is responsible for the negotiation, award, and administration of the financial aspect of the project. Our Disclosure Statement (DS2) outlines how the Institution will allocate costs.

36. Be specific about what you need to complete the project Be sure to budget your items in the correct value category Be specific about what you label things, e.g., advertising vs. marketing Be sure to read the proposal guidelines

37. In some cases the proposal guidelines determine how the items of cost will be labeled In case of a discrepancy between the provisions of a specific sponsored agreement and the provisions in Banner, the agreement should govern Banner, however, cannot be modified to match the sponsored provisions Therefore, off ledger adjustments may be necessary when reporting financial data to the sponsor

38. During an audit, costs deemed unallowable must be removed from the grant along with the associated F&A costs incurred Cost transfers that are not properly documented may be considered unallowable and must also be removed from the grant These unallowable items become uncommitted voluntary cost share, i.e., costs to the department!

39. Are clerical salaries allowed on Federal grants? Generally allowable as an F&A expense Are office supplies allowed on Federal grants? Generally allowable as an F&A expense What about general purpose equipment, such as copy machines, computers, and typewriters? Unallowable as direct charge, except where approved in advance by the awarding agency What about memberships, subscriptions, and professional organizations? Allowable for institution only, except civic, community organizations, country clubs, or social clubs. Institutional policy requires that the Sponsor must give prior approval of all professional memberships.

40. Are recruiting costs allowed on Federal grants? Allowable under strict conditions Are rental cost of buildings and equipment allowed? Allowable under strict conditions Are scholarships and student aid costs allowable? Only if the purpose of the sponsored agreement is to provide training to selected participants (e.g., NIH Kirschstein-NRSA fellows) Tuition remission can be paid in lieu of wages to students under certain circumstances (see section J.10 for reporting requirements). Institutional policy is that tuition remission is only allowed if the Dean of Graduate School waives the tuition in writing. Additionally, if the student receives salary on a grant, the tuition follows the salary.

41. What about Stipends? These are Payments made to an individual under a fellowship or training grant in accordance with preestablished levels to provide for the individual’s living expenses during the period of training. A stipend is not considered compensation for the services expected of an employee. Stipends are not allowable under research grants even when they appear to benefit the research project. Although stipends are not considered salaries, this income is still subject to Federal and, sometimes, State income tax.

42. Websites for more information: Research Support Services http://researchsupport.memphis.edu/ Grants Accounting http://bf.memphis.edu/finance/accounting/gc.php