Budget 101

1. Budget 101 Overview of a typical grant budget Erin Scott, CRA

2. ONU Budget Template • Please see handout • This spreadsheet can be found at: http://www.onu.edu/administration/advancement/grants_and_proposals/forms_and_resources • We are requesting that all faculty and staff submitting proposals begin using this spreadsheet to calculate budgets.

3. General Considerations • The proposal budget should be derived directly from the project description. • Budgets are generally computed on a 12-month basis, unless the project will have a different time frame. • The proposal budget for all years of a multiyear project is generally reviewed and approved before the project begins. • Follow sponsor guidelines for format. • Determine what costs the sponsor allows. For example, some government and non-profit sponsors do not allow faculty academic year time to be charged time to a project.

4. Salary Costs • Types of personnel frequently involved in projects include: • faculty members, academic year and off-duty quarter • Co-investigator • undergraduate assistants • consultants • For each person involved in the project, list name (if known), position and percentage of time on the project. • When projects are charged for personnel salaries, the associatedfringe benefits are also charged.

5. Direct Appointments/Release TimeSalary • Funds to cover the cost of faculty and staff time spent on a project can be requested from most sponsors. • The time that faculty and staff members who are already paid from department or college operating accounts spend on a project is called release time. • Faculty with nine-month contracts may receive up to three-ninths of their academic year salary during their off-duty quarter, if the funds come from non-university sources (e.g., a research grant or contract). • Persons who are hired specifically to work on sponsored projects (e.g., research assistants and associates) have direct appointments to the project and their salaries are paid directly from project funds. Should project funding end, the appointments end.

6. Effort – How to Calculate • A PI on a 9 month appointment contributing 11% academic effort (1 PM) and 66% summer effort (2 PM). Salary $60,000 AY Fringe Benefits 34% • $60,000 x 11% = $6,600 AY • $60,000/9*3 = $20,000 x 66% = $13,200 Summer • $6,600 x 34% = $2,244 AY & $4,488 Summer Person Months • 9 x 11 % = 1 AY PM • 3 x 66 % = 2 Summer PM

7. Equipment • For an item to be considered equipment, it must meet all three of the following criteria: • 1) Cost $5,000 or more • 2) Have a useful life of at least one year • 3) Be stand-alone and function independently • If a project recovers F&A costs at the appropriate negotiated rate, e.g., 42% of modified total direct costs (MTDC), equipment is excluded from the MTDC base and from F&A charges.

8. Other Direct Costs • Animal Costs • Include housing, supplies, food • Materials & Supplies • Do not include “general” office supplies. These costs must be directly related to the project. • Other Costs • Publication costs, statistical costs, project specific costs • Travel • Use federal rates when calculating per diem rates

9. Subcontracts • A subcontract may be required if part of the research effort under a grant or contract is to be performed by another organization • Subcontracts are always awarded to an organization or institution, not to an individual. ONU project employees cannot have financial interests in any organization receiving a subcontract. (COI) • If an individual not affiliated with an organization is doing part of the work, that individual must be paid as a consultant. Budgeting Subcontracts • In the proposal budget the total cost of the subcontract, including fringe benefits and F&A costs, is shown as a single line item. • Typically, the budget breakdown submitted by a potential subcontractor is signed by an official of the subcontracting institution to indicate that all institutional requirements have been satisfied.

10. Facilities & Administrative (F&A) Costs • F&A costs are those costs associated with providing and maintaining the infrastructure that supports the research enterprise (buildings and their maintenance, libraries, etc.) and which cannot easily be identified with a specific project. • "Facilities" is defined as depreciation and use allowances, interest on debt associated with certain buildings, equipment and capital improvements, operation and maintenance expenses, and library expenses. • "Administration" is defined as general administration and expenses, departmental and college administration, sponsored projects administration, and all other types of expenditures not listed specifically under one of the subcategories of Facilities. • F&A cost rates are determined in conjunction with auditors from the U.S. Department of Health and Human Services.

11. Cost Sharing • Cost sharing means charging part of the costs of a sponsored project to a source other than the sponsor. • Sometimes a program requires cost sharing; e.g., large equipment awards.  This is known as required cost sharing. • If cost sharing is included in a proposal to a federal sponsor and the proposal is funded, the promised cost share becomes a requirement of the award whether or not that requirement is specified in the award document.

12. Questions? Beckie Watercutter: 419-772-2038 r-watercutter@onu.edu http://www.onu.edu/administration/advancement/development/grant_proposal Erin Scott 419-772-3954 e-scott@onu.edu