Developing budgets that accurately portray your programs and projects is not an easy task. Below is some information, as well as documents and sample budgets which may assist you.

Budget Templates

Here are some links to sample budget spreadsheets.  These sample budgets are separated out based upon the length of your project:

1. UND Detailed One Year Proposal Budget - Sample
2. UND Detailed Two Year Proposal Budget - Sample
3. UND Detailed Three Year Proposal Budget - Sample
4. UND Detailed Four Year Proposal Budget - Sample
5. UND Detailed Five Year Proposal Budget - Sample

If your project requires matching or cost share funds, here are some links to sample budget spreadsheets which include columns for cost share expenses.  These sample budgets are separated out based upon the length of your project:

1. UND Detailed One Year Proposal Budget With Cost Share - Sample
2. UND Detailed Two Year Proposal Budget With Cost Share - Sample
3. UND Detailed Three Year Proposal Budget With Cost Share - Sample
4. UND Detailed Four Year Proposal Budget With Cost Share - Sample
5. UND Detailed Five Year Proposal Budget With Cost Share - Sample

Personnel Costs

The majority (60% - 70%) of your proposal budget will most likely be personnel costs.  So it is very important to accurately reflect these costs for the life of your project.  Here are some tips:

1. If your project's start date is next fiscal year, make sure to calculate the employee's institutional base salary at next year's rate.  This may be as easy as taking this year's base salary and increasing it by 3-5%.
2. If you are proposing a multiple year project, make sure to increase the employee's budgeted salary by 3-5% each year. 
3. If you are proposing a project to the National Institutes of Health (NIH), you will need to show an employee's effort in terms of "Man-Months" instead of "Effort Percentage".  Here is a quick and easy Man-Months Conversion Chart.
4. If you are proposing the use of Graduate Students, your Department Administrator should have a listing of current GRA and GTA salary amounts.  If not, you can use this GRA and GTA Salary Amounts for FY 2009 form as a guide.

Fringe Benefits

For proposal purposes, you should estimate your emplyee's fringe benefit rates based upon the Estimated 2009 Fringe Benefit Rates (%).  These rates have been derived by using the UND FY 2009 Fringe Benefit Calculator found on the UND Payroll Office website at http://www.und.edu/dept/payroll/html/benefits.htm. 

Fringe benefits include worker’s compensation, TIAA & other annuity, health insurance, life insurance, disability insurance, social security taxes, unemployment compensation, and the employee assistance program. 

Even though we propose fringe benefit expenses based upon a percentage of the employee's salary, during the life of the project the actual benefits will be charged to the project.

Subcontracts

If your project requires the use of subcontractors, the following information needs to be completed by the subcontractor before the proposal is submitted by UND:

1. Commitment Letter
2. Scope of Work
3. Budget and Budget Justification

If you are sending a proposal to the National Institutes of Health (NIH), and your project requires the use of subcontractors, the following NIH forms need to be completed and signed by the subcontractor before the proposal is submitted by UND:

1. NIH Face Page
2. NIH Detailed Budget for Initial Budget Period
3. NIH Budget for Entire Proposed Period of Support
4. NIH Checklist Page
5. NIH Consortium Agreement Commitment

Q & A

Q. How specific do I need to be in estimating my project costs?

You need to use accurate salary and fringe benefit rates and give enough detail to demonstrate that you have a clear idea of what your costs will be.  Requesting funds for nonspecific budget categories such as “other” can be interpreted by the funding agency as a lack of planning.

Q. Shouldn’t I ask for as little money as possible to improve my chances of receiving funding?

You should ask for what you need to carry out the project—no more and no less.  Inflated budgets look “padded” and can harm your chances for funding, and underestimating your costs can lead to project failure if an award is made.  The concept of “lowest bidder” only applies to contracts, not grants, and even funding decisions for contracts are based on the overall quality of the proposed project not just the project with the lowest cost.

Q. What is the difference between a grant and a contract?

Projects funded by grants generally require the PI to make a good faith effort to achieve project goals within the funds and time allotted.  Funding is not contingent upon perfect performance.  Under a contract, the PI is responsible for providing a specific set of deliverables before payment is received from the funding agency.  If the PI is unable to deliver these products, funding for the project will be affected.

Q. What happens if I get more than one grant or contract funded?

This would be a nice problem to have!  Typically it is difficult to obtain external funding.  If a PI receives more than one grant for the same sponsored project activity, the cost of the project may be shared by the granting agencies, unless one of the granting agencies requires that the PI not accept funding from any other source.  In this case, the PI would need to accept funding from only one agency.

If the PI receives funding for several different projects, each of which involves part of the PI’s time, the PI will have to adjust their time commitments on their sponsored projects so that all of their university commitments still total 100%.

Q. What happens if I make a mistake in preparing my budget?

Proposal budgets are “estimates” of the cost of carrying out the sponsored project.  It often is necessary to plan what your project costs will be sometime in the future.  This means that real budget needs usually differ from those described in the proposal.  If this occurs, funds within cost categories can be reallocated.  The funding agency may require that UND request approval to rebudget these funds, but most federal agencies now waive this approval requirement.

Q. What happens if I need more money or time to complete my project?

When more funding is needed from the funding agency than originally proposed, the PI may request supplemental funding.  This request should be justified on the basis of programmatic needs that were not anticipated at the proposal stage. 

When more time is needed, the PI needs to obtain a no cost extension.  The Research Administration Office can assist the PI in developing this request.

Q. How can faculty be paid more salary for working on a sponsored project?

Federal guidelines prohibit grant funds from being used to augment faculty or staff member’s salaries above the level normally paid by the university. 

Q. What should be included under “Personnel” costs?

Principal Investigator - The first item under Personnel should be the cost of the time that the Principal Investigator (PI) or Project Director devotes to the project.  Every project must have an eligible PI, and that PI must devote a specific amount of time to the project during the entire project period.  The cost of the PI’s time may be charged to the funding agency, contributed by the University, or cost-shared by both.  A rule of thumb is that one day a week is equal to 20% time.

Co-Principal Investigator/s - A sponsored project may have Co-Principal Investigators (Co-PI’s), although some agencies only recognize one PI.  Co-PI’s are subject to the requirements listed above.

Project Coordinator/s - At times it is necessary to hire an individual to coordinate the various activities supported by the sponsored project.  Many funding agencies will fund such a position if it is in support of programmatic activities.  Beware of describing this position as administrative as it may be disallowed because of that description.

Faculty Associates - When UND faculty members are involved to a significant degree in the sponsored project, they should be considered part of the project team, and their time should be either charged to the sponsored project or contributed by UND. 

Student Workers - UND students can provide valuable assistance to a sponsored project, and it also is a way for students to participate and learn from real life research, training, and service activities. 

Q. How are “Fringe Benefits” handled on a sponsored project?

Fringe benefits charged to sponsored projects at UND include the employer’s contribution to social security, Medicare, life insurance, and workman’s compensation etc. on behalf of the employee.  The sponsored project that provides any portion of an employee’s salary also is charged the same portion of associated fringe benefits.

All proposals for external funding shall include fringe benefit rates charged at the full-time rate for all faculty during the academic year and all staff (except students) regardless of the hours worked per week. A link to the UND estimated fringe benefit rates is shown at the top of this page.

Q. What if I need “Equipment” to conduct my project?

Funding agencies often are willing to fund equipment, but it is wise to check the program guidelines to see if equipment is an allowable expense.  If it is, the equipment should be for programmatic not administrative purposes.

At UND, the threshold for equipment is $5,000 per unit.  This means that a piece of equipment or furniture that costs less than $5,000 will be budgeted as “Supplies” at the proposal stage.  The federal government capitalizes equipment at $5,000.

Generally equipment is requested in the first year of a project to allow for the use of the equipment throughout the length of the project period.  Major items of equipment may also require installation and maintenance costs that should be identified in the project budget.

Q. Will my sponsored project pay for “Travel”?

Travel to professional meetings and project sites as well as to meet with project partners is usually an allowable cost, but specific program guidelines always should be consulted.  The funding agency also may require project personnel to attend meetings convened by the sponsor.  These costs should be included in the project budget.

 Costs for air travel within the domestic U.S. should be based on number of person trips to a specified destination at a specific rate per trip.  Project staff lodging and Per Diem within the continental United States should be estimated according to maximum per diem rates.

International travel for projects supported with federal funds requires prior approval by the funding agency. 

Q. What if I need an external consultant to work on my project?

External consultants are paid under “Fees".  Consultants are distinguished from project personnel by the limited role they have on the project.  The use of external consultants is an excellent way to add to the expertise of the project team, unless the consultants appear to be carrying out the project.  Consultants should be used for very specific activities of short duration.  The IRS will view a consultant that acts like an employee (regular hours and consistent involvement) as an employee, so it is important to use consultants sparingly.

External consultant costs vary.  If the agency does not specify an upper limit for consulting fees, it is appropriate to set the consultant fee according to what the consultant usually charges or what the market will bear.  Proposal reviewers are usually aware of what these costs should be, so costs should reflect the level of expertise of the consultant as well as the field the consultant represents. 

A PI may not serve as a consultant on their own sponsored project or hire immediate family members as consultants (or employees) as this would constitute a conflict of interest.

Q. What is meant by indirect or F&A costs?  Do these costs apply to my project?

Indirect costs, now known as Facilities and Administration (F&A) costs, are the real costs associated with the administration of sponsored project activities at UND. F&A costs are not based on what it costs to administer or house a specific sponsored project, but rather what it costs the University to administer and house all of its sponsored project activities.

F&A costs are perhaps best understood by comparison to the direct costs of doing sponsored projects, which include expenditures for items like salary, equipment, travel, commodities, and so forth that are used in carrying out project activities.

F&A costs are those less visible costs related to the maintenance and operation of the university’s facilities and services, such as administration (purchasing, accounting), buildings (lab and office space), utilities (electricity, heating, air conditioning, and water), and so forth.  F&A rates are precisely calculated, audited, and negotiated between the university and the federal government. Therefore F&A costs vary from university to university, generally being higher at private institutions and lower at public institutions.

Q. What happens if the funding agency does not pay F&A costs or pays F&A costs at a reduced rate?

If it is the funding agency’s official policy not to pay F&A costs or to pay these costs at a reduced rate, UND will accept the agency’s policy on F&A costs. 

Q. Are there any costs that are not allowable on a project budget?

Federal regulations and University Policy specify unallowable costs.  Specific funding agencies also may disallow certain costs.  Agency guidelines always should be followed unless a program officer from the agency directs otherwise.

UND Policy and OMB Circular A-21 specifically disallows the following costs:

•                 Air Cleaners/Purifiers/Filters

•                 Alcoholic Beverages

•                 Alcohol/Disinfectant Wipes (except for public use)

•                 Christmas Cards

•                 Coffeepots

•                 Communication Expenses

•                 Cups, Water Glasses, Napkins, Tableware, etc

•                 Decorations

•                 Displays, Demonstrations and Exhibits

•                 Equipment Purchases ($5,000 or above)

•                 Facial Tissue

•                 Flowers

•                 Food or Beverages for Grant Activities

•                 Gifts

•                 Hand Sanitizers (except for public use)

•                 Holiday Cards

•                 Holiday Decorations

•                 Kleenex

•                 Lost Departmental Keys

•                 Meeting Room Costs

•                 Office Supplies

•                 Personal Care Items

•                 Personal Dues or Memberships

•                 Photographs

•                 Pictures

•                 Picture Frames

•                 Plants

•                 Postage

•                 Promotional Items and Memorabilia, Including Gifts and Souvenirs

•                 Proposal Preparation Costs

•                 Salaries for Administrative and Clerical Staff

•                 Salary Overload Payments

•                 Scholarship / Fellowship Payments

•                 Subcontractors

•                 Telephone Line Charges

Q. I want to collaborate with a staff member at another university/agency on a sponsored project, what do I need to do?

There are two ways that faculty from one institution can collaborate with faculty from another institution on a sponsored project:

Option 1:  University A submits a proposal and a faculty member from University B serves as an independent consultant on the project.  Consulting fees and expenses (not employee salary) are paid by University A directly to the faculty member. The faculty member should not use Agency B’s resources or facilities to carry out their consulting activities.

Option 2:  Agency A submits a proposal and Agency B is a subcontractor on the project.  Subcontracts are legally binding agreements between and among the prime recipient of any given award and any lower tier partners.  Throughout the period of the award, the subcontractor’s relationship is with the Primary Agency and not the funding source.  It is the Primary Agency’s responsibility to monitor the performance of all subcontractors. This makes it easier for the funding source to administer the project because they only have to interact with the Primary Agency. 

Q. What do I need to do if UND is submitting the prime proposal and other entities will serve as subcontractors on the project? 

At the proposal stage, each lower tier partner submits a proposal to us, which includes a signed letter of support indicating (a) willingness to participate in the project if it is funded, (b) the type of services that will be provided, and (c) the estimated cost of these services, a budget and budget justification, and any other agency forms that may be required. These supporting documents will be included in our proposal, and the proposal budget will include a separate line item for each subcontractor’s costs.

Q. What do I need to do if another entity wants UND to be a subcontractor on their proposal?

At the proposal stage, the UND employee who wishes to work with the entity will be the PI for the UND subcontract.  This PI should complete a proposal which will be submitted to the entity.  This proposal will be treated just like any other proposal submitted by UND to a funding agency, and will require the same institutional review process and approvals.

When the subcontract is awarded to UND, this subcontract must be reviewed by the Research Administration and Grants & Contracts Administration offices to ensure that the terms and conditions of the subcontract are acceptable to the University. 

Q. Where can I obtain the cost share funds required by the funding agency?

Universities obtain much of their cost sharing funds from contributed faculty time and the fringe benefits associated with that time.  Funds for cost sharing must be paid from a University fund that does not include any federal funds.  It is not allowable to cost share federal funds with federal funds.

When UND cost shares a PI’s time, no University funds are actually paid to the funding agency, and the faculty or staff member’s salary remains the same.  By tracking the PI’s time on the project, Grants & Contracts Administration can demonstrate to the auditors that the PI did indeed spend the requisite amount of time on the sponsored project.  This provides documentation of the cost-shared funds.

Another source of cost share is unrecovered F&A costs.  F&A costs are real costs to UND, so when a funding agency does not allow the F&A costs to be charged to the agency, the University may consider these costs part of the UND cost share or matching funds.  However, unrecovered F&A is not acceptable as cost share on some programs.  Check with sponsor guidelines before including unrecovered F&A costs as cost share. 

A third source of cost share is the purchase of direct cost items on a local funding source.  These items need to be applicable to the sponsored project, and easily tracked for audit purposes. 

Q. What happens if I am unable to generate the required cost share funds after I receive an award?

Once UND commits to cost sharing a sponsored project submitted to a federal agency, the cost share funds must be provided by UND.  Some federal agencies allow the cost share to be renegotiated when the award is made if there is a change in work scope or actual agency funding is less than requested.  However, after the award is made and the cost share is established, any deviation from the amount of cost sharing must be negotiated with the federal agency.