Transcript Building Budgets that Survive the Real World

Building Realistic Budgets
Judy Harris, Proposal Processing
Division of Sponsored Research
U N I V E R S I T Y OF F L O R I DA
Course Objectives
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Participants will be able to construct an effective
budget using their knowledge of federal, state,
and university requirements.
Participants will become familiar with the
University’s criteria for cost sharing.
Participants will be able to use the web to
maintain current regarding any sponsor changes
that impact budget development.
U N I V E R S I T Y OF F L O R I DA
Additional Course Objectives
• Become familiar with the steps that
must be taken before you begin
preparing a proposal budget.
• Be able to develop a proposal budget.
• Become familiar with the major cost
categories.
U N I V E R S I T Y OF F L O R I DA
What is a Budget?
 An estimate of costs required to
perform a statement of work
with a specific start and end
date.
U N I V E R S I T Y OF F L O R I DA
Proposal Budgets
 Made up of costs that can be explained
or verified and are reality-based
 No “Educated Guesses” or “Off The
Wall” estimates
 May require several drafts before it is
finalized
 May vary in structure and complexity
U N I V E R S I T Y OF F L O R I DA
Why Is a Budget Important?
 It is the second most scrutinized part of the proposal
 A clear concise budget supported by a strong budget
justification can increase the chances of a proposal
being funded
 The University is held to pricing information provided
in proposal
 The proposal budget can become the actual award
budget
U N I V E R S I T Y OF F L O R I DA
Budgets are the “reality check” for the project.
U N I V E R S I T Y OF F L O R I DA
Pre-Preparation Steps
 Locate and review agency guidelines
 Identify budget ceiling and any budgetary limitations
or restrictions
 Identify the start date and/or period of performance (If
none, establish one)
 Identify differences between general agency and
specific program announcement budget guidelines
 Identify limitations on overhead (F&A costs) or
administrative fees
 Identify all special forms or formats, schedules,
required cost breakdowns
 Identify any other special conditions
U N I V E R S I T Y OF F L O R I DA
Read the guidelines for budget preparation carefully…they’ll
become the “rules” when the project is funded
U N I V E R S I T Y OF F L O R I DA
Basic Proposal Budget Components
1. Direct Costs
2. Facilities and Administrative
Costs, or F&A
(a.k.a. Indirect Costs)
U N I V E R S I T Y OF F L O R I DA
Direct Costs
 Expenses identified specifically with a
particular sponsored project, instructional
activity, or other institutional activity
 Must be allowable, allocable, reasonable &
necessary for the program, given consistent
treatment and conform to sponsor limitations
U N I V E R S I T Y OF F L O R I DA
Facilities & Administrative Costs
 Costs incurred for common or joint objectives
which cannot be identified to a specific direct
cost activity
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Facilities and Utilities
Administrative and Clerical Salaries
DSR/Purchasing/HR/Controller
Postage
Local Telephone
Office Supplies
Data Processing/Computer Supplies
General Purpose Software
Memberships
Subscriptions
U N I V E R S I T Y OF F L O R I DA
Major Budget Categories
Personnel Costs
Fringe Benefits
Travel
Research Supplies
and Materials
 Participant Support
 Consultants
 Tuition
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 Equipment
 Subcontracts
 Facilities and
Administrative Costs
(F&A)
 Other Direct Costs
U N I V E R S I T Y OF F L O R I DA
Personnel Costs
 Personnel Categories:
 Academic Personnel (includes Faculty
& Post Docs)
 TEAMS/USPS
 OPS (includes Graduate Research
Assistants, Student Assistants & Other
Temporary Employees)
U N I V E R S I T Y OF F L O R I DA
Domestic Travel
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Airfare
Lodging
Car Rental
Per Diem
Mileage
Parking Fees
Registration Fees
Local Transportation (Taxi, Metro, Shuttle)
Includes travel to Canada
U N I V E R S I T Y OF F L O R I DA
Foreign Travel
(Generally subject to prior approval from sponsor).
 Airfare
 Apartment Rental
 Car Rental
 Local Transportation
 Lodging
 Per Diem (Federal travel subject to GSA
Schedule)
 Registration Fees
 Includes travel to Mexico
U N I V E R S I T Y OF F L O R I DA
Budgeting Travel
 Should include detailed
information in budget narrative:
Number of Travelers
Length of Trip
Destination
Per Diem
Travel Fares
Registration Fees/
Conference Costs
U N I V E R S I T Y OF F L O R I DA
Equipment
 Costs more than $1,000
 Has a useful life of one year or more
 Some sponsors may require supporting
documentation/quote at proposal
submission
U N I V E R S I T Y OF F L O R I DA
Tuition
 All new proposals, including resubmissions,
competing renewals and supplements, that
include salary/stipend for graduate assistants
and where tuition is an allowable cost, must
budget appropriate amounts for tuition.
U N I V E R S I T Y OF F L O R I DA
Consultants
 Non-UF Employees
 Not a subcontractor – no substantial
programmatic involvement
 Normal daily rate
 Supported by letter/quote from Consultant
U N I V E R S I T Y OF F L O R I DA
Subcontractors
 Can be:
 Other Institutions
 Commercial Companies
 Subcontractor has substantive
programmatic involvement and may
be co-author on resulting publications
U N I V E R S I T Y OF F L O R I DA
Subcontractors
 Before submitting the proposal obtain:
 Letter of Commitment from institutional
authorized official.
 Written Quotes/Budgets
 Statement of work
U N I V E R S I T Y OF F L O R I DA
Participant Support
 Payments to individuals
required on the project with no
obligation to provide work or
services
 Typical costs
− Stipends
− Travel-related costs
U N I V E R S I T Y OF F L O R I DA
Other Direct Costs
 Student Support for
Scholarships/Fellowships
 Tuition, fees, stipends
 Not providing ANY services
U N I V E R S I T Y OF F L O R I DA
Other Direct Costs
 Facilities
 Rental Space
 Renovation
U N I V E R S I T Y OF F L O R I DA
Facilities & Administrative Costs (Indirect Costs)
 Applied to ALL sponsored projects unless
sponsor policy/program limits indirect recovery
 Following sponsor types have specified
F&A rates:
State of Florida: 25%
Water Management Districts 25% TDC
Other Florida Governmental Entities 25% TDC
Clinical Trials 25% TDC
U N I V E R S I T Y OF F L O R I DA
Facilities & Administrative Costs (Indirect Costs)
University rates are based on the following
factors:
Function/Purpose Location of Project
Research
Instruction
Other
AREC
On-Campus
Off-Campus
U N I V E R S I T Y OF F L O R I DA
Facilities & Administrative Costs (Indirect Costs)
Function
Location
On Campus
Off Campus
Organized Research
AREC
Other Sponsored Acts
46.5%
46.4%
33.6%
26.0%
25.0%
26.0%
Instruction
50.0%
26.0%
48.5%
28.0%
Department of Defense
U N I V E R S I T Y OF F L O R I DA
Calculating F&A
• Identify Exclusions
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Equipment
Capital Expenditures (includes renovations)
Patient care charges
Tuition remission
Rental costs of off-site facilities
Scholarships
Fellowships
Subcontract amounts in excess of first $25,000
• Modified Total Direct Cost Base (MTDC) =
Total Direct Costs minus items not charged with F&A.
• Total Direct Cost Base (TDC) =
Total Direct Costs x F&A rate without any exclusions.
U N I V E R S I T Y OF F L O R I DA
Total Budget
Total Direct Costs
+ F&A Costs
= Total Budget
U N I V E R S I T Y OF F L O R I DA
Cost Sharing in Budgets
 Identifies necessary project costs not requested from
sponsor
 Should be a sponsor requirement
 Should be referenced in budget as directed by sponsor
 Shows UF’s/Third Party commitment to Project
 Should follow UF Cost Sharing Policy
U N I V E R S I T Y OF F L O R I DA
Charging Costs Directly or Indirectly to Sponsored Projects
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In order to comply with (OMB) Circular A-21 and the Cost Accounting Standards
Board’s cost accounting standards, UF’s policy for charging costs to federally
sponsored projects is:
 Clerical and administrative salaries will be charged indirectly unless direct charging can be
justified in accordance with OMB Circular A-21.
 Postage will generally be charged indirectly.
 Basic telephone charges will generally be charged indirectly, including cell phones.
 Lab supplies will generally be charged directly.
 Office supplies will generally be charged indirectly.
 General purpose software will generally be charged indirectly.
 Technical software will generally be charged directly.
 Subscriptions will generally be charged indirectly.
 Institutional and individual memberships will generally be charged indirectly.
 Repair and maintenance charges for equipment purchased on the award will generally be
charged directly.
 Other related costs (photocopies, travel, technical and scientific equipment, animal care
and other services provided by specialized service facilities) will generally be charged
directly.
U N I V E R S I T Y OF F L O R I DA
Arithmetic – Double Check Budget!
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Fringe Benefit Rates
GRA Tuition
F&A Rate
MTDC Exclusions
On & Off Campus
Budget Total
 Correct?
 Within Sponsor Limits?
 For All Years?
U N I V E R S I T Y OF F L O R I DA
Review and Finalize Budget
 Review draft
 ceiling price exceeded?
 Revise
 How much to cut? add?
 Cut logical places
 Should the technical proposal be revised due to budget
changes?
 Are Cost Share funds required?
 Have cost-share commitments been secured?
 Proposed effort documented?
 Equipment match documented?
U N I V E R S I T Y OF F L O R I DA
Final Budget Presentation
 Prepare Sponsor budget forms
 Accurate
 Neat
 Legible
U N I V E R S I T Y OF F L O R I DA
Finalizing Budget
 Prepare justification/budget
narrative
 Should be arranged in order of
Sponsor’s budget form
 Clear & Concise
 Explanation of request
U N I V E R S I T Y OF F L O R I DA