Budget basics for administrators
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Budget Basics for Administrators. Sean Hine Branch Chief Office of Grants Administration National Cancer Institute June 2014. What we will be discussing:. Let’s discuss some logistics How do you start the request? Electronic submission Discussion of costs Overarching rules

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Budget Basics for Administrators

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Budget Basics for Administrators

Sean Hine

Branch Chief

Office of Grants Administration

National Cancer Institute

June 2014

What we will be discussing:

  • Let’s discuss some logistics

    • How do you start the request?

    • Electronic submission

    • Discussion of costs

    • Overarching rules

  • Types of budgets

  • Dive into the nitty-gritty – budget specifics

  • Pre-award considerations

  • After the award

We have an idea for a project…now what?

  • All applications to the NIH must be in response to a Funding Opportunity Announcement (FOA)

  • Be sure you understand the specifics of the FOA

    • Including: period of support, type of budget(s), limits in $ levels, additional reporting, etc.

  • Abide by any provided submission dates

Welcome to the electronic world!

  • NIH has completed the process of transitioning all competing applications to the electronic (SF 424) process

    • This includes multi-project proposals

    • More information at the following Guide Notice: http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-075.html

  • The requirements may change from mechanism to mechanism – be careful!

All about costs

  • A grantee is responsible for following and NIH for ensuring that all cost considerations are met

  • Ensure your understanding of the applicable cost principles

    • Particularly with the change to the uniform principles

    • Grantees may shape their own systems as long as the principles are followed and the CFR standards are met for financial management systems

  • Four tests for determining allowability:

    • Reasonableness

    • Allocability

    • Consistency

    • Conformance

Costs (cont.)

  • Differentiation between a Direct Costs and Facility & Administrative (indirect) Costs

    • Directs – can be identified to a specific grant, project, etc.

    • F&A – common or joint costs that cannot be readily identified with a specific grant

  • More information including discussion on cost transfers, reimbursement of F&A, specific items of cost, etc. can be found at the following within the NIH Grants Policy Statement: http://grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch7.htm

Costs (cont.)

  • It is NIH’s responsibility as stewards of Federal funds to ensure that a grantee’s financial management systems are adequate to receive support and that all costs being requested within a proposal are allowable

    • If we have any concerns, we will be in touch!

Salary Cap

  • Effective Jan. 12, 2014, the salary cap for Executive Level II has increased to $181,500

    • Guide Notice announcing the change: http://grants.nih.gov/grants/guide/notice-files/NOT-OD-14-052.html

  • This level also applies to consortia

General Rules/Considerations

  • Bona Fide Need

    • In any request, please be sure that the expenses you are including can be reasonably expected to be expended in the request time of support

  • A budget tells NIH what is needed in terms of $ for the proposed research. It is not used to assess the merit of that research; only accounted after the merit has been established

General Rules/Considerations (cont.)

  • Cost Sharing

    • Not required

    • Is assumed however when an expense is listed but there is no reimbursement requested (includes personnel contributing effort exceeding the level of salary support)

  • Application requesting more than $500,000 Direct Costs (exclusive of consortia F&A) must seek permission from NIH at least six weeks prior to submission

    • Understand the specifics of the FOA

General Rules/Considerations (cont.)

  • Well-funded investigators should discuss appropriateness and specific-Institute policies prior to submission

  • Responsibility for the Fiscal Management of the award rests with the award recipient and listed principal investigator(s)

Types of budgets

  • Modular

  • Categorical/Itemized

  • Inclusion of consortia (modular & categorical)

  • Program specific:


    • Ruth L. Kirschstein National Research Service Awards – Fellowship & Training

    • Research Career Development Awards

Modular Budgets

  • Availability of use is dependent on mechanism: R01, R03, R15, R21, R34 and others as identified on FOA

  • Application and associated review process does not require a detailed (categorical) budget

  • Capped at $250K direct costs per year (exclusive of consortium F&A costs)

    • If you exceed $250K directs, you are moving to the categorical budget request

  • If mechanism listed above, modular budget must be used if at or below $250K

Modular Budgets (cont.)

  • Grantee should begin with a categorical budget for all years to craft the “module” request

    • Module = $25K direct costs

    • General example: All five years of an R01 budget is $841,432. The average per year is $168,286. Modular budget request per year (rounding to next module) would be $175,000.

  • No escalation per year

  • Request may fluctuate if appropriate per FOA or one-time expense (i.e. equipment) but it should be justified

Modular Budgets (cont.)

  • Full justification on personnel

    • Personnel should include names, person months and description of role

    • Include other information as you deem appropriate to assist in clarification of request

  • Consortia costs are calculated separately but same justification (personnel) requirements apply

Modular Budgets (cont.)

  • A few more things:

    • If NIH needs further information, even a detailed budget explanation, we may ask for it

    • The NIH Salary Cap should be accounted for in your calculation/estimate of the number of modules needed

    • Be thorough in your personnel justification

Time for the details – Categorical Budgets

  • Personnel

    • Indicate level of effort (calendar months)

    • Provide institutional base salary up to the NIH salary cap

      • If salary exceeds the cap, welcome to include a statement indicating as such in the justification

    • Apply applicable fringe benefit for position

    • Explain fluctuations in efforts!

  • Equipment

    • Generally, expected to be a one-time expense

    • Be sure to comply with institution’s definition of equipment (NIH defines as $5K or more and an expected life exceeding one year)

Categorical budgets (cont.)

  • Travel

    • Dependent upon the needs of the research but be sure it provides direct benefit to the project

    • Must be consistent with institution’s own travel policies

    • Comply with Fly America Act: http://grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch4.htm#fly_america_act

  • Participant/Trainee Costs

    • With exception of Training grants, this section should be left blank unless specifically identified within FOA

Categorical budgets (cont.)

  • Other Direct Costs

    • Highly dependent upon the type of research being conducted – be realistic!

    • Must be well justified – explain fluctuations and atypical expenses in the justification section

    • Include tuition remission in this section

Categorical budgets (cont.)

  • F&A (indirect) costs

    • Be sure to follow the rate agreement in place at the time of the application explicitly

    • NIH will utilize whatever rate is in place at the time of award

    • If the indirect cost base calculation is rather complicated, it may be beneficial to include a brief explanation in the justification

Consortia Expenses

  • Modular budget

    • May exceed the $250K direct cost limit only for consortia F&A

    • May round to the nearest $1,000

    • Beneficial to explain the direct cost need per year

    • Personnel justification still required

  • Categorical budget

    • Detailed budget and justification similar to the parent grantee required

  • Regardless, flow/pass-down rules are in effect!

Some Classic Mistakes

  • Did not request permission for submitting application greater than $500K directs

  • Modular with multiple consortia without a clear idea as to how much is needed for each site – we need to reflect their costs including appropriate F&A too!

  • Categorical budget does not justify fluctuations

  • Application indicates that the grantee is going to take care of the PI’s salary BUT when the award hits, not so much…

Some Classic Mistakes (cont.)

  • The listed calendar months when applied to the base salary does not equate to requested salary

  • Base salary exceeds current salary cap

  • Calendar months in budget differs from justification

  • Costs in budget differ from justification

  • Indirect cost base calculation makes no sense given rate agreement and costs


  • If you are submitting an R01 and the request is:

    • At or less than $250K each year, use a modular format

    • Above $250K in ANY year OR a foreign (non-US) applicant, use a categorical format

    • The $250K direct cost limit is exclusive of consortia F&A

Special Programs

  • The following programs have individual budgeting requirements:

    • SBIR/STTRs

    • NRSA

    • Career (K) awards

  • Be sure to comply with the specifics of the FOA and the listed budget requirements

Pre-Award Costs

  • Costs associated with a project that are incurred prior to the receiving of the NIH Award

    • Remember – only the award is a guarantee of the Federal commitment

  • Allowable up to 90 days prior the start date of a competing award

    • Beyond 90 days requires prior approval

  • Cost considerations still apply

  • Incurred at the grantee’s own risk and expense – no requirement of the Federal government!

You got the $!! Now what?

  • When receiving the award, be sure to:

    • Check that it was sent to the correct location

    • Ensure the funds are available in payment management

    • Understand the level of support - $ and time

    • Account for any terms & conditions; keep an eye out for any special restrictions on funds

      • Any restricted funds must be tracked by the grantee separately!

After the award (cont.)

  • Funds not matching what you asked for?

    • Study section cuts have been applied

      • Can discuss these with your awarding Institute/Center for reconsideration

    • Funding policies have been put into place

      • Not appealable and most likely being applied to all (i.e. you are not the only one!)

    • If there may be necessary changes, be sure to discuss any potential changes in scope to the project with the awarding Institute/Center

After the award (cont.)

  • Build an internal budget utilizing the information provided in the award

  • Again, be sure to track restricted funds separately

  • Follow all regulations and policies

  • If you are encountering start-up issues that may result in a large amount being unspent, have a pro-active discussion with your NIH staff

    • We are here to help!!

Last words…

  • This is all of our Federal tax $ at work – we have a mutual obligation to take care of it wisely!

  • There is a lot that goes into putting forward an application and conducting reviews – ask questions prior to help the process go smoothly

  • For investigators, learn what a great resource your own sponsored programs office can be


  • NIH Grants Policy Statement (10/13):


  • SF424 (R&R) Application and Electronic Submission Information:


  • NIH Modular Research Grant Applications:


Thank you!!


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