Pre-Award: Budget Development for Grants

1. Pre-Award: Budget Development for Grants UCLA School of Nursing Research Support Team November 14, 2011

2. Presentation Overview • Preparing budgets • Timeline • Budget categories • Project roles • Post-award compliance • Costing principles • Managing project expenses • Effort & progress reports

3. The Purpose of Budgets • Demonstrate that PI has considered all costs of achieving the specific aims and project goals • Dedicate effort and resources to the project • Delineate budget categories which must be adhered to (±25%) once the project is underway • Describe the scientific necessity of every line item

4. Specific Aims Drive the Budget

5. Timeline for Successful Budgets • Three months before due date • Develop Specific Aims • Meet with Statistics Consultation Group to develop power analysis and study size, statistician effort (if applicable), data management plan • Develop project timeline • What is the project duration? • Who is involved? Does effort fluctuate? • Enrollment timeline? • Analysis timeline?

6. Timeline for Successful Budgets (continued) • Two months before due date • Identify personnel and performance sites • Rough draft of budget and justification • One month before due date • Final budget and justification

7. Timeline for Successful Budgets (continued) • Secure special arrangements earlier • Permission to exceed direct cost limitation? • Subawards to other Institutions? • Projects with an international component? • Quotes for equipment, consultants, vendor agreements? • Mandatory cost sharing? • Program income?

8. Budget Foundations Just- ification Describe necessity Cost categories Effort, subcontracts, other costs Project goals & specific aims What is feasible/necessary to achieve goals? Program announcement Scope? Cost/category limitations? Modular or line item budget?

9. Call for Proposals • Consider whether you chose the best announcement for your scope of research • Investigator-initiated R01s are scalable; early-stage investigators have a distinct advantage • Each award type has underlying objectives – don’t shoehorn your work into an ill-fitting announcement • Consider another announcement if expenses are much greater/smaller than average award

10. Direct and Indirect costs • Direct Costs identified with a particular sponsored project and directly assigned to that project with a high degree of accuracy Examples: scientific/technical personnel effort, project supplies, subject renumeration, scientific/technical computers • Indirect Costs For common or joint objectives which cannot be identified specifically with a particular project Examples: clerical effort, office supplies, general purpose computers

11. Direct Cost Categories • Personnel: define effort devoted to the project • Materials and supplies • Travel (PI to study sites, conferences) • Consultants • Equipment • Subawards • Other costs • Define categories and atypical line items at outset to ensure allowability when project is underway • Subject renumeration, TIF, fee remission, animal research, pharmacy costs, rent, project-specific office-type supplies, telephones, mailing, copying, machines (<5k), core services

12. Personnel Determinations • Personnel comprise the largest part of grant budgets • 2% escalation per NOT-OD-11-068 • All personnel have a project role, duties, and effort • Senior/Key Personnel • individuals who contribute to the scientific development or execution of the project in a substantive, measurable way • Current staff or TBN? • Actual salary/benefits vs institutional scales

13. Project roles: Senior/Key • Multiple PI • Requires Multiple PI leadership plan • Co-Investigator • Requires stated effort/salary • Faculty Collaborator • Other Significant Contributor • Effort is “as needed”

14. Project roles: Other Personnel • Use project role, not payroll title • Payroll title is used to determine associated costs (e.g. graduate fee remission, postdoctoral minima) • Consolidate like appointments • Staff Scientist • Postdoctoral Scholar • Research Assistant/Coordinator • Technician • Consultant

15. Subaward, Vendor or Consultant? • Subawards are the most common mechanism for collaboration with another site that brings intellectual value to the project. They have discrete, fully-formed budgets authorized by an institutional official. • Vendor Agreements are established when a site performs work (assays, sample processing) on a fee-for-service basis. No intellectual contribution. • Consultants are non-UCLA individuals who perform fee-for-service work at a fixed rate; always requires a letter of support stating the rate, scope and expertise; compliant with SB1467 “Public Contracts: Conflict of Interest.”

16. Human and Animal Subjects • Protocol defines timepoints and processes for subject renumeration which must be included in the budget • Approvals must be in place before award can be issued • Start work on the protocol before award is issued to ensure the project is not delayed or restricted

17. Financial Characteristics of Contracts & Grants • Defined performance period • Ongoing reporting – progress, effort and technical reports • Auditable financial reports

18. Financial Characteristics of Contracts & Grants (continued) • Most research grants are cost-reimbursable • Specific scope of work • Unobligated funds returned to agency • Some contracts (clinical trials, subcontracts for services) are fixed-rate • Funds provided for services rendered • Unobligated funds retained under Policy 913 • Research Office will advise PI regarding the contract type

19. Federal Costing Principles • OMB A-21 • Should I charge this to my grant? • Allowability, Allocability, Reasonableness, Consistency • OMB A-110 • Competitive procurement • Report submission and records retention • Prior approval for rebudgeting beyond established thresholds

20. Costing Principles (continued) • Allowability • Does the agency or announcement prohibit certain costs? • Allocability • Is the expense tied directly and proportionally to the project? • Reasonableness • Are the cost and units reasonable in light of the study aims and scope of work? • The Times test: does it pass public scrutiny? • Consistency • Are the costs consistent across projects and campus units?

21. Managing Project Expenses • Partnership between PI, requestor, purchaser and grant analyst to adhere to principles and facilitate timely correction • Continuous, dynamic, collaborative review • Review Process • Research Office provides ad hoc, real-time reports on expenditures • PI defines steps to align expenses with budget and goals • Fund manager and requester take action • Repeat

22. Managing Project Expenses (continued) • By approving a purchase, PI certifies that the expense is necessary, directly benefits and is used exclusively for the project • Use exception processes sparingly or never • Out-of-pocket expenses, cost transfers, sole-source purchases • Expenses >90 days old cannot be moved to or between research projects (NIH GPS 7.5)

23. Examples of reporting flags • Categorical variances ± 25% • Rebudgeting into/out of IDC-exclusion categories • Effort variances • Unallowable/misattributed items • Carryforward >25% to continuation year

24. Reporting • Effort reports • PI submits reports quarterly • Prevents overlap and ensures effort is consistent with stated levels • Personnel effort must be ≥ pay • Prior approval required if senior/key effort decreases >25% from proposed effort • Three reporting points: Other Support page, All Personnel Report, Effort Reporting System

25. Reporting (continued) • Progress reports • Submitted to agency annually to secure continuation funding • Publications? Results? Project delays? Changes to project? Enrollment? Effort? Carryforward over threshold? • Sloppy reports are frequently returned and will delay continuation funding

26. Summary • Budgets and expenses are a function of the project goals and specific aims • Budgets should be as realistic as possible to minimize post-award changes • PI and departmental coordinators are jointly responsible for adhering to costing principles and managing project expenses

27. Questions? • Slides will be available on the web (click Research, Past Presentations) • Email researchoffice@sonnet.ucla.edu