Transcript Basic Budget Building

Basic Budget Building
Research Executive Area
Please Note
Rates used in this Tutorial are for example
purposes only and may not be up to date.
For current rates, please see our
Proposal Fact Sheet
Basic Budget Building
This presentation is available on the www under
“Basic Budget Building Tutorial” at
http://www.umass.edu/research/ogca/proceds.htm
All underlined entries herein are hyperlinks to other
resources. You are invited to use and share this
presentation and to follow the links for additional
important information
First Steps
• Contact OGCA by sending an email to the pre-award research
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•
•
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administrator responsible for reviewing your proposal. Let them
know the deadline and provide the URL for program guidelines.
Review Sponsor guidelines for any costing rules that could
include:
• Ceilings on requested amount
• Indirect cost limits
• Cost-share requirements
• Direct cost restrictions (no equipment for example)
Consult OGCA Fact Sheet for current rates
Identify sponsor forms
Build your budget using this basic budget building tutorial as a
starting point. Contact OGCA with any questions.
Two Major Budget
Components
• Direct Costs:
• The costs that are directly attributed to the project.
Examples include salary, supplies, equipment, etc.
• Facilities and Administrative Costs (F&A).
(Indirect Costs or Overhead):
• Pooled costs UMass incurs in support of Sponsored
Activities not directly attributable to any one sponsored
project. F&A is assessed as a percentage of direct
costs.
Two Types of Direct Costs
• Personnel (Salaries and Fringe Benefits)
• Non-Personnel
Personnel
• Faculty Salaries
• Academic
• Summer
• Calendar
Academic Year (AY) Salary
• Consult with your department head to determine how
much time you are allowed to dedicate to research projects.
Personnel effort on all ACTIVE awards plus teaching load
cannot exceed 100% . In other words, 100% summer
salary (14 weeks) + committed academic year research
effort (up to the maximum percentage allotted for research
by your department during the academic year) + Teaching
load + other obligations = 100%
• Academic Year (AY) salary is based on a 9 month
appointment
• AY salary charged to the sponsor is assessed the full fringe
benefits package. The exception to this is the non-tenure
track research professor -- this can be non-benefited
Academic Year Salary (Cont’d)
• Some sponsors (e.g. NSF) do not allow
payment of academic year salary without
strong justification (strictly research
appointments, etc.)
Academic Year Salary
Sample Calculation
• To charge 11% (1 month) of an academic
salary of $65,000:
11% X $65,000 = $7,150
Show basis of effort according to sponsor
preference, usually represented as either % of
effort or monthly. NSF requires by month, NIH
by %
Personnel Budget Detail
Academic Salary
Cost Type
Cost
Personnel
Principal Investigator (1 month
or 11% academic year)
Total
$7,150
$7,150
Fringe
Fringe on Academic Year
Salary
• Group Insurance & Retirement:
27.00%
• Worker’s Comp., Unemp., & Univ. Health:
• FICA (Medicare):
.91%
1.45%
(applicable only if hired after 4/86)
• Health & Welfare:
$11 per week
Academic Year Salary
Sample Fringe Calculation
• Group Insurance 27.00% X $7,150 = $1,931
• Worker’s Comp, etc.
• FICA (Medicare)
.91% X $7,150 =
$65
1.45% X $7,150 = $104
• 38 weeks (AY) X $11/wk X 11%
=
$46
• Total Fringe = $2,146
Fringe Budget Detail
Academic Year Fringe
Cost Type
Cost
Fringe
Personnel
Principal Investigator
11% academic year
Total
$7,150
$2,146
$7,150
$2,146
Personnel
• Faculty Salaries
• Academic
• Summer
• Calendar
Faculty Summer Salary
• Federal:
• Those faculty with Academic Year (AY) appointments can
receive an additional 33% as summer salary. For example if
AY pay is $100,000, then an addition $33,000 can be charged
as summer salary.
• The summer pay rate is based on the 9 month academic year
salary.
• NSF permits only 2/9’s, the equivalent of 2 month’s salary.
• Industrial and Foundation:
• Pay rate unrestricted – negotiated with sponsor
• Personnel effort on all ACTIVE awards plus teaching load cannot
exceed 100% . In other words, 100% summer salary (14 weeks)
+ committed academic year research effort (up to the maximum
percentage allotted for research by your department during the
academic year) + Teaching load + other obligations = 100%
Faculty Summer Salary
Sample Calculation
Annual salary = $54,000
Monthly salary= $54,000/9 = $6,000/mo
2 months of summer salary = $12,000 charged to the
project
• Show basis of effort according to sponsor preference,
usually represented as either % of effort or monthly.
NSF requires by month, NIH by %
Personnel Budget Detail
Summer Salary
Cost Type
Cost
Fringe
Personnel
Principal Investigator
11% academic year
Principal Investigator
2 months summer salary (67% summer)
Total
$7,150
$2,146
$12,000
$19,150
$2,146
Faculty Summer Salary
Sample Fringe Calculation
• If PI hired before April 1, 1986
• Worker’s Comp. = .91%(Summer Salary)
• If PI hired after April 1, 1986
• FICA
= 1.45%
• Worker’s Comp. = .91%
2.36%
For the sample budget, assume the latter:
2.36% X $12,000 = $283
Personnel Budget Detail
Summer Salary Fringe
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1 month)
PI summer, 2 mos
(67% summer)
Total
$7,150
$2,146
$12,000
$283
$19,150
$2,429
Personnel
• Faculty Salaries
• Academic
• Summer
• Calendar
Faculty Calendar Year
Appointment
• Some faculty have calendar year appointments –
12 months
• Full fringe is assessed; same as academic
appointments
• Additional compensation can only be charged to
Non-Federal sources and with Dean and Provost
written approval - only FICA & Worker’s Comp.
are charged for fringe
Personnel
• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
Other Professional
Sample Calculation
• Calendar year employees:
Sample annual salary = $30,000
• Calculating effort on a % basis:
• 30% X $30,000 = $9,000
• Calculating effort on a monthly basis:
• $30,000/12 months = $2,500/month;
• $9,000/$2,500 = 3.6 months
• Additional compensation: professional and classified staff
can be budgeted up to an additional 12% salary from Non-Federal
sources on top of their base annual with Dept. Head and Dean
approval. Must be clearly noted in the budget as “Add comp” –
consult with Human Resources for allowability.
Personnel Budget Detail
Other Professional Salary
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1
month)
$7,150
$2,146
PI summer, 2 mos
(67% summer)
$12,000
$283
Other Professional,
30% (3.6 mos)
$9,000
Total
$28,150
$2,429
Other Professional
Sample Fringe Calculation
•
Assessed at full fringe rates
• Fringe (27%) + Worker’s Comp (.91%): 27.91%
$9,000 x .2791 = $2,512
• Health & Welfare $11/week or $572 annually
30% effort x $572 = $172
• FICA (if hired after 4/1/86) 1.45%
$9,000 x .0145 = $131
• Total Fringe = $2,512 + $172 + $131 =
$2,815 for this example
Personnel Budget Detail
Other Professional Fringe
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1
month)
$7,150
$2,146
PI summer, 2 mos
(67% summer)
$12,000
$283
Other Professional,
30% (3.6 mos)
$9,000
$2,815
$28,150
$5,244
Total
Personnel
• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
Graduate Student Stipend
• Stipend - Minimum Graduate Stipends are set by
academic areas, per student contracts. For a
memo regarding specific minimum student
stipends click here:
New Recalculated Minimum Graduate Student Employee
Stipends
• Example: for a graduate student hired in 2003 for
20 hrs per week both academic and summer:
20 hours per week X 52 weeks = 1040 hours
1040 X $14.12 = $14,685
Personnel Budget Detail
Graduate Student Stipend
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1
month)
$7,150
$2,146
PI summer, 2 mos (67%
summer)
$12,000
$283
Other Professional, 30%
(3.6 mos)
$9,000
$2,815
Graduate Student (1040
hours or 50%)
$14,685
Total
$42,835
$5,244
Graduate Student
Sample Fringe Calculation
• GEO Health Fee: assessed at $2.57 per hour
The following examples reflect typical appointments:
• $1,950: 20 hours/wk X 38 weeks academic = 760 hrs
X $2.57/hr
• $2,673: 20 hours/wk X 52 weeks = 1,040 hrs x
$2.57/hr
• $3, 392: 20 hours/wk X 38 weeks academic + 40
hours/wk X 14 weeks = 1,320 hours x $2.57/hr
Graduate Student Fringe
Sample Fringe Calculation
• Health & Welfare
$11/wk per student
• $572 for 52 week year
• $418 for 38 week academic year
• $154 for 14 week summer
$572 this example
(cont’d)
Graduate Student
Sample Fringe Calculation
(cont’d)
• Summer Student Payroll FICA
If not enrolled in classes: 1.45% summer payroll
(14 weeks)
$14,685/52 wks = $282/wk
$282 X 14 wks = $3,954/summer
1.45% X $3,954 = $57
$57 for this example
Graduate Student
Sample Fringe Total
•
•
•
•
GEO Health Fee
Health & Welfare
Summer Student FICA
Total
$2,673
$ 572
$ 57
$3,302
• NOTE: Curriculum fee is assessed on all
academic year grad student appointments but not
budgeted as fringe -- see “Other” for more info
Graduate Student
Fringe Calculation
• It is important to understand how the fringe
calculation is done, however we have constructed
a Graduate Student Fringe Calculator to make it
easier. It also calculates the Curriculum fee.
Personnel Budget Detail
Graduate Student Fringe
Cost Type
Cost
Fringe
Personnel
PI academic, 11%
(1 month)
$7,150
$2,146
PI summer, 2 mos
(67% summer)
$12,000
$283
Other Professional,
30% (3.6 mos)
$9,000
$2,815
Graduate Student
(1040 hours or 50%)
$14,685
$3,302
$42,835
$8,546
Total
Personnel
• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Postdoctoral Fellow
Postdoctoral Fellow
• Salary is determined by what the market
will bear in a particular field and is usually
figured on an annual basis. Check with
Department Head for prevailing rates
• $35,000 per year this example
Personnel Budget Detail
Postdoctoral Fellow Salary
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1
month)
$7,150
$2,146
PI summer, 2 mos (67%
summer)
$12,000
$283
Other Professional, 30%
(3.6 mos)
$9,000
$2,815
Graduate Student (1040
hours)
$14,685
$3,302
Postdoc (12 mos)
$35,000
Total
$42,835
$8,546
Postdoctoral Fringe
• UMass requires the budgeting of health insurance
for postdocs by either providing:
• 1) The full benefits package – includes group insurance
and retirement
• 2) Budgeting for the postdoc health plan – no
retirement
Post Doc Fringe (cont’d)
• 1)
•
•
•
•
Full benefits:
Group Insurance & Retirement: 27%
Worker’s Comp., Unemployment, & Univ. Health: .91
FICA (Medicare): 1.45% (applicable if hired after 4/86)
Health & Welfare: $11 per week
27% X $35,000
.91% X $35,000
1.45% X $35,000
52 weeks X $11/wk
Total Fringe
= $9,450
=
$319
=
$508
=
$572
= $10,849
Postdoctoral
Sample Fringe Calculation (cont’d)
• 2) Postdoc Health Insurance plan:
Fellow only
$232/mo
Fellow and child(ren)
$615/mo
Fellow and spouse
$728/mo
Fellow, spouse & child(ren) $1,111/mo
12 months X $232/mo = $2,784
• Worker’s Comp and FICA are assessed as well:
.91% X $35,000 = $319
1.45% X $35,000 = $508
Postdoctoral
Sample Fringe Total
Postdoc with health (no-retirement):
• Worker’s Comp
• FICA
• Health Insurance
• Total
$319
$508
$2,784
$3,611
Personnel Budget Detail
Postdoctoral Fellow Fringe
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1 month)
$7,150
$2,146
PI summer, 2 mos (67% summer)
$12,000
$283
Other Professional, 30% (3.6 mos)
$9000
$2,815
Graduate Student (1040 hours)
$14,685
$3,302
Postdoc (12 mos)
$35,000
$3,611
$77,835
$12,157
Total
Personnel
• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Postdoctoral Fellow
• Secretarial
Secretarial
Secretarial salary can be charged to nonfederal projects without any restrictions. The
direct charging of secretarial services on
federally supported projects is allowed only
under a limited number of scenarios. See the
policy statement and consult with OGCA
proposal staff for guidance.
Personnel
• Faculty Salaries
• Summer
• Academic
• Calendar
• Other Professional (Programmer, Technician, etc.)
• Graduate Student
• Post Doctoral Fellow
• Secretarial
• Undergraduate Student
Undergraduate Student
• Undergraduate Students are hired for
varying numbers of hours per week
• The pay scale for undergraduates is
determined by the job description and
Human Resources guidelines
10 hrs/wk X 38 wks X $10/hr = $3,800
Personnel Budget Detail
Undergraduate Student Pay
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1 month)
$7,150
$2,146
$12,000
$283
$9000
$2,815
Postdoc (12 mos)
$35,000
$3,611
Graduate Student (1040 hours)
$14,685
$ 3,302
PI summer, 2 mos (67% summer)
Other Professional, 30% (3.6 mos)
Undergraduate (10 hrs/wk academic)
Total
$3,800
$77,835
$12.157
Undergraduate Fringe
Undergraduate salary is not charged fringe.
However, FICA is charged during summer
employment if the student is not enrolled in summer
classes.
Fringe = $0 for this example since the student is
working during the academic year.
Personnel Budget Detail
Undergraduate Student Fringe
Cost Type
Cost
Fringe
Personnel
PI academic, 11% (1 month)
$7,150
$2,146
$12,000
$283
$9000
$2,815
Postdoc (12 mos)
$35,000
$3,611
Graduate Student (1040 hours)
$14,685
$3,302
$3,800
$0
$81,635
$12,157
PI summer, 2 mos (67% summer)
Other Professional, 30% (3.6 mos)
Undergraduate (10 hrs/wk academic)
Total
Non-personnel
• Consultants
Non-personnel Costs
Consultants
• A consultant lends their expertise and advice in their given
field without actually “working” on the project
• UMass personnel cannot be paid as consultants on UMass
grants & contracts
• NSF limits consultant daily rate to max of $498 per day.
This rate can be used for guidance on other federal projects
but is not a requirement. Basis for costing on non-federal
grants is market driven
• Provide daily rate of pay in the budget – obtain from
consultant – do not guesstimate, get exact rate
Non-personnel Budget Detail
Consultants
Cost Type
Consultant – ABC Advice, Inc. ($498/day, 10 days)
Cost
$4,980
Non-personnel
• Consultant
• Equipment
Equipment
•
Definition:
•
•
•
•
$1,000 unit cost or more
Non-expendable tangible property
Useful life of 2 years or more
Budgeting:
•
•
List pieces of equipment separately showing unit cost
Basis for costing: costing can easily be done on-line for
items from laptops to centrifuges, or with familiar
vendors. Avoid guesstimates
Non-personnel Budget Detail
Equipment
Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Non-personnel
•
•
•
Consultant
Equipment
Administrative
Non-personnel
•
•
•
Consultant
Equipment
Administrative
• Administrative and Office Supplies
Administrative
Office & Administrative Supplies
• Definition:
• Pens, pencils, file folders, paper products, including
photocopy paper, film, tape, etc., and small office machines
under $100
• Budgeting:
• Federal: strict limitations placed on ability to budget. NOT
ALLOWABLE – consult with OGCA. Not included in
sample budget for this reason
• Non-federal: no limits - budget as needed
• Basis of costing: experience
• Range: $25 - $100, depending on size of project
Non-personnel
•
•
•
Consultant
Equipment
Administrative
• Administrative and Office Supplies
• Postage and Telephone
Administrative
Postage & Telephone
•
Definition:
• Overnight courier services, regular postage, telephone
•
Budgeting:
• Allowable on federal projects but only with thorough
explanation and justification. Must detail project
related need and state ability to separately track these
expenses from routine non-project expenses for
auditing purposes
• Federal: telephone only for long-distance or for phone
line entirely dedicated to the project
Administrative
Postage & Telephone (cont’d)
• Limitations on costing are not typically placed by non-
federal sponsors
• Basis for costing: experience in related projects with
costing scaled up or down depending on relative size of
project. Check your records and/or bookkeeper’s for
prior accounting on project of a similar size and type
• Typical range: $50 to $500; amounts vary depending
on nature of the project
Administrative
Postage & Telephone
Sample calculation/justification
• Postage for mailing brochures:
• 200 X .25 = $50
• Justification
• Mailing of brochures to candidates for participation
in the study. Brochures explain guidelines and
criteria. They are required to properly educate
possible participants prior to screening. These costs
are auditable and accounted for separately from nonproject costs
Administrative Costs
Postage & Telephone
Calculation/Justification (cont’d)
• Telephone (long-distance):
• $200
• Justification:
• Long distance phone calls required for follow-up
with accepted participants to run initial interviews
and to schedule and confirm appointments for
participation. These costs are auditable and
accounted for separately from non-project costs
Non-personnel Budget Detail
Administrative (cont’d)
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative –
Postage for mailing brochures
Telephone (long-distance)
$50
$200
Non-personnel
•
•
•
Consultant
Equipment
Administrative
• Administrative and Office Supplies
• Postage and Telephone
• Subscriptions, Membership Dues
Administrative
Subscriptions, Membership Dues
• Definition:
• Self-explanatory; costs must be allocable to a specific
project and allowed by the sponsor
• Budgeting:
• Federal: strict limitations placed on ability to budget.
NOT ALLOWABLE – consult with OGCA. Not
included in sample budget for this reason
• Non-federal: no limits - budget as needed. Should be
explained/justified
• Basis of costing: current vendor rates
• Range: variable
Non-personnel
•
•
•
Consultant
Equipment
Administrative
• Administrative and Office Supplies
• Postage and Telephone
• Subscriptions, Membership Dues
• Photocopying
Administrative
Photocopying
• Definition:
• Both on and off-campus project-related photocopying
services
• Budgeting:
• Federal: Allowable on federal projects but only with
thorough explanation and justification. Must detail
project related need and state ability to separately track
these expenses from routine non-project expenses for
auditing purposes
• Non-Federal: no limits - budget as needed
Administrative
Photocopying (cont’d)
• Budgeting (cont’d)
• Basis of costing: experience in related projects with
costing scaled up or down depending on relative size of
project. Check your records and/or bookkeeper’s for
prior accounting on project of a similar size and type
• Range: variable
Administrative
Photocopying justification
Sample explanation/justification:
• Funds are budgeted for project-related copying
expenses incurred in the dissemination of paper
submissions, documents/reports, and
meetings/presentations required by the sponsor.
These costs are auditable and separately tracked
from routine non-project expenses
Non-personnel Costs
•
•
•
•
Consultant
Equipment
Administrative
Supplies
Non-personnel Costs
Supplies
•
•
•
•
Consultant
Equipment
Administrative
Supplies
• Laboratory supplies, chemicals
Supplies
Laboratory supplies, chemicals
• Definition:
• Laboratory supplies and chemicals allocable to
proposed project
• Budgeting:
• List types and give subtotals for major items in the
budget explanation as applicable
• Basis for costing: check with vendors or accounting
records for prior costing on similar projects. If new to
budget building, confer with more experienced
colleagues. Avoid over-inflating costs
• Range: variable, $100 - $25,000 based on project
size/type
Supplies
Lab supplies/chemicals
Calculation
Lab supplies/chemicals:
• Chemicals:
• Reagents:
• Antibodies:
• Enzymes:
$5,000
$1,000
$2,000
$500
• Disposable lab supplies
(pipettes, media agents,
syringes, etc.):
• Total:
$300
$8,800
Non-personnel Budget Detail
Supplies
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative –
Postage for mailing brochures
Telephone (long distance)
Supplies –
Lab/chemical supplies
$50
$200
$8,800
Non-personnel Costs
Supplies (cont’d)
•
•
•
•
Consultant
Equipment
Administrative
Supplies
• Laboratory supplies, chemicals
• Computer supplies
Supplies -- Computer supplies
• Definition:
• Computer paper, diskettes, zip disks, toner, etc
• Budgeting:
• Federal:
 Allowable with proper explanation and justification
 Must detail project related need and state that these
expenses are separately auditable from non-project costs
• Non-federal: no restrictions
• Basis for costing:
Check with vendors, accounting records, or colleagues for
prior costing on similar projects
 Avoid over-inflating costs

• Range: variable, $50 - $250 based on project size/type
Supplies
Computer supplies
Calculation/Justification
• Computer supplies:
• Cost: $200
• Justification:
• Computer supplies are required for project
related sponsor mandated reports. These costs
are separately auditable from non-project costs
Non-personnel Budget Detail
Supplies
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative –
Postage for mailing brochures
Telephone (long-distance)
Supplies –
Lab/chemical supplies
Computer supplies
$50
$200
$8,800
$200
Non-personnel Costs
Supplies
The list of items in this sample budget under “Supplies”
are not exhaustive but provided for illustrative
purposes. Other costs that might arise are listed below
for convenience. Click item for more information if
hyperlinked
• Research animals
• Software, Software Upgrades, & Software
Licenses
Non-personnel Costs
•
•
•
•
•
Consultant
Equipment
Administrative
Supplies
Travel
Non-personnel Costs
Travel
• Definition:
• Airfare (domestic & foreign), per diem, hotel,
conference registration, ground transportation
(taxi/limo), car rental, mileage & tolls
• Budgeting:
• Federal:
 Cannot charge business class or first class air travel
 Must utilize U.S. flag carriers at the lowest available
rates
• Non-federal: No airfare limitations
Non-personnel Costs
Travel
(cont’d)
• Budgeting cont’d.
• Basis for costing:
 Airfare: check with travel agent or on-line service.
 Domestic per diem and hotel: UMass limits per diem
(food) charge on domestic travel at $30.00 per day
($35 for MA, NYC, DC). See federal per diem site for
suggested domestic hotel costs or call your travel
agent.
 Foreign: Use foreign per diem and hotel rates, actual
expenses based on prior travel or check with travel
agent and/or bookkeeper.
 Mileage: set at the IRS rate, currently (FY ’03) set at
.375 per mile.
Non-personnel Costs
Travel (cont’d)
• Range:

$1,200 to $1,600 per domestic conference

$1,500 to $3,000 per foreign conference depending
on location/duration

Non-conference travel costs vary significantly

Do not guesstimate

Build budget with information suggested under
“Basis for costing” and provide explanation
Travel
Calculation
Domestic:
• Conferences in DC (two each for PI & RA)
Airfare: $550 X 2 (PI & RA) X 2 trips
 Hotel: $110 X 3 days X 2 X 2
 Per diem: 3 days X $35/day X 2 X 2
 Registration: $400 X 2 X 2
 Mileage (to/from Bradley): .375 X 70 miles X 2
 Ground transportation (to/from Dulles): $35 X 4
• Total:

= $2,200
= $1,320
= $420
= $1,600
= $53
= $140
= $5,733
Travel
Calculation (cont’d)
Foreign:
• Conference in Moscow (PI)
Airfare:
$950
 Hotel: 5 days X $191
$955
 Per diem: 5 X $103
$515
 Registration:
$400
 Mileage: (to/from Bradley):
$53
 Ground transportation:
$150
• Total:
$3,023

Non-personnel Budget Detail
Travel
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative –
Postage for mailing brochures
Telephone (long-distance)
Supplies –
Lab/chemical supplies
Computer supplies
Travel –
Domestic: $5,733
Foreign: $3,023
$250
$10,050
$8,756
Non-personnel Costs
•
•
•
•
•
•
Consultant
Equipment
Administrative
Supplies
Travel
Subcontracts
Non-personnel Costs
Subcontracts
Definition:
• Generally, a subcontractor is defined as an
organization, often another university, who
helps carry out the activities of the proposed
project by performing a portion of the research
using their own facilities. They receive a
proportional share of funding from the sponsor
via UMass and will often charge their own
indirect costs
Non-personnel Costs
Subcontracts (cont’d)
Procedures
•
The following items must be provided to OGCA:
 A letter signed by the subcontractor’s authorized
signatory (OGCA equivalent)
 Statement of work (subcontractor specific – does not
include UMass effort)
 Subcontractor budget
 Indirect Cost Rate Agreement (if subcontractor is
budgeting indirects in their own budget)
 Sole source justification
Non-personnel Costs
Subcontracts (cont’d)
Procedures (cont’d)
• The first four items should be handled by the
subcontractor and forwarded to OGCA
• The sole source justification is completed by the UMass
Principal Investigator. It explains why the subcontractor
is uniquely qualified to carry out the work. Sole source
justifications can be forwarded to OGCA via email
• Subcontractors should use all sponsor forms, including
any required certifications/assurances
Non-personnel Costs
Subcontracts (cont’d)
Budgeting:
• The subcontractor typically budgets for both Direct
Costs (DC) and Indirect Costs (IC). Take the total of
the DC and IC provided in the subcontractor budget and
roll that total into your budget creating a line item
called “Subcontracts” – see next slide for sample
subcontractor budget. The subcontractor’s total costs
are then rolled into the UMass budget under the
“Subcontract” line item
Subcontractor Budget
Sample
Wassamatta U. subcontract
Cost
1. Salaries
$10,500
2. Fringe
$2,625
3. Equipment
$2,500
4. Administrative
$100
5. Supplies
$500
6. Travel
$2,500
Total Direct Cost
$18,725
Total Indirect Cost (67% MTDC)
$12,546
Total Cost
$31,271
Non-personnel Budget Detail
Subcontracts
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative – Postage for mailing brochures;
Telephone (long-distance)
Supplies – Lab/chemical supplies; Computer
supplies
$250
$10,050
Travel – domestic & foreign
$8,756
Subcontract – Wassamata U.
$31,271
Non-personnel Costs
•
•
•
•
•
•
•
Consultant
Equipment
Administrative
Supplies
Travel
Subcontracts
Other Direct
Non-personnel Costs
Other Direct
• Definition: the following items are often budgeted under
“Other” but for the sample budget, only curriculum fee
appears.
• Curriculum fee
• Equipment rentals, maintenance & repair
• Human subject payment
• Publication costs
• Participant support costs
• Do not use “Miscellaneous” as a line item
Above items not intended to be exhaustive but are
illustrative of common items budgeted in the “Other”
category.
Other Direct
Calculation
Curriculum Fee
• The rate is $6.31/hr. per Graduate Student (GS)

1 GS X 20 hrs/wk X 38 wks X $6.31 = $4,796
• Note:

No more than 760 hrs or $4,796 per GS will be charged
in an academic year

Summer effort is not charged CF

Curriculum Fee is exempt from F&A
Non-personnel Budget Detail
Other Direct
Direct Cost Type
Cost
Consultant – ABC Advice, Inc. ($498/day, 10 days)
$4,980
Equipment – Mac Power Book G4, 17” super drive
$3,299
Administrative – Postage for mailing brochures; Telephone
(long-distance)
$250
Supplies – Lab/chemical supplies; Computer supplies
$10,050
Travel – domestic & foreign
$8,756
Subcontracts – Wassamata U.
$31,271
Other Direct – Curriculum fee on graduate student
$4,796
Total Direct Cost
Cost type
Salaries
Fringe
Consultant
Equipment
Administrative
Supplies
Travel
Subcontracts
Other
Total Direct Cost
Cost
$81,635
$12,157
$4,980
$3,299
$250
$10,050
$8,756
$31,271
$4,796
$157,194
Two Major Budget
Components
• Direct Costs
• Facilities and Administrative Costs
Facilities and Administrative
Costs (F&A, overhead, indirect costs)
• Definition:
• F&A is calculated as a percentage of Direct Costs
• Rates vary depending on type of project, sponsor type,
and project location (on-campus, off-campus); see fact
sheet for specific rates. Consult with OGCA before
budgeting either the “Off-campus” or “Other Sponsored
Activities” or “Instruction” rates
• If the sponsor’s F&A rate differs from the University’s,
defer to sponsor mandated rates but provide OGCA
with a copy of the sponsor’s guidelines supporting this
restriction
Facilities and Administrative
Costs (cont’d)
• Definition (cont’d)
• F&A is assessed either on a Modified Total Direct Cost basis
(MTDC) or a Total Direct Cost (TDC) basis. MTDC simply
means -- do not assess F&A (back them out of total before
calculating F&A) on the following costs:
• Equipment ($1,000 or more unit cost)
• Tuition (for cost-sharing purposes)
• Curriculum fee
• Rental costs of off-site facilities
• Fellowships
• Subcontractor costs in excess of $25,000
Facilities and Administrative
Costs (cont’d)
• Definition (cont’d)
• Total Direct Cost (TDC) means that the applicable
F&A rate is assessed on the direct cost total. Every rule
has an exception of course: never assess F&A on the
curriculum fee
• Budgeting:
• Review sponsor guidelines and assess F&A costs as
instructed. Confer with OGCA if unclear
Facilities and Administrative
Calculation
Cost type
Salaries
Fringe
Consultant
Equipment
Administrative
Supplies
Travel
Subcontracts
Other
Total Direct Cost
Cost
$81,635

Assume an on-campus research
project for our sample budget
with a 55% MTDC F&A rate.
55% is therefore assessed on
the total direct direct costs less
equipment, curriculum fee, and
subcontractor costs in excess of
$25K. Thus the MTDC base:

$157,194 - $3,299 - ($31,271$25K) - $4,796 = $142,828;
multiply this by 55%:

$142,828 X 55% = $78,555
$12,157
$4,980
$3,299
$250
$10,050
$8,756
$31,271
$4,796
$157,194
F&A Budget Detail
Cost type
Cost
Salaries
$81,635
Fringe
$12,157
Consultant
$4,980
Equipment
$3,299
Administrative
Supplies
Travel
Subcontracts
Other
Total Direct Cost
Total Indirect Costs
Total Cost
$250
$10,050
$8,756
$31,271
$4,796
$157,194
$78,555
$235,749
Cost-sharing
Definition
• Definition:
Cost-share is that part of the project’s costs borne
by the University rather than the sponsor. Many
sponsors require cost-sharing, often specific
matching (such as 1:1 or 1:2) is required and
other times agencies simply indicate that costsharing is recommended and will be a factor in
the review and scoring of a proposal
Cost-sharing
When allowable
• When to cost-share:
•
To include cost-share in your proposal, sponsor’s
written guidelines must either require it, or strongly
suggest its inclusion.
•
UMass policy does not allow for “voluntary” costsharing. If the sponsor doesn’t require it, cost-share
must not appear in your budget.
•
Do not provide shared costs from third party sources
(Non-UMass, non-subcontractor). Confer with OGCA
if third party share is required by sponsor.
Cost-sharing
Allowable costs
• What to cost-share:
• If established that the sponsor requires or recommends cost
share, only the following costs may be shared regardless of
whether sponsoring agency is federal or non-federal:
• Salaries
• Fringe
• Equipment
• Subcontractor
• Tuition waivers
• Indirect costs
• NOTE: Cost share must be from UMass accounts, not from other
grants or contracts, federal or non-federal
Cost-sharing
Process
• All cost-shared amounts and their
associated state ledger account numbers
must be listed on the second page of the
Internal Processing Form (IPF). This costshare must also be authorized with a
signature in the far right column, by the
individual authorized to commit the shared
funds, usually the Department Head
Cost-share
Budgeting
•
Salaries
Cost-share
Budgeting
• Salaries:
• Shared salary must derive from UMass funds, not
matched from other federal or non-federal grants
•
Shared salary can be budgeted for UMass personnel
with paid appointments. Exceptions to this rule:
• Faculty summer salary & emeritus faculty salary
•
Salary is shared only for time specifically dedicated to
the project during the proposed project period
Cost-share
Salaries (cont’d)
• Cost-shared salary is typically shown as a percentage of
the employee’s base appointment but can also be
budgeted in weeks or months following the same rules
of effort reporting as required for reporting time
charged to the sponsor
• Keep in mind that personnel effort on all ACTIVE
awards plus teaching load cannot exceed 100% . In
other words, 100% summer salary (14 weeks) +
committed (charged and cost-shared) academic year
research effort (up to the maximum percentage allotted
for research by your department during the academic
year) + Teaching load + other obligations = 100%
Cost-share, salaries
Sample calculation
• Prof. Grant wants to cost-
share 1 month (11% AY) of
his academic salary. Prof.
Grant makes $65,000 per
academic year
• 11% X $65,000 = $7,150
• Show basis of effort according
to sponsor preference, usually
represented as either % of
effort or monthly. NSF
requires by month, NIH by %
Cost Type
UM cost-share
PI (11% AY)
$7,150
Total Direct Cost
$7,150
Cost-share, salaries
Sample Calculation (cont’d)
• Regardless of whether
funding is federal or nonfederal, secretarial salary
can be cost-shared
• Secretary’s salary is
$30,000/calendar year and
will devote 10% to the
project
• $30,000 X 10% = $3,000
Cost Type
UM costshare
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Total Direct Cost
$10,150
Cost-share
Fringe
• Salaries
• Fringe
Cost-share, Fringe
Sample Calculation on PI Academic
• Same rules apply for
budgeting shared fringe as
for charging to the sponsor:
• Group Insurance
• 27% X $7,150 = $1,931
• Worker’s Comp, etc.
• .91% X $7,150 =
$65
• FICA (Medicare)
• 1.45% X $7,150 = $104
• Health & Welfare
• 38 weeks (AY) X $11/wk X
11%
= $46
Total Fringe: $2,146
Cost Type
UM cost-share
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe PI
$2,146
Total Direct Cost
$12,296
Cost-share, Fringe
Sample Calculation on Secretarial
•
•
Same rules apply for budgeting
shared fringe as for charging to the
sponsor. If secretary benefited:
Group Insurance
27% X $3,000 = $810
•
Worker’s Comp, etc.
.91 X $3,000 = $27
•
FICA (Medicare)
1.45% X $3,000 = $44
•
Health &Welfare:
$11 week X 52 weeks X 10% = $57
Total Fringe: $938
Cost Type
UM cost-share
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe: PI
$2,146
Fringe: Secretary
$938
Total Direct Cost
$13,234
Cost-share
Equipment
• Salaries
• Fringe
• Equipment
Cost-share - Equipment
Sample Calculation
• Criteria:
• Must be purchased
exclusively for use on
the project from
UMass funds
• Must be purchased
during the project’s
anticipated period of
performance
• Sample budget:
• Eye Tracker: $7,995
Cost Type
UM costshare
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe: PI
$2,146
Fringe: Secretary
Equipment
Total Direct Cost
$938
$7,995
$21,229
Cost-share
Subcontract
• Salaries
• Fringe
• Equipment
• Subcontract
Cost-share, Subcontract
Sample Calculation
• Subcontractor cost-share must
be signed off by the sub’s
OGCA. Shared items must be
auditable.
• When applying UMass F&A
on UMass shared direct costs,
the subcontractor’s total
shared cost, like equipment, is
exempt. See slide on sharing
F&A costs for further
explanation.
• Sample budget: Sub
contributes salary, fringe, and
associated F&A costs: $4,175
Cost Type
UM cost-share
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe: PI
$2,146
Fringe: Secretary
$938
Equipment
$7,995
Subcontract
$4,175
Total Direct Cost
$25,404
Cost-share
Tuition waiver
• Salaries
• Fringe
• Equipment
• Subcontract
• Tuition waivers
Cost-share, Tuition Waivers
Sample Calculation
• Tuition waivers are budgeted
for graduate students whose
salary is being charged or
cost-shared to the grant
• Student stipends must be
budgeted at a minimum
of $2,682 per semester to
receive a waiver
• Tuition waivers:
$2,705.50 per semester
• Calculation for sample
budget:
1 student X 2 semesters X
$2,705.50 = $5,411
Cost Type
UM cost-share
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe: PI
$2,146
Fringe: Secretary
$938
Equipment
$7,995
Subcontract
$4,175
Tuition waiver
$5,411
Total Direct Cost
$30,815
Cost-share
Facilities and Administrative Costs
(F&A, overhead, indirect costs)
• Salaries
• Fringe
• Equipment
• Subcontract
• Tuition waivers
• Facilities and Administrative Costs
Cost-share, F&A
Sample calculation
• Assess F&A on shared direct
costs using same rate charged
to sponsor. However, always
use MTDC basis for sharing
of F&A: equipment and
tuition waivers are exempt
from F&A assessment. In
addition, do not assess F&A
on subcontractor’s total
shared costs.
• Sample calculation: $30,815
– ($7,995 + $4,175 + $5,411)
= $13,234 X 55% = $7,279
Cost Type
UM cost-share
PI (11% AY)
$7,150
Secretary (10%)
$3,000
Fringe: PI
$2,146
Fringe: Secretary
$938
Equipment
$7,995
Subcontract
$4,175
Tuition waiver
$5,411
Total Direct Cost
Total Indirect Cost
Total Cost Share
$30,815
$7,279
$38,094
Total Budget
Sponsor & UMass cost-share
Cost type
Sponsor
UMass
Total
Salaries
$81,635
$10,150
$91,785
Fringe
$12,157
$3,084
$15,241
Consultant
$4,980
Equipment
$3,299
Administrative
Supplies
Travel
Subcontracts
Other
Total Direct Cost
Total Indirect Costs
Total Cost
$4,980
$7,995
$11,294
$250
$250
$10,050
$10,050
$8,756
$8,756
$31,271
$4,175
$35,446
$4,796
$5,411
$10,207
$157,194
$30,815
$188,009
$78,555
$7,279
$85,834
$235,749
$38,094
$273,843
Budget Explanation and
Justification
• A well developed budget is accompanied by a budget explanation.
• A complete and realistic budget justification demonstrates that
your project is well conceived. It also tends to minimize the
chances that sponsors will arbitrarily reduce or eliminate budget
categories. Sponsors have a good idea of what a project should
cost, and generally know when you are over or under budgeting.
Follow sponsor guidelines on minimum items required.
• Explanation and justification are synonymous terms except with
federal grants where “Explanation” merely details what the cost
item is while “Justification” conveys why a cost item – particularly
“Administrative costs” – are allocable and necessary for the
successful completion of the project.