The University of Texas at Arlington Office of Research and Office of Accounting and Business Services Brown Bag Training Session Three: The 1,2,3’s of Budget Preparation

The 1,2,3’s of Budget Preparation and Management Presenters: Preparation: Rae Schofield Management: Brent Norman

Goals and Objectives 1 ~ Read the Proposal/Agency Guidelines and Evaluate your Budget Needs 2 ~ Elements of the Budget 3 ~ Special Requirements and Restrictions

1 ~ The Guidelines and Budget Needs The guidelines tell you: Your dollar limit, if any Your dollar limit, if any Which costs are allowable Which costs are allowable Evaluating your budget needs: Does the scope of your project fit the solicitation? Does the scope of your project fit the solicitation? Will cost needs exceed the allowable dollar limits? Will cost needs exceed the allowable dollar limits?

2 ~ Elements of the Budget Types of Costs: Types of Costs: Direct Direct e.g. salary, fringe benefits, travel, equipment, lab supplies e.g. salary, fringe benefits, travel, equipment, lab supplies Are easily associated with a specific project Are easily associated with a specific project Facilities & Administration (F&A) Facilities & Administration (F&A) Also known as Indirect Costs (IDC) Also known as Indirect Costs (IDC) e.g. utilities, admin support, general office supplies e.g. utilities, admin support, general office supplies Can be associated with many other sponsored projects or cannot be easily associated with a specific project Can be associated with many other sponsored projects or cannot be easily associated with a specific project

2 ~ Elements of the Budget Types of Direct Costs Types of Direct Costs Salaries: Salaries: UTA Employees who will direct effort to the grant, e.g. PIs, Post Docs, Students UTA Employees who will direct effort to the grant, e.g. PIs, Post Docs, Students Should reflect the amount of time that person will spend on the project Should reflect the amount of time that person will spend on the project Fringe Benefits: Fringe Benefits: Should reflect UTA’s approved rates for the associated position Should reflect UTA’s approved rates for the associated position Includes: Health Insurance, Social Security, Retirement, Vacation/Sick Leave, FICA, OASI Includes: Health Insurance, Social Security, Retirement, Vacation/Sick Leave, FICA, OASI

2 ~ Elements of the Budget Types of Direct Costs Types of Direct Costs Equipment Equipment Must be identified and justified in proposal Must be identified and justified in proposal Costs $5,000 or more and has a lifetime of 1 year or more, including fabricated equipment Costs $5,000 or more and has a lifetime of 1 year or more, including fabricated equipment Consultants Consultants Used to pay experts outside UTA who provide professional advice or service Used to pay experts outside UTA who provide professional advice or service Publications Publications e.g. manuscript illustration, reprints, page charges e.g. manuscript illustration, reprints, page charges

2 ~ Elements of the Budget Types of Direct Costs Types of Direct Costs Research and Expendable Supplies Research and Expendable Supplies Identified and justified in the proposal Identified and justified in the proposal Must be clearly associated with, and necessary to, that particular project Must be clearly associated with, and necessary to, that particular project Must be expended only for the associated project Must be expended only for the associated project Examples are: chemicals/glassware, small electronics, software, animals, ect. Examples are: chemicals/glassware, small electronics, software, animals, ect.

2 ~ Elements of the Budget Types of Direct Costs Types of Direct Costs Travel Travel Identified and justified Identified and justified Includes: transportation, room and board Includes: transportation, room and board Must be directly related to the project Must be directly related to the project Subcontracts Subcontracts Must provide a substantial programmatic contribution Must provide a substantial programmatic contribution At a minimum require a detailed budget, budget justification, work statement, and institutional endorsement At a minimum require a detailed budget, budget justification, work statement, and institutional endorsement Tuition Tuition Not permitted on federal awards Not permitted on federal awards

2 ~ Elements of the Budget Types of Direct Costs Types of Direct Costs Copying & Duplication Copying & Duplication Only allowable for unusual costs such as: large survey instruments, test, questionnaires, work shop procedures, program brochures Only allowable for unusual costs such as: large survey instruments, test, questionnaires, work shop procedures, program brochures Identified and justified Identified and justified Other Direct Costs Other Direct Costs e.g. renovation of space, off campus facility rentals, long distance charges, participant support costs e.g. renovation of space, off campus facility rentals, long distance charges, participant support costs

2 ~ Elements of the Budget F&A Costs F&A Costs Expressed as a percentage of S&W, MTDC, TDC Expressed as a percentage of S&W, MTDC, TDC The rate is negotiated with the federal government The rate is negotiated with the federal government MTDC excludes: MTDC excludes: –Equipment over $5,000 –Portion of each subaward in excess of $25,000 –Tuition remission –Off campus facility rental –Alteration and renovation –Participant support costs

2 ~ Elements of the Budget F&A Costs F&A Costs On-Campus vs. Off-Campus On-Campus vs. Off-Campus To be considered off-campus you must be paying rent for the facilities out of the program budget To be considered off-campus you must be paying rent for the facilities out of the program budget The budget must be divided between on- campus and off-campus activities The budget must be divided between on- campus and off-campus activities You must specify where the work will be done and how long it will last You must specify where the work will be done and how long it will last

2 ~ Elements of the Budget The Budget Justification The Budget Justification Identifies your costs and explains the need for them Identifies your costs and explains the need for them Answer any questions a reviewer may have about how you calculated your costs Answer any questions a reviewer may have about how you calculated your costs Indicates the basis salaries and for any yearly increases Indicates the basis salaries and for any yearly increases Should reflect the objectives of the project Should reflect the objectives of the project

3 ~ Special Requirements and Restrictions Does the agency require cost share? Does the agency require cost share? Do they require special travel considerations? Do they require special travel considerations? Do they limit F&A? Do they limit F&A? Do they prohibit certain cost categories? Do they prohibit certain cost categories? Specific forms or format? Specific forms or format? Remember that the budget can be reduced upon award leading to a reduction in scope as well. Remember that the budget can be reduced upon award leading to a reduction in scope as well.

Budget Preparation Start early Start early Contact your OR representative and let them help you Contact your OR representative and let them help you Ask questions Ask questions Construct your budget Construct your budget Incorporate it into your proposal Incorporate it into your proposal

Other Resources OR Website: OR Website: NSF GPG: NSF GPG: NIH Forms and Applications: NIH Forms and Applications: OMB Circulars: OMB Circulars: education.html education.html

Budget Management 1. Establishing Budgets 2. Grant Expenditures 3. Explanation of Receivables Categories 4. Budget Modifications

1. Establishing Budgets Budgets are entered upon receipt of a written, approved authorization from an outside agency. Grant Grant Contract Contract Modification to an existing account Modification to an existing account

2. Grant Expenditures All allowable, allocable direct charges should be applied to the grant as they are incurred. All requests to transfer expenditures to a grant should be in writing ( ) with justification to the Grant Accountant and include the following: Document number or voucher number Document number or voucher number Dollar amount Dollar amount Account number where expense was charged Account number where expense was charged A copy of the invoice or receipt to support the request A copy of the invoice or receipt to support the request

3. Receivables Categories Budget Categories 91 and 92 reflect the receivables for the account. 91 Commitment Receivable – Begins as the total amount of the awarded budget and is reduced as billings are recorded 91 Commitment Receivable – Begins as the total amount of the awarded budget and is reduced as billings are recorded 92 Billings Receivable – Begins as zero and increases to reflect the total amount billed 92 Billings Receivable – Begins as zero and increases to reflect the total amount billed

4. Budget Modifications Budget Transfers: All budget transfer requests should be written ( ) and submitted to the Office of Research for approval. All budget transfer requests should be written ( ) and submitted to the Office of Research for approval. A transfer involving a category subject to F&A and one not subject to F&A will have an impact on the F&A budget. A transfer involving a category subject to F&A and one not subject to F&A will have an impact on the F&A budget. Example: 50% F&A rate, transfer $100 from 50 to 80, must also transfer $50 from 90 to 80. Example: 50% F&A rate, transfer $100 from 50 to 80, must also transfer $50 from 90 to 80.

4. Budget Modifications Modified By Sponsor: Modification letter from the sponsor through the Office of Research Modification letter from the sponsor through the Office of Research Budget revision by the Office of Research Budget revision by the Office of Research

Brown Bag Training Session Four Wednesday January 22, 2003 Wednesday January 22, 2003 Gifts vs. Grants Gifts vs. Grants