Developing budgets that accurately portray your proposed project is not an easy task. In this time of extremely competitive research and decreasing funding, you need to include an accurate budget in your proposal 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, or a lack of the financial expertise it takes to effectively run a sponsored project. Your budget should include what you need to carry out the project—no more and no less. Inflated budgets look “padded” and can harm your chances for funding, while 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. Keeping these ideas in mind , most proposal budgets are divided into three sections: Personnel, Other Direct Costs, and Facilities & Administrative Costs (or indirect costs). Detailed discussions of these three sections, as well sample budget templates, are shown below. You may also wish to review the "Allowable Costs" section of this website for a discussion on those expenses which should not be included in your budget.

Budget Categories

1. Personnel Costs

The majority (60% - 70%) of your proposal budget will most likely be personnel costs, which consist of salaries and fringe benefits. So it is very important to accurately reflect these costs for the life of your project.

Salaries

Salary costs are the actual expenses for key personnel working on the project. These expenses are calculated by taking the employee's institutional base salary and multiplying it by the percent effort that is proposed for the individual. An employee's institutional base salary can be found by contacting your department administrator or Research Administration.

A general rule of thumb for effort is that one day a week is equal to 20% time.

Here is a listing of the most common personnel listed in a proposal:

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.

Only a full-time faculty member or a full-time professional staff member may be named as the Principal Investigator or Co-Principal Investigator of a research proposal. The following academic ranks constitute appointments to the faculty: instructor, assistant professor, associate professor, and professor. These appointments may be at the probationary or tenured level.

Exceptions may be made to this policy based upon approval of a petition submitted to the Vice President for Research. The petition, which is submitted by the proposed Principal Investigator, must indicate endorsement or non-endorsement by the department faculty as evidenced by the Chairperson's signature, by the Dean, and by the Director of the Research Development & Compliance Office. A blank petition form can be found below:

Petition To Appoint Principal Investigator

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 for the Principal Investigator above.

Other Faculty - 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 shown in the proposal budget. Employees from entities other than UND should not be listed as personnel, as they are not employed by the University. These type of arrangements should be budgeted as either a subcontract or a consultant (see explanations of both below).

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.

Graduate Students - Graduate students can provide valuable assistance to a sponsored project. It is recommended that the graduate student's tuition expense be included in the budget, as well as the graduate student's salary for working on the project.

Undergraduate Students - UND students can also provide valuable assistance to a sponsored project, while at the same time being able to participate and learn from real life research, training, and service activities.

Here are some tips when calculating salary costs:

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 the UND GRA and GTA Salary Amounts for FY 2010 form as a guide.
5. The cost of the PI’s time should be charged to the funding agency. It is not recommended that an employee show effort with no salary dollars associated.

Federal guidelines prohibit grant funds from being used to augment faculty or staff member’s salaries above the level normally paid by the university. The only exception to this rule is if the employee, in completing the duties of the grant project, is exceeding his/her expectations as set forth by their employee contract. This instance is called "Overload", and prior approval from the sponsor is required for this type of expense.

Fringe Benefits

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.

For proposal purposes, you should estimate your employee's fringe benefit rates based upon the Estimated UND Fringe Benefit Rate Spreadsheet - FY 2010.

These rates have been derived by using the Fringe Benefit Calculator found on the UND Payroll Office website at http://www.und.edu/dept/payroll/html/calculators.htm:

UND Fringe Benefits Calculator - FY 2010

Keep in mind that even though we propose fringe benefit expenses based upon a percentage of the employee's salary (using the spreadsheet shown above), during the life of the project the actual fringe benefits for that employee will be charged to the project.

2. Other Direct Costs

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.

Most often, travel costs consist of airline costs, vehicle costs, hotel, per diem, and other miscellaneous expenses such as taxi service or parking.

• Costs for airline travel within the domestic U.S. should be based on the number of person trips to a specified destination at a specific rate per trip. This cost can be anywhere from $1,000 to $1,500 per person, per trip.
• If you are going to be using a vehicle to travel, you should use a state vehicle whenever possible. The cost to use a state vehicle is estimated at $0.33 per mile for a car and $0.44 per mile for a mini-van. For exact costs to use a state vehicle, contact the UND Transportation Department. If you do get approval to use your vehicle, instead of a state vehicle, the rate for personal vehicle mileage is roughly $0.45 per mile for in-state travel and $0.18 per mile for out-of-state travel.
• Project staff lodging within the continental United States should be estimated according to the approximate rate per night at a hotel in that area, as costs per hotel vary widely based upon the area they are located in. A good rule of thumb is to figure $150 to $200 per night, per room. If you are planning on staying in a hotel within the state of North Dakota, you are limited to $55 plus tax per night.
• Per diem, or the maximum allowable food costs per day, should be estimated according to maximum per diem rates.  For current domestic per diem rates, please consult the GSA Domestic Per Diem Rates website.
• It is also a good idea to figure in miscellaneous costs such as taxi service to the hotel, or costs to park your vehicle at the airport.

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

Supplies

Supplies for your project will generally include lab supplies such as glassware, plasticware, and reagents, as well as project specific supplies.

Animal Costs

Many projects require the use of animals in their research.  When animals are used in research, the costs associated with them include the purchasing of the animals as well as their housing per diem. At the UNDSMHS, the housing of animals is done at the UND Center for Biomedical Research. Per diem rates for housing animals at the UND Center for Biomedical Research can be estimated at:

• Mouse - $0.09 per day
• Rat - $0.17 per day
• Hamster - $0.17 per day
• Rabbit - $0.65 per day
• Guinea Pig - $1.12 per day

Equipment

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 that costs less than $5,000 will be budgeted as “Supplies” at the proposal stage. When equipment is shown in the budget, you need to include a detailed listing of all equipment you are proposing to purchase.

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 your budget.

Keep in mind that F&A Cost is not figured on equipment expenses.

Subcontracts

The ongoing use of an ouside party to perform substantive work on your project is called a subcontract, and needs to be shown as such in your budget. If the work being provided by this outside party is not substantive, nor ongoing, you may be able to budget this work as consultant costs (see "consultant" below). If you are unsure whether these outside services need to be budgeted as a subcontract or as consultant costs, use the Consultant vs. Subcontract Form as a guide.

At the proposal stage, each subcontractor 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
• A scope of work detailing the work they will do, as well as the end product they will provide to us
• Any other agency forms that may be required

These supporting documents may or may not be included in our proposal, but irregardless our proposal budget will include a separate line item for each subcontractor’s costs.

Keep in mind that UND employees can not be paid as a subcontractor. They need to be paid salary and fringe benefits, and shown in the "Personnel" section of your budget.

Note:

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

Also keep in mind that F&A Costs are calculated only on the first $25,000 of each subcontract.

Consultants

If your project requires the use of a outside party to perform a one-time event such as a review, analysis, etc. as opposed to an ongoing relationship, you need to factor consultant costs into your budget. These external 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. Most often, these consultant costs will require the inclusion of a commitment letter in your proposal.

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.

Keep in mind that UND employees can not be paid as consultants. They need to be paid salary and fringe benefits, and shown in the "Personnel" section of your budget.

If you are unsure whether these outside services need to be budgeted as consultant costs or as a subcontract, see the "Subcontracts" section above. There you can find the Consultant vs. Subcontract Form which will guide you in the right direction.

3. Facilities & Administration Costs (Indirect Costs)

Facilities and Administration Costs (F&A Costs), previously known as Indirect 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 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.

For the most recent F&A rates, which F&A rate applies to your project, and a detailed explanation of how to calculate F&A costs on your budget, visit the "F&A (Indirect Cost) Rates" section of this website.

Keep in mind that if you have multiple schools within UND involved in your proposal, and F&A Cost is an allowable charge in your budget, you will need to discuss the distribution of the F&A Cost Return with these schools. It is also recommended that a memo or a signed agreement discussing the distribution of the F&A Cost Return is included with the proposal. Here is an example of such a letter:

• F & A Cost Return Distribution Letter - Example

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. A copy of their policy needs to be included with the proposal when it is routed for signatures.

Budget Templates

Here are 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, please contact Research Administration for a budget template which includes cost share columns.

Here are some tips to completing your proposal budget:

• Tips for Completion of Your Proposal Budget