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Short
Guide to Proposal Preparation
BUDGET
The budget is the most "technical" part of a proposal and,
for many, the most worrisome. Consequently, this section will go into
the organization and calculation of budgets in detail, with the aim of
providing an up-to-date guide to their preparation.
Here's a piece of advice about your budget: leave it until last. No one
can realistically foresee budgetary requirements until the project description
is down on paper. Too often, people work up what they think will be a
final budget before tackling the rest of the proposal, and then dis cover
that their real needs are different from what they originally anticipated.
Having a well-organized project description in hand will greatly simplify
budget preparation.
Arrangement by categories is the basis of budget organization. This is
not the obvious fact it may seem, since many investigators (and not always
the novices) tend to try to organize budgets by activity or component,
so that cost items of the same type appear in several different places.
Some agencies ma y require a budget summary organized by project component,
but this will always be as a supplement to the detailed category-type
budget.
The reasons for organizing a budget by cost category are:
- clarity and simplicity of presentation.
- ease of matching proposed budget items to the eventual award document,
which is invariably arranged by category.
- simplifying the task of the University's research accountants, whose
records must necessarily be organized by type of expenditure.
Budgets are also organized by funding period, with a separate column
for each twelve-month period of the proposed award. Again, this is not
an obvious way of doing things; some investigators see their projects
in terms of timed phases (e.g. an initial exploratory phase, one or more
investigative phases, and a final phase for report writing), and will
attempt to divide their budgets into periods corresponding to these phases.
Another common mistake is to prepare a separate, complete budget for each
year of the proposed grant or contract; this involves needless and confusing
repetition of details.
The reasons for arranging a budget by twelve-month periods are much the
same as for arranging it by cost category: simplicity and clarity, correspondence
to agency practice (even multi-year awards are broken up into the twelve-month
periods), and ease of later fiscal accounting.
Organization by cost category and organization by funding period: these
are the only basic principles that need to be observed for good budget
preparation.
- CU Proposal Number
This will be assigned and typed by OCG.
- Budget Heading
This heading represents the official title of the University, the title
of the proposed project, and the name of the Principal Investigator.
Also the duration is the period of time proposed for the active life
of the award, and should be appropriate to the anticipated amount of
time needed for the completion of the project.
- Salaries and Wages
This category includes only those payments to project workers which
are made on a salary or wage basis. Personnel are normally listed in
the order shown:
- Faculty salaries are ordinarily projected using four percent annual
increases. When calculating salaries, remember that annual increases
come on July 1 for faculty who have academic year (i.e., nine-month)
appointments.
- Research Associates are faculty-level personnel, and four percent
annual increases may also be used in calculating their salaries.
Salaries for Research Associates must be comparable to salaries
for department faculty members with similar experience. Please consult
your departmental chair for establishing a Research Associate's
rate of pay.
- Graduate Research Assistants' salaries are calculated using four
percent annual increases every July 1. Graduate Research Assistant
salary levels above the campus minimum rate may be set by official
action in each individual department. A unit is free to declare
one rate of pay (the minimum or higher), or a graded plan may be
adopted that allows the research assistant salary to increase with
training and years of experience. This graded scale must be uniformly
applied, and all rates exceeding the campus minimum must have prior
approval of the Dean of the Graduate School. GRA salaries are subject
to annual revision, so it is a good practice to check with OCG,
your department, or the Graduate School regarding current and future
rates. Also note that appropriate tuition must be budgeted in accordance
with the GRA's appointment.
- Staff salaries are projected using four percent annual increases,
unless more precise information is available. These increases usually
come on July 1 of each year, although a given individual may have
a different anniversary date.
- Hourly Workers' wages should be calculated as precisely as possible,
using the number of person-hours and current rates of pay.
- Fringe Benefits
For detailed fringe benefit rates by job category, click here.
- Permanent Equipment
This category is defined by the University and the Federal government
as including all items over $5,000 per unit which have an expected service
life of two years or more. Provide as much speci fic information as
possible about each item of equipment, including manufacturer's name,
model number and name, unit cost of the equipment, and the number needed.
- Materials and Supplies
This category includes material items that cost less than $5,000 per
unit and/or last less than two years in service. As with the permanent
equipment category, provide as much detail as possible about each item
included in the budget. Examples of relevant items include chemicals
and other laboratory supplies, computer software, and field supplies.
- Travel
This category is subdivided into domestic and foreign subcategories.
Domestic travel includes all trips within the U.S., its possessions,
and, usually, Canada. Foreign travel includes trips beginning or ending
in any other country. The travel category, particularly foreign travel,
should be quite detailed. Details for each trip should include the name
of the traveler, the purpose of the trip, and the destination and duration.
There should be separate lines for such items as registration fees,
ground transportation, airfares and per diem. Federally approved per
diem rates for given regions or countries can be obtained by calling
OCG or by clicking here
(for domestic rates) or here
(for foreign rates).
- Publication Costs
This category is meant to cover the cost of disseminating research results.
Normally this involves the preparation and submission of required reports,
and the publication in one or more professional journals. The desired
level of detail includes the name of the journal, anticipated number
of pages, and the cost per page.
- Other Direct Costs
This category is for everything not covered by the more specific categories
discussed above. It includes such things as: consultants' fees, shop
services, computer costs, tuition, subcontract costs, equipment maintenance
costs, and special rental costs. The same rules apply to items in this
category as to other categories: provide specific details and up-to-date
cost estimates whenever possible.
Tuition remission for graduate research assistants on appointment
to a research grant or contract for at least 15% time is required.
This charge must be budgeted at the resident or the non-resident rate,
as appropriate for the student hired, and pro-rated according to the
student's percentage of appointment.
- Indirect Costs
Indirect costs on grants and contracts are real costs for the support
of research and other sponsored programs. Indirect costs are those which
cannot be directly identified with specific projects and include the
following types of expenses: general and administrative, research administration,
physical plant (utilities and maintenance), departmental administration,
building and equipment use charges, libraries, and student services.
Indirect cost rates are negotiated with the U.S. Department of Health
and Human Services and are averaged over the costs of all research done
on our campus. Due to Federal requirements, a modified total direct
cost (MTDC) rate has been established at the Boulder campus. Thus, indirect
costs are charged on all items of direct costs, except for permanent
equipment, subcontract costs beyond the first $25,000, tuition remission,
and stipends.
For a listing of current indirect cost rates, click here.
Some Federal programs do not allow the audited indirect cost rates,
but rather specify the base and percentage to be used. (For example,
ED training grants pay a simple 8 percent of total direct direct costs.)
Also, many private agencies have established their own indirect cost
rates. The University policy on indirect costs is to request the Federally
audited rates shown above in all cases where no other rate is specified
and consistently applied by the funding agency. When full indirect
cost recovery is not possible, the Principal Investigator must complete
an Indirect Cost Addendum Sheet (available at OCG), which will be
attached to and routed with the proposal.
- Cost-Sharing
Cost sharing specifically refers to a portion of the total project costs
contributed by the University. Some degree of cost-sharing is required
by Federal law on some government-sponsored grants, but rarely on contracts.
Some agencies require no cost sharing. When required, the percentage
of cost-sharing differs from agency to agency and even from project
to project.
The normal method of cost-sharing is to show a percentage of the
Principal Investigator's time as being devoted to the project during
the academic year. It should be emphasized that this time-commitment
for cost-sharing purposes is in no sense merely pro forma: it is a
real time-commitment by the person involved. It imposes a formal obligation
on the University, and must be accounted for later. The salary shown
for this percentage of time is calculated in exactly the same manner
as in the proposed budget. Fringe benefits and indirect costs are
also calculated on the basis of this salary in the same manner as
before.
Next:
The Budget Justification
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