Back to the Basics Preparing an NIH Budget Anne Corriveau and Laurie Naber Office of Research and Project Administration

“The financial expression of the project or program.” What is a “budget”? “The financial expression of the project or program.” According to NIH your budget is the financial expression of the project or program meaning the money behind the science

Research “careful or diligent search” “experimentation aimed at discovery” “to discover new information” “harnessing of curiosity” Unpredictable –difficult to estimate the resources needed to accomplish it The definition of research includes the following. What does this mean? It is unpredictable and difficult in advance to determine exactly what funds and/or resources will be required to perform the project.

Request a reasonable amount because… Reviewers look for reasonable costs and will judge whether the budget is justified by the aims and methods Significant over- or under- estimating suggests -the PI may not understand the scope of the work What you need to think about when developing your budget? Well, it all comes back to what is reasonable in terms of personnel, supplies, etc needed for the project.

Request reasonable amounts because… 2 CFR 200.400 dictates consistency in estimating, accumulating and reporting costs False Claims Act - … “knowingly presenting, or causing to be presented to an employee of the US Government a false or fraudulent claim for payment or approval” Per the Uniform Guidance the way that we account for expenses on the project must be consistent with federal cost principals and must provide adequate documentation to support the costs charged to the award. If documentation does not exist to support the expense, the University is submitting a False Claim to the federal government. Hence, reasonable budget amounts should be determined and the standard operating procedure.

What’s CFR 200 got to do with it? Allocable - Will there be a mechanism to determine relative benefit to the project? Allowable - Will NIH limitations or institutional policy prohibit this cost? Necessary - Will this be needed to fulfill the scope of the project? Reasonable – prudent person test? These are the cost principals originally prescribed in A21.

Pre-award visits Post-award Ensure that budgets proposed are compatible with the accounting system Costs should not be proposed in a different manner than they will be treated post award Consistency - Direct vs. indirect For example, payment for your PIs effort should be proposed in calendar months vs. hourly rate. Consistency means a cost that is an indirect cost (for example F&A) will not be included in the direct costs to the project (ie: snow removal, central administration, RSRB, etc.)

NIH Grants Policy Statement 11/16, Section 7.2, last sentence “ The fact that a proposed cost is awarded as requested by an applicant does not indicate a determination for allowability” For example, meals/food are not allowed on a conference grant. Just because the budget is approved, the cost standards still apply. Some line items may include advertising, patient recruitment, and travel costs. This mirrors what is stated in the UG.

“Special” NIH grants Read the FOA Budget cap Modular vs. detailed Rebudgeting Unallowable/restricted costs Pre-proposal that includes preliminary budget Be sure you have the correct and most recent FOA. The FOA trumps the SF424 Guidelines. Any information in the FOA must be followed. The FOA will include deadline dates, budgetary restrictions, effort requirements, etc. If the pre-proposal requests a preliminary budget, you may be locked into that figure. Modular budget required if the average budget year is under $250,000 K per year, unless the FOA specifies a detailed budget. Be careful when budgeting into categories that may be awarded as restricted costs. This would include subawards, participant costs, and as the FOA might identify. “Use what you know, do what it says”- R Linder

NIH Budget for Research Grant Personnel Faculty and committed effort Per OMB memo dated 1/5/01- “most Federally-funded research programs should have some level of committed faculty effort” Show all personnel devoting effort even if no salary requested Institutional Base Salary Projected increase NIH Salary Cap Current benefit rate https://www.rochester.edu/orpa/ If your budget does not include effort for your PI, NIH will have questions. The University Policy states that a PI must devote at least 1% effort to the project. The institutional base salary consistent with the actual salary must be used in all instances except for when it is above the current NIH Salary cap. Even in this instance, you may use the actual base salary and NIH will apply the cap. Do not budget over 3%. That being said, some institutes and centers do not award projected increases in out years. The current salary cap is $187,000. Even if you are applying the cap, use the actual base salary to calculate their benefits.

NIH Budget for a Research Grant Personnel Medical School Faculty Generally appointed on a 12/calendar month basis River Campus Faculty/School of Nursing Generally appointed on a nine-month, or academic year basis Keep in mind there are these two types of appointments and the correct one is budgeted.

NIH Budget for a Research Grant Personnel For 9 month faculty, academic-year and summer effort should be listed on separate lines The NIH Salary Cap applies to 9 month appointments too! The 9-month appointment NIH Salary Cap calculates to $140,250

NIH Budget for a Research Grant Personnel Consultants Postdocs Employment relationship Graduate Students Medical Insurance Tuition Compensation limitation Here are other personnel to consider during budget development.

NIH Budget for a Research Grant Materials & Supplies Document, document, document!

NIH Budget for a Research Grant Equipment UR equipment threshold - >$1,000 Life expectancy of more than one year Total cost – includes shipping, in-transit insurance, installation General purpose? Software? NIH equipment threshold is $5,000. Since the UR equipment threshold is $1,000 and everything over $1,000 should be reported in the equipment line and excluded from the F&A calculation.

NIH Budget for a Research Grant Travel Relevance of the trip to the project U. S. Carrier Lowest fare

NIH Budget for a Research Grant “Other” Costs Subcontracts Payments to research subjects Direct vs. Indirect Publication costs Computing time Tuition There are other costs to think about that we routinely see on proposals.

NIH Budget for Research Grant F & A Costs Negotiated rate (each year if split rate) On Campus Off Campus Exclusions (MTDC!) Equipment Patient Care Costs Subcontract total costs in excess of $25,000 Tuition Rent We’ll provide details when walking through an actual budget.

Modular vs. Detailed? Use modular budget!

Modular = Simplify! No… $25,000 direct cost increments categorical budget accepted with proposal categorical budget required at award difference in allowable costs difference in post-award management requirements $25,000 direct cost increments A modular budget is easier to develop since there is no breakout of specific costs.

Modular Detailed internal direct costs budget Current NIH salary cap Cost sharing F & A calculations Out years direct costs budget 3% escalation Consortium – Subcontracts Detailed budget The department should have a detailed budget to determine the number of modules to request.

Modular Divide total of all years direct costs by number of years, round to nearest $25,000 Same direct costs each year (with exceptions!) Equipment Justification Take your total detailed budget and divide by the number of project years rounding to the nearest $25,000. This figure is your F&A base. The MTDC has exclusions. Go to internal detailed budget for modular grant In our budget, Hogwarts is at the international rate of 8% and Rydell is at a F&A rate of 30%

Modular Budget Justification Personnel Name, title, role, responsibilities, number/kind of person months and percent effort Do not include salary $ or fringe rate info Include consultants Consortium Justification Include name of institution, whether domestic or foreign and averaged annual subcontractor’s total costs Variations in number of modules Equipment in any given year Per notice OD-00-046 only include personnel in your justification for a modular budget.

Detailed (R & R Budget) Categorical budget for each year submitted Salary dollars at the institutional base Use 3% escalation in out years Negotiated Fringe rate for institutional base for each year Even in the out years!! Consortium budgets also detailed Go to detail budget workbook.

Detailed (R & R Budget) Budget Justification Personnel Equipment New equipment when equipment already exists Include quotes Travel – related to project? Destination, number of people traveling, dates or duration

Detailed (R & R Budget) Budget Justification Materials & Supplies Itemized list Animals Number, price, per diem, time period to follow

Detailed (R & R Budget) Budget Justification Other costs Justify, justify, justify Consortium Justification requirements as for modular

Detailed (R & R Budget) Budget Justification Escalation factor used Unusual estimations/circumstances

NIH Budgets Helpful Websites http://www.rochester.edu/ORPA http://grants.nih.gov/grants/developing_budget.htm http://grants.nih.gov/grants/funding/modular/modular.htm

Questions?