Developing a Budget or Cost Proposal

The budget is just as important as the technical proposal. It is a comprehensive planning document that integrates all of the details for attaining the objectives of the proposal. The budgetary process should take into account preparation for long-range goals, as well as the short-term objectives.

The project budget is the instrument through which the cost of the project’s activities, plans, priorities, and organization are expressed. The funding agency grants a certain amount of money to the project on the basis of the line-by-line budget estimate that is submitted as part of the grant proposal.

Budget Elements

Included in the budget should be provisions for the cost categories listed below as specified by OMB Circular A-21, Cost Principles for Educational Institutions, www.omb.gov.

1)       Salaries and wages to cover personnel, honorariums, and clerical assistance. Salaries requested must be consistent with the regular practices of KSU. In addition to making provisions for the above categories, it is imperative that the budget includes funds to cover fringe benefits for full-time employees. The KSU Salary Schedule is available from Human Resources.

2)      Fringe Benefits including employee benefits such as Social Security, Kentucky Retirement, Group Life Insurance, Unemployment Compensation, and Worker’s Compensation are included in the KSU fringe benefit rate. Fringe benefits rates are available from OSP or Business and Finance.

3)      Communications include postage, mailing services, and telecommunications charges.

4)      Travel includes in-state and out-of-state trips for fieldwork, attendance at conferences and seminars needed by the investigator to enhance his/her ability to perform the work of the proposal or to present the results of the project.

a)      Domestic travel includes travel within the 50 states of the United States and to Puerto Rico.  All other travel is considered foreign travel. United States government sponsors require persons traveling under a grant or contact to travel by U.S. airlines or on airlines that operate under a U.S. airlines code share.

b)      The current reimbursable rates for KSU include the rates for use of a personal automobile and meals and are available from the OSP or Business and Finance.

5)      Contractual Services include Consultants and other non-University services not otherwise directly charged in the grant. For construction related contractual services, all parties must comply with The Davis-Bacon Act (40 USC 276a et seq.); (http://www.thecre.com/fedlaw/legal12a/276a.htm). This act establishes minimum wages to be paid to laborers and mechanics on construction projects to which the U.S. is a party involving public buildings or public works within the U.S.

Anticipated Consultant services must be justified. Daily compensation rate, number of days of expected service, and per diem allowances should be included in the travel, consultant, or “other” category of the budget as appropriate.

6)      Supplies and Materials include items such as printing, instructional materials, office supplies, audiovisual equipment, and computers under $5,000 (or agency standard). The budget should indicate in general terms the type of expendable materials and supplies that are required to meet the goals of the project.

7)      Equipment includes allowable items such as scientific equipment and apparatus unavailable to the Principal Investigator for the purpose of conducting the work required on the project. Generally, equipment refers to an item of property that has the acquisition cost of $2,000 (or agency standard) or more and an expected service life of more than one year. A brief description and justification to show the purpose, function, and cost of the equipment is necessary. Include vendor quotes for equipment where feasible.

8)      Grants, Scholarships, and Awards are provided for support of graduate or undergraduate research assistants to help carry out the proposed research. Stipends are taxable and must be filed as a source of income for the tax year in which the funds were received.

9)      Indirect Costs (IDC) or Facilities and Administrative (F&A) Cost appears as a single separate item in the budget. This item is not university profit; rather, it represents the total costs to the University in support of the project which cannot be directly attributed to a project activity. This can include a portion of the University’s overall administrative costs such as purchasing and procurement, personnel, payroll, buildings, equipment, maintenance, office space, utilities, and research administration. The IDC rates at Kentucky State University are approved by the U.S. Department of Health and Human Services, Division of Cost Allocation. Please see full rate agreement in the Appendix and on the OSP website in the Information section. Any deviation from the Approved IDC rates must be approved by the Associate. V. P. for the Office of Research, Grants, and Sponsored Programs.

10)    In accordance with OMB Circular A-110, cost sharing must be verifiable and auditable within Cost Sharing, known as cost matching, is the portion of the project costs that are pledged by the requestor and any other non-federal agency. Cost sharing can be a mandatory requirement by the agency. OMB Circulars A-21 and A-110 have very specific regulations regarding the documentation of all cost sharing in the University’s accounting system; must not be included as contributions for any other federally-funded project or program; must be necessary and reasonable to accomplish project or program objectives; must be allowable in accordance with the applicable cost principles (OMB Circular A-21); the terms and conditions of the funding agency and the KSU policies; must be funded from non-federal sources unless authorized by federal statute; and must be incurred during the term of the agreement. Non-documentation of cost sharing may result in disallowed costs of the funding agency. All matching contributions must be approved by the Dean of the College and the Office of Research, Grants, and Sponsored Programs prior to submission of the proposal.

a)      In-kind contribution is the value of items such as donated time of faculty and staff, use of equipment, facilities, and supplies that a grantee contributes as its share of project costs. The value of these services must be approved by the principal investigator’s or project director’s Dean of the College because the funding of these expenses comes from that departmental budget, not the funding agency. Explanations for the source(s) of funds to cover this item should be clearly identified with an explanation provided in the proposal when forwarded for review and signature to OSP. Principal Investigators should contact the OSP staff for assistance with in-kind contribution or cost-sharing issues. All in-kind time and services must be documented. PI’S SHOULD NOT VOLUNTEER IN-KIND CONTRIBUTIONS OR CASH MATCHING UNLESS EXPLICITLY REQUIRED BY THE FUNDING AGENCY. In-kind contributions should not exceed the amount required by the agency.

b)      Cash Match is the commitment of cash resources to the project or program. Proposals that are not supported by documentation identifying all sources of cash match commitments will not be submitted from the University to any funding agencies. Specific account numbers authorized by the dean must be provided prior to submitting the proposal. The OMB Circulars A-21 and A-110 apply for regulation and documentation of third party contributions.

c)       Third Party contributions are those contributions that are made by non-federal organizations outside of the university system. They can be in-kind or cash. Third party contributions may be in the form of cash, real property, equipment, supplies, other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program. The OMB Circulars A-21 and A-110 apply for regulation and documentation of third party contributions.

 

 

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