The budget is the first measurement of the principal investigator's skill in planning the project and performing it in a cost-effective manner. If the estimate is too low or too high, the reviewer will speculate that the principal investigator has not thought the project through or does not have a realistic grasp of the magnitude of the project. Reviewers typically have had considerable experience in judging what can be done for given amounts of money. Since SPO is experienced in constructing budgets, the principal investigator should request SPO assistance in preparing an accurate budget of the total costs.
The actual costs of a project include many items, some of which may not be immediately apparent to the principal investigator. Listed below are the most common elements to be included in a budget, but the specific requirements of individual projects will suggest other costs.
1. Salaries & Wages
This section includes all University project personnel, their titles, the amount of effort each will work on the project, rate of pay, and amount requested from the sponsor to support each person for the budget period.
The project personnel should be listed in rank order as follows: senior personnel beginning with the principal investigator, associate investigator, research assistants, technical support staff and administrative/clerical support staff. Consultants should not be included in this category. Personnel currently on the University payroll are listed on the budget by name and title. If no current individual has been designated to fill the position, or if someone new must be hired, only the job title should be listed.
Reimbursement for faculty is expressed in terms of total percentage of effort applied to the project. The monthly rate of pay is based on the faculty member's 9-month academic year contract. (See Section III, I for more information on supplemental salary support for faculty.) Reimbursement for professional staff is based on the 12- month calendar year and is usually expressed in percentages of effort. Generally, effort should not be expressed in terms of person-hours, and hourly rates should never be quoted for faculty. An exception to this rule is part-time support personnel and students who are hired on an hourly basis.
2. Employee Fringe Benefits
The University charges the actual cost of each fringe benefit (FICA, health and life insurance, SUI, Worker's Compensation, pension plan and long-term disability applicable to each individual) directly to sponsored projects. However, fringe benefit rates expressed as a percentage of salary for each of the personnel classifications (faculty, staff, students) are used in proposals. SPO should be consulted for current rates applicable to the various personnel classifications.
3. Permanent Equipment
This is defined as an item of equipment that is directly related to the proposed project and has a purchase price in excess of $500 and a useful life of two years or more. Items that do not fit this definition because of price and/or service life must be requested in the supplies category. Permanent equipment is categorized further as special purpose (or research) equipment and as general purpose equipment. Special purpose or research equipment is property that is used primarily for scientific or technical applications. General purpose equipment includes items such as office furniture, typewriters, refrigerators, cameras, vehicles, and data processing equipment.
Since inclusion of an item of permanent equipment in an approved budget constitutes prior approval of purchase for most funding agencies, requesting funds in the application for equipment eliminates the need to obtain approval separately when the item is about to be ordered. In addition, the foresight shown by including such requests in the application will be weighed by reviewers in evaluating the principal investigator's perception of the instrumentation needs in conducting the project. Whenever possible the piece of equipment, model number and manufacturer should be specified.
Care must be taken to include all the items of cost associated with the acquisition of equipment, such as tax, shipping and installation costs.
4. Travel
Travel costs are usually divided into domestic and foreign travel. Allowable travel includes travel to scientific meetings, travel for consultation with collaborators or agency project monitors, and travel in the field to pursue the stated objectives of the project. Domestic travel is defined as all travel within the United States, its possessions and territories, and Canada. Foreign travel is all other travel. However, travel within Canada and the United States (including its possessions and territories) enroute to a foreign destination is considered foreign travel. U.S. owned airlines must be used for foreign travel funded by the federal government.
Details for each trip should be provided, including destination, duration, number of travelers, air fare, car rental rates, per diem or subsistence rates, conference registration rates, and incidentals (transportation to and from airports, etc.). SPO receives Standardized Regulations from the U.S. Department of State that lists official per diem rates in foreign cities, as well as Federal Travel Regulations from the General Services Administration which lists maximum per diem rates for cities in the United States.
5. Consultants
Consultant fees are paid to outside experts for short-term or sporadic input, usually for problem solving, evaluation, or provision of technical knowledge. Fees should be stated as daily or hourly rates, and travel expenses should be specified separately, either in this category or in the travel category (depending on the sponsor's policy). Justification must include the need for and the qualifications of each consultant. Some federal agencies --notably the National Science Foundation and NASA -- limit consultant rates to no more than the daily rate of a GS-18 federal employee. University employees cannot be paid as consultants to sponsored projects received by the University.
6. Expendable Materials & Supplies
This category includes supplies and items of expendable equipment (property that does not meet the definition of permanent equipment). Supplies in the budget should be listed by general type. Examples include chemicals, animals and animal rations, office supplies, unusually large quantities of paper supplies as in the preparation and distribution of questionnaires or other brochures and forms, and minor gifts for informants in anthropological or sociological studies.
7. Publication Costs
Publication costs are the charges made by professional journals or private publishers to edit, print, and disseminate articles resulting from the sponsored project. For journal articles, usual costs are per page charges, with a separate fee per quantity of preprints and reprints. Book publication is rarely supported as part of a sponsored project. However, the National Endowment for the Humanities sponsors projects for editing or publishing specific works. Most projects have some publication costs, since dissemination of the project's work usually is required by the sponsor.
8. Subcontracts
A subcontract is a formal agreement (contract or grant) with a third party (often another educational institution) that is entered into to obtain services or to delegate some portion of the approved research or scope of work. Specific approval of the sponsor is required, thus the proposal must include the subcontractor's authorized proposal and budget. In accordance with federal regulations, principal investigators must document the reasons for choosing a particular subcontractor over others.
9. Other Direct Costs
This category contains miscellaneous costs that are not readily grouped in the above categories. This can include items such as equipment repair, postage, telephone, subscriptions to periodicals, human subject fees, and photocopying expenses. These expenses should not be lumped together, but rather should be listed individually.
10. Indirect Costs
The categories listed above are considered "direct costs" because they can be readily identified and attributed to a specific project. Other costs cannot be charged directly because they result from shared services such as operation and maintenance of the physical plant, general administration, library, and depreciation or use allowance for buildings and equipment. These costs are called "indirect costs" or "overhead" and are charged to sponsored projects by applying a negotiated composite rate to the appropriate direct cost base.
The rates and base to which they apply are established in accordance with the cost principles outlined in OMB Circular A-21 and agreed upon in a Negotiation Agreement with the government. There are on-campus and off-campus indirect cost rates depending on where the project is performed. SPO should be consulted for the applicable current rates.
It is the position of the University that all proposals requesting support from any sponsor, either Government or non-government, must include a request for full indirect cost recovery. However, some sponsors, particularly some foundations, have specific written policies that preclude the use of the University's full indirect cost rates. In these cases the rate allowed by the sponsor may be used in lieu of the negotiated rate.
