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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

Budget Basics for Administrators

Sean Hine

Branch Chief

Office of Grants Administration

National Cancer Institute

June 2014

what we will be discussing
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
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
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
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
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 cont1
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
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
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
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 cont1
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
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
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
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 cont1
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 cont2
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 b udgets
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
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 cont1
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 cont2
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
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
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
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
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
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
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
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 cont1
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
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
Thank you!!