Transcript Advanced Budgeting

Creating Complex
Grant Budgets
Presented by University Advancement
and
the Office of Sponsored Programs
March 26, 2014
Budgeting 101 Review
• Direct costs include:
• Salaries and wages
• Fringe benefits (FY14 grant-funded rate 50.75% (projected), 7.65% for
summer/ /existing employees/part-timers)
• Consulting/stipends
• Travel
• Equipment/supplies/materials
• Publication/mailings/telephone/advertising costs
• Participation support costs (food, travel, honorarium)
• Student tuition/fees
• Rental fees (buildings, computer labs, work stations, etc.)
• Indirect costs include:
• The “invisible” costs associated with conducting a project (classroom
space, lighting, heat, secretarial support)
What are Indirect Costs?
• Also referred to as overhead or Facilities and Administrative (F&A)
costs. This is the cost of doing business.
• Universities have a federally approved rate. Rowan’s current rates
are:
• 42% of Modified Total Direct Costs* (on-campus) – 45% in July 2014
• 17% of Modified Total Direct Costs (off-campus)
• 21% of Modified Total Direct Costs (industry sponsors)
• Most foundations/corporations do not allow (or limit the amount
of) indirect costs you can request. It is up to the discretion of your
chair, dean, and the Associate Provost for Research to accept
indirect waivers or restrictions.
• *Modified Total Direct Costs = The total project costs minus units of equipment over $5k each,
student tuition remission, fellowships/scholarships, capital expenditures, patient care fees, rental
costs of off-site facilities, and each portion of each subgrant and subcontract in excess of $25k.
Cost Principles
Cost principles are rules to account for and record costs associated
with grants and contracts, determined in accordance with generally
accepted accounting principles.
Cost principles for educational institutions are listed in OMB Circular A-21
http://www.whitehouse.gov/omb/circulars_a021_2004/#e
Recipients of grants and contracts are responsible for ensuring the
costs charged meet the following cost principles:
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4.
Allowable
Allocable
Reasonable
Consistently Treated
What’s Allowable?
Many items are conditionally allowable: they must be essential to
advance the project’s objectives AND be approved in advance by
sponsor (i.e. membership dues, conference travel, patent costs).
• What’s NEVER allowable:
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Alcoholic beverages
Contingency provisions
Lobbying
Alumni activities
Goods or services for personal use
Flow-through funds for terrorist groups
• If a sponsored agreement further restricts costs, this trumps OMB
Circular A-122: “no” means “no.”
What’s Allocable?
• Allocable = Capable of being assigned or charged to an
award/project/function in proportion to benefit received.
• Direct costs must be identified specifically with a particular sponsored
project, an instructional activity, any other institutional activity or can
be directly assigned to such activities with a high degree of accuracy.
• Indirect costs (F&A costs) are incurred for common or joint objectives
and therefore cannot be identified readily and specifically identified
with a particular sponsor project, and instructional activity or any
other institutional activity.
• Example: Direct cost vs. Indirect costs – What’s allocable?
• Acquisition of computer software or minor equipment that directly and
solely furthers the purpose of the research is a direct cost.
• Office supplies and furniture, such as notebooks, pencils and desks and
administrative work related to proposal creation and submission are
indirect costs.
What’s Reasonable?
• When you bought X amount of items at Y price, you:
• Bought necessary items.
• Acted prudently: others would have made similar decisions given facts
and circumstances at the time.
• Followed good business practices and applicable laws and regulations
and followed the sponsored agreement terms and conditions.
• Followed institutional policies (i.e. bidding, use of certain vendors).
Use the newspaper headline test:
Rowan University Professor Uses
Federal Grant Funds to Pay for Day-Care Costs During Travel
What’s Consistent?
• All costs incurred for the same purpose in like circumstances are treated
the same.
• Related to estimation, accumulating and reporting of costs
• Consistent allocation of costs incurred for the same purpose
• Examples of direct cost consistency:
• Support staff salaries are consistently charged
• Employees are charged the same and appropriate fringe benefit rate
• Similar travel costs are charged
• Examples of indirect cost consistency:
• Same (or very similar) office supplies costs
• Routine maintenance of plant/equipment costs
For some projects and specific funding, there are exceptions related to
consistency of costs.
• For example, some programs will allow for office supplies and other indirect
costs (i.e. phone calls) to be charged directly.
What Should I NOT do?
• Attend a conference and charge your grant for costs associated
with an extended vacation or family member’s expenses
• Rent a Lexus and/or provide gas receipts after the car has been
returned
• Charge your grant for effort (salary) you did not actually expend
• Purchase a leather briefcase
• Charge costs associated with a retirement party for a faculty
member or researcher
• Charge travel costs that are restricted in the award terms and
conditions, even though the travel supports the project’s objective
or disseminates findings
• Buy extra supplies with your grant funds for departmental use or
use on another sponsored project
Core Questions to Ask
• How does this purchase/expenditure help accomplish the project’s
objectives?
• Is this purchase permitted in the award terms/conditions?
• Is prior approval necessary? (From the sponsor? From Purchasing?)
• Is this a reasonable purchase?
• Can this purchase/expenditure be used in a personal manner or for
other activities other than the proposed research?
Use your budget justification to document how the purchase
advances the project’s objectives. If you are requesting an expensive
item, do your homework know the requirements for
getting/providing quotes.
Cost Sharing
• Cost sharing, or cost-match, is defined as the portion of the project
costs that are not borne by the sponsor, and instead borne by the
university or a third-party.
• Can include:
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Cash, supplies, equipment donations
Use of space/facilities
Cost of renovating the space
Indirect costs (if sponsor does not allow us to collect these)
Salaries/fringe
Volunteered time/services (students, staff, professionals)
• The term “in-kind” refers to donated services or materials to a
sponsored program in which there is no exchange of cash (see
handout).
Cost Sharing Regulations
• Must be approved by chair and dean. Cost-sharing is entered on
page 2 of the Proposal Planning and Submission Form.
Sponsor’s Request
University Cost Share
Third Party Cost Share
TOTAL
Direct Costs
F&A Costs @ (insert%)
Total Project Costs
• Costs must be verifiable. Time sheets/time logs, estimate of fair
market value for donations, paystubs, invoices, Effort Reporting
logs, printouts from Banner, etc.
• If you have a federal grant, you cannot use those funds as a costmatch to another federal program. These funds often can be used
to match private awards. Always check with the Office of
Sponsored Programs or University Advancement.
Cost sharing can be mandatory, voluntary, or disallowed by sponsor.
Personnel Costs
• Key Personnel include those who shape or impact the
programmatic aspect of the project. Can include:
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Faculty and Staff
Project Managers
Post-docs
Graduate students (sometimes)
Collaborators
“Effort” (in months) is usually associated with key personnel. Use actual
salaries to calculate costs based on the amount of effort personnel will
provide (in months). Contact OSP if you need personnel salaries.
Course Release/Buy-Out
• Faculty are currently on a 12-12 load. Course releases are
determined by the adjusted load process at your college.
• Refer to Course “Buy-Out” Policy
Example:
Dr. Jones has been approved for a 3-credit course release. She would
like to request buy-out on a sponsored project budget for an additional
3 credits. She cannot budget at the adjunct rate, so her salary request
would be:
$7,565 for a 3-credit buy-out
$579 for fringe (7.65%)
$8,144 cost to replace 3-credits
Personnel Costs Continued
“Other” Personnel:
• Students
• Lab technicians, other staff members (general secretarial support is
considered an “indirect” cost if the secretary performs other duties)
• Counselors
• Program Assistants
Usually, “other” personnel do not need an associated “effort” (in months).
Undergraduate wages vary from $11-$15/hr. Graduate stipends vary from
$7,000-$15,000 per year. Contact Dr. Pourkay Forouza at CGCE for graduate
stipend guidance.
Tuition and fees are often requested for Graduate Assistants. This estimate
should be based on actual per-credit rates and fees for your school. STEM
thesis-track grad programs have a special tuition rate.
Personnel Costs Regulations
Faculty
• The AFT union 2011-2015 agreement (Article XX) allows faculty to
receive academic-year (Sept-June) compensation from sponsored
programs for up to 30% of base salary, or $18,000, whichever is
greater. Anticipated same for future contract.
• The AFT union agreement does not cap the amount of money
summer salary faculty can request or earn.
Staff
• Staff members can be fully grant funded.
Do not overbudget effort! You cannot budget anyone for more than
12 months in a year, no matter how long/fast s/he works!
Personnel Fringe Costs
• If requesting salary, you must remember to request the associated
fringe costs (or can cost match). Fringe rate is determined yearly by
the State of New Jersey. FY13 full fringe rate includes:
Pension
11.29%
Health Benefits
30.06%
Workers Comp
1.15%
Unemployment Ins
.16%
Temp Disability Ins
.27%
Unused Sick leave
.17%
FICA
7.65% - part-time, summer, existing
TOTAL 50.75% (projected)
• There is no fringe applied to undergrad or graduate student wages.
Personnel Fringe Costs
• Example 1: Dr. Jones is requesting 1 month summer support at
$10,000. Since she is not under contract in the summer, she only
needs to request FICA fringe at 7.65%. Her total request, salaries
and fringe, will equal $10,765.
• Example 2: Dr. Jones is hiring a post-doc for $45,000. She should
also budget 50.75% fringe to fully cover associated employment
costs. Her total request, salaries and fringe, will equal $67,838.
• Example 3: Dr. Jones is requesting funds to support for a part-time
lab technician. Because the employee is only part time, Dr. Jones
only has to request 7.65% FICA fringe on the tech’s salary request.
Subawards
• Subawards are portions of awarded funds issued to another agency
to advance the project’s objectives.
• Example: Rowan University is awarded $500,000 for an outreach
project. $145,000 of this amount will be issued to Penn State for their
critical role in the project.
• Subawards MUST be budgeted in the proposal if they are ESSENTIAL
to the project. Otherwise, use a vendor (see handout).
• Subaward budgets should be created in collaboration with the other
institution. The subawardee will use their negotiated fringe and F&A
rate since work is being performed there.
• Subaward researchers are key players. Often will need to document
why you are choosing him/her (can’t just be buddies). Provide a CV to
indicate why s/he is the best choice.
• Be careful- you are ultimately responsible for a subawardee’s actions
and non actions!
• Remember, only the FIRST $25k of each subaward is included in the F&A
calculation.
Consultants
• Consultants are expert individuals who can provide a service.
• Service could include testing, evaluation, assessment, advisement.
• A consultant is paid a flat fee based on actual work performed. Ask
for the person’s standard hourly rate (or market rate) and estimate
the amount of hours the person will work. This flat rate will include
ALL costs, including travel, expenses, and overhead.
• Same as subawards-justify why this person is the right person to
hire.
• Federal sponsors expect an external evaluator/assessment
consultant.
Participant Support Costs
• You can request support costs for participants in your project. This
could include trainees, meeting/workshop participants, human
subjects, or other project participants.
• Registration fees, travel allowances, manuals and supplies,
honorarium, incentives, subsidence, and stipends may be regarded
as participant support costs.
• These costs MUST advance the project’s objectives and be necessary. If
participants attend an 8-hour training workshop, food costs may be
justifiable (check with sponsor). Remember, alcohol is never allowed.
• Estimate your costs carefully—this is one category that often cannot be
easily modified after an award is received.
• These costs are budgeted for independently (i.e. don’t lump
participant travel costs with your own travel costs).
• You should know how many participants you will support.
Help!
For help forming budgets, contact:
Stephanie Lezotte, Acting Director
Office of Sponsored Programs
[email protected] x4124
(state, federal, industry clinic grant
applications)
Deanne Farrell, Director
Corporate and Foundation Relations
[email protected] x5418
(corporate, foundation grant
applications)
For post-award budget questions, contact:
Kristy Carpenter, Post-Award Specialist
Office of Sponsored Programs
[email protected] x5497
What Do You Think?
• Dr. Mason wants to buy a customized freezer to store samples
acquired during the award period. His department is running
out of space and he has been asked to allocate ½ of the
freezer space to departmental purposes.
• Allowable cost?
What Do You Think?
• Helen has a grant to encourage increased representation of
minority students in STEM fields. An important element is
networking events, which involve food.
• Helen is not charging the cost of food to the sponsor, but
wants to use the cost to meet mandatory cost-sharing.
• Allowable cost?
What Do You Think?
• Syndey wants to buy a $5000 secure server using grant dollars.
• Was not in the budget narrative
• Will only be used to store field research (i.e. will not be his office
server)
• Allowable cost?