Transcript Sponsored Project Budgeting

SPS
Primer
Sponsored Project Budgeting
Jeffrey Silber
Sponsored Program Services
1
Why Budget?
SPS
Primer
• Budgets are needed:
– To ensure that the funds being requested are sufficient to perform
the work proposed
– Sponsors typically request detailed information in support of
budget request
• Some sponsors or solicitations may not pay for certain expenses
– Budgets help substantiate use of awarded funds
– To demonstrate that projects are proposed as “break even,”
consistent with the institution’s mission and corporate and tax
status
• PI and Unit are responsible for correct and sufficient
budgets, regardless of other reviews.
2
Sources for
Budget Information
SPS
Primer
• Proposal solicitation and referenced sponsor materials
• SPS Guide to Budgeting and Costing
http://www.osp.cornell.edu/ProposalPrep/Costing-guide.html
• SPS web pages for links to rates:
–
–
–
–
–
Facilities and Administrative Costs
Employee Benefits
Graduate Tuition
Student Health Insurance
Escalation rates
• College and/or departmental information
3
Budget Tools
SPS
Primer
• SPS Budget Template (Excel)
• Salary data from PEDL or CPBS
• Prior or similar project data (if available) from ADW
4
Preparing Budgets
SPS
Primer
• Budgets should be prepared for all proposals
• Budgets need to conform to the sponsor requirements, but
still retain the ability to map to the institution’s financial
systems
• At a minimum, even when the sponsor does not require a
detailed budget (e.g. fixed price agreement), a high level
budget should be prepared for SPS review
• Budgets can be prepared fairly early in the proposal
development process, allowing for preliminary review and
iteration with principal investigator
5
Budget Characteristics
SPS
Primer
• Allowable costs
– With only rare exceptions, budgets must conform to OMB
Circular A-21 rules on reasonableness, allocability, consistency,
and allowability
• Budgets should represent intention for expenditure of funds.
– Cannot deliberately propose in one category with the intention of
spending in another
• Direct and indirect costs must be treated separately
– Modified total direct costs (MTDC)
– Facilities and administrative costs (F&A, IDC)
• Salaries must reflect “level of effort” not hourly rates
6
Cost Sharing
(Cornell Policy 1.1)
SPS
Primer
• Cost Sharing
– Mandatory
– Voluntary
• Committed
• Uncommitted
– Examine the need for any form of cost sharing.
The determination of the need for cost sharing is to be made by the PI,
department, and college, with an understanding of the institutional
cost, agency rules, and solicitation requirements.
– Identify sources for mandatory and voluntary committed cost sharing
Caution: Any unreimbursed costs quantified in a proposal narrative,
budget, or budget justification constitute either mandatory or voluntary
committed cost sharing.
– Document cost sharing types, amounts and sources on Form 10.
7
Program Income
(Cornell Policy 3.8)
SPS
Primer
• Program income is revenue generated by the activity of the
sponsored project, during the project period
–
–
–
–
Conference registration fees
Materials or products fabricated by projected-supported facilities
Sale or rental of project equipment
Generally not royalties or licenses
• Must be treated in a specific fashion, based on sponsor and
award type
• May be required to be spent before project funds
8
Budget categories:
Salaries and Wages
SPS
Primer
• Faculty salaries may be academic year (9 month), summer (no more
than 3 months, each month equaling 1/9 of AY), or, with some contract
college faculty, calendar year (12 months)
• GRA appointments are typically for academic year and/or summer
• Other appointments are typically 12 months
• Salaries and wages should be projected to reflect rate during project
period, and escalated for subsequent periods
• NIH limits salaries to an annualized rate of $183,500 (CY2006). This
translates to a nine month salary of $137,625. This may result in the
need for identifying non-grant funds for a portion of the salary.
9
Budget categories:
Salaries and Wages
SPS
Primer
• GRA
– Tuition (typically one-half the full rate)
– Stipend (minimum amount is published by Graduate School)
– Health Insurance
• Note that Tuition and Health Insurance are excluded from MTDC
– Generally shown as a single line, rather than breaking out components.
– NIH also limits GRA compensation to a reasonable amount, and may
not fund more than their Level 0 postdoc rate ($36,996 for FFY 2006)
• Sabbatic salary
– May be included, but must be explicitly stated and represent salary for
work on the project during that period
10
Budget categories:
Employee Benefits
SPS
Primer
• Benefits have different treatment in Endowed and Contract College
divisions
– Proposals crossing divisions must use both rates
• The correct rates must be used for the project period
– Use multiple rates, and prorate if necessary
• Benefit charges cannot be waived, except as defined in policy
• Benefit charges are not applied to student (undergraduate or GRA)
payments
• All employees (permanent, temporary, full-time, part-time, student,
etc.) receive at least some employee benefits
• Rates are reviewed and approved by Federal Government
11
Budget categories:
Employee Benefits
SPS
Primer
• Endowed Colleges
– Three rates (Full, Minimum, Zero)
– Most benefits-eligible employees are charged full rate on their
salaries. Includes faculty summer salary and benefits-eligible
temporary employees.
– Non-benefits eligible staff (part-time, temporary) are assessed at
the minimum rate.
– Student staff, faculty sabbatic salaries, and some special
payments receive the zero rate.
– Rates are typically negotiated for a multi-year period
12
Budget categories:
Employee Benefits
SPS
Primer
• Contract Colleges
–
–
–
–
Two rates (Full, Zero)
Most employees charged at the full rate
Student staff and faculty sabbatics are charged at the zero rate
Awards from New York State agencies, of monies from the
state’s general fund, are not assessed benefits
– The rate is set annually
• The majority of the rate is set by the State
• A small piece is added for the Cornell-provided benefits
• The entire rate is approved, usually around May, by the Federal
Government (HHS)
13
Budget categories:
Equipment (Policy 3.9)
SPS
Primer
• Definition of Equipment
– Durability (2 or more years)
– Value ($5,000 or more, >= $100,000 for software)
• Generally equipment is acquired in a single functional unit,
but in some cases it may be fabricated, in which case parts,
but usually not labor, may be included in the asset cost.
• Equipment is capitalized in the University’s books
• Where necessary, observe a lower, sponsor stated, threshold
• Equipment is excluded from MTDC
• Sometimes sponsor will provide equipment, or keep title
14
Budget categories:
Equipment
SPS
Primer
• Special Purpose Equipment
– “means equipment which is used only for research, medical, scientific,
or other technical activities. Examples of special purpose equipment
include microscopes, x-ray machines, surgical instruments, and
spectrometers.” (OMB A-21)
• General Purpose Equipment
– “means equipment, which is not limited to research, medical, scientific
or other technical activities. Examples include office equipment and
furnishings, modular offices, telephone networks, information
technology equipment and systems, air conditioning equipment,
reproduction and printing equipment, and motor vehicles.”
• General purpose equipment is normally charged indirectly and thus
requires prior approval by sponsor if direct charged, and should be
clearly stated in the budget.
15
Budget categories:
Travel (Policy 3.2)
SPS
Primer
• Some sponsors require foreign travel approval. Some require approval
of all travel. Some do not permit any travel.
• Travel must relate to project. Sponsors generally want to see the detail
(number of trips, where, etc.)
• Federal sponsors require use of domestic air carriers for most foreign
travel. Any additional cost must be factored into budget.
• Sponsors expect that travel will be done in a least cost manner. Use of
premium travel – although permitted in some cases by CU policy –
should be justified in proposal.
• Per diem information may be found at www.payments.cornell.edu
16
Budget categories:
Other General Expenses
SPS
Primer
• Supplies
– Office supplies are normally indirect
– Lab or other project supplies may be included if allocable
• Services
– Consulting Agreements
• Important to identify consulting details in proposal text or justification.
Will assist in subsequent sole source justification.
• Publication Costs
• Communications
– Most communications (local phone, postage, generally indirect)
• Lease and rental
• Repair and Maintenance
– Generally only for R&M of project equipment
17
Budget categories:
Other General Expenses
•
SPS
Primer
User Fees, Per Diems
– Facility should be following “Recharge Operation and Service Facility” policy
(3.10)
•
Participant costs
– Cornell excludes from MTDC
– NSF prohibits rebudgeting out of this category without prior approval
•
Subcontracts
–
–
–
–
–
Performance of a portion of the project scope (or “science”) by another party
Not routine technical services (see Services or Consultants)
Amount over $25,000 excluded from MTDC
Weill Medical College is not a subcontract
Important to identify subcontracting details in proposal text or justification.
Otherwise sponsor approval may be required. May also assist in subsequent
sole source justification.
18
Budget categories:
Facilities and
Administrative Costs
SPS
Primer
• Use rate specific for the division/campus and the proper
time period
– Use multiple rates and prorate if necessary
• Off campus rate only applicable when personnel are located
elsewhere for a continuous period greater than two months.
Other activities (services, subcontracts, etc.) are considered
on-campus.
• Rates should be proposed at the federally-approved rate, or
the sponsor’s published maximum for this solicitation,
which ever is less. Other rates must be approved by the
appropriate Vice President or Dean prior to submission.
19
F&A Cost Bases
SPS
Primer
• All direct costs live in a “base” either instruction, research,
other sponsored activity (public service/extension) or other
institutional activities
• Base used for F&A computation is Modified Total Direct
Cost (MTDC). Equal to Direct Cost less equipment, tuition,
portion of subcontracts greater than $25,000
• Some programs may provide F&A on a Total Direct Cost
(TDC) base. This is typically a lower rate, and there are no
exclusions (even if cost is higher than if MTDC)
• Occasionally sponsor will require salary & wages or other
special base
20
F&A Math Tricks
SPS
Primer
• To “back in” to a number for direct costs use
– TOTAL BUDGET/(1+F&A RATE)
– (e.g. 100,000/(1.58)=63,291 F&A=36,709)
• If there are exclusions use
–
–
–
–
TOTAL BUDGET – EXCLUSIONS/ (1+F&A RATE)
Example: $100,000 total budget, $15,000 equipment
(100,000-15,000)/(1.58)=53,797 direct subject to MTDC
53,797 (direct in MTDC) + 15,000 (excluded) + 31,203 (F&A)
21
Budget Justification
SPS
Primer
• Key element of documenting “thoughts” behind the budget
development
• Should include rates (benefit, F&A, escalation), bases,
exclusions, etc.
• Should include details on each category
• Identify any normally direct costs that will be charged
directly
• Must “tie” to the budget
• Can be vital for resolving audit issues years after project
completion
22
High Level Budget
SPS
Primer
• Salaries
– Break out GRA Tuition/Stipend/Health, Students, Temporary Staff
• Benefits
• Equipment
• Participant Costs
• Subcontracts
• Other Direct
• F&A
• This permits SPS to ensure that rates are correct and budget is
reasonable.
23
Budget Template
SPS
Primer
http://www.osp.cornell.edu/ProposalPrep/BudgetTemplate/SponsoredBudgetTemplate.xls
24
Sample Budget Formats
SPS
Primer
• NSF (Form 1030), available through FASTLANE
• NIH (PHS 398)
• SF 424 R&R, used by grants.gov, and in the future to be
used by all federal agencies. NOTE: This will become the
default budget for federal assistantship programs
• High level budget
25
SPS
Primer
26
SPS
Primer
27
SPS
Primer
28
SPS
Primer
29