Budget DevelopmentBasic to Complex

Marj Townsend, CRAResearch Advancement Manager

School of Life SciencesArizona State University

Karin ParkGrant and Contract Officer

Office for Research and Sponsored Projects AdministrationArizona State University

The first step in developing a budget is………..

Planning!

Orchestrating Budget Management

• Start early• Find out who will be involved• If you have other institutions involved, provide

them with a specific dollar amount and stick to that amount

• Have a “user” friendly budget template• Set a deadline for final budget• Use the who, what, where and when approach

Who?• Who are the Co-I’s?• Who else is involved?

a. Department RA staffb. Sponsored Projects Staffc. Other institution contacts

• Who will be doing what?

What?• What kind of project is it?

a. Constructionb. Organized Researchc. Public Service

• What’s the sponsor budget dollar limitations?

Where?• On campus or off campus?• Foreign travel?• Travel to partner sites?• In the field or lab?

When?• When is it due to the sponsor?• If you have subs or collaborators,

when do you want to have their information sent?

• When (by date) do you want the final budget?

BUDGET RELATED QUESTIONS FOR FACULTY TO CONSIDER

Do I need to ask for summer effort?

Will I be using Research Assistants? Will I need other staff?

Will space be an issue?

Will there be any required match or cost sharing?

Will I need to request a reduced indirect cost rate?

Will there be any subcontracts/Consultants?

Determine Allowable vs. Unallowable Costs

• An “allowable” cost is one that is eligible for reimbursement by the federal government.

• Ask whether:A. Is it permissible by institution? A cost is permitted

by institution, as outlined in its administrative procedures.

B. Is it allowable by agency? A cost is permitted by the terms of the sponsoring agency.

• An "unallowable" cost is one that is not eligible for reimbursement by the federal government.

Two Main Budget Components

There are two parts in a basic proposal budget:•Direct Costs•Facilities & Administrative Costs (F&A)•Also known as “Indirect Cost” or “Overhead”

Direct Costs + F&A Costs = Total Budget

The many names of F&A

• Overhead• Indirect Costs• IDC

It is a rate that applies to the university as a whole

Cannot be specifically identified to one project or activity

Are they Subcontractors or Consultants?

• A way to look at it is if someone is just bringing a briefcase and a brain, then they are a consultant.

• If they have the facilities, supplies, analyze, and contribute to the scope of work they are a subcontractor. Do they have deliverables? Will they be a part of any publication?

Why Do Smaller budgets always seem to be the most difficultUsually they have limited funds available

making it tricky to budgetBecause of the limit in funding, many agencies

ask for cost shareSponsors are generally Foundations with

limited fundsTrying to fit in a lot of work with limited

funding

Multi-Year BudgetsCost of living increase (The typical rate used is

between 2-4%)Merit IncreasesMaterials and SuppliesTravelProject needs for each specific yearTuition RemissionStudentsSubcontractors

Complex Budgets Consists Of:

• Multi-Dollars (Millions)• Multi-Principal Investigator• Multi-Partners/Subcontracts• Multi-Period of Performance

Complex Proposal Budgets might also include:

• Large institutional commitments• Special contract terms and conditions• Proposal specific personnel resources required• “Go No Go” decision making

Hold a meeting of the minds as soon as you get wind of a complex proposal opportunity

Useful Tools to help keep things on track

• Checklist of all items needed• Web based document center/site for all parties

to upload their proposal documents (Sharepoint)

• Calendar showing critical dates and target dates – out in the open for everyone to see as a reminder

• Send out administrative email to all including partners with deadlines

• Create list of “who is doing what”

Partner Information SheetUsed to determine all critical issues to be addressed•Cost share commitments•Institution Eligibility•Budget Parameters

All proposal contributors can use the same tool for consistency and one voice

Remember:All cost associated with the project should be included in the proposed budget, and identified as either a request for funding from the sponsor or as a contribution from the University or other sources.

Items to Watch out for:• Sponsor restrictions• CAS (cost accounting standards) items• Foreign travel

Budget JustificationExplanation of the factors used to determine the costs•Format to follow the flow of the budget categories’•Should be tailored to sponsor-specific requirements and the specific project or activity•Must demonstrate how the expense is needed for the execution of the project.•Provide any other information that will aid the sponsor in evaluating and funding the proposed item of cost

Ignoring the allowability of costs won’t make them go

away!

Resources Available• Other Research Advancement Personnel• Sponsored Projects Administrators• Previous Proposals• President/Provost/VP office• Compliance• Environmental Health and Safety• Legal

Budget Development –Central Office perspective

High-level budget review

• NOT a line-by-line review• Budget figures consistent with budget

narrative, internal forms• Period of performance consistent with

budget• Sponsor budget requirements (e.g. salary

cap, allowable costs)

Main focus: protect the university•Excessive commitments•Cost sharing•Intra-University consulting•Appropriate rates used

• F&A • ERE • Tuition remission

Limited time for review – How to manage?

• Planning• Read the guidelines – know the rules• Ready tools and resources• Knowledge of the sponsor

How we manage limited time• Communicate!• Transparency in expectations, what we do• Mutual respect and courtesy builds trust• Phone call or face time instead of e-mail

How we manage limited time•We like it when department staff…

• Provide sponsor guidelines EARLY on• Provide budgets AND budget narrative for

early review• Summarize any changes after the

preliminary review • Final package for submission is complete

and high quality

Just good enough?

…or Excellent“One of the top 100 universities in the world”

“nation's top 40 'coolest' schools”

“Ranked in the top tier of national universities” “among top universities chosen by international students”

“Presidential recognition for community service”

“One of America’s top 20 institutions for research activity”

Questions?