Lesley A. Brown Director of Proposal Development

 A budget is another way to express your project in terms of costs required to complete the work.

Project Activities Line Item Budget Budget Justification

 A budget should always tell the same story as the narrative.  A carefully developed budget improves your chances for success.  Program officers will review your budget to see how well it relates to proposed activities.  Budgets are estimates, but they should be as specific as possible.

 Ask for what you need and be realistic. Don’t try to cut yourself short.  Budgets that are too low cast doubt on your planning ability.  Inflated budgets raise flags with program officers.  Round numbers to the nearest dollar.  Always remember to follow the directions!  If no forms are provided, you can create your own.

 You do not have to develop your budget on your own.  Your College-Based Research Officer can help.  Erika Cottingham and Ellen Zavala in the Office of Research Services and Outreach can help.

 If program guidelines give overall dollar limits, stick to those limits.  Look for allowable costs vs. unallowable costs.  Is cost-sharing required? If so, what level?  Is there a limitation on facilities and administrative (F&A) costs recovery? If so, what is the limit? If no limitation, request full F&A costs.

 Allowable costs for university grant projects are governed by 2 CFR 220 (formerly OMB Circular A- 21).  Cost Accounting Standards Outlined in A-21: ◦ (1) Consistency in estimating, accumulating, and reporting costs; ◦ (2) Consistency in allocating costs incurred in like circumstances for the same purposes; ◦ (3) Identification and exclusion of specifically identifiable unallowable costs; ◦ (4) Consistency in the selection and use of a cost accounting period.

 Department of Education: Education Department General Administrative Regulations (EDGAR).  National Science Foundation: Award and Administration Guide.  National Institutes of Health: NIH Grants Policy Statement.  Federal Acquisition Regulations (FAR).

 Contact your College-Based Research Officer.  Contact Erika Cottingham in Research Services and Outreach: or

 Direct Costs  Facilities and Administrative Costs (F&A) a/k/a Indirect Costs a/k/a Overhead  Cost-Sharing

 Direct costs are explicit project expenditures listed as line items that can be specifically identified with a particular project or program.  Direct costs are usually categorized into personnel (people) and non-personnel (things):  Personnel – salaries, wages, fringe benefits, consultant fees.  Non-Personnel – equipment, travel, materials and supplies, publications, printing, communications, subcontracts, tuition.

 Salaries ◦ Faculty ◦ Students and Postdocs ◦ Technicians ◦ Clerical (complex projects only)  Fringe benefits  Consultant fees

 Equipment  Travel  Materials and supplies  Publications  Printing  Communications  Subcontracts  Tuition

 Defined as capital equipment costing more $5,000 or more.  Several items of small equipment that total $5,000 (e.g., 5 computers costing $1,000 each) should NOT be listed on the equipment line but on the materials and supplies line.

 Use UNC Charlotte (state of North Carolina) approved travel rates unless it is an international project where the sponsor explicitly approves using U.S. Federal travel rates.

 Show graduate student salary separate from tuition.  Tuition should be listed under “other direct costs.”

 A subcontract is an award to another organization to perform part of the work.  The other organization provides us with their budget for their personnel and non- personnel items.  The subcontract becomes a line item on our budget, and the other organization’s indirect costs become a direct cost for us.

 It is important to know the difference between subcontractors and vendors.  A subcontractor helps design the project, performs part of the work, and helps with the final report—there is an intellectual contribution to the project.  A vendor sells a service that the company sells as a normal part of their business operations.

 We charge F&A (indirect costs) on the first $25,000 of each subcontract.  We charge F&A on the total amount of each vendor purchase.

 Do NOT list a miscellaneous budget category.  The “Other Direct Costs” category should be used for specific charges that can be identified, quantified and associated with one project.

 Facilities and Administrative Costs (F&A), aka Indirect costs, aka overhead  Facilities and Administrative Costs (F&A) are real project costs that are hard to tie back to a specific project:  Examples include payroll and accounting, space, use of equipment, library usage, lighting, and general project administration costs.

 Indirect Costs (F&A) are governed by University Policy # 86.  Facilities and administrative costs will be reimbursed by a federal sponsoring agency at their UNC Charlotte negotiated F&A rate.  Rates can be found on the Research Services and Outreach website.  The University expects all non-federal sponsored programs to be reimbursed for their full costs, both direct and F&A.

 At UNC Charlotte they are calculated on a percentage of the budget.  Modified total direct costs base includes: ◦ All salaries and wages, fringe benefits ◦ Materials and supplies ◦ Services ◦ Travel ◦ Subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract).

 Modified total direct costs base excludes: ◦ Equipment costing in excess of $5,000 ◦ Capital expenditures ◦ Charges for patient care ◦ Tuition remission, scholarships and fellowships ◦ Rental costs of off-site facilities ◦ The portion of each subgrant and subcontract in excess of $25,000

 UNC Charlotte has different rates for Organized Research, Instruction, and Other Sponsored Activities.  There is an on-campus and an off-campus rate for each type of activity.

 For 2014 through 2017 the on-campus F&A rate for Organized Research is 51% of Modified Total Direct Costs.

 For 2014 through 2017, the on-campus F&A rate for Instruction is 51.5% of Modified Total Direct Costs.  Many Federal agencies, e.g., NIH and DoED, limit F&A on training grants to 8%.

 Defined as anything that is not organized research or instruction.  Contact your College-based Research Officer, Erika Cottingham or Ellen Zavala to determine if your project qualifies as OSA.  For 2014 through 2017 the on-campus F&A rate for OSA is 35% of Modified Total Direct Costs.

 In order to use the off-campus rate, rent must be paid to a third-party landlord and at least 51% of the project must take place in an off-campus facility.  The Vice Chancellor for Research and Economic Development will also approve the off-campus rate for faculty members who are resident at a federal or corporate laboratory outside the Charlotte region for the entire project.

 The Off-Campus rate for all activities and all fiscal years is 26% of Modified Total Direct costs.  Check with your College-based Research Officer, Erika Cottingham or Ellen Zavala to confirm that your project qualifies for an off- campus rate.

 Always include F&A Costs at the federally negotiated rate unless the program guidelines state otherwise.  Contact your College-Based Research Officer or Erika Cottinghan ( or if you have questions about F&A Costs.

 In projects funded by local government and non- profit agencies, but excluding those funded by federal “pass-through” dollars, the University will charge an “administrative” cost of 26% of in lieu of F&A.  Ellen Zavala, Director of Research Services and Outreach, or Lesley Brown, Director of Proposal Development, must approve the use of “administrative” costs in lieu of F&A.

 Many non-profit foundations have an established policy of not paying indirect costs.  In such cases, you must attach a copy of this policy to your proposal when it is routed for signatures.  In all other circumstances, only the Vice Chancellor for Research and Economic Development may approve a waiver of Indirect Costs.

 The University will return 10% of recovered F&A and “administrative” costs to the project director’s academic department.  For awards involving multiple investigators, the allocation among departments will follow the allocation of credit assigned on the Internal Processing Forms.

 Costs that the institution will contribute to the total project costs are considered shared costs or cost-sharing.  Examples include: ◦ the value of someone’s time plus fringe benefits, ◦ departmental or college cash for any operating costs, ◦ equipment, and ◦ the indirect costs associated with these dollars.

 Include cost-sharing only when it is required by the sponsor.  Showing cost-sharing when it is not required will not help you get funding.

 Explicit commitments to cost share should not be included in proposals unless specifically required by the sponsor.  If PIs spend time on research projects for which they receive no salary from the sponsor, they should describe their participation in terms that do not commit them to specific percentages of effort (salary) or to non-salary expenses.

 Sometimes called budget narrative.  This section justifies each line item in your budget by explaining why it is necessary to the completion of the project.  The budget justification is an important part of your proposal and should provide sufficient detail so that reviewers can understand the full costs of your project.

 In general, a budget justification should make the following clear: ◦ How salary costs were calculated; ◦ How fringe benefits were calculated; ◦ The details for travel costs (# of trips, # of travelers, airfare, lodging, per diem); ◦ How expenses for materials, supplies and equipment were derived (quotes, past experience); ◦ Basis for the F&A rate.

 The budget justification for personnel should include a description of the tasks each person will perform.

Project Activities Line Item Budget Budget Justification

 Show the basis for your calculations.  Ex. – Local mileage for PI, 125 miles/month for 12 $.36/mile = $540  Show the components of the fringe benefit rate.  Ex. – Faculty/staff fringe benefits are of salaries and include FICA, retirement, and health insurance.

 In multi-year budgets, allow for yearly increases and indicate annual percentage increases. You can generally use 2-3%. Note that projected salary increases take effect July 1 of each year.  Itemize the budget and justify each item such as personnel, equipment, travel, and other major expenses.

 All costs must be incurred during the proposed project period.  Every reasonable expense associated with the project can be included in your budget.

 Remember that the budget and budget narrative/justification are meant to persuade the reviewer that sufficient funds (not too little and not too much) are requested to achieve project goals and objectives in a cost-effective manner.

 Your budget is an approximation of what you plan to spend. If funded, you will have flexibility to revise your budget as needed.  You must work with the Office of Award Management or your college/departmental administrator on budget revisions.

 Do not list budget figures in the text of the proposal. You do not want to look through the entire proposal at the last minute because of budget changes.  Work with your College-Based Research Officer or Erika Cottingham in advance of the deadline to avoid the last minute rush.  Be sure your numbers add up!!!!

Ellen E. Zavala, Director Office of Research Services and Outreach 314 Cameron Hall or Erika Cottingham, Associate Director Office of Research Services and Outreach 312 Cameron Hall or

 College-Based Research Officers: ◦ COE: Lauren Beastall ◦ COED: Kris Duryea ◦ CHHS: Vikki Cherwon ◦ CLAS: Peter Szanton ◦ CCI: Pat Bridges ◦ All other colleges and units work with Erika Cottingham