This guide contains basic information for
faculty and staff budgeting proposals for extramural support. It is updated periodically
to reflect changes in budgetary policies and suggestions on budgeting likely
costs in future years. ORSP has prepared a spreadsheet template (Excel 2000) for budgeting proposed sponsored
activity.
The most important advice ORSP can give the
potential Project Director or Principal Investigator (PI) is this: Contact ORSP
as soon as you begin to prepare a proposal, so that you can make full use of
ORSP services in proposal preparation and alert ORSP to keep you informed of
any changes in sponsor or University requirements that might affect your budget
or any other aspect of your proposal. Many PIs find the following ORSP services
particularly helpful:
1. ORSP will provide at your request any instructions,
guidelines, forms and similar materials required, and assist in their
interpretation.
2. If you request a budget conference well in
advance of proposal submission, ORSP will help you build appropriate budget and
funding strategies (including cost-sharing).
3. In addition, ORSP will prepare your
proposal budget, if you will provide the following information at least a week
prior to proposal submission, and sit down with us for a brief consultation:
a. the names and
time commitments of all University professional personnel engaged in the
project;
b. the titles and
time commitments (or total project wages) of all classified or student
personnel engaged in the project;
c. the costs of all
purchased goods and services, including any subawards, for the project; and
d. the amounts and
sources of any University cost-sharing of project costs.
NOTE: Final responsibility for the accuracy
and completeness of the budget rests with the PI. If ORSP prepares your final
budget, please take the time to review it before submitting your proposal.
If you wish to prepare the budget yourself,
keep the likelihood of inflationary increases in mind, especially for multi-year
projects. ORSP recommends that you project 5% annual increases for salaries and
wages, purchased goods and services, and tuition. If you propose a project of
more than three years, you may wish to lower these rates.
A. Personnel
1. Use the current accurate salary and wage
figures as a basis for calculating salaries and wages for all persons included
in the budget. These figures are available in the most recent Personnel Action
Forms, which are filed in departmental offices.
2. Add 5% to salary and wage figures every
July 1 for the duration of the project. This will ensure that your budget will
have enough money to cover any raises, promotions, or increases in the fringe
benefit rate.
NOTE: Faculty and staff preparing proposals
which will fund salaries for University employees must budget for salary
increases which may result from collective bargaining and/or Board of Trustee
action. The fact that an estimated increase is funded by an external source
does not mean that such an increase will be given to employees: employees
receive only increases approved by the Board of Trustees and/or provided for in
the appropriate collective bargaining agreement.
3. To derive monthly salary figures, divide
academic year salaries by 9 and fiscal year salaries by 12, excluding from the
basic salaries any administrative stipends. To derive weekly salary figures,
divide monthly figures by 4; to derive daily salary figures divide monthly
figures by 20.
4. Designate time commitments for all project
personnel as salary (expressed in months, each month being 1/12 of a fiscal
year salary or 1/9 of an academic year salary), summer salary (expressed in
months, and available only to personnel with academic year appointments), or
overload compensation (also expressed in months).
NOTE: Both University and federal policy
normally prohibit faculty members from earning as additional compensation from
sponsored projects any monies beyond their regular salaries, except that
faculty on academic year appointments may derive additional summer salary for
the portion of the summer devoted to sponsored activity. (See annual memorandum
on summer salary from the
Office of Human Resources.) Requests for overload compensation resulting from
non-federally sponsored projects require approval of the Vice President for
Research.
5. Remember that clerical support can be
important assistance in the substantial administrative and bookkeeping tasks
associated with management of a sponsored project. Note, however, that federal
sponsors will not approve the use of grant funds to pay for such support
without an explicit, detailed justification, demonstrating that the effort
required is well beyond that normally provided for departmental activities.
Even if the sponsor does not require the
information, ORSP needs the names of all professionals included in the project,
whether their salaries are to be paid by the sponsor or by the University. ORSP
also needs to know the amount of time and the amount of money for each person
or position included in the budget. Such information is necessary in order to
meet subsequent reporting requirements.
B. Fringe Benefits
The University has negotiated two fringe
benefit rates, one for all non-faculty temporary employees and a second for all
other non-student personnel. See Fringe
Benefits for rates currently
in effect.
C. Travel
Eligible travel costs usually include the
costs of attending professional meetings to confer with colleagues and to
disseminate the results of the project, as well as the costs of travel
necessary to conduct the project. Most sponsors have special restrictions on
foreign travel; if foreign travel is included in your project, designate it as
such on a separate line from domestic travel.
To estimate travel costs by public carrier,
consult a travel agent. To estimate travel costs by your own vehicle, use the
current University mileage reimbursement rate determined through collective
bargaining. To estimate travel costs by University motor vehicle, use the
current Motor Pool mileage and daily rental rates. For multi-year projects,
estimate an 5% annual increase in costs.
D. Equipment
Capital equipment refers to an item of
nonexpendable, tangible, personal property having a useful life of at least one
year, an acquisition cost of $5000 or more, and the ability to function as a
stand alone unit. Equipment meeting all three criteria is exempt from indirect
costs. Example: a gas chromatograph costing $5500.
Non-Capital Equipment refers to equipment
which satifies the definition of Capital Equipment except for the acquisition
cost which is less than $5000. Non-Capital equipment is included in the base
(i.e. included in Modified Total Direct Costs) on which indirect costs are
charged. Example: a personal computer costing $2800.
Capital Equipment must be distinguished from
Non-Capital Equipment in all proposal budgets. Each should be shown as a separate
line item as appropriate. Indirect costs will be charged on Non-Capital
Equipment, but not on Capital Equipment.
Some sponsors, such as the NSF, specify the
budget format to be used for proposals and include "equipment" as one
of the categories. Only Capital Equipment should be listed in the
"equipment" category. Non-Capital Equipment should be listed as a
separate line item within "Other Direct Costs".
NOTE: Some sponsors prohibit equipment
purchases, some permit "scientific" but not "general purpose"
equipment to be purchased, others require special cost-sharing for equipment
purchases.
E. Computer Costs
Include funds to cover all costs associated
with using the central computer facilities, UNET, including the costs of
consultants and cpu time, as well as disk and port charges. Consult with UNET
for current rates and for assistance in estimating computer needs
realistically. UNET staff will make arrangements to assist you in dealing with
the uncertainties of predicting computer needs. Unless otherwise agreed to in
advance, however, project accounts will be charged to cover any cost overruns.
F. Supplies
Supplies include such expendables as
laboratory and office supplies, as well as any equipment that costs less than
$500 to acquire or has an expected useful life of less than one year. If your
supplies needs are large, classify them by major items or categories, and
justify the larger categories. Remember to take inflationary increases into
account.
G. Communication Costs
Communication costs include telephone,
postage, photocopying, printing, shipping and related expenses. They may also
include publication costs, the charges made by some professional journals to
edit, print and disseminate articles resulting from the project.
H. Consultants
Consultants are experts engaged by the
project for short-term or sporadic periods, usually to provide technical
assistance or to render evaluation services. Not all temporary project
personnel qualify as consultants; if you are in doubt on this issue, consult
with the Professional Employment Manager in the Office of Human Resources. Consultants should
be identified in your budget by name. Their fees should be on a per diem basis,
with travel or other reimburseable expenses estimated separately.
NOTE: If the consultant to your project is
another employee of the University of Maine System, fringe benefits must be
applied also to consultant fees.
I. Subawards
A subaward
to another organization or institution,
to which a portion of the project activities will be delegated, is
distinguished from contracts for the purchase of services by having its own key
personnel, scope of work, and budget. Subawards are formal arrangements and
usually carry the same terms and conditions as the prime award, such as
accounting, auditing, purchasing, and reporting requirements. Each subaward has
its own budget, and the total costs of subawards are entered as a line on the
master project budget.
J. Purchased Services
Purchased services encompass all other
arrangements to pay persons or organizations outside the University for
services necessary to the completion of project activities, such as the
services of a photographer, a pilot, or a printer.
K. Tuition
Tuition fees are a normal part of training
grant budgets, and are also appropriate for graduate students engaged on a
sponsored research project. Estimates for tuition costs should be based on an
average annual increase of 5%.
L. Conferences
If your project includes a conference,
seminar, workshop, or short-term institute, your sponsor may be willing to
consider funding participant support in the form of stipends or travel expenses
or both. Other expenses for such programs, if they are to be held in University
facilities, must be negotiated with the Catering and Conference Services.
M. Library Materials
Books, periodicals, backfiles, maps, and
audiovisual resources are appropriate expenditures for most research, training,
and curriculum grants. Consult the Dean of Libraries and Cultural Affairs for assistance in
determining needs and costs.
N. Other Direct Costs
Almost all costs incurred that are directly
attributable to your project may be included -- entertainment costs and
standard office furniture are two notable exceptions. But if you intend to pay
human subjects for their time, lease a hot air balloon, or erect a building,
those are direct costs and should be listed as such. If in doubt about the
allowability of such costs, consult ORSP for assistance.
O. Total Direct Costs
Calculate the sum of itemized direct costs,
lines A-O above, and enter the total.
P. Total Modified Direct Costs
Subtract from the total direct costs the
costs of the following items:
a) equipment, as
defined above;
b) construction, renovation or alteration of physical facilities;
c) the amount in excess of $25,000 on each subcontract;
d) tuition for student assistants;
e) scholarships or fellowships;
f) rental and maintenance of off-campus facilities.
The remaining sum is the base to which the
indirect cost rate is applied.
Q. Indirect Costs
Indirect costs (or "overhead") are
costs for goods and services that cannot be identified directly with a specific
project. They are pro rata shares of costs for goods and services that benefit
activities too numerous to charge in measurable shares, such as the costs of
operating and maintaining the physical plant and the libraries, or the costs of
administrative functions such as payroll or accounting. For more information
about indirect costs and about the way in which indirect cost rates are
established, consult ORSP.
To calculate the indirect costs on your
budget, multiply the Total Modified Direct Costs by the appropriate indirect
cost rate. See Indirect
Costs for rates currently in
effect for Research, Instruction, and Other Sponsored Activities.
NOTE: The research rate is used for all
research and research-related activities, including preparation and planning
for research, management of research programs, and application and
dissemination of research results.
The instruction rate is used for projects
that primarily aim to teach and train persons who have student status at the
University, or to develop credit-bearing courses, curricula, or instructional
materials for University students. If a project has both an instructional and a
research component, the research rate is used.
The rate for other sponsored programs is used
only for projects that have neither a research nor an instructional component,
as defined above.
NOTE: The rates above are for projects
conducted primarily from University facilities. There are also off-campus rates
used for projects conducted at a site or sites remote from campus. It is
normally necessary in such projects to provide for acquiring appropriate
facilities as a direct cost of the project. For more information about these
so-called "off-campus" rates, call ORSP.
R. Total Project Costs
Add Total Direct Costs and Indirect Costs to
reach the final line of your budget, Total Project Costs.
S. Cost-Sharing
Cost-sharing means that the University
contributes a portion of the costs. It is required by some sponsors, encouraged
by others, and a matter of University policy and practice in still others.
While the University may in principle share
in any of the costs, in practice the preferred contribution from the University
is a portion of the personnel costs: salaries and wages, plus the fringe
benefits associated with them. The University also pays the indirect costs
associated with the direct costs it contributes.
University cost-sharing sometimes takes the
form of sharing a portion of the indirect costs associated with sponsor-funded
direct costs. If a grantmaker as a matter of formally adopted and written
policy applicable to all grantees does not reimburse the full indirect costs,
the portion that cannot be recovered should be shown on the budget as a
University contribution. Moreover, the University has entered into cooperative
agreements with the State of Maine and with a number of other sponsors for
particular programs and has established, as a part of that agreement, a policy
on sharing of indirect costs. If in doubt about cost-sharing of indirect costs
for your proposal consult ORSP.
Prior approval of the Vice President for
Research or of the Director of the Office of Research and Sponsored Programs is
required for any cost-sharing of the indirect costs associated with
sponsor-funded direct costs.
For internal accounting purposes, ORSP needs
to know precisely which costs will be borne by the university and from which
accounts these costs are to be paid. The sponsor may also require that you
indicate which costs are to be paid by the university. If not, your budget for
a project with cost-sharing should consist of a single column of itemized
direct costs, total direct costs, indirect costs, and total project costs,
followed by a statement that the university will share a stated percentage of
the costs.
Example:
Total Project Costs $100,000 University share 5% $ 5,000 Requested from sponsor $ 95,000
T. Multi-Year projects
The University and most sponsors require a separate budget
for each project year and a summary budget for the entire project period.
NOTE: In drawing up a budget for a multi-year project,
the fringe benefit and indirect cost rates in effect at the time of proposal
submission are used for all project years. If funded, the original indirect
cost rate would remain in effect for the non-competitive duration of the
project. In contrast, fringe benefit rates are subject to periodic audit and
negotiation and may increase or decrease on July 1 of each year. When a revised
budget or the annual budget for a continuation year is submitted, the fringe
benefit rates in effect at that time are used. It is important to maintain
enough budgetary flexibility in the initial proposal to accommodate any
increases in these rates. A generous estimate of anticipated increases in
salaries and wages is usually the best way to preserve such flexibility.
U. Budget Justification
Many sponsors require detailed information about
budget items and about the bases for estimating costs. Even if it is not
required, it is a good idea to explain any unusual proposed expenditures.
V. Budget Attachments
If your project includes the acquisition of major
equipment, it is wise to include a vendor's quotation or catalog pages.
If your proposal names a person or organization to
serve in a consulting role, include a letter of agreement from the proposed
consultant(s). The letter should stipulate the cost of the services to be
provided.
If your project involves a subaward to another
organization, attach an authorization, scope of work, and approved budget from
the proposed subawardee.
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