Budgeting Basics

Budgeting Basics Tracy Cromp, Research Administrator Office of Sponsored Programs Stuart Taub, Associate Director Office of Sponsored Programs Syracuse University Office of Sponsored Programs 113 Bowne Hall Agenda  Acronyms  Regulatory Framework  Direct versus Indirect Costs  Principles of Direct Costs  Categories of Direct Costs  Budgeting Essentials  Hands-on Budgeting Acronyms  OMB - Office of Management and Budget  CFR - Code of Federal Regulations  FAR - Federal Acquisition Regulations  TDC - Total Direct Costs  MTDC - Modified Total Direct Costs  F&A - Facilities and Administrative Costs General Regulatory Framework  OMB  Agency implementation guidelines  Award-specific requirements OMB Circulars  OMB Circular A-110 – Uniform Administrative Requirements With Institutions of Higher Education, Hospitals and Other Non-Profit Organizations  OMB Circular A-133 – Audits of Institutions of Higher Education and Other Non-Profit Organizations  OMB Circular A-21 – Cost Principles for Educational Institutions. Includes four CAS Standards http://www.whitehouse.gov/omb/circulars/index.html Which Regulations Take Precedence?  Award  Terms of the Awarding Agency  A-110  A-21 Agency Implementation  National Institutes of Health – Grant Policy Statement http://grants.nih.gov/grants/policy/nihgps_2001/nihgps_2001.pdf  National Science Foundation – Grant Proposal Guide http://www.nsf.gov/pubs/2003/nsf032/start.htm  National Aeronautics and Space Administration – Research Grant Handbook http://ec.msfc.nasa.gov/hq/grcover.htm  Environmental Protection Agency – General Regulation for Assistance Programs for Other than State and Local Governments http://www.epa.gov/ogd/AppKit/applicable_epa_regulations_and_d escription.htm Award-specific Requirements  RFA/RFP restrictions, special conditions, and cost request caps  Special program guidelines  Recommendations for revisions Direct versus Indirect Costs  Direct: Costs that can be specifically identified with a particular project or program.  Indirect: Real Costs that are incurred … for common or joint objectives and which therefore cannot be identified with a particular project or program. Principles of Direct Costs  Reasonable and necessary  Allocable  Allowable – Cost Principles – Award Restrictions/ Budget  Specific Benefit to Project  Charged in Timely Fashion  Consistently treated  Conforming to the Regulations Major Categories of Costs  Personnel (salaries and fringe benefits)  Consultant Costs  Equipment  Supplies  Travel  Other  Consortium / Contractual Costs  Trainee Costs  Facilities & Administrative Costs Personnel  Syracuse University employees  No administrative/clerical positions (generally, but there are exceptions)  Funding proportional to effort  Note and explain part-time  Cost sharing  Include future increases  Include fringe benefits Faculty Salary Calculation  Academic Year- divide AY salary amount by 8.5 months and multiply by the number of months allocated to the project or multiply AY salary by faculty percentage of effort (depends on the sponsor guidelines)  Summer- Faculty may budget for up to 3.5 additional paid summer months using the same calculation. (NSF limits this to 2 months) Fringe Benefits  Composite benefit allocation – Medical Insurance – Dental and Life Insurance plans – FICA, unemployment, worker’s comp – TIAA-CREF retirement – Disability Insurance – Remitted Tuition Current Fringe Benefit Rates  29.5% (Full-time faculty academic year/staff)  17.4% (Summer Faculty)  7.1% (Temp. Wages, Undergrad. Students)  11.6% (Federal Graduate Assistants)  40.0% (Non-federal Graduate Assistants, Rate includes Tuition)  http://sumweb.syr.edu/osp/proposal2.html Consultants  Individual hired to give professional advice or services for a fee  Fee generally determined by number of days or hours of consultation time provided  Considered independent contractor  Letter agreement outlines scope of involvement and method of compensation Consultants (continued)  Include name and affiliation  Include frequency and rate  Include travel and per diem  Justify necessity and reasonableness  Include biosketches  SU Consulting Agreement on OSP website http://sumweb.syr.edu/osp/proposal2.html Equipment  Unit cost of $5,000 or greater, useful life of 2 years  Exclusive use by project, or reasonable allocation  Establish necessity  Discuss current capacity  Itemize and justify Supplies  Tangible property with unit cost less than equipment  Itemize consumable categories greater than $5,000  Include Software as a supply Travel  Itemize (domestic and foreign)  Include purpose and destination  Highlight relevance to project  Do NOT include consultant travel  NOTE: must use US Carrier for air travel (Fly-America Act) Other Costs - Working Definition  Non-tangible, Non-Stuff  You need it, but you can’t see it, you can’t touch it, you can’t store it  But, it’s necessary to run the project Other  Publication and page charges  Study participant costs  Tuition  Maintenance agreements Other (continued)  Computer charges  Rental and leases  Photocopying  Telephone/fax  Postage  Purchased services Purchased Service  Individual, institution or company  Provision of a routine service for a fee  Fee generally determined on a unit basis  Purchase order generally serves as outline of services to be performed  Service does not have programmatic decision making Subcontracts  Has responsibility for programmatic decision making  Institutional collaboration  Named collaborating investigator  Cost-based budget  Formal agreement- responsible for federal program compliance  Total costs are direct costs to grantee Substantive Programmatic Work  Involvement includes the performance of a significant, often discrete, portion of the grant  Generally a fair degree of independence in study design, execution and reporting  Subcontract investigator provides scientific input which could affect the direction of the project Facilities & Administrative Costs Formerly “indirect costs”  Depreciation of facilities  Facility operations  Allocation of shared services examples: Library, Computing, etc.  Components of departmental administration  Current SU F & A Rates  50%, Research, on-campus  26%, Research, off-campus  32.5%, Training  Sponsor Restricted rate (must obtain documentation of Sponsor Policy) http://sumweb.syr.edu/osp/proposal2.html Facilities & Administrative Base  Modified Total Direct Costs (MTDC)  Total Direct Costs less: – Equipment – Tuition and fees – Portion of subawards in excess of $25,000 (entire project period for each institution) Calculations  Sum total direct costs  Subtract exclusions  Adjust for subawards  Multiply MTDC by appropriate rate  Add to total direct cost to arrive at TOTAL costs Sample Budget Principal Investigator (100% AY) Graduate Assistant Fringe Benefits (29.5%, 11.6%) Supplies Equipment Other (Tuition) Subcontract Total Direct Costs 80,000 18,000 25,688 15,000 10,000 8,724 50,000 207,412 Sample Budget (continued) TDC 207,412 MTDC 163,688 TDC minus equipment, tuition and the amount of each subcontract above $25,000 F & A Costs (163,688 x 50%) Total Sponsor Costs 81,844 289,256 Additional Budget Years  Use escalation factor – Usually 3- 4% escalation per year  Exceptions (examples: large equipment purchase in one year only, Subcontracts might have Indirect cost applied in the first, but none applied in future years  Use projected tuition estimates for future years (Approx.. 6% increase/ year) Cost-Sharing  Financial support contributed by University to the Sponsored Project, most commonly percentage of faculty time or tuition.  Should be viewed as an eligibility criteria, not as review criteria  Proposed cost-sharing should have Dept. Chair and Dean’s approval before proposal arrives at OSP. Signed “proposal checklist” indicates their approval.  If mandatory requirement, must be shown in it’s own column on the budget or on it’s own line as with NSF’s line M Cash vs. In-Kind  Cost share from University sources are considered cash of non-cash contributions provided by a third party are considered in-kind  Value Cost-Sharing, Cont’d  Cost Sharing under increased Audit Scrutiny by NSF Inspector General. NSF has targeted cost sharing as one of its top 10 management challenges.  Audit Findings Include: – Failure to identify cost sharing in Accounting Systems. – Incorrect valuation of in-kind cost sharing – No method exists for valuing contributed effort as Cost Sharing. Federal Grants News, March 2002 issue OSP Tuition Guidelines  Funds available for cost sharing tuition on sponsored activities are linked to institutional overhead recovery. Consequently, in all cases tuition cost – sharing by OSP is based on availability of funds.  Sponsored activities that recover the full, federally approved F&A rate may be eligible for OSP Costsharing of tuition expenses, if approved by the college or school Dean.  OSP will cost-share an amount not to exceed that charged to the sponsor. (1 to 1 match) Budget Narrative  Justify each item (or group of items) in each category  Provide justification for initial year budget and escalation/exceptions for additional budget years  Good idea to establish Budget Narrative Template so at a moments notice you can quickly update your existing template for submission REVIEW OF HANDOUTS Benefits of Excel Spreadsheets  Developing your budget using Excel greatly reduces the amount of manual calculation.  Less margin for error  Keep them Simple and Universal  OSP is far more effective assisting with proposal submission if we don’t have to check figures manually.  OSP can quickly correct mistakes and Email you the revisions. Need Help with a Budget??   Call us early, Call us often We’re here to help you. The more time you give us, the more helpful we can be.  Questions/Comments