Budget Basics : Show Me the Money!

1. Budget Basics:Show Me the Money! Institute for Research Development

2. What You Will Learn Today Institute for Research Development • Purpose of a budget • Guiding principles • Getting started • Direct vs. Indirect Costs • Budget Justification • Cost Sharing • Sponsored Programs Accounting Overview • Major Projects • Effort Certification

3. What is a budget? Institute for Research Development • Financial aspect of your proposal • Detailed statement • Outlines estimated costs • Supports proposed work • Sponsors want to know how funds will be used • Reviewers see if costs are reasonable in relation to the proposed work

4. OMB Circular A-21 Institute for Research Development • Defines allowable costs • Defines unallowable costs • Specifically identifies direct & indirect costs • Establishes accounting standards for allowability • Reasonable • Consistent • Allocable

5. Reasonable (A-21 Section C-3) “A cost may be considered reasonable if the nature of the goods or services acquired or applied, and the amount involved, reflect action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made.”

6. Allocable • Is the cost benefitting the project? • Is the cost incurred solely to advance the work of the project? • If the benefit extends to other ASU projects, that cost should be pro-rated

7. Consistent • Is the cost consistent with ASU’s policies? • Remember Research Governing Principles • Is the cost incurred solely for the same purpose, in like circumstances and treated consistently as direct or F&A? • If cost is unallowable for ASU, it’s unallowable for a grant: • No 2% raise for ASU employees • No 2% raise for grant employees

8. Allowable Compliance with sponsor’s policy, A-21 & ASU • Specific UNallowableCosts • Alcoholic beverages • Entertainment • Fines & penalties • Fundraising & alumni activities • Internal interest charges • Subscriptions • Advertisement or public relations • Travel in excess of coach • Clerical salaries & general office supplies (IDC)

9. University Policies & Procedures Institute for Research Development ASU Operating Policies and Procedures http://www.astate.edu/a/finance/procedures/index.dot Sponsored Programs Accounting (SPA) Procedures http://www.astate.edu/a/spa/index.dot ASU Research Governing Principles http://www.astate.edu/dotAsset/cfd5ff63-d23d-4165-8c91-797cb8b45d2b.pdf

10. How do I get started? • Responsibility rests with PI • Required approvals • Department • College • Department and College of any ASU co-PIs • ORTT

11. Guidelines Vary Every sponsor has specific budget restrictions. Read the solicitation carefully to ensure you understand the requirements. Then, read the solicitation AGAIN!

12. Planning a Budget • Numbers come from • Actual sources • Pay scales • Historical experience • Quotes from vendors

13. Budget Checklist • Solicitation • Direct cost limit • Indirect cost restrictions • Project dates • Number of years • Who is involved & what are the roles? • Subawards? Consultants?

14. Budget Checklist Cont. • Equipment? (any over $5000) • Supplies, materials • GA tuition • Participant Costs • Travel • How many people? • Where? • Purpose?

15. ASU’s Accounting Categories 614000 Sponsored Salary 615000 Part-Time Salary 620000 Fringe 710000 Supplies 710701 Workshop Fees 710801 Consulting 710807 Honorariums 711004 Subawards 720000 Travel 730000 Capital/Equipment 750000 Stipends 790300 F&A

16. 2014 Estimated Fringe Rates

17. Direct Costs • Specifically applied to project • Salaries & Fringe • Equipment • Travel • Supplies • Tuition Remission • Subawards • Other Indirect Costs (F&A) • Cannot be tied to particular project • Utilities & Maintenance • Support or admin staff • Federally negotiated rate • 36% of MTDC • 11% off campus • Exceptions • Sponsor doesn’t allow • Under $10,000 IDC Rate Letter: http://www.astate.edu/dotAsset/dabe148c-99a2-468b-96a6-c39c0290ea2a.pdf

18. Budget Justification • One of the most important non-technical sections of your proposal • Rationale for each budget category • Brief & project-related • Follow same line-item format as budget form

19. Should Justify • Personnel • Each role and tasks performed • Effort required (person months or %) • Do NOT write a bio • ASU employees canNOT be consultants • Materials, Supplies & Equipment • Less specific about brands

20. Should Justify • Costs that fluctuate or only appear once • Unusual items • Items normally disallowed by OMB Circular A-21

21. Cost Sharing/Matching • Part of the project not paid by sponsor • MUST be pre-approved by chair and dean • A-21 Guidance: • Matching funds must follow the same conditions as sponsored funds • Costs claimed as match cannot be claimed on other projects • If unallowable on grant, unallowable as match • Cannot match federal with federal

22. Types of Cost Sharing • Mandatory • Required by sponsor • Must be tracked & reported • Often expressed as a percent of budget • Should not exceed amount required • Voluntary Committed • Must be tracked & reported • ASU does not encourage • Voluntary Uncommitted (incidental, unplanned) • PI effort above commitment • No mechanism for reporting

23. Suggestions for Cost Sharing • PI time • Unrecovered F&A • Specialized Equipment Use • Specialized Facilities Use • Specialized Services/Processes • Travel • Supplies

24. Program Income • Recipients must account for income related to projects financed by the federal government • May retain and use income if allowed by agency by: • Adding to the project to further the objectives • Financing the non-federal share • Deducting from the total cost of the project • No obligation for income earned after end of project

25. Budget Templates • http://www.astate.edu/a/ortt/forms/ • Samples

26. Break Time!

27. Sponsored Programs Accounting • Located on the sixth floor of the Dean B. Ellis Library • Staff • Nikki Turner, Director • Jessica Daniels, Accountant • Jenny Estes, Accountant • Whitney Lumpkin, Accountant • Chelsea Gambill, Accounting Technician • Website: http://www.astate.edu/a/spa/index.dot

28. Division of Responsibility • Jenny Estes • College of Science & Mathematics • Jessica Daniels • College of Education • AVC Research • College of Agriculture • College of Communications • Whitney Lumpkin • ABI • Museum • Delta Heritage • College of Business • College of Engineering • College of Humanities and Social Sciences • University College • Student Affairs • Nursing

29. What Do We Do? • Assist the PI and grant staff with questions about the grant • Work with the Sponsors on any financial questions • Understand and follow sponsor and University guidelines • Establish fund in Banner system • Monitor and approve expenditures • Prepare invoices and financial reports • Time and Effort Reporting • Post-Award Training

30. When Do I Need to Contact SPA? • Change in scope or objective • Change in key personnel listed in approved proposal • Absence of PI for more than three months • Additional funding • Transfers between direct and F&A costs • Transfers of trainee expenses to other categories • Subcontracting portions of work • Budget Transfers in “Letter Agreement” Funds

31. Time and Effort Reporting – Why? • Effort is the total of an employee’s time spent on university activities for which he/she is compensated • Effort reporting is a process for verifying how an individual utilizes his or her time during a given reporting period • Required under Circular A-21 • Must be certified at least twice per year

32. Time and Effort Reporting – Who? • Full-time employees are expected to certify their own time, unless due to circumstances beyond their control, in which case PI’s can certify. • PI’s are required to certify for part-time employees and students. • Deans/ Dept. chairs may be alternate certifiers with suitable means of verification

33. Time and Effort Reporting – When? • Effort certification at ASU is through Self-Service Banner

34. Time and Effort Reporting – How? • Payroll documents (ESF and Assignment Change Forms) are used to create the payroll distribution in Banner. • SPA extracts after-the-fact data to Self-Service • During the certification period, faculty and staff certify in Self-Service

35. Sponsored Programs Website • SPA Procedures • Administrative Cost • Cost Sharing • Cost Transfer • Effort Certification • Fund Closeout • Residual Balance • Subrecipient Monitoring • Student Support Payment • SPA Forms • Internal Award Notice • Request for Advance Account • Expense Transfer Form • Student Support Payment Request • Administrative Cost Justification http://www.astate.edu/a/spa/index.dot

36. Sponsored Programs Training • Sponsored Projects Overview • Allowable vs. Unallowable Costs • Self-Service & Internet Native Banner • Special Issues (Match Issues and Time and Effort)

37. Wrap Up Institute for Research Development • Questions, comments? • Homework Thank you! Cheryl Dison: 870-972-2694 cgoad@astate.edu Nikki Turner: 870-972-2400 anturner@astate.edu