Developing a Research Project Budget

1. Developing a Research Project Budget Donna Smith, Office of the Vice-President Research & Innovation April 13, 2010

2. Budget Overview • Follows all sponsor rules for the project (eligible expenses) and all University policies and procedures. • Are comprehensive -Show details of all revenues and expenses. - Indicate sources for revenues and whether cash or in-kind. • Are as accurate as possible • - Note details and sources of estimates (incl. formal quotes). • - Check your math. • Present information logically • -Group expenses together (e.g., salaries, benefits, equipment).

3. Budget Overview • Are calculated over periods of time for multi-year projects - Provide start dates and end dates for each period when you will receive funds and when your expenditures are likely to occur. - Sponsor fiscal year (e.g., Tri-council, Apr 1 - March 31). - University fiscal year (May 1 - April 30). - Other sponsors may use their fiscal year or could use the calendar year. • Are defensible if audited • -Keep all of your records.

4. Fundamental Principle • Two sides to every budget story (at least!) • Total Revenue (TR) and Total Expense (TE) • TR ≥ TE

5. Revenue: Cash • Ensure that your “ask” does not exceed sponsor guidelines. • Detail all non-sponsor sources of cash commitments and keep written confirmation of each commitment to your project as a long period of time may elapse until collection.

6. Revenue: The kinds of in-kind • What is the value of the good or service that you are receiving for your project that you are not paying for directly with cash? • Does the sponsor have regulations on what can be counted as in-kind and the amount represented in the project as in-kind contributions? • Substantiate the value of in-kind—what is required by the sponsor? And just as important—what may be required by an auditor?! • Keep a written record of all in-kind contributions.

7. Revenue: The kinds of in-kind • Examples of in-kind expenditures: • Salaries and benefits of human resources donated to the project • Space incl. utilities, furniture, equipment • Vendor discounts on goods purchases • Equipment time

8. Budget Expense Details Salaries and Benefits Overview • Salaries • Costs must comply with all labour legislation (e.g., Employment Standards Act of Ontario – ESA, minimum wage, public holiday pay, etc.) and all applicable York University Collective Agreements. • Benefits • Must pay statutory benefits for all employees except Graduate Student RAs and Postdoctoral fellows (i.e., employer portion of EI, CPP, EHT, WSIB premiums and any other government mandated payment, see http://www.yorku.ca/hr/units/cpb/index.html). • Actual costs are charged to research accounts—you can use standard rates for budgeting purposes. • Benefits are payable on earnings and vacation pay. • Current standard benefit rates can be found at http://www.yorku.ca/finance/documents.htm.

9. Salaries and Benefits: Graduate Students • Graduate Students • Work through your academic department. • GA? Or RA? • GAs are covered under CUPE 3903 Unit 3 Collective Agreement—see current CA for rates of pay. • RAs are not employees. Clarity Note: For the purpose of clarity, graduate students registered as full-time at York University who receive financial assistance from or through York University for research or academic activities which are predominantly for the purposes of advancing the students’ progress towards fulfilment of their program and degree requirements are not in the bargaining unit CUPE 3903 Unit 3 collective agreement). • There are no benefits or other deductions for RAs and the stipend rate is negotiable.

10. Salaries and Benefits: Post-Doctoral Fellows • Post Doctoral Fellows • Are not employees. • Receive a stipend, not employment income. Therefore, there are no vacation pay requirements. • Minimum benefits available (current rate 3.5 per cent). • Funder may set limits on stipends, length of engagement, and time from conferral of doctoral degree • e.g., NSERC current minimum is $25,000 • SSHRC current maximum is $31,500 • CIHR current minimum is $36,750

11. Salaries and Benefits: Undergraduate Students • Undergraduate Students • RAY program – minimum pay rate $15.00 per hour plus stat. benefits, with a $3,000 maximum financial reimbursement F/W term • Workstudy students –minimum pay rate is minimum wage (currently $10.25) with a $1,500 maximum financial reimbursement F/W term • Sample student salary calculation per hour: • For further information see http://sfs.yorku.ca/employment/admin/.

12. Salaries & Benefits: Non-Student Research Personnel • Research Associates and Research Assistants: • A research associate has an advanced degree and participates actively in the research work. Their work is primarily self-directed. They hold similar qualifications to a faculty member. • Research Assistant may have a Master’s degree or less. They work under the PI’s direction (e.g., technician). • If the employee is not covered by a Collective Agreement, the pay rate is negotiable.

13. Salaries & Benefits: Non-Student Research Personnel Example • E.g., Research Associate • Full-time employees accrue vacation rather than a percentage on each pay cheque. • The benefit rate is for budgeting purposes. Actual amounts will be deducted from research account.

14. Salaries & Benefits: Multi-Year Projects • Multi-Year Projects • Review Collective Agreements for future year increases as appropriate. • Increase salary/benefit total costs by 3 per cent each year to account for unknown CA increases and those employees not covered by a CA. • Pay freeze for Ontario BPS for two years: • How does this apply? • “It's complicated,” Dalton McGuinty, Toronto Star, March 30, 2010

15. Budget Expense Details Procurement of Goods & Services • Purchase of Goods • Obtain appropriate quotes through University preferred suppliers where possible • Ensure quotes include taxes, delivery and installation. See http://www.yorku.ca/univsec/policies/document.php?document=58. • No preferred vendor. Obtain quote from Canadian supplier where possible • Ensure your budget accounts for replacement goods as required such as computers if the research project is for many years (e.g., computers purchased in Year 1 and replaced in Year 5 of seven-year project). • Budget for ongoing maintenance costs for any equipment.

16. Budget Expense Details Procurement of Goods and Services • Purchasing Services • Ensure consultant/professional services are an eligible expense • Review procurement/Finance guidelines for eligibility. See http://www.yorku.ca/finance/documents.htm. • HST (Harmonized Sales Tax) • Effective July 1, 2010 at 13 per cent. • Research equipment exemption has been removed. HST of 13 per cent will apply but cost eligible for a 78 per cent rebate of OHST 8 per cent portion (67 per cent rebate of GST portion still applies) • See http://www.yorku.ca/finance/documents/HST_General_Community_Web_Version.pdf.

17. Budget Expense Details Procurement of Goods and Services Source: “Harmonized Sales Tax in Ontario,” York Finance presentation March 2010, A. Dimarcantonio, D. Archer

18. Budget Expense Details: Research Space • Refer to the research costs table for in-kind costs. See http://www.yorku.ca/research/support/documents/. • When renovating space for infrastructure projects: • Campus Services & Business Operations (CSBO) must prepare all quotes for York space renovations. Please contact the Office of Research Services if you have a research project involving infrastructure projects.

19. Budget Expense Details Travel and Conference Costs • Travel Costs • Obtain quotes from online travel sites, e.g., Expedia, Travelocity for airfare, hotel and other travel service requirements. • Check CAUBO/AUCC rates for hotels and car rentals. • Use per diem rates for meal costs, although when submitted actual receipts are acceptable in most cases. • Most sponsors do not cover passport and/or visa costs, travel insurance (other than cancellation insurance), so check regulations carefully before including them. • Be aware of change fees and non-refundable components.

20. Budget Expense Details Travel and Conference Costs • Travel Costs http://www.yorku.ca/finance/documents.htm

21. Budget Expense Details Travel and Conference Costs • Conference Costs for Hosted Conferences • Registration fees are HST taxable • Travel costs, e.g., co-PIs from other universities (if eligible) • http://www.caubo.ca/pr/agreements_hotels_e.cfm • Facility costs (e.g., room rental and assoc. costs such as cleaning) • Meal costs from on-campus/off-campus caterers • Equipment rentals e.g., audio-visual, costs for recording proceedings • Printing/supplies costs (e.g., advertising, posters, programs) • Salaries/benefits for for extra staff

22. Budget Expense Details Audit Fees • Costs of professional audit when requested by sponsor • Costs must be budgeted in the research budget • Costs paid from the research cost centre • Research Accounting (Finance) arranges the procurement of the auditor • Currently cost approximately $7,500 (average) per audit year

23. Budget Expense Details Miscellaneous Expenses • Insurance • Vehicle insurance—The cost of vehicle may be an eligible expense in the project but the cost of the insurance generally is not. Insurance & Risk Management arranges coverage but the Project must arrange an alternate source of funding to pay. • Insurance for equipment—ensure that Insurance & Risk Management is made aware of any expensive equipment purchases to ensure that coverage, if required, is arranged. • Insurance for transporting equipment outside Canada: http://www.yorku.ca/finance/services/riskinsurance/insurance.htm • Customs clearance costs—Procurement Services arranges for clearance of goods imported or exported: http://www.yorku.ca/procurement/internal/customsclearance/

24. Budget Expense Details Miscellaneous Expenses • Cost of Currency Exchange • When project payments are from a foreign sponsor, is the exchange rate set or floating? • Win/lose uncertainty with foreign currencies. • Finance sets the rate for US$ invoices/cheques periodically relative to the current exchange rate between the US and Canadian dollars. • Use reliable websites (e.g., OANDA.com) for converting currency for travel expenditures. Understand differences between cash/credit card rates and buy/sell rates. • International Sponsor Regulations • Check to see if you are required to follow another nation’s rules when accepting funds from an international sponsor (usually gov’t), such as the “Fly America” policy when accepting US Federal government funds

25. Budget Expense Details Overhead • Overhead on Research Contracts • Minimum overhead should be included in research budgets at 40 per cent of the total direct costs of research for industry contracts. • For contract research, York seeks the full federal government contract research overhead rates as established by Public Works and Government Services Canada (PWGSC): • 65 per cent calculated on salaries + benefits for on-campus research • 30 per cent calculated on salaries + benefits for off-campus research • 2 per cent calculated on travel expenses • Overhead MUST be calculated on partners’ cash contributions matching funding programs such as NSERC, OCE and CIHR industry matching programs. • Source: January 2009 memo to faculty from D. Dewitt/KWM Siu – Assoc. Vice-Presidents Research

26. Budget Expense Details: The Fine Print • Research Grants • By signing and submitting a research grant you are agreeing to abide by all of the terms and conditions contained in the call. Therefore, your budget must comply with the call. • Fixed-Price Contracts • You are agreeing to perform work for a set price. Accuracy in your budget is critical. • “Change is inevitable” ~Benjamin Disraeli • “…except from a vending machine”  ~Robert C. Gallagher • Always check current rules, practices, rates and regulations. Your budget calculations from last year may not be accurate for this year.