John C. Williams
Dr. Williams and his students, through an INBRE grant, are able to work on various experiments using microwave synthesis.
Developing a Grant Budget
Grant budgets document the cost of all work effort, deliverables, facilities, etc. required to support a proposed project. They typically include two parts: a budget summary and budget narrative. ORGA is available to assist at all phases of the budget development process.
When developing a budget, the PI should consider everything necessary to ensure the project runs successfully. Make a comprehensive list without worrying initially about cost. Include every aspect of the program such as reduced courseload, paid students and other personnel, supplies, equipment, facilities for program-related events, travel, etc. If the funder does not allow full reimbursement of F&A costs (described below), you should also consider standard operating costs such as office space, clerical support, web and technology support, etc. Some of these may be eligible for cost-share (detail below).
Federal Circular A-21, issued by the Office of Management and Budget (OMB), is the set of instructions to Federal agencies regarding costs typically allowed in grant proposals. The document, entitled "Principles for Determining Costs Applicable to Grants, Contracts and Other Agreements with Educational Institutions," states criteria for allowable and unallowable costs, as well as direct and indirect costs. Sponsors may have specific costs beyond those defined in A-21. ORGA can assist in identifying appropriate budget items.
Allowable costs are reasonable, allocable to the proposed project, treated consistently in like circumstances, and conform to sponsor policies and guidelines, A-21 cost principles and institutional policy (Section C of A-21). Unallowable costs should not be included in any proposal budget.
Direct costs can be identified specifically with the sponsored project. They can be assigned to the project with relative ease and a high degree of accuracy. Typical direct costs include salaries and fringe benefits of project personnel, project-specific equipment, travel necessary to perform work or report results, lab and other materials or supplies, etc. (Section D of A-21).
Facilities & Administrative (F&A) or Indirect Costs
F&A costs reimburse the college for its operating costs of sponsored research and programs. This includes items such as clerical and administrative salaries and fringe benefits; telephone, computer and internet costs and support; general purpose equipment; routine postage; office space; utilities; insurance; etc. Using this standardized rate, which the college negotiates every three years, makes the budget development process easier by eliminating calculations for individual support costs. In rare cases, F&A costs may be budgeted as direct costs.
In cases of demonstration or training projects, private foundation proposals, and some others, the allowable F&A rate may be capped at a certain percentage (8% or 22% is common) or disallowed completely. When developing a new project budget with these constraints, please consult with ORGA. It may be possible to capture some program operating costs through budget line items or cost-sharing. The sum of the total direct and indirect costs is known as the total costs.
Please consult the common proposal data page for the current indirect cost rates in use at Rhode Island College.
F&A (Indirect) Cost Revenue Redistribution
PIs may use a portion of the F&A cost reimbursed through their grant to further their professional development. This redistribution rewards PIs for scholarly contributions and provides additional incentive to develop grant proposals. Indirect cost revenues are redistributed annually, following the close of the fiscal year. Please see the college policy on redistribution of indirect cost revenues for further detail.
Drafting a Budget Summary and Budget Narrative
The budget summary, or line-item budget, is a list of all project costs being requested, with dollar amounts listed alongside each budget item, line and category.
PIs should assign costs using the budget format or form assigned by the sponsor. Projects with a cost-share requirement should show those costs in a separate column clearly identified as the college's contribution.
A budget narrative is often required. This can be a helpful resource document in developing and administering all aspects of a program. The budget narrative provides detailed justification of each budgeted program item and indicates how the budget line was calculated.
Cost Sharing and Matching Funds
Sponsors may require cost share or match funds to be included in a proposal budget, showing institutional commitment to the proposed program. Both terms indicate a requirement that college (and collaborator, if appropriate) funds or in-kind contributions will partially support a sponsored program. The required share or match may be determined by the sponsor. Cost- share requirements can often be met through in-kind or donated services. They may also be met through a reduced or waived F&A rate. Cost match typically requires a contribution of actual dollars (at varying ratios) to support the program.
Cost share and match can be met through other program donations from individuals, the college, or certain other grants. It can be calculated through the value of in-kind college contributions such as web, public relations, computer or telephone support, office space, volunteer student time, etc. All PIs must be aware of the provisions of US OMB Circular A-110 Guidelines on Cost Sharing.
For grant proposals submitted to federal agencies, the PI must document to the granting agency that the proposed project is in compliance with A-110 General Guidelines on Cost Sharing. These state that all matching contributions, whether cash or in-kind, must meet the following criteria:
- Are verifiable from the recipient's records;
- Are not included as contributions for any other federally-assisted program;
- Are types of charges that would be allowable under applicable cost principles;
- Are not paid by the federal government under another assistance agreement; and
- Are provided for in the approved budget when required by the federal agency.
All cost share and match commitments must be approved in advance by college administration as part of the standard institutional approval process for proposal submissions.
Collaborating agencies or organizations conducting specific services of the research or program effort are typically reimbursed through a subaward. This allows the lead organization to pass a budgeted portion of grant funds to the subawardee via a formal contract. Subawardees are governed by the same budgeting, performance and reporting expectations as the lead organization (sometimes known as the 'prime' awardee) as well as any additional restrictions imposed by the prime awardee via the contract.
Subawards should be openly disclosed to the sponsor and budgeted in detail, as part of the total project budget. Collaborators to be reimbursed via subaward should incorporate their F&A (indirect cost) rate as part of their subaward budget prior to proposal submission. This rate and budget is beholden to the same regulations as those applicable to RIC as the lead applicant.
Subawards must be approved in advance by college administration as part of the standard institutional approval process for proposal submissions.
Tailoring the Budget to the Sponsor
All items requested in the budget must conform to sponsor requirements:
- Is the total dollar amount requested within the limit published in the RFP? Has the RFP been read carefully to understand whether the proposal budget limit is inclusive of the indirect cost amount?
- Is the indirect cost amount the maximum allowed?
- Have all budget lines been calculated accurately in collaboration with ORGA or sent to ORGA for review?
- Have the proper sponsor budget forms or format been used?
- Are any budgeted items considered unallowable by the sponsor?
- Do all budgeted line items conform with OMB Circular A-21?
- Are there requirements for cost sharing or matching? If so, do they conform with OMB Circular A-110?