The Principal Investigator (PI) should ensure the project is carefully planned to include all costs necessary for successfully conducting the project. The budget should account for the costs of research personnel, equipment, supplies, collaborations, subcontracts, travel, and other specific research needs.
The PI should include only costs that relate specifically to the work that will be performed on the project. The PI should avoid the temptation to include contingencies (i.e., padding the budget) and include only those costs that can be justified in a budget narrative or in response to a sponsor inquiry.
Known or predictable cost increases should also be included (e.g. annual inflation increase). In order to ensure that the budget contains sufficient direct costs, it is important for the Investigator to:
Obtain up-to-date, realistic price estimates;
Allow for expected inflation and/or possible salary increases (3 or 4%);
Review the technical effort carefully so nothing is overlooked that could be a potential cost to the project; and
Accurately estimate what kinds of funds will be needed.
Proposal budgets include two basic categories: direct costs of the proposed project, and indirect costs or facilities & administration (F&A) expenses.
B. Salary
Determining Appropriate Salary
Salaries for research personnel should reflect the market rates for the geographic region and the credentials and qualifications required for the positions being hired.
NIH restricts the amount of direct salary an individual can receive under an NIH grant or cooperative agreement - NIH Salary Cap is $183,500 - Effective January 1, 2006. This salary cap is exclusive of fringe benefits and any indirect costs. As such all salaries for paid research personnel are determined in Genevas HR team update. NIH Salary Cap Guide
Federal government employees CANNOT request their salary on federal grant applications.
For multiple year projects, budgets should include a 3% cost of living adjustment for salaries.
Determining Percent Effort
Total percentage of effort (teaching, research, administration, consulting, etc.) cannot exceed 100 percent.
The PI’s percent effort on a grant is the amount of the PI’s time that he/she will devote to the project.
Fringe Benefits
The fringe benefit rate is assigned as a percentage of the salary to cover those benefits provided by The Geneva Foundation. The rate is determined by the percent effort or the number of hours worked per week (full-time or part-time status). The fringe benefit rates for the Foundation are determined annually.
For current fringe benefit rates, please contact the SRSP staff.
A consultant is identified as a person who has a particular skill or a particular profession and whose profession or skill is necessary for the performance of the proposed project. The consultant’s work is typically performed outside of the home institution.
Appropriate Consultant Costs
Consultant costs may include fees, travel and per diem or subsistence where applicable. If so, these costs should not be included under the Travel category, but rather detailed under the Consultant category.
Certain sponsors may have maximum rates allowable for Consultant costs. For example, the NSF sets the Current Maximum Daily Consultant Rate of Pay ($537.00 daily - January 1, 2005). NSF Policy.
Letters of Support
The project proposal should include a letter of support from each consultant indicating their enthusiasm for the project, willingness to participate, and a brief statement of work.
It is highly encouraged that consultants provide a quote stating their fee for the work to be performed.
D. Equipment
Definition
For Federal grants, equipment is defined by cost principles applicable to non-profits and Geneva's policy as any item with an acquisition cost of $5,000 or more per unit and a useful life of more than one year. (OMB Circular A-110.34.)
Pricing
Each individual equipment item must be identified and priced separately.
PI must obtain written quotes for all pieces of equipment, preferably “not to exceed” quotations.
Shipping and Freight
Shipping and freight charges for equipment should be captured in the budget as an expense related to the proposed unit(s)
Tax oSales tax for equipment should be captured in the budget as an expense related to the proposed unit(s).
E. Supplies/Materials
Definition
Items with a unit cost under $5,000 should be included in the Supplies/Materials budget category.
This category includes, but is not limited to, items such as the following: chemicals, glassware, small electronic components, and computer and printer supplies. The estimated costs should be provided for each category.
Itemization
Supplies/materials should be itemized in separate categories. However, NIH does not require itemization of categories in amounts less than $1,000.
Pricing
Office supplies are generally allowable as direct costs under grants with federal funds.
Office Max and Office Depot can be used to generate cost estimates for various office/business supplies.
F. Travel
Itemization
Travel costs should be itemized under separate categories for in-state, out-of-state, and foreign travel.
The budget must specify destination, mileage, airfare, number of trips, number of travelers, and costs per trip as appropriate, along with budget justifications.
Mileage
For current mileage rates as reimbursed by The Geneva Foundation, please contact the SRSP staff.
Cost Estimates
Travel cost estimates can be obtained from either state-approved travel agencies or from several on-line travel agencies. For example:
Other Expenses/Costs are items that are not captured under other budget categories. These may include items such as:
contractual services
postage and fax expenses
equipment maintenance/warranties
printing/copying expenses
publication costs
freight expenses
rentals and leases
stipends, honoraria, etc.
H. Unallowable Costs
Definition
The following list covers unallowable costs specified in Section J of OMB Circular A122. This list is meant only as a quick reference. Please refer to OMB Circular A122 for a complete list of unallowable costs and the specific wording of those prohibitions.
Alcoholic beverages
Advertising, other than for help wanted or for the procurement of goods or services necessary for the performance of the award
Bad debt expenses
Development/fundraising costs
Entertainment costs
Fines and penalties
First class travel
Goods and services for personal use
Lobbying
Pre-award costs unless approved by the sponsoring agency
I. Subcontracts
Subcontract for Outside Organization
If another institution/organization (sub recipient) will be paid to conduct a portion of the proposed project, a subcontract is the best mechanism if the following criteria apply:
Funds will be paid to another university/organization rather than to an individual.
The sub recipient will contribute to the scholarly or scientific conduct of the project.
The sub recipient’s effort requires judgment, unique expertise, and original thought.
The sub recipient does not provide identical services to others as their primary business.
Each participating consortium/subcontractor must submit:
A separate statement of work
A detailed budget for both the initial budget period and the entire proposed project period.
Written confirmation of the institution's willingness to participate in the project.
Required documentation: Agency forms signed by subcontractor signatory (cover page, budget page including budget justification and project narrative). Subcontractor budget must include any approved indirect cost rate for their home institution.
Include the direct costs and indirect costs for the subcontract separately. The indirect costs must be based on the approved indirect cost rate for the institution/organization to which Geneva will award the subcontract.
The total costs of the subcontract (subcontractor's direct costs + subcontractor's indirect costs) are a direct cost in the project budget.
Geneva’s indirect cost rate is applied only to the first $25,000 of each subcontract.
Geneva as Subcontract
If Geneva is to be a subcontractor to another entity, a proposal should be submitted through the SRSP to the proposed grantor.
Guidelines from the original funding agency must be followed.
Geneva’s indirect cost rate is assessed on the full portion of the direct cost budget.
J. Geneva’s Indirect Cost Rate
Definition
The Geneva Foundation has a negotiated Indirect Cost Rate with USUHS, its’ cognizant agency, that is negotiated on a yearly basis.
The IDC rate is audited and approved annually by the Defense Contractors’ Auditing Agency (DCAA).
The current rate for FY05 is 19.9%.
For more information regarding Geneva’s IDC rate, please contact the SRSP staff.
Application
F&A/Indirect costs are applied to Modified Total Direct Costs (MTDC), which consist of all salaries/wages, fringe benefits, materials, supplies, services, travel and subgrants/subcontracts up to the first $25,000 of each subgrant/subcontract (regardless of the period covered by the subgrant/subcontract).
Exclusions
MTDC shall exclude the portion of each subgrant/subcontract in excess of $25,000.
K. Budget Justifications
Definition
The budget justification is an explanation of the factors used to determine the costs of each proposal budget line item. The justification should be structured to allow for maximum ease for determination of sponsor's reviewers. If there are no forms or specific instructions included, the justification should follow the format of the budget with a justification for each category.
