How to Create a Proposal Budget

1. How to Create a Proposal Budget/ Fiscal Rules for Department Administrators

2. Overview Part 1: Challenges, Strategies, and Resources Part 2: Preparing Budgets for NIH Grant Proposals Part 3: Non-NIH Budgets: Tips and Tools

3. Budget Preparation: The Challenges �This needs to go out this afternoon�� �I did a budget, just have Dr. Smith sign off�� �I�ve just added a few things to the research design�� �Just pad the numbers, they�ll cut it anyway�� �I know we can�t include this in the budget, see if you can hide the cost�� �I know this is $1M of work, but the budget limit is $500K. Make it work��

4. Budget Preparation: The Issues Allowable Costs Salary and Effort Fringe Benefits Subcontracts and Consultants Other Direct Costs Justification Calculating F&A

5. Allowable Costs Vary from funder to funder, and even from RFA to RFA Always, always, ALWAYS read the RFA and other funding guidelines Generally, costs must be specific to the project, but not all project-specific costs may be allowed Salary Equipment Supplies When in doubt, contact the funder�s project officer

6. Salary and Effort MUCH more complex than it first appears 10% of what? University? Practice Plan? VA? Summer? Outside activities? How many hours per week? What is included in Institutional Base Salary? Administrative support may not be allowable

7. Fringe Benefits May or may not be limited by funder Check RFA May vary by type of position Likely to vary over time Check with your Office for Sponsored Research on your institution�s policies

8. Subcontracts and Consultants May or may not be allowable; check RFA Generally, subcontracts are with institutions, consulting agreements are with individuals If someone is using institutional resources to work on the project, it should probably be a subcontract Always get detailed letter of agreement from individual consultants and signed, approved budgets from institutions when there are subcontracts Some PI�s like to game the system, so be careful

9. Other Direct Costs Repeat after me: check the RFA for allowable costs! Be specific and detailed Equipment purchased for the project should be project-specific and usually purchased early in the project period General office supplies often excluded

10. The Budget Justification Your chance to explain project costs Often do not have page limits Fully explain role of all Personnel and how salary charges were calculated Identify and explain any cost-sharing Your opportunity to answer questions funder may have about your costs and calculations NOT a pro forma exercise; use this to your advantage

11. Calculating F&A Often varies by funder type Not all project costs may be included in the calculation (e.g. equipment often excluded) Some funders, especially private foundations, won�t pay any F&A Institutions often require written policy from funder regarding what F&A can be charged Work with your office for research

12. Budget Preparation: Strategies READ THE INSTRUCTIONS Talk with project officers Ask faculty ahead of major deadlines Start early Communicate deadlines Train new faculty from the start Figure out what they really want, and find a legal way to do it

13. Resources Your Office of Sponsored Research Sponsor Project Officers Colleagues (find a mentor) Funded proposals from same sponsor Professional Associations (NCURA, SRA, AIM)

14. Preparing Budgets for NIH Grant Proposals

15. Determine appropriate budget component � refer to the guidelines in the program announcement Modular if requesting up $250,000 in annual direct costs (excluding consortium F&A). Use the PHS 398 Modular Budget Component for electronic applications Detail budget required if direct costs are over $250,000. Use the PHS 398 Research & Related Budget for electronic and PHS 398 Form Pages 4 & 5 for paper. Annual direct cost over $500k per year needs advance approval from IC program staff six weeks prior to submitting application

16. Building the Budget Do a detail budget on spreadsheet regardless of the budget component required in the program announcement, modular vs. detailed. This is your planning devise. If submitting a modular you will get you an idea how many $25k modules to request each year. Create a template to use in building each of your proposal budgets for consistency. This can be used by the Principle Investigators or grant administrator. Subcontracts � If there are going to be any subcontracts in the proposal have the cooperating institution send you a detailed budget and justification. This should be approved by the PI and will be needed first before you can start to work on the main budget.

17. Salaries and Fringe Benefits � These will generally be the largest component of you budget costs. Verify annual salaries of personnel Identify key personnel For staff with salaries over the current NIH cap, enter the NIH cap amount only Be sure fringe rates are correct for professional, fellows and non-professional All effort should be in calendar months not percentages. Annual inflationary increase of 3% is allowable with the NIH

18. Non Personnel Costs to consider Consultants � need letter of support from person who will be doing the consulting & how much they will charge for their services Equipment � description of equipment to be purchased and how it will benefit the project. Generally requested in the first year. Supplies � PI should be able to give you an estimate of costs and what supplies will be used Travel � how many conferences will be attended and by how many people with estimated airfare, hotel and meal costs Patient Care Costs

19. Animal Costs Other Expenses Consortium/Contractual � will be obtained from any of the cooperating institutions Overhead Base Direct Costs � this will include the total of all direct costs less any items that are excluded from overhead (generally things like equipment and patient care) Indirect Costs � based on the rate determined by the appropriate governmental agency. Multiply the overhead base direct costs by this rate to determine you indirect cost.

20. Budget Justifications � On modular budgets justify all personnel and include their roles on the project and effort in calendar months. List any consortiums with personnel and estimated annual cost, direct and indirect. On detail budgets justify all other costs.

21. Non-NIH Budgets Tips & Tools

22. There are Other Sponsors Out There National Science Foundation (NSF) Department of Energy (DOE) Department of Defense (DoD) American Cancer Society (ACS) Industry Private Foundations etc�

23. National Science Foundation The funding source for approximately 20 percent of all federally supported basic research conducted by America's colleges and universities. Issue about 10,000 new awards per year, with an average duration of three years In many fields such as mathematics, computer science and the social sciences, NSF is the major source of federal backing.

24. Other sponsors vs. the NIH The proposal deadlines and project start dates can be variable throughout the year. The period of the award may be more variable (ie. 1 year, 18 months, 3 years, 5 years). There is not always a set upper limit on funding, but instead can be a range (ie. $150K - $300K per year). The PI may have some flexibility in determining the # of years and the amount of funding to request. There is typically a detailed budget required (not modular).

25. Step 1 in preparing a budget Read the solicitation/announcement!! What is the deadline for submission (including the time)? How many years of funding may be requested? Is there an upper limit for funding, or a range? Are there specific budget restrictions? (ie. no faculty salary allowed, no F & A or reduced F & A rate) Is cost sharing required? Is re-budgeting among categories allowed after the award is made (for non-FDP awards)?

26. Example of the Importance of Reading the Solicitation PI sends research administrator (RA) an e-mail asking for a budget for an NSF proposal. He wants 0.5 month of PI summer salary, a portion of a post doc and supplies, for a total of $45K. RA reads the solicitation and realizes that the only allowable expense is travel. Fortunately the RA read the solicitation before spending valuable time preparing a budget, and the PI was able to modify his proposal and still submit by the deadline.

27. Step 2: Gather necessary Information -Basic Components of a Budget Salary Fringe Benefits Equipment Travel Materials & Supplies (consumable) Subcontracts Consultants Other (ie. tuition, services, facility usage fees) Indirect Costs (F & A)

28. Step 3: Prepare Basic Budget Using a Template Create an Excel template that can be used to create basic budgets. Don�t worry about accounting for every possible circumstance; you can always modify the template later as needed on a case by case basis. See example of template used at Northwestern University�s McCormick School of Engineering

29. Budget Tips If you are supporting a graduate student�s salary/stipend, remember to include any corresponding tuition in the budget For salaries, include a cost of living increase for subsequent years Remember to exclude some budget items from the modified total direct cost base when calculating F & A (ie. capital equipment, tuition, subcontracts after the first $25K, NSF participant support costs)

30. Keep Post-award Issues in Mind When Preparing a Budget Effort Reporting � is there anything unusual in the proposal that will affect the way effort is reported? Make sure effort commitments are very clear at the proposal stage. Is re-budgeting allowed? Make sure that the budget is realistic and appropriate. For NSF awards, remember that participant support costs (PSC) cannot be re-budgeted without prior approval from the sponsor (even for FDP awards). Make sure that the PSC budget is reasonable.