In undertaking any research project, whether it is sponsored by the federal government or by some other organization, there are two components of costs - those directly attributable to the specific project (direct costs) and those incurred for the general support and management of research (indirect costs). These two classes of expenditures are equally necessary to achieve the research objectives. The University becomes committed to incurring costs in both categories when it assumes stewardship of a sponsored research project.
What follows is an overview of the general requirements for constructing grant budgets. It is important to realize that as a P.I. you will rarely be expected to take complete responsibility for developing a budget. Assistance is available through the Office of Grants and Research and the Controller's Office.
You should present in the proposed budget your best estimate of the financial support necessary to carry out the project. An itemized listing of all proposed expenditures must be provided, along with a reasonably detailed explanation of how budget categories, fringe benefit rates, indirect cost percentages, and per credit course-release charges were established.
The budget spells out project costs and usually consists of a spreadsheet or table with the budget detailed as line items and a budget narrative (also known as a budget justification) that explains the various expenses. Even when proposal guidelines do not specifically mention a narrative, be sure to include a one or two page explanation of the budget as it is a UW-Green Bay requirement for all submitted proposals.
Consider including an exhaustive budget for your project, even if it exceeds the normal grant size of a particular funding organization. Simply make it clear that you are seeking additional funding from other sources. This technique will make it easier for you to combine awards down the road should you have the good fortune of receiving multiple grants.
Make sure that all budget items meet the funding agency's requirements. For example, all U.S. government agencies have strict requirements for airline travel. Be sure the cost of the airline travel in your budget meets their requirements. If a line item falls outside an agency's requirements (e.g. some organizations will not cover equipment purchases or other capital expenses), explain in the budget justification that other grant sources will pay for the item.
Many universities require that indirect costs (overhead) be added to grants that they administer. Check with the appropriate offices to find out what the standard (or required) rates are for overhead. Pass a draft budget by the university officer in charge of grant administration for assistance with indirect costs and costs not directly associated with research (e.g. facilities use charges).
Indirect Costs (IDC)
Facilities and Administration (F&A) cost is another term used for indirect costs. See more information on the definition and use here.
Research - Includes all research and development activities that are: 1) separately budgeted and accounted for by the university, and 2) performed for specific research projects. It is sponsored by federal and non-federal agencies and organizations. It includes training individuals in research techniques (commonly called research training) where activities use the same facilities as other research and development activities and where such activities are not included in the instruction functions.
Instruction - Includes all teaching, course and curriculum development, and academic advising and development.
Public Service - Includes sponsored program activities other than instruction and organized research, such as student services, administration, the library and public outreach activities. It does not include fellowships, work-study and gifts.
Federal & State - Direct Costs
- Salaries and Wages
List the salaries of faculty personnel first, staff personnel second, clerical personnel third, and part-time, non-professional workers fourth. Faculty, staff, and clerical salary figures should include a percentage of effort figure that reflects the estimated amount of time each person will devote to the proposed project. In the case of part-time, non-professional personnel, the number of hours may be used in the estimate. Student help should be included in this category. Consultants should not be included here, but rather in a separate budget category. Care should be taken to anticipate and provide for annual merit and promotional rate increases. Contact the Controller's Office to get estimates of increases for future years. While it is appropriate to request summer support for academic year personnel, a summer salary cannot exceed two-ninths of the full time academic year salary paid an individual during the previous academic year without prior approval of the appropriate Dean. In all cases, summer salaries shown must be determined and approved in accordance with University policy. Proposed funds cannot be used to augment salaries beyond the University approved rate.
- Fringe Benefits
Fringe benefits, expressed as a percentage of salary, include such items as Social Security, state retirement programs, health insurance, life insurance, and disability insurance. Fringe benefit rates vary according to the personnel classification. Rates for the different University salary classifications (e.g., faculty and academic staff, classified staff, Limited Term Employees, graduate assistants) are updated annually and are available from the Office of Grants and Research and the Office of Business and Finance. As with salaries, fringe benefit rates should be adjusted for future years based on estimates of anticipated increases.
2012-2013 Fringe Benefit Rates for Extramural Support Funds
Identify as specifically as possible the types and costs of consumable supplies needed for the proposed project.
Include the name, model number, and cost of each piece of equipment to be acquired for use in the project.
- Computer Use
Calculate the cost of necessary computer time and support services according to the approved Computer Center rate schedule.
- Alterations and Renovations
Include the costs of any necessary alterations or renovations as determined by specific agreements and estimates.
- Space and Facilities
Contact the Office of Grants and Research in regards to general and specific resources available.
- Student Stipends
Student stipends are generally only included for training grants. Agency guidelines usually dictate the manner in which stipends are charged and distributed.
- Tuition and Fees
Contact the Office of Grants and Research in regards to applicable campus and System policy.
Where funding agency regulations permit, the budget should include appropriate amounts for Miscellaneous costs such as telephone and fax costs, freight charges, equipment maintenance and rental, service contracts or charges, and reference books needed specifically for the project.
Federal & State - Indirect Costs
Some costs can be identified easily and can be charged to the grant as direct costs. Other costs cannot be directly charged as they result from shared services. Indirect costs, although not readily identifiable within a specific project, represent real costs incurred for the general support and management of a project hosted by the University. Proposals to extramural agencies should request reimbursement of indirect costs consistent with the written policies of such agencies. In the absence of a written policy, the federally negotiated, predetermined indirect cost rates for the University Cluster campuses should be applied. The latter reimbursement rates are established annually in a negotiated agreement between a designated federal agency (currently the Department of Health and Human Services) and the UW-System Administration according to guidelines set forth by the U.S. Office of Management and Budget in OMB Circular A-21. The current negotiated rate of reimbursement for indirect costs is available from the Office of Grants and Research and the Office of Business and Finance. Indirect costs are usually divided into the following categories:
- General Administration and General Expense: for accounting, payroll, purchasing services, and administrative offices
- Plant Operation and Maintenance: for utilities, janitorial services, routine maintenance, and repairs
- Depreciation of Use Allowances: for buildings and equipment
- Departmental Administration Expenses: for administrative costs at the departmental level
- Sponsored Project Administration: for personnel and operating expenses of offices whose responsibility is the administration of sponsored projects
Federal & State - Cost-Sharing
Many federal agencies require or encourage cost-sharing on the part of the institution proposing to host a grant project. Such contributions are considered a demonstration of commitment to the proposed project. Considerable flexibility is usually allowed in determining how the University shares in the cost of the project; however, since the cost-sharing must be auditable, it should be limited to contributed staff salaries, related fringe benefits, and indirect costs whenever possible. In most instances, general supply and expense items should not be included because of the difficulty in maintaining auditable records. Some agencies have established minimum cost-sharing levels for certain programs. Contact the OGR or the funding agency for specific cost-sharing requirements.
Some funding agencies, particularly private foundations and corporations, have begun requesting that funding applications be submitted in a relatively brief letter format. Some of these agencies will provide guidelines for preparing such applications while others will not. Basically, you are trying to present to the funding source a concise description of your project in a format similar to that of the prospectus described above. The following information should be included if specific guidelines are not provided:
Introduce yourself, your institution, and your project, with references made to the name of the agency or program under which the proposal is being submitted and to any preliminary contacts that have been made with the agency.
- Appropriateness of Funding Agency
Describe why it is that you feel this particular funding agency would be interested in funding your project. This requires acquiring background information on the funding source regarding its stated objectives, funding priorities, and funding history. Such information can be found in resource materials subscribed to by the Office of Grants and Research.
- Needs Statement
Describe and document an existing situation, which requires research and/or action to achieve some preferred condition. The purpose of the needs statement is to persuade the reader that there is a gap between "what is" and "what ought to be." Needs statements should emphasize the extent and implications of the gap.
- Description of the Project
List measurable objectives for the project (which should be directly related to fulfilling the need described previously), an overview of the means by which these objectives will be achieved, and how it will be determined if the objectives have been met.
- Request for Funds
There is generally no need to provide an itemized budget, but you should include the total amount of funding you are requesting and a fairly specific explanation of how the money will be used. Indicate any other funding that is already committed to the project and how-continuation of the project will be achieved after the grant period has ended.
- Adequacy of Expertise and Resources
Describe the qualifications of the key personnel needed to conduct the project and the adequacy of the resources available at the institution to support the project.
Indicate a desire to discuss the project at greater length, either through further correspondence or a personal meeting, and a willingness to supply a more detailed description of the project if the funding agency so desires. The principal investigator should sign the letter proposal, but the Chancellor or his designee should sign a letter of support and commitment to accompany the proposal.
Frequently Asked Questions
How do I determine which rate to use for my project?
If more than 50% of ALL staff time on the project is on-campus, the higher rate will need to be applied.
My sponsor limits their F&A rate. Do I need a waiver?
If the funding agency has a written policy limiting their F&A rate this will be accepted and will not require a waiver. The only exception would be in the case of a for-profit agency who indicates a limit on IDC. For profit agencies are required to pay the full, negotiated rate specific to the activity, i.e., research, instruction, testing, etc. Budgets reflecting less than the full IDC rate are calculated using total direct costs (TDC).
I once applied to an agency and they only paid 8% for indirect costs. I applied for another grant with them and assumed that they still only paid 8%, but I was wrong. They pay different rates for different programs and I didn't ask for the right amount of funds. What do I do?
Once you have submitted a budget to or have been awarded by a funding agency, it is not likely that there is room for negotiations to increase the IDC. When in doubt as to what rate to use, call the OGR for guidance.
I'm new at UW-Green Bay and need to transfer a federal grant from another institution. What F&A rate do I use for the transfer year? What about subsequent years?
Normally, the agency will accept for the first year the current IDC rate of the institution from which you are transferring. The budget for subsequent years should use UW-Green Bay's negotiated rate.
My sponsor requires cost sharing. If they don't pay our usual IDC rate, can I consider the difference in the IDC as a portion of cost sharing?
How do you calculate IDC when subcontracts are included in the project? Do the other institutions charge indirect costs as well as UW-Green Bay?
In calculating the budget that contains a subcontract or multiple subcontracts, UW-Green Bay applies IDC costs to only UW System salary and fringe benefits. The other institutions develop their individual budgets to include direct costs plus their own negotiated IDC rate. The total cost of each subcontract is included in UW-Green Bay's direct costs.
How do you calculate a budget using Total Direct Costs (TDC)?
When calculating a budget using the TDC method there are no exclusions since we are not receiving our full rate.
Sample Budget & Template
Download a budget template in Excel format.
|Research Assistant/Translator||12 months||$400||$4800|
|Transportation within country|
|--Phase 1||4 months||$300||$1,200|
|--Phase 2||8 months||$1,500||$12,000|
|Audio cassette tapes||200||$2||$400|
|Photographic and slide film||20||$5||$100|
|NUD*IST 4.0 Software||$373|
|Total Project Allowance||$35,238|
|Sought from other sources||($15,000)|
|Total Grant Request||$50,690|
Jet Travel $6,100
This estimate is based on the commercial high season rate for jet economy travel on Sabena Belgian Airlines. No U.S. carriers fly to Kigali, Rwanda. Sabena has student fare tickets available which will be significantly less expensive (approximately $2,000).
Maintenance Allowance $22,788
Based on the Fulbright-Hays Maintenance Allowances published in the grant application guide.
Research Assistant/Translator $4,800
The research assistant/translator will be a native (and primary) speaker of Kinya-rwanda with at least a four-year university degree. She will accompany the primary investigator during life history interviews to provide assistance in comprehension. In addition, she will provide commentary, explanations, and observations to facilitate the primary investigator in participant observation. During the first phase of the project in Kigali, the research assistant will work forty hours a week and occasional overtime as needed. During phase two and three in rural Rwanda, the assistant will stay with the investigator overnight in the field when necessary. The salary of $400 per month is based on the average pay rate for individuals with similar qualifications working for international NGO's in Rwanda.
Transportation within country, Phase
The primary investigator and research assistant will need regular transportation within Kigali by bus and taxi. The average taxi fare in Kigali is $6-8 and bus fare is $.15. This figure is based on an average of $10 per day in transportation costs during the first project phase.
Transportation within country, Phases
two and three $12,000
Project personnel will also require regular transportation between rural field sites. If it is not possible to remain overnight, daily trips will be necessary. The average rental rate for a 4x4 vehicle in Rwanda is $130 per day. This estimate is based on an average of $50 per day in transportation costs for the second and third project phases. These costs could be reduced if an arrangement could be made with either a government ministry or international aid agency for transportation assistance.
The rate for email service from RwandaTel (the only service provider in Rwanda) is $60 per month. Email access is vital for receiving news reports on Rwanda and the region as well as for staying in contact with dissertation committee members and advisors in the United States
Audiocassette tapes $400
Audiocassette tapes will be necessary for recording life history interviews, musical performances, community events, story telling, and other pertinent data.
Photographic & slide film $100
Photographic and slide film will be necessary to document visual data such as landscape, environment, marriages, funerals, community events, etc.
Laptop Computer $2,895
A laptop computer will be necessary for recording observations, thoughts, and analysis during research project. Price listed is a special offer to UNC students through the Carolina Computing Initiative.
NUD*IST 4.0 Software $373.00
NUD*IST, "Nonnumerical, Unstructured Data, Indexing, Searching, and Theorizing," is necessary for cataloging, indexing, and managing field notes both during and following the field research phase. The program will assist in cataloging themes that emerge during the life history interviews.
Administrative fee $100
Fee set by Fulbright-Hays for the sponsoring institution.