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Sponsored Project Budgeting. Jeffrey Silber Sponsored Program Services. 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

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sponsored project budgeting

Sponsored Project Budgeting

Jeffrey Silber

Sponsored Program Services

why budget
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.

Why Budget?
sources for budget information
Proposal solicitation and referenced sponsor materials

SPS Guide to Budgeting and Costinghttp://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

Sources for Budget Information
budget tools
SPS Budget Template (Excel)

Salary data from PEDL or CPBS

Prior or similar project data (if available) from ADW

Budget Tools
preparing budgets
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

Preparing Budgets
budget characteristics
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

Budget Characteristics
cost sharing cornell policy 1 1
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 sharingCaution: 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.

Cost Sharing(Cornell Policy 1.1)
program income cornell policy 3 8
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

Program Income(Cornell Policy 3.8)
budget categories salaries and wages
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.

Budget categories:Salaries and Wages
budget categories salaries and wages10
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

Budget categories:Salaries and Wages
budget categories employee benefits
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

Budget categories:Employee Benefits
budget categories employee benefits12
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

Budget categories:Employee Benefits
budget categories employee benefits13
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)

Budget categories:Employee Benefits
budget categories equipment policy 3 9
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

Budget categories:Equipment (Policy 3.9)
budget categories equipment
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.

Budget categories:Equipment
budget categories travel policy 3 2
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

Budget categories:Travel (Policy 3.2)
budget categories other general expenses
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

Budget categories:Other General Expenses
budget categories other general expenses18
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.

Budget categories:Other General Expenses
budget categories facilities and administrative costs
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.

Budget categories:Facilities and Administrative Costs
f a cost bases
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

F&A Cost Bases
f a math tricks
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)

F&A Math Tricks
budget justification
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

Budget Justification
high level budget
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.

High Level Budget
budget template
Budget Template

http://www.osp.cornell.edu/ProposalPrep/BudgetTemplate/SponsoredBudgetTemplate.xls

sample budget formats
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

Sample Budget Formats
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