Transcript Slide 1

U N I V E R S I T Y
O F
NOTRE DAME
Budget Preparation
Office of Research
Elements of a Budget
There are a number of elements that are important
to building a budget. These include:
Direct Costs
Indirect
Costs
Cost Sharing
Let’s explore each of these…
Allowable and Allocable Costs
But first, a word or two on allowable and allocable costs…
 All costs associated with sponsored research must fall into both
of these categories:
Allowable
Allocable
Those project costs that are
eligible, reasonable, necessary, and
allocable to the project.
Costs that are assignable or
chargeable to one or more cost
objective in accordance with the
relative benefits received or other
equitable relationships defined or
agreed upon by contractual parties.
Costs
Meaning: The cost has to be clearly related to the scope of the research project within the parameters agreed
upon by the researcher and the sponsor.
Allowable and Allocable Costs
The following are some examples:
Allowable
Not Allowable
• Advertising – Recruitment & Procurement
• Conference & Convention Registration Fees
• Contractual Services/Consultants
• Equipment
• Express Mail
• Freight Related to Goods Purchased
• Honoraria Payments to Study Subjects
• Laboratory Supplies
• Printing, Binding, Publication, Reproduction
• Salaries/Benefits of Faculty
• Salaries/Benefits of Graduate Assistants
• Stipends
• Telephone Toll Charges
• Travel
• Administrative Costs
• Alcoholic Beverages
• Covering Overruns on Other Sponsored Projects
• Donations and Gifts
• Entertainment Costs
• Fines & Penalties
• First Class Travel
• Fund Raising
• Goods & Services for Personal Use
• Lobbying
• Memberships in Social & Civic Clubs
• Office Supplies
• Official Function – Receptions & Events
• Postage
• Pre-award Costs (unless approved by sponsor)
• Subscriptions
• Telephone Equipment, Pagers, Cell Phones
Direct Costs
Direct costs are clearly
identifiable costs
related to a specific
project
What this Means
Identify
Definition
Task
Direct Costs
If a cost can be
identified specifically
with a particular
sponsored project, an
instructional activity, or
another institutional
activity, or that can be
directly assigned to
such activities relatively
easily with a high
degree of accuracy,
then it is most likely a
direct cost.
Direct Costs
General categories of direct costs include but are not limited to:
Salaries and
Wages
Equipment
Participant
Support Costs
Tuition
Fringe Benefits
Supplies
Publication
Costs
Sub-Contracts
Contractual
Services
Travel
Computer
Costs
Rental Costs
Direct Costs
Salaries and
Wages
Examples
-
PI (Principal Investigator)
Co-PI
Post Doctoral Staff
Graduate Research Assts.
Undergrad Research Assts.
Exempt Staff
Non-exempt Staff
NOTE: Only individuals who are
currently on Notre Dame’s payroll
would be budgeted under the
salaries/wages category. This
category would not include external consultants and sub agreements.
• The money that is paid to personnel associated with the
proposal.
• Salaries and wages are related to effort.
• Effort is defined as the portion of time spent on a
particular activity expressed as a percentage of the
individual's total activity for the institution, or as total
months (calendar, academic, or summer) spent working
on the project.
• It’s also related to the appointment of faculty members
contributing to the project—whether a faculty member
has a 9- or a 12-month appointment impacts the way
that salary is calculated.
• Faculty on a 9-month appointment generally request
summer salary in their grants (for June, July and August)
Direct Costs
Fringe Benefits
Examples
-
FICA/Social Security taxes
Unemployment insurance
Worker’s Compensation
Health, dental, life insurance
Retirement benefits
• Fringe benefits comprise a normal and required direct
cost category for most educational institutions. These
costs need to be estimated for all employees proposed
to work on a project. It comprises the employer-paid
portion benefits and taxes for each employee. These
costs are listed separately from the personnel salary on
the proposal budget.
• Notre Dame has specific percentages of salary it uses as
fringe benefits rates, depending on the position of the
individual. These rates are determined on a yearly basis
by the University.
• For the most current list of fringe benefit rates, please
look at http://or.nd.edu/proposal-preparation/budget-preparation/fringe-benefits/.
Direct Costs
Contractual
Services
Examples
- Any service directly related
to the project
• Contractual services are the money that is paid to
individuals who have been contracted to perform certain
aspects of the research project
• Generally defined as consultative work
• Note: Consultants are required to provide their daily
rate as part of the budget development process
Direct Costs
Equipment
Examples
- Scientific and technical
- Computer /software
(dedicated to the project)
- Rental costs
- Alterations/Renovations for
equipment
- Maintenance contract
(dedicated-equipment)
Note: Requires justification
explaining the expenditure’s
direct application to the federal
award.
Indirect Costs are generally not
applied to Equipment costs.
• Equipment is defined as an item of property that has an
acquisition cost of $5,000 or more and an expected
service life of more than one year.
• It is important to note that the acquisition cost of
equipment includes modifications, attachments, and
accessories necessary to make the property usable for
the purpose for which it was purchased.
• Allowable items ordinarily will be limited to research
equipment and apparatus not already available for the
conduct of the work.
• General-purpose equipment, such as a personal
computer and office furnishings, are not eligible for
support unless primarily or exclusively used in the actual
conduct of scientific research.
Direct Costs
Supplies
Examples
-
-
Research data collection
Chemicals, pharmaceuticals
Glassware
Field supplies
Compressed gases and
liquids
Radioactive material
Software directly associated
with scope of work
Rare and precious metals &
non-precious metals
Animals
Books and reference
materials dedicated to
project
Non-administrative supplies
• Supplies (and materials) are defined as tangible personal
property, other than equipment, costing less than
$5,000, or any other lower threshold consistent with the
policy established by the proposing organization, used
during the research project.
• For some sponsors, cost estimates must be included for
items that represent a substantial amount of the
proposed line item cost.
• Caution: Do not confuse supplies with equipment. While
the wording seems similar, they play different roles in the
research project and the budget.
Direct Costs
Travel
Examples
- Airfare
- Ground transportation
- Fuel costs
- Lodging
• The estimated travel costs for a proposal budget.
• For many agencies, travel costs must be separated into
domestic travel and international travel.
• Additionally, there may be certain guidelines on what
travel costs are allowable, depending on the sponsor.
Research administrators should always check the
program guidelines or with a program officer if they
have questions.
Direct Costs
Participant
Support Costs
Examples
-
Stipends
Travel to/from training
Meals during training
Lodging during training
Space rental costs
Materials/supplies for
trainees
Note: Indirect Costs are generally
not applied to Participant Support
costs. Specific program guidelines
should be referenced.
• This budget category refers to costs for participants or
trainees (but not employees) in connection with
sponsored conferences, meetings, symposia, training
activities and workshops.
• For some educational projects conducted at local school
districts, however, the participants being trained may be
considered employees. In such cases, the costs must be
classified as participant support if payment is made
through a stipend or training allowance method. The
school district must have an accounting mechanism in
place (i.e., sub-account code) to differentiate between
regular salary and stipend payments.
Direct Costs
Publication
Costs
Examples
-
Documenting
Printing
Binding
Copying
Journal costs
Necessary illustrations
Data clean-up
Data storage
Indexing of data/databases
Software development, etc
Indexing of physical
specimens, collections, etc
• The costs associated with disseminating research results
from a particular project
• The proposal budget may request funds for the costs of
documenting, preparing, publishing or otherwise making
available to others the findings and products of the work
conducted under the grant.
Direct Costs
Computer
Costs
Examples
-
Mainframe Computer Time
Research Core Services
Leasing equipment
Computer maintenance
and/or repairs
Note: Must be directly related to
project only.
• For some sponsors, the cost of computer services,
including computer-based retrieval of scientific,
technical and educational information, may be
requested. Generally, this is acceptable only where it is
institutional policy to charge such as direct costs.
• General purpose (word processing, spreadsheets,
communication) computer equipment should generally
not be requested.
• Special purpose or scientific use computers or
associated hardware and software, however, may be
requested as items of equipment or supplies (based on
the actual cost of the item) when necessary to
accomplish the project objectives and not otherwise
reasonably available.
Direct Costs
Tuition
Examples
- Undergraduate Tuition
- Graduate Tuition
Note: Be careful when using this
as cost share because if the
University fails to meet the
guaranteed amount, severe
financial repercussions may result
and these must be resolved by the
department and college.
Indirect costs are generally not
applied to tuition costs.
• It is the current policy of Notre Dame to provide tuition
waivers (through the Graduate School) for graduate
student researchers funded on sponsored programs and
may also be shown as cost sharing.
• When using the value of a tuition waiver for cost
sharing, care should be taken to use a tuition waiver
value that accurately reflects the student’s expected
course load.
• When the sponsor specifically allows the budgeting of a
program or institutional allowance that may be used to
defray tuition costs (e.g., NSF IGERT) this cost should be
included in the sponsor budget.
• For more information visit the OR website:
http://or.nd.edu/policies-and-procedures/procedures/cost-sharing-guidelines/
Direct Costs
Sub-Contracts
Examples
- Universities
- Other institutions who
meet the subcontractor
guidelines
• A subcontractor is a sub-recipient of proposal award
funds.
• To qualify as a subcontractor, the following must be met:
– Subcontractor services are uniquely designed in response to each
project and not provided commercially;
– Subcontractor technical lead is usually a scientific collaborator, or
even a co-Principal Investigator ("PI") on a project taking place at
Notre Dame;
– Subcontractor retains rights to intellectual property;
– Subcontractor participates in development and execution of the
statement of work;
– Subcontractor's results are likely to be published in the scientific
literature and/or subcontractor is likely to be co-author on a
Notre Dame publication.
Direct Costs
Rental Costs
Examples
- Space
- Equipment
- Vehicles
• Rental costs are those that are project-specific and
rented off-campus from a 3rd party.
• Rental costs include any direct-costed rent of nonUniversity owned space and the cost of maintenance, if
it is included in the rental agreement.
• This category does not include other kinds of rental or
lease costs such as hotel rooms, equipment or
automobiles. These other kinds of costs are direct costs
subject to overhead.
• Rent is automatically included in the On-Campus
Facilities and Administration Costs and will be paid out
of the Facilities and Administration (i.e., Indirect) Costs
recovered.
Direct Costs
Other Direct
Costs
• Any other cost directly associated with the project not
attributable to the previous categories
Examples
-
-
Consultant fees
Printing
Reprints and page charges
Photography
Photocopy charges
Repairs/maintenance (related to scientific-technical
equipment)
Animal care
Lab testing services
Computing network charges of dedicated computing
equipment
Recruitment of approved personnel
Promotion of conference, workshop, seminar
Long Distance Telephone (including fax) toll charges
Lab, scientific, and field non-capital equipment
Lease/rental of vehicles and other equipment
-Lease/rental of off-campus facilities
- Subcontract costs
- Subject pay for survey, project participation
- Consortia fees
- Postage / Printing / Copying
- (if the volume is ‘beyond routine’ it is an unlikely
circumstance)
- Freight/express deliveries when needed to transport project
material in a timely manner
- Justification/certification form required to be maintained with
the invoice in the award file
- Telephone:
-Long distance (Project specific)
-Cellular (project specific, rare circumstances)
- Consultants
- Service Center Charges
Direct Costs
• Each of these individual costs together equal the Total Direct
Costs of the proposal budget.
Direct Costs
Direct Costs
Indirect
Costs
Total Direct Costs
Cost Sharing
Salaries and
Wages
Equipment
Participant
Support Costs
Tuition
Fringe
Benefits
Supplies
Publication
Costs
Sub-Contracts
Contractual
Services
Travel
Computer
Costs
Rental Costs
Indirect Costs
Indirect costs are those
costs related to
expenses incurred in
conducting or
supporting research, or
other externally-funded
activities, but not
directly attributable to
a specific project.
What this Means
Identify
Definition
Task
Indirect Costs
If a cost cannot be
identified specifically
with a particular
sponsored project, an
instructional activity, or
another institutional
activity, then it is most
likely an indirect cost.
Indirect Costs
• General categories of indirect costs include:
General
Administration
(accounting, payroll,
purchasing, etc.),
Sponsored Project
Administration
Plant Operation and
Maintenance
Library Expenses
Departmental
Administration
Expenses
Depreciation or Use
Allowance for
Buildings and
Equipment
Student
Administration and
Services
Etc.
Indirect Costs
• Indirect costs cover a variety of different facilities and administrative costs
(F&A) including the following examples:
- Administrative and clerical salaries, wages,
fringe benefits
- General purpose/admin. equipment
- Copier, printer
- Office furniture
- Computer
- Software (e.g., Microsoft Office)
- Maintenance contracts (admin. equipment)
- Maintenance and/or repairs
- Parts and supplies for admin. equipment
- Office Supplies
- General computer costs
- Lab supplies (administrative)
- Custodial supplies
- Forms
- Books and reference materials
-
Dues/memberships
Recruiting costs
Public relations
Legal and financial services
Insurance
Printing/photocopy charges
Freight
Postage (including express couriers)
Computing network charges
Heating
Lighting
Other utilities
Telephone—basic service, installation, repair, and line
charges (including ATS, WATS, fax, pagers, Internet and
cell phones)
- General purpose non-capital equipment
Indirect Costs
• Indirect costs are not figured individually like direct costs, but
are figured as a percentage of total direct costs.
Direct Costs
General Admin.
Sponsored
Project Admin.
Operation and
Maintenance
Dept. Admin.
Expenses
Depreciation or
Use Allowance
Student Admin.
and Services
Library
Expenses
Indirect Costs
Etc.
Cost Sharing
Indirect Costs
But first:
• In order to determine the Indirect costs, the Modified Total
Direct Costs need to be figured, as follows:
Direct
Costs
-
Equipment
-
Participant
Support Costs
-
Tuition
=
Modified
Total
Direct
Costs
Indirect Costs
• The Indirect Costs are then figured as follows:
Modified
Total
Direct
Costs
x
F&A
Rate
=
Indirect
Costs
Indirect Costs
F&A
Rate
• This rate is a percentage that has been negotiated
between Notre Dame and the Department of
Health and Human Services—Notre Dame’s
cognizant agency
• Check http://or.nd.edu/award-management/award-management/ to see
Notre Dame’s most recently negotiated rate.
Cognizant Agency: To simplify relations between Federal grantees and
awarding agencies, the US Office of Management and Budget (OMB)
established the cognizant agency concept, under which a single agency
represents all others in dealing with grantees in common areas. In this case, the
cognizant agency reviews and approves grantees’ indirect cost rates. Approved
rates must be accepted by other agencies, unless specific program regulations
restrict the recovery of indirect costs. The cognizant agency for non-profit
organizations is determined by calculating which Federal agency provides the
most grant funding.
Indirect Costs
Indirect Costs
• In some very specific instances, the F&A rate will be different
than the negotiated federal rate.
• Reference the program guidelines or consult with a program
officer to identify these unique situations.
• Waiving of Indirect Costs happens very rarely and under very
strict circumstances.
• Research administrators should speak with Director of PreAward regarding the waiving of Indirect Costs.
Cost Sharing
Cost sharing, or
"matching,“ refers to
that portion of project
or program costs is not
borne by the funding
agency. It includes all
contributions, including
cash and in-kind, that a
recipient makes to an
award.
What this Means
Identify
Definition
Task
Cost Sharing
Notre Dame will
sometimes “share” in
the cost and pay an
amount of money (or
effort) towards a
project as part of its
funding. This is sharing
is sometimes required
by the sponsor and
sometimes it is
volunteered support by
Notre Dame.
Cost Sharing
Some Important Comments about Cost Sharing:
If the award is federal, only acceptable non-federal costs qualify as
cost sharing and must conform to other necessary and reasonable
provisions to accomplish the program objectives.
Cost sharing effort is included in the calculation of total
committed effort.
Cost sharing is auditable and must be allowable under cost
principles and verifiable to records.
Cost Sharing
Cost sharing can be identified within one of two categories:
Mandatory cost share: Cost sharing by
the Notre Dame that is required by the
sponsor.
Committed: defined as those
resources that are committed and
budgeted for in a sponsored
agreement
Voluntary cost share: A contribution to
a sponsored project or program offered
by the PI (or by Notre Dame) but not
required by the sponsor as a condition
of obtaining the award. Voluntary cost
sharing is classified as either committed
or uncommitted.
Uncommitted: defined as university
faculty effort that is over and above
that which is committed and
budgeted for but not charged to the
sponsored agreement. Voluntary
uncommitted cost sharing should not
be recorded as organized research.
Cost Sharing
• All mandatory and voluntary cost sharing is identified in the
budget.
Direct Costs
Indirect
Costs
Cost
Sharing
Cost
Sharing
Mandatory
Cost Share
Voluntary
Cost Share
Cost Sharing
• The Office of the Vice President for Research has established
some important policies that act as guidelines to help the
research community at Notre Dame determine how to
properly allocate and manage cost sharing.
• These guidelines can be found at:
procedures/procedures/cost-sharing-guidelines/
http://or.nd.edu/policies-and-
NIH Modular Budgets
• Modular budgets are applicable to certain
research grant applications to NIH requesting
$250,000 or less per year for direct costs.
• Modular budgets are simplified; therefore,
detailed categorical information is not to be
submitted with the application.
• For all modular budgets, request total direct
costs (in modules of $25,000), reflecting
appropriate support for the project. There will
be no future year escalations. A typical modular
grant application will request the same number
of modules in each year. Provide an additional
narrative budget justification for any variation
in the number of modules requested.
NSF Budgets
John Doe
The budget data
should then be added
for the budget period
in the corresponding
budget areas…
Note: The internal budget should
contain all of the budget areas
found in an NSF budget. Be sure
to use the internal budget as a
guide when entering data into
FastLane. This will help to ensure
accuracy.
NSF Budgets
NSF Budgets
NSF Budgets
NSF Budgets
To properly calculate the indirect
costs, the F&A rate and the
Modified Total Direct Costs (MTDC)
must both be entered in the
Indirect Costs section.
MODIFIED TOTAL DIRECT COSTS (MTDC)
NSF Budgets
To calculate the
total Direct and
Indirect Costs, click
here…
NSF Budgets
When all budget data has
been entered, the Calculate &
Save button must be clicked
in order to save all data.
Once it has been saved, click
the Go Back button and
follow the same process for
subsequent budget years.
Managing resources
Identify all your options
Look ahead to deadlines for your next
phase or next project
Use the right resource at the right
time