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Basic Budget Building

Basic Budget Building

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Basic Budget Building

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  1. Basic Budget Building Research Executive Area

  2. Please Note Rates used in this Tutorial are for example purposes only and may not be up to date. For current rates, please see our Proposal Fact Sheet

  3. Basic Budget Building This presentation is available on the www under “Basic Budget Building Tutorial” at http://www.umass.edu/research/ogca/proceds.htm All underlined entries herein are hyperlinks to other resources. You are invited to use and share this presentation and to follow the links for additional important information

  4. First Steps • Contact OGCA by sending an email to the pre-award research administrator responsible for reviewing your proposal. Let them know the deadline and provide the URL for program guidelines. • Review Sponsor guidelines for any costing rules that could include: • Ceilings on requested amount • Indirect cost limits • Cost-share requirements • Direct cost restrictions (no equipment for example) • Consult OGCA Fact Sheet for current rates • Identify sponsor forms • Build your budget using this basic budget building tutorial as a starting point. Contact OGCA with any questions.

  5. Two Major Budget Components • Direct Costs: • The costs that are directly attributed to the project. Examples include salary, supplies, equipment, etc. • Facilities and Administrative Costs (F&A). (Indirect Costs or Overhead): • Pooled costs UMass incurs in support of Sponsored Activities not directly attributable to any one sponsored project. F&A is assessed as a percentage of direct costs.

  6. Two Types of Direct Costs • Personnel (Salaries and Fringe Benefits) • Non-Personnel

  7. Personnel • Faculty Salaries • Academic • Summer • Calendar

  8. Academic Year (AY) Salary • Consult with your department head to determine how much time you are allowed to dedicate to research projects.Personnel effort on all ACTIVE awards plus teaching load cannot exceed 100% . In other words, 100% summer salary (14 weeks) + committed academic year research effort (up to the maximum percentage allotted for research by your department during the academic year) + Teaching load + other obligations = 100% • Academic Year (AY) salary is based on a 9 month appointment • AY salary charged to the sponsor is assessed the full fringe benefits package. The exception to this is the non-tenure track research professor -- this can be non-benefited

  9. Academic Year Salary (Cont’d) • Some sponsors (e.g. NSF) do not allow payment of academic year salary without strong justification (strictly research appointments, etc.)

  10. Academic Year Salary Sample Calculation • To charge 11% (1 month) of an academic salary of $65,000: 11% X $65,000 = $7,150 Show basis of effort according to sponsor preference, usually represented as either % of effort or monthly. NSF requires by month, NIH by %

  11. Personnel Budget Detail Academic Salary

  12. Fringe on Academic Year Salary • Group Insurance & Retirement: 27.00% • Worker’s Comp., Unemp., & Univ. Health: .91% • FICA (Medicare): 1.45% (applicable only if hired after 4/86) • Health & Welfare: $11 per week

  13. Academic Year SalarySample Fringe Calculation • Group Insurance 27.00% X $7,150 = $1,931 • Worker’s Comp, etc. .91% X $7,150 = $65 • FICA (Medicare) 1.45% X $7,150 = $104 • 38 weeks (AY) X $11/wk X 11% = $46 • Total Fringe = $2,146

  14. Fringe Budget DetailAcademic Year Fringe

  15. Personnel • Faculty Salaries • Academic • Summer • Calendar

  16. Faculty Summer Salary • Federal: • Those faculty with Academic Year (AY) appointments can receive an additional 33% as summer salary. For example if AY pay is $100,000, then an addition $33,000 can be charged as summer salary. • The summer pay rate is based on the 9 month academic year salary. • NSF permits only 2/9’s, the equivalent of 2 month’s salary. • Industrial and Foundation: • Pay rate unrestricted – negotiated with sponsor • Personnel effort on all ACTIVE awards plus teaching load cannot exceed 100% . In other words, 100% summer salary (14 weeks) + committed academic year research effort (up to the maximum percentage allotted for research by your department during the academic year) + Teaching load + other obligations = 100%

  17. Faculty Summer SalarySample Calculation Annual salary = $54,000 Monthly salary= $54,000/9 = $6,000/mo 2 months of summer salary = $12,000 charged to the project • Show basis of effort according to sponsor preference, usually represented as either % of effort or monthly. NSF requires by month, NIH by %

  18. Personnel Budget DetailSummer Salary

  19. Faculty Summer Salary Sample Fringe Calculation • If PI hired before April 1, 1986 • Worker’s Comp. = .91%(Summer Salary) • If PI hired after April 1, 1986 • FICA = 1.45% • Worker’s Comp. = .91% 2.36% For the sample budget, assume the latter: 2.36% X $12,000 = $283

  20. Personnel Budget DetailSummer Salary Fringe

  21. Personnel • Faculty Salaries • Academic • Summer • Calendar

  22. Faculty Calendar Year Appointment • Some faculty have calendar year appointments – 12 months • Full fringe is assessed; same as academic appointments • Additional compensation can only be charged to Non-Federal sources and with Dean and Provost written approval - only FICA & Worker’s Comp. are charged for fringe

  23. Personnel • Faculty Salaries • Summer • Academic • Calendar • Other Professional (Programmer, Technician, etc.)

  24. Other Professional Sample Calculation • Calendar year employees: Sample annual salary = $30,000 • Calculating effort on a % basis: • 30% X $30,000 = $9,000 • Calculating effort on a monthly basis: • $30,000/12 months = $2,500/month; • $9,000/$2,500 = 3.6 months • Additional compensation: professional and classified staff can be budgeted up to an additional 12% salary from Non-Federal sources on top of their base annual with Dept. Head and Dean approval. Must be clearly noted in the budget as “Add comp” – consult with Human Resources for allowability.

  25. Personnel Budget DetailOther Professional Salary

  26. Other Professional Sample Fringe Calculation • Assessed at full fringe rates • Fringe (27%) + Worker’s Comp (.91%): 27.91% $9,000 x .2791 = $2,512 • Health & Welfare $11/week or $572 annually 30% effort x $572 = $172 • FICA (if hired after 4/1/86) 1.45% $9,000 x .0145 = $131 • Total Fringe = $2,512 + $172 + $131 = $2,815for this example

  27. Personnel Budget DetailOther Professional Fringe

  28. Personnel • Faculty Salaries • Summer • Academic • Calendar • Other Professional (Programmer, Technician, etc.) • Graduate Student

  29. Graduate Student Stipend • Stipend - Minimum Graduate Stipends are set by academic areas, per student contracts.  For a memo regarding specific minimum student stipends click here: New Recalculated Minimum Graduate Student Employee Stipends • Example: for a graduate student hired in 2003 for 20 hrs per week both academic and summer: 20 hours per week X 52 weeks = 1040 hours 1040 X $14.12 = $14,685

  30. Personnel Budget DetailGraduate Student Stipend

  31. Graduate Student Sample Fringe Calculation • GEO Health Fee:assessed at $2.57 per hour The following examples reflect typical appointments: • $1,950: 20 hours/wk X 38 weeks academic = 760 hrs X $2.57/hr • $2,673: 20 hours/wk X 52 weeks = 1,040 hrs x $2.57/hr • $3, 392: 20 hours/wk X 38 weeks academic + 40 hours/wk X 14 weeks = 1,320 hours x $2.57/hr

  32. Graduate Student Fringe Sample Fringe Calculation(cont’d) • Health & Welfare $11/wk per student • $572 for 52 week year • $418 for 38 week academic year • $154 for 14 week summer $572 this example

  33. Graduate Student Sample Fringe Calculation(cont’d) • Summer Student Payroll FICA If not enrolled in classes: 1.45% summer payroll (14 weeks) $14,685/52 wks = $282/wk $282 X 14 wks = $3,954/summer 1.45% X $3,954 = $57 $57 for this example

  34. Graduate Student Sample Fringe Total • GEO Health Fee $2,673 • Health & Welfare $ 572 • Summer Student FICA $ 57 • Total$3,302 • NOTE: Curriculum fee is assessed on all academic year grad student appointments but not budgeted as fringe -- see “Other” for more info

  35. Graduate Student Fringe Calculation • It is important to understand how the fringe calculation is done, however we have constructed a Graduate Student Fringe Calculator to make it easier. It also calculates the Curriculum fee.

  36. Personnel Budget DetailGraduate Student Fringe

  37. Personnel • Faculty Salaries • Summer • Academic • Calendar • Other Professional (Programmer, Technician, etc.) • Graduate Student • Postdoctoral Fellow

  38. Postdoctoral Fellow • Salary is determined by what the market will bear in a particular field and is usually figured on an annual basis. Check with Department Head for prevailing rates • $35,000 per year this example

  39. Personnel Budget DetailPostdoctoral Fellow Salary

  40. Postdoctoral Fringe • UMass requires the budgeting of health insurance for postdocs by either providing: • 1) The full benefits package – includes group insurance and retirement • 2) Budgeting for the postdoc health plan – no retirement

  41. Post Doc Fringe (cont’d) • 1) Full benefits: • Group Insurance & Retirement: 27% • Worker’s Comp., Unemployment, & Univ. Health: .91 • FICA (Medicare): 1.45% (applicable if hired after 4/86) • Health & Welfare: $11 per week 27% X $35,000 = $9,450 .91% X $35,000 = $319 1.45% X $35,000 = $508 52 weeks X $11/wk = $572 Total Fringe = $10,849

  42. Postdoctoral Sample Fringe Calculation (cont’d) • 2) Postdoc Health Insurance plan: Fellow only $232/mo Fellow and child(ren) $615/mo Fellow and spouse $728/mo Fellow, spouse & child(ren) $1,111/mo 12 months X $232/mo = $2,784 • Worker’s Comp and FICA are assessed as well: .91% X $35,000 = $319 1.45% X $35,000 = $508

  43. Postdoctoral Sample Fringe Total Postdoc with health (no-retirement): • Worker’s Comp $319 • FICA $508 • Health Insurance $2,784 • Total $3,611

  44. Personnel Budget DetailPostdoctoral Fellow Fringe

  45. Personnel • Faculty Salaries • Summer • Academic • Calendar • Other Professional (Programmer, Technician, etc.) • Graduate Student • Postdoctoral Fellow • Secretarial

  46. Secretarial Secretarial salary can be charged to non-federal projects without any restrictions. The direct charging of secretarial services on federally supported projects is allowed only under a limited number of scenarios. See the policy statement and consult with OGCA proposal staff for guidance.

  47. Personnel • Faculty Salaries • Summer • Academic • Calendar • Other Professional (Programmer, Technician, etc.) • Graduate Student • Post Doctoral Fellow • Secretarial • Undergraduate Student

  48. Undergraduate Student • Undergraduate Students are hired for varying numbers of hours per week • The pay scale for undergraduates is determined by the job description and Human Resources guidelines 10 hrs/wk X 38 wks X $10/hr = $3,800

  49. Personnel Budget DetailUndergraduate Student Pay

  50. Undergraduate Fringe Undergraduate salary is not charged fringe. However, FICA is charged during summer employment if the student is not enrolled in summer classes. Fringe = $0 for this example since the student is working during the academic year.