What is a budget and why budgets are so important?
A budget is a project “blueprint” and it helps your sponsor determine if the proposed project.
- It justifies your request and shows how you calculated costs.
- It provides a financial "blueprint" for your project if you are funded.
- It shows that you—and the university—will manage the sponsor's funds, which are usually public money, responsibly.
Three key words to keep in mind when preparing your budget: Allowable, Allocable & Reasonable
What does allowable, allocable, and reasonable mean?
- “Allowable Costs” refers to items of cost can be funded with federal grant dollars as long as the cost fits within a framework of responsible stewardship of public funds. To be an allowable cost, the cost must not be expressly prohibited by the sponsored program regulations, the sponsored agreement, the university's own policies, or the Federal Cost Principles (found in the Uniform Guidance). Costs must be treated consistently by applying the generally accepted accounting principles appropriate to the circumstances (such as the Federal Cost Principles).
- Allocable: Costs are incurred solely to support or advance the work of a specific sponsored research award (and only during the sponsor-approved project period).
- Reasonable: Costs must be able to withstand public scrutiny, i.e., objective individuals not affiliated with the institution would agree that a cost is reasonable and appropriate.
Tips for Budgets
- Read the sponsor's guidelines!
- Keep in mind that you need to have a reasonable estimate of the project’s cost. A good rule of thumb when working on your budget is to be realistic; do not "pad" costs - but don't short-change yourself in an effort to be more "competitive" either (though you will want to check whether or not the sponsor has a maximum request amount).
- Be sure everything in your budget is referenced in the project description/project narrative—and be sure everything mentioned in your project description that would incur cost is shown in the budget.
- Check to see if the sponsor REQUIRES certain items (i.e. travel to a conference or planning session)
- Check to see if the sponsor DOES NOT ALLOW certain items (example: salaries & wages, foreign travel, F&A/Indirect Costs, etc.).
- Discuss your project and its costs with your chair/dean.
- Start early and contact OSRP for assistance!!
How to budget Personnel Costs?
- You should include full salary and benefits for all UNCP faculty, staff and students participating on a sponsored project. Personnel costs may be charged as direct costs or cost-share commitments in the proposal budget.
- Salaries and wages are determined by the amount of time spent by each person on the project
- For faculty, calculate a dollar value for each person's time and effort using his/her current Institutional base salary (IBS), or 9-month base salary (which does not include compensation for administrative duties, summer teaching, etc.). OSRP will help you calculate this appropriately and accurately.
- Example: If the project requires 25% effort of a faculty member during the academic year, you should include 2.25PM of his/her current base salary in the budget.
Tip: A “person month” is the metric for expressing the effort (amount of time) principal investigators (PIs), faculty and other senior personnel devote to a specific project. The effort is based on the type of appointment of the individual with the organization; e.g., calendar year (CY), academic year (AY), and/or summer term (SM); and the organization’s definition of such. For instance, some institutions define the academic year as a 9-month appointment while others define it as a 10-month appointment.
"For a full-time member of the faculty or EPA staff, the salary approved by the Chancellor, Board of Trustees, or Board of Governors is the base salary to be paid during the contract period. No additional compensation may be paid for University duties that are generally related to the position to which the individual is appointed during the Contract Period."
- To help you calculate the amount of supplemental compensation faculty are eligible to earn outside the contract period (i.e., the summer) or, in rare exceptions, during the academic year, you may request OSRP for a Supplemental Pay Tracking table.
- Keep in mind sponsors must provide written approval of any supplemental compensation to be paid during the academic year before it occurs. And that once the project is awarded you’ll need to provide periodic effort certification (time and effort).