Budgeting Basics

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Budgeting Basics

• Tracy Cromp, Research Administrator
• Office of Sponsored Programs
• Stuart Taub, Associate Director
• Office of Sponsored Programs
• Syracuse University
• Office of Sponsored Programs
• 113 Bowne Hall

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Agenda

• Acronyms
• Regulatory Framework
• Direct versus Indirect Costs
• Principles of Direct Costs
• Categories of Direct Costs
• Budgeting Essentials
• Hands-on Budgeting

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Acronyms

• OMB - Office of Management and Budget
• CFR - Code of Federal Regulations
• FAR - Federal Acquisition Regulations
• TDC - Total Direct Costs
• MTDC - Modified Total Direct Costs
• FA - Facilities and Administrative Costs

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General Regulatory Framework

• OMB
• Agency implementation guidelines
• Award-specific requirements

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OMB Circulars

• OMB Circular A-110
• Uniform Administrative Requirements With
  Institutions of Higher Education, Hospitals and
  Other Non-Profit Organizations
• OMB Circular A-133
• Audits of Institutions of Higher Education and
  Other Non-Profit Organizations
• OMB Circular A-21
• Cost Principles for Educational Institutions.
  Includes four CAS Standardshttp//www.whitehouse
  .gov/omb/circulars/index.html

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Which Regulations Take Precedence?

• Award
• Terms of the Awarding Agency
• A-110
• A-21

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Agency Implementation

• National Institutes of Health
• Grant Policy Statement
• http//grants.nih.gov/grants/policy/nihgps_20
  01/nihgps_2001.pdf
• National Science Foundation
• Grant Proposal Guide
• http//www.nsf.gov/pubs/2003/nsf032/start.ht
  m
• National Aeronautics and Space Administration
• Research Grant Handbook
• http//ec.msfc.nasa.gov/hq/grcover.htm
• Environmental Protection Agency
• General Regulation for Assistance Programs for
  Other than State and Local Governments
  http//www.epa.gov/ogd/AppKit/applicable_epa_regul
  ations_and_description.htm

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Award-specific Requirements

• RFA/RFP restrictions, special conditions, and
  cost request caps
• Special program guidelines
• Recommendations for revisions

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Direct versus Indirect Costs

• Direct Costs that can be specifically
  identified with a particular project or program.
• Indirect Real Costs that are incurred for
  common or joint objectives and which therefore
  cannot be identified with a particular project or
  program.

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Principles of Direct Costs

• Specific Benefit to Project
• Charged in Timely Fashion
• Consistently treated
• Conforming to the Regulations

• Reasonable and necessary
• Allocable
• Allowable
• Cost Principles
• Award Restrictions/ Budget

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Major Categories of Costs

• Personnel (salaries and fringe benefits)
• Consultant Costs
• Equipment
• Supplies
• Travel

• Other
• Consortium / Contractual Costs
• Trainee Costs
• Facilities Administrative Costs

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Personnel

• Syracuse University employees
• No administrative/clerical positions (generally,
  but there are exceptions)
• Funding proportional to effort
• Note and explain part-time
• Cost sharing
• Include future increases
• Include fringe benefits

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Faculty Salary Calculation

• Academic Year- divide AY salary amount by 8.5
  months and multiply by the number of months
  allocated to the project or multiply AY salary
  by faculty percentage of effort (depends on the
  sponsor guidelines)
• Summer- Faculty may budget for up to 3.5
  additional paid summer months using the same
  calculation. (NSF limits this to 2 months)

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Fringe Benefits

• Composite benefit allocation
• Medical Insurance
• Dental and Life Insurance plans
• FICA, unemployment, workers comp
• TIAA-CREF retirement
• Disability Insurance
• Remitted Tuition

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Current Fringe Benefit Rates

• 29.5 (Full-time faculty academic year/staff)
• 17.4 (Summer Faculty)
• 7.1 (Temp. Wages, Undergrad. Students)
• 11.6 (Federal Graduate Assistants)
• 40.0 (Non-federal Graduate Assistants, Rate
  includes Tuition)
• http//sumweb.syr.edu/osp/proposal2.html

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Consultants

• Individual hired to give professional advice or
  services for a fee
• Fee generally determined by number of days or
  hours of consultation time provided
• Considered independent contractor
• Letter agreement outlines scope of involvement
  and method of compensation

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Consultants (continued)

• Include name and affiliation
• Include frequency and rate
• Include travel and per diem
• Justify necessity and reasonableness
• Include biosketches
• SU Consulting Agreement on OSP website
• http//sumweb.syr.edu/osp/proposal2.html

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Equipment

• Unit cost of 5,000 or greater, useful life of 2
  years
• Exclusive use by project, or reasonable
  allocation
• Establish necessity
• Discuss current capacity
• Itemize and justify

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Supplies

• Tangible property with unit cost less than
  equipment
• Itemize consumable categories greater than 5,000
• Include Software as a supply

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Travel

• Itemize (domestic and foreign)
• Include purpose and destination
• Highlight relevance to project
• Do NOT include consultant travel
• NOTE must use US Carrier for air travel
  (Fly-America Act)

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Other Costs - Working Definition

• Non-tangible, Non-Stuff
• You need it, but you cant see it, you cant
  touch it, you cant store it
• But, its necessary to run the project

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Other

• Publication and page charges
• Study participant costs
• Tuition
• Maintenance agreements

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Other (continued)

• Computer charges
• Rental and leases
• Photocopying
• Telephone/fax
• Postage
• Purchased services

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Purchased Service

• Individual, institution or company
• Provision of a routine service for a fee
• Fee generally determined on a unit basis
• Purchase order generally serves as outline of
  services to be performed
• Service does not have programmatic decision making

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Subcontracts

• Has responsibility for programmatic decision
  making
• Institutional collaboration
• Named collaborating investigator
• Cost-based budget
• Formal agreement- responsible for federal program
  compliance
• Total costs are direct costs to grantee

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Substantive Programmatic Work

• Involvement includes the performance of a
  significant, often discrete, portion of the grant
• Generally a fair degree of independence in study
  design, execution and reporting
• Subcontract investigator provides scientific
  input which could affect the direction of the
  project

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Facilities Administrative Costs

• Formerly indirect costs
• Depreciation of facilities
• Facility operations
• Allocation of shared services
• examples Library, Computing, etc.
• Components of departmental
• administration

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Current SU F A Rates

• 50, Research, on-campus
• 26, Research, off-campus
• 32.5, Training
• Sponsor Restricted rate (must obtain
  documentation of Sponsor Policy)
• http//sumweb.syr.edu/osp/proposal2.html

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Facilities Administrative Base

• Modified Total Direct Costs (MTDC)
• Total Direct Costs less
• Equipment
• Tuition and fees
• Portion of subawards in excess of 25,000
  (entire project period for each institution)

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Calculations

• Sum total direct costs
• Subtract exclusions
• Adjust for subawards
• Multiply MTDC by appropriate rate
• Add to total direct cost to arrive at TOTAL costs

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Sample Budget

• Principal Investigator (100 AY) 80,000
• Graduate Assistant 18,000
• Fringe Benefits (29.5, 11.6) 25,688
• Supplies 15,000
• Equipment 10,000
• Other (Tuition) 8,724
• Subcontract 50,000
• Total Direct Costs 207,412

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Sample Budget (continued)

• TDC 207,412
• MTDC 163,688
• TDC minus equipment, tuition and the amount of
  each subcontract above 25,000
• F A Costs (163,688 x 50) 81,844
• Total Sponsor Costs 289,256

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Additional Budget Years

• Use escalation factor
• Usually 3- 4 escalation per year
• Exceptions (examples large equipment purchase in
  one year only, Subcontracts might have Indirect
  cost applied in the first, but none applied in
  future years
• Use projected tuition estimates for future years
  (Approx.. 6 increase/ year)

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Cost-Sharing

• Financial support contributed by University to
  the Sponsored Project, most commonly percentage
  of faculty time or tuition.
• Should be viewed as an eligibility criteria, not
  as review criteria
• Proposed cost-sharing should have Dept. Chair and
  Deans approval before proposal arrives at OSP.
  Signed proposal checklist indicates their
  approval.
• If mandatory requirement, must be shown in its
  own column on the budget or on its own line as
  with NSFs line M

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Cash vs. In-Kind

• Cost share from University sources are considered
  cash
• Value of non-cash contributions provided by a
  third party are considered in-kind

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Cost-Sharing, Contd

• Cost Sharing under increased Audit Scrutiny by
  NSF Inspector General. NSF has targeted cost
  sharing as one of its top 10 management
  challenges.
• Audit Findings Include
• Failure to identify cost sharing in Accounting
  Systems.
• Incorrect valuation of in-kind cost sharing
• No method exists for valuing contributed effort
  as Cost Sharing.
• Federal Grants News, March 2002 issue

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OSP Tuition Guidelines

• Funds available for cost sharing tuition on
  sponsored activities are linked to institutional
  overhead recovery. Consequently, in all cases
  tuition cost sharing by OSP is based on
  availability of funds.
• Sponsored activities that recover the full,
  federally approved FA rate may be eligible for
  OSP Cost-sharing of tuition expenses, if approved
  by the college or school Dean.
• OSP will cost-share an amount not to exceed that
  charged to the sponsor. (1 to 1 match)

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Budget Narrative

• Justify each item (or group of items) in each
  category
• Provide justification for initial year budget and
  escalation/exceptions for additional budget years
• Good idea to establish Budget Narrative Template
  so at a moments notice you can quickly update
  your existing template for submission

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REVIEW OF HANDOUTS
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Benefits of Excel Spreadsheets

• Developing your budget using Excel greatly
  reduces the amount of manual calculation.
• Less margin for error
• Keep them Simple and Universal
• OSP is far more effective assisting with proposal
  submission if we dont have to check figures
  manually.
• OSP can quickly correct mistakes and E-mail you
  the revisions.

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Need Help with a Budget??

• Call us early, Call us often
• Were here to help you.
• The more time you give us, the more helpful we
  can be.

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Questions/Comments