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

2. “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

3. 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.

4. 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.

5. Request reasonable amounts because…
2 CFR 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.

6. 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.

7. 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.)

8. 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.

9. “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

10. 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
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.

11. 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.

12. 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

13. 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.

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

15. 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.

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

17. 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.

18. 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.

19. Modular vs. Detailed?
Use modular budget!

20. 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.

21. 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.

22. 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%

23. 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 only include personnel in your justification for a modular budget.

24. 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.

25. 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

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

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

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

29. NIH Budgets Helpful Websites

30. Questions?