sacramento state - leadership begins here
.
Sac State HomeAbout Sacramento StateAcademic AffairsUniversity EnterprisesGiving a GiftSite IndexContact..
Sacramento State RACA RACA
About RCAC
.
.

Proposal Development Guide

Table of Contents

 

PROPOSAL BUDGETING
Discoveries and Directions
Budget Preparation Overview

An accurate and comprehensive budget is absolutely necessary for the success of a proposal. A budget lacking sufficient detail may indicate to the sponsor that you have not completely anticipated the resources needed for your project. Many sponsors will be able to judge your probable needs from reading your narrative. If your budget seems too high, they may conclude that you are trying to secure more funding than you actually need which may lead to a negative conclusion. On the other hand, if you significantly underestimate your needs, the sponsor may conclude that you really don't understand the dimensions of your project. Be as accurate, reasonable and detailed as possible.

A budget for a sponsored project generally has three elements: direct costs, F&A (indirect costs), and total costs.

  • Direct Costs: Direct costs are those which can be easily ascribed to a particular project. Salaries, wages, and appropriate fringe benefits of those who will work on, and be paid from, the grant are examples of direct costs. Project supplies and materials, project travel, equipment, consultants and evaluators, and other items that directly relate to the project are other examples.

  • Facilities and Administrative (F&A) Costs: commonly called overhead or indirect are costs that the University or University Enterprises, Inc. (UEI) incurs for common or joint objectives that cannot be identified easily with a particular project. Examples of F&A costs are: maintaining and operating a physical plant, utilities, general administration, the library, use of capital assets, and staff services such as for purchasing, payroll, and accounting. These costs typically are expressed as a percentage of components of the direct costs, e.g., X% of total direct costs (TDC) or modified total direct costs (MTDC). Most sponsors expect that the budget will include these costs. For federal grants and contracts the rate and base is established by an agreement between our University and its cognizant agency, which is the US Department of Health and Human Services (DHHS). View the current rates. It is University and UEI policy to request full indirect costs on all projects unless there are specific written agency exceptions.

  • Total Costs: Direct costs plus F&A costs equals total costs. In preparing your budget you should attempt to recover all costs--both direct and F&A--for your proposed project.


Allowable vs Unallowable Costs (A-21)

The Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions, is the basic document dealing with the allowability of costs on federal grants. Costs are considered allowable if they: (1) are necessary and reasonable to the project; (2) are in compliance with the limitations of a grant agreement; (3) are allocated to the grant on a basis consistent with policies that apply to all activities of the grantee; (4) are accounted for consistently and in accordance with generally accepted accounting principles; and (5) have not been allocated to or included in the cost of any other federally funded program.

Some federal agencies have issued more restrictive requirements and additional restrictions for allowability of costs may be included in the grant agreement. The rule of precedence is that the most restrictive cost provisions applicable to the grant agreement prevail.

Because Circular A-21 does not identify every potential allowable cost, considerable interpretation may be necessary. However certain types of costs are clearly unallowable. These include advertising (except for recruitment or procurement), bad debts, contingencies, entertainment, fines and penalties, interest, and losses on agreements.


Major Elements of a Budget

Many agencies provide specific formats to use in preparing a proposal budget. If a format is provided, you should follow it as precisely as possible. If the agency does not propose a format, the following categories are useful in developing a budget for your project. These categories will allow you to consider your estimated expenses and fiscal responsibilities.

Personnel Costs: List by name each individual who will receive salary support from the project.

  • Faculty: Identify faculty by name, title, University salary rate, percent of time devoted to the project, and the amount requested from the sponsor. Note: Sacramento State policy is to request reimbursement at full rate not replacement rate.

    Identify regular academic year salary provisions, sabbatical supplements, and summer pay separately. Include the percentage of time or number of months the PI(s) plan(s) to spend on the project, whether or not salary is requested. In multi-year projects, be sure to provide for expected salary increases due to cost-of-living adjustments and promotion.

  • Other Professional Staff: A named individual must be a University or UEI employee in the position listed; otherwise, you must have a competitive recruitment for unfilled positions. If you request salary for an unfilled key position, use the terms "to be appointed," or "to be hired." In that case, the position should be described by its University payroll title and the salary calculated at the mid-range of that title.

  • Students: It is not necessary to list undergraduate and graduate students by name. List the number of student assistants, rate of pay, number of hours per week, number of weeks, and total amount for each category.

  • Technicians and Clerical Staff: These positions should be listed in the same manner as faculty. List by title or job classification, salary scale rate (or hourly rate), percent of time (or number of hours per week/month) on the project, and total amount requested.

  • Other/Temporaries: Interviewers, programmers, and other temporary personnel should be listed by hourly rate, number of hours and total amount requested.

Fringe Benefits: List the employee benefits for each person who will receive salary support. Fringe benefits cover the cost of FICA (social security and medicare), state unemployment and workers' compensation insurance, and may also cover retirement contributions and health, dental and life insurance.

Current rates are available on the web or by contacting your Sponsored Research Officer.

Trainee (Student) Costs: Training programs may include provisions for trainee stipends, required tuition and fees, trainee travel, and project supplies. Identify the costs (by semester or month) and the number of trainees to justify the dollar amount you request. Check agency guidelines for maximum allowable charges.

  • Stipends and Allowances: List the number of students, the monthly (or semester) amount, and the total amount requested. Indicate the purpose of any allowance payment, e.g., moving expenses, living expenses, etc. Distinguish between academic year and summer amounts.

  • Tuition and Fees: Indicate the number of students, the amount per student, the number of semesters, and the total amount requested. Include amounts, if any, for summer courses. In multi-year projects, provide an estimate for any potential increase.

  • Travel: If student travel funds are requested, indicate the amount and purpose. Check the sponsor's guidelines before including funds for student travel in your trainee cost request.

  • Project Supplies (e.g. books): Specify the number of students who will receive this support, the amount (usually per semester), and the total amount requested. In your budget narrative, clearly justify the need for this request.

Consultants: List the estimated daily rate, the number of days, and the total cost for each consultant. If travel, per diem, or other compensation is to be provided, be sure to detail it in the budget. In the budget narrative give reasons why you will hire particular consultants and what they will do on the project. Check agency guidelines since many agencies stipulate a maximum daily fee.

Please note that current Sacramento State employees cannot be listed as consultants; all Sacramento State personnel are to be paid at their current salary rate, not an honorarium or fee.

Equipment: Capital equipment is tangible property (other than real estate) having an acquisition value of $3,000 or more and a normal life expectancy of two or more years. You should list separately each item costing more than $3,000 and describe each item as completely as possible. Make certain that you include state, federal, and other taxes, duty on foreign goods, and delivery and installation costs, as applicable. Justify the need for each item as fully as possible. In the narrative indicate the source of information concerning equipment. Observing competitive purchasing procedures, note, if possible, the manufacturer, model number, and other identifying information, with the caveat that the manufacturer's name and model number is given to establish the approximate cost of an item and to describe the specific type of equipment you need. Whenever possible, obtain written quotations (three, if possible) from vendors.

Construction, Alteration, or Renovation Costs: Although rarely necessary, or allowable, if you will require construction, alteration to, or renovation of facilities in the project, you should include that cost in the budget. If sponsor guidelines allow for the inclusion of these costs and you need to undertake such activities, consult with Facilities Management prior to incorporating such items into your budget. If these items are included in your budget, be sure to include supporting documentation showing how you arrived at your estimate.

Travel: Items listed under travel include local travel and travel outside the immediate area. For each trip, identify the destination, duration of stay, and relevance to the project. All approved travel will be reimbursed at established, allowable University rates.

  • Transportation: Indicate the number of individuals on each trip. Give the mode of travel and itemize airfares, surface fares, mileage rates and an estimated number of miles when you propose to use a personal vehicle and/or charges for rental vehicles.

  • Per Diem: Indicate the number of individuals, estimate the number of days of per diem per individual, and the appropriate per diem rate. Contact your Sponsored Research Officer or reference the Sacramento State Travel Policy for the current University travel policy and rates.

  • Lodging: Indicate the number of individuals, estimate the number of nights per individual, and the estimated cost for each night.

  • Registration: Include the cost of conference or workshop registration, and/or other fees.

  • Local Travel: Estimate the mileage, parking fees, and number of trips.

Subcontracts/Subagreements: Some projects may need to contract out certain project tasks or services to non-Sacramento State organizations. This process should involve direct discussions with potential subcontractors and it may be necessary to obtain estimates and approvals from them for their services. Once an award has been made, your account administrator will assist you in developing any necessary agreement(s).

Supplies and Materials: Make adequate allowance for project supplies, materials, and other consumable items. List each of the major subcategories within the general category of supplies and materials. In the narrative note the basis on which you made the estimates for each of these categories. Frequently, you can make estimates based on the previous year's expenditures.

  • Office Supplies: Include a request for all consumable supplies you will need including letterhead, envelopes, folders, mailers, pencils, staples, notepads, etc. Average your anticipated needs by requesting a certain amount per month over the life of the grant.

  • Small Equipment: Small equipment items, usually those having a value of less than $3,000, are usually included in your budget under the materials and supplies category, but be sure to check the sponsor's definition.

  • Software, Chemical Compounds, Replacement Parts, etc: These are generally considered to be supply items and should be listed in this portion of your budget. Specify the specific software as well as the various chemical compounds, glassware, and/or replacement parts, etc. you are likely to need to complete your project. Indicate the quantity and cost for each item. In your budget narrative be sure to justify the need for these items.

  • Instructional Materials, Questionnaires, Test Materials: List the quantity, unit cost, and total cost for these items.

Other Direct Costs: Include items that do not readily fit into any of the above categories. Other direct costs might include communications, copying and printing, space or equipment rental, payment of outpatient, subject, or information fees, book or periodical purchases, costs for equipment maintenance, page charges or other publication costs, charges for communication services, and charge backs.

  • Communications: This category includes telephone, fax, postage and other communication services such as, express mail and courier services. If new phone lines need to be installed or purchased, include these costs in your budget as well. Estimate--on an average monthly basis--the cost of these services.

  • Copying and Printing: If you anticipate a significant amount of copying and/or duplicating, you should estimate a monthly charge, e.g. $15/mo x 12 mos. If you can accurately estimate the total amount of duplicating, you should list a total number of pages and a per page charge, e.g. 6,000 pages @ .05 per page. In developing this portion of your budget, remember to include duplication costs for various interim and final technical reports. The cost of non-routine reproduction of materials developed during the project or required by terms of the grant agreement should also be included in the budget.

  • Equipment Maintenance/Service Contracts: If equipment you purchase or use is covered by a service agreement, include the cost of that agreement (or your portion of the cost) in the budget.

  • Space and Equipment Rental: If you rent equipment, indicate the type, model number, and manufacturer. Give the current rental rate of each item, supported by vendors' catalogues or written quotes. List the rental rate for any space which is rented.

  • Human Subjects Charges: If your project includes the use of human subjects and these subjects are to be paid for their participation, include the amount of payment as a budget item.

  • Animals for Research Studies: Include the cost of animal subjects (mice, frogs, fish, etc) that must be purchased for the project.

  • Machine Shop Charges, Lab Rental Fees, Computer Lab Charges: There are charges associated with the use of the University's various technical shops. Include the cost for use of these services in your budget.

F&A (Indirect) Costs: After totaling all the anticipated direct charges, apply the applicable indirect cost rate to obtain the total cost request for your project. View the current rates. It is University and UEI policy to request full indirect costs on all projects unless there is a specific written agency exception. For example, the U.S. Education Department General Administrative Regulations (EDGAR), specifies an 8% MTDC rate for certain training projects. This rate should be applied only to those projects covered by the provisions in EDGAR. More information on F&A (Indirect) Costs.

Cost Sharing/Matching Funds: Some sponsors require the University to contribute to the cost of a particular project, i.e., cost sharing. This is sometimes required by federal programs or agencies and can also be required by non-federal entities. Cost sharing can include cash, in-kind, or both.

  • In-kind: In-kind or third-party contributions include University space, personnel time, equipment, etc. which the sponsor will not be paying for either as a direct or indirect cost. Examples include: waiver of a consultant's fee; free use of a facility; a contribution of supplies, which would otherwise have to be purchased with grant funds. If you indicate in-kind, obtain and keep documentation in the form of a statement or receipt from the contributor. A letter or email from the department chair and/or dean is required for in-kind costs, including university personnel (e.g., release time, etc.) or space related costs.

  • Matching Funds: Matching funds are a special type of cost sharing and applies to grants rather than contracts. The terms of a match are that the sponsor awards funds in direct ratio proportion to the funds which the grantee contributes to the project. This is usually identified in the program guidelines as a specific percent or fraction of the total project budget. The match can be made by contributing portions of salaries, fringe benefits, indirect costs directly applicable to that portion of the contributed salaries, and direct cost items such as supplies, printing, duplicating, or travel. If you use these items for matching, maintain appropriate documentation.

Sacramento State’s Cost Share Policy.