Budgeting, Budget Justification, & Templates

Office of Sponsored ProgramsAll rights reserved GTRC

Budgeting, Budget Justification, & Templates

Jim Childers, Grants & Contracts Accounting

Candice Ferguson, Office of Sponsored Programs


Budgets, Budget Template & Budget Justification

Agenda

WelcomeTerminology:

Cost Principles, Budget, Direct Costs, F&A

Terminology: Cost Share, Audit

Agency SpecificsAdjourn…



Goals

To give an overview of the guidelines and fundamentals of a proposal budget

Discussions will include2 CFR 200

Cost Accounting Standards (CAS)

Direct Cost

Indirect Cost

Project Budgeting

Cost sharing



Cost Principles

2 CFR 200 Establishes principles for determining costs applicable to grants, contracts, and other agreements with non-federal entities.Determines what costs can be included in the F&A calculationRemember: addresses both direct and F&A costs as well as specific allowable costs Electronic Code of Federal Regulations http://www.ecfr.gov/



Cost Principles – Cont’d

2 CFR 200 It incorporates four Cost Accounting Standards (CAS)

Consistency in estimating, accumulating and reporting cost

Consistency in allocating cost

Accounting for unallowable cost

Consistency in periods

The intent of CAS

Standardize university costing practices

Standardize requirements for recipients

Preclude a perceived over charge to the government

Prevent charging unallowable costs to the federal award



The Budget Where to begin?

Read the Program AnnouncementWrite the research proposalCreate the budget and budget justificationRe-read the Program AnnouncementMake any changes to finalize the budget

Initial DecisionsHow much should I request?What costs should I include?

Function of the Budget?



Budget & Budget JustificationBudget

A competitive budget is one that will provide the sponsor with a complete financial picture of the proposed project.Budgets are reviewed by the sponsor to verify if the costs are reasonable and necessary to carry out the proposed project, and if it conforms to the sponsor's instructions.

Budget JustificationProvides further explanation of the direct costs involved with the project.



FY16 Provisional RatesFiscal year: Begins on July 1st and ends on June 30thFringe Benefits 30.0%

Yes - Employees (includes Post Docs)No- Grad & Undergrad Students

Limited Benefits (50-74% time) 21.3%Partial Benefits 1.5%

Tech TempsOthers

Graduate Student Health Insurance 3.0%



Mock BudgetSalaries (Faculty) $10,0001 GRA $20,000Fringe Benefits (FB) $3,600Equipment (Radar) $10,000Subaward $52,000Tuition Remission $17,868M&S $5,000___________________________Total Direct (TD) Costs: $118,468

Do the proposed cost directly assist in the performance of the project during the award period? Will the service or materials comply with the sponsor’s rules for allowable expense?Do the proposed cost exceed any budget category limitations

Do the proposed cost directly assist in the performance of the project during the award period? Will the service or materials comply with the sponsor’s rules for allowable expense?Do the proposed cost exceed any budget category limitations



Direct CostsDirect costs are those that can be specifically identified with a single sponsored project. Direct costs should be reflected by major budget categories with an attached narrative detailing how the costs were calculated.

Salaries/wagesFringe benefits




EquipmentTravel Participant support costs.




Contracted servicesSuppliesCommunicationAwards (tuition remission)



F&A Facilities & Administrative

(“Indirect Costs”)

Costs incurred for common or joint objectives

and, therefore, cannot be readily identified with a

particular project or program.

e.g., Utilities, Plant Maintenance



F&AFacilities:

building depreciationequipment depreciationmaintenance & repair utilities

Administrative:

Salaries, supplies, telecomm, etc. of admin depts :

Purchasing DeptPayroll DeptController’s OfficeDeans’ OfficesPresident’s Office



F&A Costs are RealReimbursement of expenses from the past to cover future costs.

Annual F&A rate proposal for negotiation with ONR

Some sponsors do not pay the fully negotiated rate (e.g., Ed, NIH training grants)

Negotiated rates may not cover our real costs

2 CFR 200 limits the recovery of certain costs (i.e., administrative capped @ 26%)



A Brief History of Indirect Cost Policy1942 Green Book Navy Department

1947 Blue Book Navy Department (ONR)

1958 Budget Circular A-21 Bureau of the Budget

1970s Fed Mgmt Dir 73-8 General Services Agency

1979 Circular A-21 Back to OMB

1990s #!%?*#&!!!!

2014 2 CFR 200 Circular Reform



F&A Cost Calculation

Facilities & Administrative Expense

----------------------------------------- MTDC Base

F&A Rate



MTDCModified Total Direct Cost

F&A Rates are based on Modified Total Direct Costs which is the total direct cost (TDC) less equipment over $5,000, subcontract expenses in excess of $25,000, student tuition remission, participant support costs, and rental of off-campus space.

i.e., Total Direct Cost

minus Equipment Purchases > $ 5,000 Sub-Contract expenses > $ 25,000 Tuition Remission Participant Support Costs Rental of Off-Campus space

= MTDC



Building and Equipment

Depreciation

Operations &Maintenance

General Administration

Department Administration

Sponsored Project

Administration

Library

Student Services

Interest

Allocation Base

Instruction & Departmental

Research

Organized Research

Other Sponsored

Activities

MTDC Instruction &

Dept. Research

MTDC Organized Research

MTDC Other Sponsored Activities

F&A CostAllocated To

DistributionBase

F&A CostRate

%

%

%

Other Institutional

Actives

Space

Space

MTDC

Space

F&A Cost Pools

MTDC

MTDC

MTDC

MTDC



FY16* Facilities & Administrative Rates

Research Capped 55.9%Off Campus 26.0%

Research Uncapped (DoD Contracts only) 59.6%Off Campus 29.7%

Other Sponsored 34.82%

Instruction 53.92%

Industrial (Non-Government) 61.8%



Mock BudgetSalaries (Faculty) $10,0001 GRA $20,000Fringe Benefits (FB) $3,500Equipment (Radar) $10,000Subaward $52,000Tuition Remission $16,392M&S $5,000______________________________Total Direct (TD)Costs: $116,892

1



Modified Total Direct CostItems NOT included in MTDC

EquipmentTuition RemissionParticipant Support CostsRental of Off-Campus Space



SubAwardsF&A charged on 1st $25,000

I.E., $50,000 subaward still only $25,000

GTRI subawards = Interdivisional TransfersBudget Justification with GTRI include a few lines explaining what GTRI is, why they are using them to do some of the research effort and include a short summary budget with only major category lines (Personnel, M&S, travel, consultant, tuition remission, overhead-combined)



Calculating MTDC

Total Direct (TD)Costs: $118,468 (Salaries, FB, Travel, M&S etc.)

Equipment Costs -$10,000

SubAward -$27,000

($52,000 - $25,000)

Tuition Remission -$17,868

------------------------------------------------

Modified Total Direct Costs $63,600

1

2



F&A (Indirect) Cost Calculation:

$63,600 (MTDC Base)* 55.9% = $35,552

Project Total (Direct & F&A)

$118,468 (TD) + 35,552 (F&A) = $154,020

Calculating F&A Costs

1

2 3

43



$118,468 (TD) + 35,552 (F&A) = $154,020

Project Total



GTRIGTRI recovers costs under the Federal Acquisition Regulations.

FAR 31.2 – Contracts with Commercial Organizations Reg.

Cost Categories:

Lab Overhead

General & Administration Rates

Cost Of Money(2)

Additional fees can be added

Contact your “SPA” rep.



Cost Sharing Voluntary committed cost share is prohibitedCost Sharing is the difference between the effort expended on a project and the effort that is paid by a sponsor. Cost sharing must be written down (& authorized) by the department and the VP for Research. Cost sharing dollars can only be used once (can’t count the same effort on two grants!) and must be verifiable.Cost sharing cannot come from federal funds.



Types of Cost SharingCash

Salaries & Fringes, Travel, Equipment, etc. VP Research, Dean, Chair, External Partners

Non-cash (In-Kind)Volunteers, Materials, Facilities, etc.



Audits: Documentation is Key

Defend the Debit!

Why did you charge the award this expense?

May be 4+ years before the award is audited. Document the file!



How Departments Influence Cost Recovery

Correct coding of expenditures

Correct assignment of expenditures

Treatment of sponsored direct costs

Treatment of “normally indirect costs”

Identification of unallowable costs

Understanding CAS

Know the requirements associated with Cost Sharing

Office of Sponsored Programs

All rights reserved GTRC

Agency Specifics: NSFInclusion of voluntary committed cost share is prohibited in solicited & unsolicited proposals

Only 8 programs have been approved to require cost sharing:– Innovation Corps Program (I-Corps)– Major Research Instrumentation Program– Robert Noyce Scholarship Program – Engineering Research Centers– Industry/University Cooperative Research Centers– Experimental Program to Stimulate Competitive Research – Small Business Innovation Research (SBIR) Program (where

applicable)– Small Business Technology Transfer (STTR) Program (where

applicable)



Agency Specifics: NSFSenior/Key Personnel– If no person months and no salary requested, person

cannot be listed in Section A of budget– Consistency with NSF’s Cost Sharing Policy– GT personnel listed in Section A of NSF proposed budget

should adhere to the GT 1% minimum effort policy– If no person months and no salary requested, remove from

Section A. Their names will remain on Cover Sheet– Role should be described in Facilities, Equipment, and

Other Resources section of the proposal



Agency Specifics: NSF

Facilities, Equipment, and Other Resources– New format in FastLane– Consistency with NSF’s Cost Sharing Policy– No reference to cost, date of acquisition, and whether

the resources are currently available or would be provided upon receipt of the award

– If no resources to describe, then a statement to that effect should be included in this section of the proposal and uploaded to FastLane



NIH Modular GrantsModular Grants

Less then or = $250,000 per year in direct costsIndividual Awards (R01, R03, R15, R21, R41, and R43)Proposals can be rejected without review if format not followed

Key FeaturesDirect costs will be in $25,000 modulesSubawards are rounded to the nearest $1,000 Utilize salary cap ($183,300)

October 1, 2013 through January 11, 2014 $179,700January 12, 2014 through September 30, 2014 $181,500

Typically modular grants request the same number of modules in each year. [Can be increased for one year if purchasing equipment]Biographical Sketch Page Increase to 3 PagesOther Support Form GG deleted (captured in Bio-Sketch)



National Institutes of Health NIH Information

Georgia Tech still requires an internal budget! The university is required to adhere to many rules and regulations.

Policy: Subawards F&A are not included in the capped amount (i.e., $250,000 does not include the subs F&A costs – separately accounted form)

> $500,000 Need prior approval to send proposalJust In Time (JIT)

NIH requires an itemization of all key personnel’s IRB training.



Mock Budget

Remember to stick to your budget!

(Grad Student vs. Post Doc!)



Review

Fundamentals of a proposal budget

Discussions will include2 CFR 200

Cost Accounting Standards (CAS)

Direct Cost

Indirect Cost

Project Budgeting

Cost sharing



Any final questions?

Thank you for attending the class.

Remember we are here to help.

Please ask questions!

Budgeting, Budget Justification, & Templates

Documents