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 Program Services
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?
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
Student Health Insurance
College and/or departmental informationSources for Budget Information
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 investigatorPreparing Budgets
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 ratesBudget Characteristics
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)
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 fundsProgram Income(Cornell Policy 3.8)
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
Tuition (typically one-half the full rate)
Stipend (minimum amount is published by Graduate School)
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)
May be included, but must be explicitly stated and represent salary for work on the project during that periodBudget categories:Salaries and Wages
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 GovernmentBudget categories:Employee Benefits
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 periodBudget categories:Employee Benefits
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
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 titleBudget categories:Equipment (Policy 3.9)
“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
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.eduBudget categories:Travel (Policy 3.2)
Office supplies are normally indirect
Lab or other project supplies may be included if allocable
Important to identify consulting details in proposal text or justification. Will assist in subsequent sole source justification.
Most communications (local phone, postage, generally indirect)
Lease and rental
Repair and Maintenance
Generally only for R&M of project equipmentBudget categories:Other General Expenses
Facility should be following “Recharge Operation and Service Facility” policy (3.10)
Cornell excludes from MTDC
NSF prohibits rebudgeting out of this category without prior approval
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
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
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 baseF&A Cost Bases
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
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 completionBudget Justification