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Budget Categories

 

Budget

A plan specifying how resources, for example, time or money, will be spent or allocated during a particular period.

 

Proposal Budget

Budgeting is the process whereby the proposed scientific and technical scope of work is translated into an itemized and systematic plan of operation, expressed in dollars over a defined period of time. The program budget provides the sponsoring agency with an opportunity to examine the composition and viability of the proposed program/activity.1 

 

The budget generally is divided into two sections: (1) direct costs and (2) facilities and administrative (F&A) costs. Direct costs, as defined by OMB Circular A-21, are those that can be directly attributed to the project. To be eligible as a direct cost, a cost must be: (1) allocable to the project; (2) allowable under the cost principles; and (3) charged consistently. The same is true for F&A costs.2

 

Direct Costs

Direct costs generally are presented in broad budget categories, such as salaries and wages, fringe benefits, equipment, supplies, consultants, subawards, travel, and the catchall, "other costs."

 

Budget Categories

Personnel

Includes salary requirements for the project and identification of the types being hired for the proposed project.  Ideally you should be estimating the number of months and the percentage of full-time effort each perspective employee will devote to the proposed project, the salary rate, and the total amount of funds being requested.  Names and titles of all key personnel and senior professional staff should be identified in this section.  

 

Note:  Salary rates included in the proposed Budgets are only estimates and
should be noted as such.  Actual salaries are set at the time of appointment or extension, in accordance with current salary scales and relevant UH and/or RCUH policies.

 

Different types of employees identified in this section should include:

 

Anticipated Salary Increases - Provision for anticipated collective bargaining increases, as well as for pending promotions or upward position reclassification and repricing must be properly budgeted for in the proposed funding application to sponsors. These increases should be considered for any program that extends beyond June 30th or for more than one year. Budgeted salaries should be properly footnoted to explain the types of anticipated salary increases, the rate of increase, and the period for which the increases apply.1

 

Fringe Benefits 
Employee Benefits - Employee fringe benefits are treated as a direct program cost and must be provided for as an expense in the proposed program budget whenever salaries are identified.1 

The current fringe benefit rates to be used for budgetary purposes are provided via a link on our webpage.

 

Consultants

Consultants are individuals whose expertise and skills will add value to a project.(2)

Costs for professional and consultant services of a particular profession or special skill required in the performance of proposed activity should be properly justified and budgeted. To the extent possible, consultant fees should list all component costs, such as, rate of service fees, travel expenses, etc. Since intraUniversity consulting is assumed to be undertaken as part of the normal faculty and staff workload, extra compensation in addition to full-time base salary should not normally be budgeted for; this principle shall generally apply to all faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member within the UH.1

 

Subawards 

Collaboration of work by more than one institution. Costs of these other institutional collaborations are represented in the budget as a single line item and are generally accompanied by a separate budget. It should be noted that the subaward total budget includes both direct and facilities and administrative costs in the single line item on the prime institution's proposal budget.(2)

 

Equipment

“Equipment” as defined by the University of Hawai`i is “tangible non-expendable personal property having a useful life of more than one year and an acquisition cost of more than $5,000.00.”3

Cost should include any anticipated price increase (with proper justification), shipping, insurance, and custom fees (for foreign purchases), delivery and installation charges (if any), and applicable taxes should be included as part of the cost of equipment acquisition.

Materials and Supplies - Materials and supplies should be identified by major categories with the estimated costs for each category. An indication of how the estimates were arrived should be provided. Prior year accounting records or other documentation may be used to support these estimates.1

 

Travel

Indicate the number and estimated cost of trips as well as the destinations (if known) and the number of individuals for each trip. If the exact location is not known, the general geographic location should be specified. The estimated cost should be itemized by air fare or other mode of transportation, the number of days of per diem and daily rate, registration and conference fees, ground transportation, excess baggage and handling charges, and other related travel expenses. Most sponsors require a statement regarding the purpose of each proposed travel and its relevance to the sponsored program, particularly in connection with foreign travel.  Some sponsors require prior approval of foreign travel. Foreign travel is defined as any travel outside of Canada, and the United States and its territories and possessions.1

 

Other

The ubiquitous "other" category contains all of those other proposal costs where a category has not been suggested by the federal granting agency. Included in those costs may be such items as animal per diems (animal acquisition costs are included as supplies), human subject honoraria [incentives], publication charges, and graphic fees. Consult agency guidelines to identify any explicitly unallowable costs.2

 

F&A Costs

Indirect Costs

Indirect costs are real costs incurred by the UH that are common to all programs but which cannot be precisely assigned and charged to individual programs. Indirect costs are those costs incurred for general administration support and maintenance and include expenditures relating to depreciation and use allowance, operation and maintenance, general administration and general expense, departmental administration expense, sponsored project administration,  library expenses, and student administration and services.1

 

All proposals for external support should request for the full reimbursement of indirect costs as prescribed under the institution’s indirect cost rate.

 

Cost Sharing:
Cost Sharing and Matching

Some federal sponsors require cost sharing/matching on research grant awards. Since cost sharing/matching identified in proposals may become a contractual commitment of the UH, they should be kept to a minimum and be limited to those items that can be easily documented and verified, such as, salaries, wages and fringe benefits. Salary costs for Deans/Directors, administrative and clerical support personnel, and use of UH facilities and equipment shall not be utilized for cost sharing/matching since these costs are included as part of the University's indirect overhead computation. Costs that are financed from federal sources cannot be used for sharing/matching purposes. Moreover, the same costs cannot be utilized as cost sharing/matching on more than one federal award. Documentation for the cost sharing/matching must be obtained prior to proposal submission.1

 

Budget Justification/Narrative
The budget generally is accompanied by a budget narrative that provides a categorical justification for the budget request. Perhaps the single most important ingredient in the budget narrative is the degree to which it presents sufficient detail to enable federal reviewers to understand why certain numbers are presented and whether they truly represent need; this may assure a positive cost analysis on the part of federal awarding agencies during their proposal review process.
This particular section also may require explanations of staffing patterns, personnel loading, various benefits, and other personnel support costs, facilities and equipment utilization or acquisition, and the need for supplies and other assets. It also may serve as a place to discuss the experience/track record of a particular institution or department or even individual staff members.2

 

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