Budget Development

faculty and student talking around laptops and work

Whether you have a list of possible expenditures, a draft worksheet, or need to brainstorm types of costs, our office will assist you in creating your project budget.

The budget is the PI's best estimate of the total cost to complete the objectives identified in the proposal. Consider the different categories of expenditures that you can include in your budget:

Salaries and Wages

Salaries and wages of the Project Director and research and technical personnel, including undergraduate and graduate students can be included on the grant budget. To determine how much to budget for faculty or staff, we think in terms of each person's percent-of-effort to be devoted to the project and apply that percentage to his/her current university salary.

Currently, we budget for academic year course release time based on a 4.4 teaching load. Therefore, one course release for a semester equals 12.5% of your time. One course release for an entire academic year equals 25% of your time. For example, if you chose to take one course release for an entire academic year, we would budget 25% of both your annual salary and benefits and request this amount to be paid by the grant. Approval for academic year pay without course release must be negotiated with administration.

Faculty members may budget for academic year release time, when formally excused from teaching or other assignments by the Department Chair or Dean. There are three categories of salary bases (or appointment types):

Calendar Year - 12 months, 52 weeks, 2080 hours
Academic Year - 9 months, 39 weeks, 1560 hours
Summer - 3 months, 13 weeks, 520 hours

Grant program guidelines should always be reviewed to determine if there are any restrictions imposed on personnel costs. For example, some agencies limit summer wages funded on a project to two months pay.Per state guidelines, nine month faculty cannot receive more than 33% of their annual salary during the summer. While current budgetary conditions are not dictating that state employees will receive any salary increases in the next couple years, one should consider budgeting salary increases in a grant budget in case situations change. Faculty who are up for tenure should also consider budgeting this salary increase as well.

Wage personnel, including students, should be budgeted at hourly rates after consultation with Human Resources or Department Chairs for current rates.

On federally sponsored projects, it is normally not appropriate to include a request for administrative support in your budget. The federal government has determined that such an expense is an indirect cost for most projects. Exceptions may be made on significantly larger projects. The pre-award team can offer guidance on these issues when questions regarding budgeting such salaries and wages arise.

One-Time Payments

Employees who are contracted to be paid over a twelve-month period or employees receiving miscellaneous "one-time" payments should be included under this budget line item. FICA will be budgeted for these payments.

Fringe Benefits and FICA

Fringe benefits are expenses directly associated with employment and include contributions to state retirement, life and health insurance, unemployment, workers compensation, social security, etc. The fringe rate is expressed as a percentage of salary based on individual benefit choices. Fringes for part-time employees and summer pay are budgeted at 7.65% (FICA only). Student employees on grants may or may not have fringe benefits; therefore, Radford University budgets FICA at the rate of 7.65% for student workers. Health insurance rates depend on your personal selection of health care plans. It is recommended that you budget for at least a 10% increase in health care costs each year.

Consultant and Other Contractual Services

Some costs you may want to consider in this category include:

Consultants - Consultants may be needed for a project that requires expertise of a specialized nature for a certain period of time. Consultants shuold be budgeted for when expertise is not available on campus. It's best to get an idea of the cost of the consultant from the person you want to hire, or someone in their field.
Publication costs directly related to the grant may be included on the budget- Radford University printing services
Radford University postage
Telephone costs directly related to grant activities may also be included on the budget.
Conference Services- if you wish to hold a conference on campus, or wish to house grant participants on campus, we can assist you in getting a quote from Radford University Conference Services for meeting facilities, lodging, and meal costs.

Travel

Most agencies want to know where you are going, the purpose of the trip, and the cost. When travel to professional meetings or conferences is required by the grant, remember to budget funds for all those collaborating on the project. Travel which provides a direct benefit to the project is generally an allowable charge. Sponsor guidelines should be read carefully to determine if travel is allowed on a grant. Public services or research projects may require considerable travel. When estimating travel costs, one should determine all the component expenses for each anticipated trip and show this detail on the budget. This includes airfare, lodging, meals and incidental expenses, conference registrations, car mileage, and car rental, etc.

Supplies

Consumable materials and supplies are items used exclusively in support of project objectives. Materials and supplies might include chemicals, glassware, small electronic parts, computer software, animals for research, etc. General office supplies (paper, pens, file folders, staples, etc) and general purpose office equipment (computers, copiers, etc) are unallowable direct costs on a federal proposed budget- unless the PI can justify that the project requires an amount above and beyond normal usage.

Subcontracts and Subawards

Sometimes specific parts of a scope of work must be performed by another institution or organization that is more qualified or has facilities that Radford University does not have. If this part of the work is necessary to the proposal, a subaward, or subcontract, may be required. Submission of subcontracts vary by agency, but pre-award staff will assist you in making sure you have everything for approvals and submission.

When the "subcontract" line item is budgeted, the PI must provide the following documentation for the proposal file:

Letter of intent signed by the subcontractor's PI and institutional authorized official
A detailed budget
Concise scope of work

Tuition

It is encouraged to include student tuition stipends in your project if possible. Please visit the Financial Aid costs and budgeting site for more information on undergraduate tuition and fees.

Equipment Rental or Purchase

All equipment purchases must be justified, estimates should be obtained from vendors, and procurement procedures should be considered in case bidding is necessary. Special purpose equipment (not general purpose) related to the grant supported project may be included on the budget. Costs for repairs and maintenance for equipment used directly for the project may be included on the budget. Check the sponsor guidelines to see who retains possession of the equipment at the end of the project.

F&A (Indirect Costs)

Indirect costs are also known as facilities and administrative (F&A) costs. These are costs to a project that are difficult to allocate on a project-by-project basis such as utilities, space, equipment and building depreciation, time of personnel in Financial Reporting, Housekeeping, Human Resources, Sponsored Programs, etc. The Commonwealth of Virginia requires 70% of those recoveries to be spent on research and the enhancement of research and the university receives a portion of those (see below for distribution).

State and University policy requires that sponsors bear the full costs of conducting a sponsored project. Full costs include all direct costs and recovery of F&A (indirect) costs at the full rate determined in accordance with the OMB Circular A-21 and negotiated with our cognizant federal audit agency. Radford University's negotiated F&A rate agreement is with the U.S. Department of Health and Human Services.

PI's are required to budget the full applicable F&A rate unless (1) the sponsoring agency has a published policy limiting or excluding payment of F&A costs, or (2) the inclusion of F&A would jeopardize the funding of the proposal, and a full or partial waiver of F&A costs has been approved by the Provost.

F&A is only charged to the grant as money is spent. Indirect costs are applied to modified total direct costs to simplify the calculation. Modified total direct costs are the total direct costs of the project minus tuition and capitalized equipment, plus the first $25,000 of each subaward or subcontract.

The current break down of how F&A costs are distributed at Radford University is as follows:30% - State of Virginia

30% - State of Virginia
30% - RU SPGM Seed Program
15% – SPGM Operations
10% - Principal Investigator Research Support Account
10% - PI’s Department Chair Research Support Account
5% - PI’s College Dean Research Support Account

Cost Sharing or Matching Funds

Sponsors may require cost sharing or matching funds as an indication of the University's commitment to a project. Any cost to a project that is not supported by a sponsor is cost sharing, whether included in the proposal budget or not. Cost Sharing is comprised of all contributions to a project by parties other than the sponsor, including contributions of the University, subcontractors, and donations.

The University will cost share only when required by the sponsoring agency. Cost sharing should not be volunteered on proposals, either in the text or the budget section. Sponsor guidelines address required cost sharing or specifically state when cost sharing or University contributions increase the proposal's funding probability.

All cost sharing, whether mandatory or voluntary, must be adequately documented and approved in University records.

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