Budgeting Basics 101

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Budgeting Basics 101

• David S. Wilkes M.D.
• Division of Pulmonary and Critical Care Medicine
• Indiana University School of Medicine

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Show Me the Money
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General Considerations

• The budget is not a last minute item.
• It is best to develop budget once you have a
  solid idea of the experimental plan.
• Make sure the budget is reasonable.
• The budget should never drive the purpose of the
  application!

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In other words Do Not Let the Tail Wag the Dog
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Budget Types

• Modular
• K series
• Non-Modular

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Modular Budgets

• Based on the premise that detailed budgets are,
  at best, estimates.
• Most detailed budgets are not accurate as such,
  NIH uses Modular budgets for grants with total
  Direct costs lt 250,000 annually.
• Only total figures are presented on the budget
  pages.

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Types of Budgets - Modular

• Each Module is 25,000.
• Modular maximum of average of 250,000/year in
  direct costs on average 10 modules annually.
• The direct costs do not have to equal 250K each
  year but need to average to this amount for the
  life of the grant.

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Modular Budgets

• Must check with your institution as to the
  requirements for an Internal Budget.
• Your institution may require a detailed budget,
  BUT
• NIH does not require these forms for submission
  to NIH
• Detailed Budget for the Initial Budget Period
  (Form Page 4)
• Categorical Budget for the Entire Period of
  Support (Form Page 5)

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Items Included in Modular Budget

• Personnel within the primary institution
• Supplies
• Equipment
• Travel
• If a contract or consortium is planned with
  another institution then TOTAL cost of the
  relationship must be included in Direct costs.

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Contracts or Consortia in Modular Budgets

• Involves the inclusion of other personnel from
  another institution.
• Expenses in your application must include direct
  costs any facilities or administrative costs
  (indirects) of the other institution.
• Simply total cost figure must be integrated in
  one of the 25,000 modules.

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Modular Budgets

• YOU MUST BE IN THE CORRECT MODULE
• Even if a reviewer interprets that your proposed
  budget is generous by a few thousand dollars,
  the smallest budget adjustment is 25,000!!!
• Avoid this by doing a detailed internal budget
  for your own use make sure what you budget is
  reasonable!
• Your institution may require a detailed internal
  budget

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Modular Budgets

• Once first year costs are determined then that
  total dollar figure should be inflated by 3 4
  each year for each year proposed.
• Allows you to select the correct number of
  modules requested for each year.
• Also allows you to average the correct number of
  modules yearly.
• Your local grant specialist should do this
  likely required by your institution before the
  application is processed.

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Narrative Justification for Modular Budgets

• Very simple!
• Include maintenance fees for equipment.
• At a minimum consists of name of personnel,
  percent efforts, and role on project
• Who is included in narrative must be credible in
  terms of expertise provided.
• If a person does not have a clear role then do
  NOT include in budget.

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Persons to Include in Narrative Justification

• Co-principal investigators are not allowed.
• Categories that are helpful
• Co-investigator essential in expertise and
  hands on input.
• Collaborator provides essential service but not
  involved conceptually in research.
• Consultant provides critical but limited input.

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Other Personnel in Budget

• Research Techs participation must be relevant
  but are usually not key personnel.
• Post doctoral fellows and graduate students
• Include for funding but not as key personnel.
• Never critical to project.
• Able to be replaced
• Make sure that these personnel will be involved
  in the project not simply asking for money to
  support a stipend.

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Final List of Personnel on Budget

• List their expertise and reason for inclusion.
• Be SPECIFIC and avoid generalities.
• Include a biosketch for everyone!

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Deciding Percent Efforts

• Too little or too much effort can result in loss
  of credibility for a person.
• Senior PI as low as 10 but only if a
  Co-Investigator or a post doc will do most of the
  work as shown by high effort.
• Best to propose gt 20 effort - even for senior
  P.I.s, at least 30 50 for new or junior
  investigators.
• Be very careful with effort requested for
  collaborators/consultants must provide evidence
  for what they will do.

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Budgets for KO8 Awards

• Basic science oriented.
• Must list 75 effort 75,000 maximum requested
  salary (despite the figure of your current
  salary).
• May obtain additional salary from non-federal
  sources. No salary support allowed from RO1 if
  awarded until K expired.
• 25,000 supply line may be supplemented from
  additional sources usually needed explain
  the source of additional support.

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Budgets for K23 Awards

• Patient oriented research.
• Must list 75 effort 75,000 maximum requested
  salary (despite figure of your current salary).
• May obtain additional salary from non-federal
  sources salary from an RO1 can not be used
  until career award expired.
• 25,000 allowed for supplies but 50,000
  allowed for exceptional instances.

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Non-Modular Budgets

• Detailed budgets required for applications
  exceeding 250,000 annually.
• Must request sufficient funds to do the work
• Each item is under great scrutiny must justify
  all figures.
• Non-modular budgets required commonly for
  clinical research and not basic science studies.

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Non-Modular Budgets

• Discuss needs with program officer before
  submission.
• Need prior approval before submission if
  gt500k/year requested.
• Request what you need and not what someone thinks
  you need!
• Let the research dictate the amount requested.
• Full disclosure is best policy.

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Non-Modular Budgets

• Credibility factor
• Will lose credibility if you ask for too much or
  too little.
• If any figure is suspect then the entire budget
  is under greater scrutiny.
• Plan, plan, plan!!!!!!!

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Non-Modular Budgets - Personnel

• Usually the most expensive part of the proposal
  (similar to modular types), BUT.
• All salaries, etc. are exposed so these figures
  and the number of personnel requested are closely
  scrutinized.
• Use the same guidelines in Modular budgets for
  including personnel
• Know the safe categories of personnel!

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Non-Modular Budgets - Personnel

• TBA categories To be announced Be very
  careful! What will this TBA technician, post
  doc, etc. do?
• If this TBA has not been identified already
  then do you really need them?
• Avoid listing TBA if possible.

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Non-Modular Budgets - Personnel

• Consultants
• List names and affiliations whether paid or
  unpaid.
• If paid list all related expenses, fees,
  travel, per diems, etc.
• If multiple consultants then create a table
  summarizing expense items.
• Internal consultants do not get paid (in general).

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Non-Modular Budgets - Equipment

• Very vulnerable section, and a section where
  credibility is lost easily!
• Chance for success increased if you anticipate
  reviewers concerns.
• Make sure these items do not overlap with core
  equipment already available pay close attention
  to any overlap with Resources page.
• Remember that if you used similar equipment to
  generate preliminary data then do you need the
  equipment that you request?

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Non-Modular Budgets - Supplies

• A common mistake is not to edit these requests
  after multiple edits are made in the Research
  Plan.
• Supplies Research Plan then OK.
• Supplies ? Research Plan then credibility drops.

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Non-Modular Budgets - Supplies

• Avoid simply dividing the total supply budget by
  categories of supplies. This always leads to
  round numbers - not good.
• Better approach is to do cost accounting just
  as you would in managing purchases in your lab.
  After all this is really a business plan. State
  why you did this!!!

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Non-Modular Budgets - Travel

• Very easily adjusted downward by reviewers.
• Must justify even then likely to be revised
  downward.
• Who will travel and why be explicit!

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Non-Modular Budgets Other Expenses

• Animal care project increases in future costs
  should discuss in detail with you animal
  facility.
• Publication costs include but be reasonable
  base figure on prior productivity.
• Service contracts key element the equipment
  purchased/utilized may be useless if you can not
  repair it.

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Non-Modular Budgets Consortium/Contracts

• Make sure that you really need that investigator
  at another institution this is expensive.
• Justification must be sound and detailed. Prior
  co-authored papers are good evidence.
• Must work very closely with you Research and
  Sponsored Programs Office to provide exact
  documentation.

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Non-Modular Budgets

• Plan very early this is not a last minute item.
• Resources at NIH website very useful.
• http//deainfo.nci.nih.gov/extra/extdocs/apprep.ht
  m

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Good Luck!!