Module 2: Proposal and Budget Preparation

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Module 2 Proposal and Budget Preparation

• Office of Research and Sponsored Programs
• The University of Mississippi
• 100 Barr Hall 662-915-7482
• www.olemiss.edu/depts/research

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Proposal elements

• READ agency announcement/guidelines
• Cover page
• Abstract or project summary
• Narrative
• References/citations
• Personnel vitae
• Budget and justification
• Facilities/resources statement
• Certifications/assurances
• Current and pending support

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Cover page

• Most federal agencies will specify format
• Generally includes items such as
• Project title
• Project period
• Amount of funding requested
• Investigator name and title
• Signature of investigator
• Signature of Authorized Institutional
  Representative (at UM, Vice Chancellor of
  Research and Sponsored Programs)

4
Signature of the investigator(s)

• Signature of the investigator(s) sometimes
  optional
• Indicates that the data in the proposal is true
  and correct
• Indicates the investigators acknowledgment of
  responsibility for the conduct of the project and
  submission of technical reports
• Indicates the investigators compliance with all
  required certifications

5
Signature of the Authorized Institutional
Representative

• Signature of the Authorized Institutional
  Representative usually mandatory
• Indicates that to the best of the signers
  knowledge the data in the proposal is true and
  correct
• Indicates that the proposal has been duly
  authorized by the institution
• Indicates that the applicant will comply with all
  required certifications and assurances
• Applicant is The University of Mississippi
• UMs Authorized Institutional Representative is
  the Vice Chancellor for Research and Sponsored
  Programs

6
Abstract or project summary

• The abstract is a very brief description of the
  project, its goals, and its projected outcomes,
  including the significance of the project to the
  particular field being studied.

7
Abstract or project summary

• Agency will usually specify the length
• Written in less technical language than the
  proposal narrative
• Some technical terms should be used
• May be used by the agency to assign reviewers or
  to direct the proposal to an appropriate study
  panel
• Often used by the agency to illustrate to the
  public what the agency is funding

8
Project narrative/statement of work (SOW)

• The narrative identifies the need for the project
  and explains how the work will be accomplished.

9
Project narrative/statement of work (SOW)

• Defines the need and how it is related to the
  overall societal issues identified in the program
  announcement
• Defines quantifiable and achievable objectives of
  the project
• Defines the methodology or approach that will be
  used to accomplish the objectives

10
References/citations

• A list of works cited in the proposal

11
Current and pending support

• Some agencies (e.g., NSF, US Army) require a list
  of the investigators current and pending
  support
• Format is provided by the agency

12
Personnel vitae

• The personnel vitae (a.k.a. curriculum vitae, or
  c.v.) is a document detailing a persons academic
  and professional accomplishments.

13
Proposal budget

• The budget is the financial expression of the
  project.
• Budget format and content must meet agency
  requirements
• ORSP requires a detailed budget link to sample

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Relevant regulations

• We are bound by OMB, federal, state, agency, and
  university regulations.

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Purpose of the budget

• The budget serves two purposes
• It estimates the cost of doing the work described
  in the narrative or statement of work
• It provides a means for monitoring the financial
  aspects of the project

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Sections of the budget

• Direct costs
• Facilities and administrative costs (a.k.a. FA
  or indirects or overhead)
• Narrative justification

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Direct costs

• As defined by the federal government
• Direct costs are those costs that can be
  identified specifically with a particular
  sponsored project, an instructional activity, or
  any other institutional activity, or that can be
  directly assigned to such activities relatively
  easily with a high degree of accuracy.
• 2 CFR, Part 220 Cost Principles for Educational
  Institutions (a.k.a. OMB Circular A-21)

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Direct costs

• Costs incurred for the same purpose in like
  circumstances must be treated consistently as
  either direct or FA costs.Where an institution
  treats a particular type of cost as a direct cost
  of sponsored agreements, all costs incurred for
  the same purpose in like circumstances shall be
  treated as direct costs of all activities of the
  institution.
• 2 CFR, Part 220 Cost Principles for Educational
  Institutions (a.k.a. OMB Circular A-21)

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Facilities and administrative (FA) costs

• FA costs are those that are incurred for common
  or joint objectives and therefore cannot be
  identified readily and specifically with a
  particular sponsored project, an instructional
  activity, or any other institutional activity.
• 2 CFR, Part 220 Cost Principles for Educational
  Institutions (a.k.a. OMB Circular A-21)

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Direct cost criteria

• Direct costs must be
• Reasonable a prudent person conducting the
  project would spend the funds in the same manner
  under the same circumstances
• Allocable to the project goods or services
  involved are chargeable to the project in direct
  relation to the benefits received
• Consistently treated like costs must be treated
  the same way throughout the university (cant be
  charged as a direct cost on some projects and as
  FA on other projects)
• Allowed by the sponsoring agency and the
  university (some agencies dont allow things like
  equipment, foreign travel, food, etc.)

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Allowable and unallowable costs

• See OMB Circular A-21, Section J for general
  provisions for selected items of cost
• The purpose and circumstance of the cost
  generally determine allowability
• Principal investigators have ultimate
  responsibility for defending all costs charged to
  their sponsored projects and to the university

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Allowable costs

• Allowable costs are those costs that are eligible
  for reimbursement by the sponsoring agency.

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Allowable costs

• To be allowable, costs must be
• Reasonable a prudent person conducting the
  project would spend the funds in the same manner
  under the same circumstances
• Allocable to the project goods or services
  involved are chargeable to the project in direct
  relation to the benefits received
• Consistently treated like costs must be treated
  the same way throughout the university (cant be
  charged as a direct cost on some projects and as
  FA on other projects

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Unallowable costs

• Are NOT eligible for reimbursement by the
  sponsoring agency
• Should NOT be charged as either a direct cost or
  an FA cost or cost shared on a federal agreement

25
Unallowable costs

• Unallowable activities include
• Fundraising
• Lobbying
• General public relations
• Unallowable transactions include
• Alcoholic beverages
• Entertainment
• Memberships in social, dining, or country clubs
• Gifts

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Direct cost items salaries and fringe benefits

• Salaries and fringe benefits of faculty/staff who
  will be working on the project (based upon the
  individuals institutional base salary)
• Faculty (may include restrictions such as NIH
  salary cap of 191,300 per year as of 01/01/08)
• Technicians
• Post-docs
• Administrative and clerical personnel costs are
  normally included in the universitys FA. If
  included as a direct cost item, such costs must
  be highlighted in the budget and clearly
  justified in the budget justification.

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Direct cost items salaries and fringe benefits

• Salaries and fringe benefits of students who will
  be working on the project
• Graduate students
• Undergraduate students

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Notes about personnel costs

• The university is required by OMB Circular A-21
  to maintain a personnel reporting system for all
  employees paid either directly or as a cost share
  on federal projects.
• Failure to make the required confirmation
  effort reporting and certificationin an
  accurate and timely manneris one of the
  principal internal control weaknesses associated
  with recent cases of noncompliance.
• OMB Circular A-133 Compliance Supplement for 2006

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Direct cost items tuition

• Graduate Assistant Tuition Remission Cost and
  Policy
• Tuition remission cost for 2007-2008 2,466 per
  semester for full-time graduate students (9
  hours)
• University policy Tuition remission for
  graduate assistants is required on grants and
  contracts unless not allowed by the agency or
  program. Any variations must be approved by the
  Vice Chancellor for Research and Sponsored
  Programs.

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Direct cost items consultants

• Consultants individuals whose expertise and
  skills will add value to a project
• Daily rate plus travel
• University uses maximum daily rate published at
  www.olemiss.edu/depts/research/toolbox/current_rat
  es.html

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Direct cost items equipment

• Equipment necessary to complete the work of the
  project
• Must be project-specific, not general purpose
• Must be necessary and reasonable
• Must be clearly justified
• Sometimes agency and UM definitions are different

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Direct cost items equipment

• Non-expendable equipment (5,000)
• If the item is 5,000 or more, and if the
  sponsoring agency is federal, existing equipment
  must be screened to determine if suitable
  equipment is already available, thus
• Avoiding the purchase of unnecessary items
• Determining the most economical and practical
  procurement
• Expendable equipment (lt5,000)
• If no category for expendable equipment, list
  under supplies category

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Direct cost items supplies

• Supplies
• Must be project-specific
• Consumable supplies and materials which are
  necessary to the project
• Examples
• Glassware
• Chemicals
• Reagents
• Animals
• Equipment lt5,000 may be included if no
  expendable equipment category
• Office supplies are normally treated as FA

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Direct cost items travel

• Travel
• Must be reasonable and directly benefit the
  project
• Must comply with the universitys travel policy
• Some funding agencies require that a proposal
  distinguish between domestic and foreign travel
• If funding agency is federal, any air
  transportation to, from, between, or within a
  country other than the U.S. of persons or
  property must be performed by a U.S. flag air
  carrier if service provided by such a carrier is
  available

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Direct cost items subcontracts

• Subcontract collaborative work with other
  institution in which an investigator at the other
  institution will assist UM in accomplishing an
  externally funded project by performing
  substantive work on the project (collaborator
  engages directly in the performance of the
  specific aims of the project)

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Direct cost items subcontracts

• Proposed costs should be reasonable and allowable
• Competitive bidding should be done prior to
  proposal submission
• Federal regulations state that we can only charge
  FA on the first 25,000 (regardless of the
  period covered by the subcontract)
• If subcontractor is identified in the proposal,
  must include itemized budget

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Direct cost items other

• Other direct costs include such things as
• Communications
• Publications
• Animal care costs (not purchase of animals)
• Human subjects costs
• Maintenance/service contracts
• Graphic arts/photographic services

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Facilities and administrative (FA) costs

• Those expenditures incurred in support of an
  institutions major, mission-related functions or
  activities
• Allocated based on a determined percentage of the
  Modified Total Direct Costs

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Modified total direct costs

• MTDC are total direct costs less
• Equipment 5,000
• Capital expenditures
• Tuition and patient care
• Rental or lease of off-site facilities
• Construction and renovation costs
• Scholarships and fellowships
• Subaward costs in excess of 25,000
• Certain other costs pursuant to the institutions
  negotiated FA rate agreement (e.g., recharge
  center rates)

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Facilities and administrative (FA) costs

• Current rates for The University of Mississippi
• On campus 44 (through June 30, 2009)
• Off campus 26(In general, off campus means
  more than 50 of the work will be conducted off
  campus)
• Rates as of July 1, 2009 for The University of
  Mississippi
• On campus 43
• Off Campus 26

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To determine FA

• Take your total direct costs
• Subtract out all the things we listed (equipment
  gt5,000 capital expenditures tuition and
  patient care rental or lease of off-site
  facilities construction and renovation costs
  scholarships and fellowships subaward costs in
  excess of 25,000)
• Multiply the remainder (the MTDC) by the
  appropriate rate

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A note about administrative and clerical costs

• Items such as office supplies, postage, local
  telephone costs, and memberships shall normally
  be treated as FA costs
• The salaries of administrative and clerical staff
  should normally be treated as FA costs
• 2 CFR, Part 220 Cost Principles for Educational
  Institutions(a.k.a. OMB Circular A-21)

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Sample budgets

• Sample 1 Salaries by Monthly Effort

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Sample budgets

• Sample 2 Salaries by Per Cent of Effort

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Cost share

• Cost sharing or matching means that portion of
  the project or program cost not borne by the
  Federal Government.
• Uniform Administrative Requirements for Grants
  and Agreements
• with Institutions of Higher Learning, Hospitals,
• and Other Non-Profit Organizations
• (OMB Circular A-110)

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University of Mississippi policy

• Cost sharing should be included in the budget
  accompanying the proposal submission only if such
  arrangements are required or strongly encouraged
  by the sponsors program guidelines.

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Federal government guidelines for cost share

• Be verifiable from recipients records
• Not be included as contributions for any other
  federally-assisted project or program
• Be necessary and reasonable for proper and
  efficient accomplishment of project or program
  objectives
• Be allowable under OMB Circular A-21
• Not be paid by the federal government under
  another award (except where authorized)
• Be provided for in the approved budget (when
  required)
• Conform to other provisions of OMB Circular A-110

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• If cost sharing is mentioned anywhere in the
  proposal, we are required to document and report
  to the agency.

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Cost shared costs can be

• Cash (such as purchases made specifically for the
  project)
• Cannot normally use Fund 10 for cash cost share
• In-kind (employee time or other goods and
  services)
• Provided by the university
• The universitys agreement to any such cost
  sharing must be secured by the prospective
  investigator during the proposal development
  process.
• Provided by a third party
• At the time of the proposal submission, the
  prospective investigator must have written
  confirmation from the third party on the amount
  and nature of cost sharing to be provided.

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A note about third party contributions

• Volunteer services value at rates consistent
  with those paid for similar work in the
  recipients organization
• Employee services value at employees regular
  rate of pay plus fringe benefits
• Donated supplies value at fair market value at
  time of donation
• Loaned equipment or space value at fair market
  rental rate
• Donated equipment determine cost share
  according to purpose of award
• work with Accounting on these

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Often used for cost share

• Salaries plus associated fringe benefits (and
  FA)
• Tuition remission
• Others, such as graduate students, equipment,
  travel, supplies, etc. (plus their associated
  FA)
• Unrecovered FA costs, when allowed by sponsor

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How to calculate cost share

• It depends on the proposal guidelines
• Some require a percentage of MTDC
• Some require a percentage of total project value
• Your Program Development Specialist in the ORSP
  will help you determine the correct amount.

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Budget justification (narrative)

• One of the most important pieces of the proposal
• Provides a categorical justification for the
  requested funds
• Purpose is to show the need of requested budget
  items
• Explains staffing patterns, benefits (fringes),
  other personnel support costs, facilities and
  equipment needs, supply needs, etc.

58
Facilities/resources statement

• Identifies the resources and facilities of the
  institution as a whole and of the department that
  are available to the project
• Identifies any unique staffing resources
  available to the project, but for which funding
  is not required

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Certifications/assurances

• Certifications and assurances are commitments
  that the university is in compliance with various
  laws and executive orders applicable to federal
  assistance.

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Certifications/assurances examples

• Certification Regarding Lobbying and Disclosure
  of Lobbying Activities
• Certification Regarding Debarment and Suspension
• Misconduct in Science
• Conflict of Interest
• Blood Borne Diseases
• Human Subjects Compliance
• Use of Animals in Research
• Common audit finding. Institutions must ensure
  that vendors, contractors, and subrecipients are
  not suspended, debarred, or otherwise excluded
  from transactions with the government.

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Resources

• OMB Circular A-21 Cost Principles for
  Educational Institutions
• OMB Circular A-110 Uniform Administrative
  Requirements for Grants and Other Agreements with
  Institutions of Higher Education, Hospitals and
  Other Non-Profit Organizations
• OMB Circular A-133 Audits of States, Local
  Governments, and Non-Profit Organizations
• UM Institutional Information for Proposal
  Preparation
• UM Manual for Research and Sponsored Programs
• UM Accounting Guidelines and Policies
• UM ORSP Program Development Specialists x7482