Introduction to Budgeting
Download
Report
Transcript Introduction to Budgeting
Intro to Budgeting
Lori Schultz, Sponsored Projects Services
Sept 2014
Today’s Agenda
Where do we start?
Basic framework for budgeting in sponsored research
OMB Circular A-21 General Costing Principles
The rules
Mechanics of building a budget
Categories of costs
Common Issues
Preparing the budget
Where do we start?
Program/Sponsor restrictions
Total dollar limits
Unallowed items of cost
Required items of cost
Cost sharing
F&A
Who else is involved? Other units/PIs?
Deadline
Sponsor Format
Relative difficulty (have we done this before?)
Mechanics of Building a Budget
What can I charge?
Budget & Justification should make sense when read along with
the science
Rules for federal awards
The specific RFP may prohibit or require certain classes of
expenses
OMB Circular A-21 (Federal Rules)
What is/was it?
OMB: Office of Management and Budget
Cost principles for federally sponsored projects
Guidance for determining direct vs. indirect costs
Replaced by OMB “Omni Circular” (2 CFR 200)
on Dec. 26, 2013
No substantial change in cost principles
Cost Principles
Reasonable –
OMB A.21, C.2(a)
Allocable –
OMB A.21, C.2(b)
Consistent –
OMB A.21, C.2(c)
Allowable –
OMB A.21, C.2(d)
Direct vs. Indirect Costs
Direct Costs
Can be identified specifically with a particular sponsored project
(OMB A-21 D.1.)
Indirect Costs
Facilities & Administrative Costs [F&A], Overhead (OMB A-21 E.1.)
Incurred for common or joint objectives - cannot be identified
readily and specifically with a particular sponsored project
Administrative expenses (staff, supplies)
Utilities
Building renovations, maintenance
Depreciation, debt service, central administration
Direct vs. Indirect Costs
Costs must be treated consistently - either as a direct or an F&A cost
‘Like costs treated in like manner’
Institution’s DS-2 often details which costs will be viewed as direct
vs. indirect
UA Direct/Indirect Cost policy:
http://rgw.arizona.edu/sites/researchgateway/files/direct_and_indi
rect_costs_of_sponsored_agreements_1.pdf
Common direct cost questions
Can I charge a computer/mobile device to my project?
Yes – if being used in a programmatic way
Connected to a scientific piece of equipment for data
collection; Needed to run simulations, analyze data,
etc.
No – if being used in a general way
Check email, browse internet, word processing, etc.
Updated guidance is more flexible
Not required to be dedicated to a single project
ALWAYS ensure it is well-described in the
justification
Common direct cost questions
Can I charge office supplies to my project?
Typically no, due to lack of allocability
However, they are allowable when in unlike circumstances
Used in a programmatic way: conference
materials, pamphlets, surveys, etc.
Common direct cost questions
Can I charge my administrative assistant to
my project?
Typically no, due to lack of allocability
However is appropriate on a ‘major project’
Outside of general job duties
Coordinating large numbers of collaborators or participants
New guidance is more flexible here
“Major projects” language removed, but requirement for allocability
still exists
Cost Sharing
• Matching funds / in-kind contributions
• Anything necessary for the completion of
the project that is not paid for by the
sponsor
– College/dept/central funds to pay for salaries, portion of
equipment, F&A restrictions, etc.
•
•
Cash or in-kind
• Cash: cost of cost-shared effort
• In-Kind: reduced indirect cost rate
3rd party contributions
Cost Sharing
The general rule: DO NOT include cost sharing unless it is required
by the program.
When required, be sure it is clearly stated in budget & justifications
Two categories:
Committed – must be tracked
Required by sponsor (committed in proposal)
Not required, but committed in the proposal
Uncommitted – does not need to be tracked
‘Volunteering’ of institution resources without mention of a specific
dollar amount
Cost Sharing & Allowability
Remember reasonable, allocable, consistent, allowable?
All of those apply!
In general cost-shared expenses are subject to the SAME
rules as direct expenses on the award:
Allowable costs, allocable items
Consistent & reasonable treatment
Within project start/end dates
Not otherwise prohibited by sponsor or program
Cost Sharing & Allowability
Sponsor F&A limitations:
Is this cost share?
Yes, but:
Am I allowed to include it in my cost sharing total?
Maybe, maybe not
I have two related federal projects. Can I use my NSF funds as cost share
for my USDA project?
NO.
Federal sources are almost never allowed as a
cost share source.
Getting started
Usually best to start with a common format, even when the
sponsor has forms:
Review at multiple levels is easier
Changes are easier
Many sponsor formats don’t calculate except simple addition
We’ll illustrate with the CALS format
Direct Costs
– Salaries
– Fringe benefits / Employee Related Expenses
–
–
–
–
(ERE)
Travel
Supplies
Contractual/Services/Subcontracts
Equipment
Budget Basics - Categories
Personnel
Name/(TBD) and effort devoted to project
% effort or person months (PM)
PM = % effort X appointment, so: 10% effort for AY = 10%
X 9mos = .9 person months
Grad Students or Student workers : salary/stipend or hourly rate
Salaries/hourly wages
Current faculty/staff: Ask department
To-be-hired: http://www.hr.arizona.edu/compensation_and_pay
ERE rates http://rgw.arizona.edu/administration/institutional-
information
Budget Basics - Categories
Personnel costs are the biggest portion of most budgets
Most likely to be restricted:
NIH Salary cap: $181,500 IBS (translates to full FY salary)
http://grants.nih.gov/grants/policy/salcap_summary.htm
NIH graduate compensation limit
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-02017.html
NSF 2-months salary
http://www.nsf.gov/pubs/policydocs/pappguide/nsf14001/gpg_2.js
p#IIC2g
Other sponsor restrictions
Budget Basics – Categories
Travel
For budgeted project personnel
Project-related conferences, required grant meetings,
subrecipient site visits, field work, etc.
Transportation, lodging, per diem, etc.
Costs based on:
Searching fares for providers (airline, etc)
Historical costs for conferences (fees / hotel)
Limits on lodging/per diem by location
(http://policy.fso.arizona.edu/fsm/1400/1471)
Budget Basics – Categories
•
Equipment
– Defined by our rate agreement:
• http://rgw.arizona.edu/administration/institutional-information
• Tangible, non-expendable, useful life >1 year
• Acquisition cost of $5,000+/unit
•
Depending on the program & cost of equipment
•
•
•
Formal quotes
Informal quotes
Acquisition cost includes tax, shipping, & installation
Budget Basics - Categories
• Materials and
Supplies
– Items to be used for
the project
•
Ex: chemicals to be used
for experimentation
•
Ex: printer paper for a
research survey
•
Ex: computer to run a piece
of lab equipment
• Contractual
– Services to be performed
by another entity for the
project
•
Ex: 3rd party vendor to perform
DNA sequencing
•
Ex: evaluator to assess
effectiveness of education
program
– Subaward
Budget Basics - Categories
Collaborator from another institution?
Subaward (subcontract)
Distinguished from a vendor by the intellectual contribution to the
project outcome
Provide SOW, budget, and budget justification prior to
submission
A single line item on your budget
Subaward budget must comply with sponsor guidelines,
subrecipient institution policies, and all federal regulations
F&A only charged on first $25,000 of each
subaward
Indirect Costs (F&A)
• Applied to costs specified in federally
negotiated rate agreement
– Modified Total Direct Cost (MTDC)
• All costs excluding tuition, equipment, patient care, off-site rentals,
scholarships, fellowships, and all subaward costs exceeding $25,000
• We are a DHHS institution
• Sponsor stipulations & F&A Waivers
• http://rgw.arizona.edu/administration/buildbudget/F-A-Costs
Working out a budget…
The Parameters
Sponsor: NIH
Total direct cost limit/yr: $250,000 (modular)
Cost sharing: Mandated by cap
On-Campus Research project for F&A
The PI is Dr. Lecter, in SWES. He makes $300,000 total IBS and
is an academic employee. He plans to spend 15% effort in the
summer.
And another one…
Sponsor: NSF
Total direct cost limit/yr: Not specified
Cost sharing: prohibited
On-Campus Research project for F&A
Subcontract to Whatsamatta U.
The PI is Dr. Lecter, in SWES. He makes $300,000 total IBS and
is an academic employee. He plans to work the entire
summer.
You WILL use algebra again…
A sponsor limits the project budget total to $150,000 and will
pay full F&A rate of 53% MTDC.
The project budgets nothing that would be excluded for F&A
purposes (tuition, equipment).
How much money is available in direct costs?
Total / 1+ F&A Rate = Direct Cost
$150,000/1.53 = $98,039
$98,039 * .53 = $51,961
$98,039 + $51,961 = $150,000
Questions?