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Building Realistic Budgets

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Title: Building Realistic Budgets


1
Building Realistic Budgets
  • Judy Harris, Proposal Processing
  • Division of Sponsored Research

2
Course Objectives
  • Participants will be able to construct an
    effective budget using their knowledge of
    federal, state, and university requirements.
  • Participants will become familiar with the
    Universitys criteria for cost sharing.
  • Participants will be able to use the web to
    maintain current regarding any sponsor changes
    that impact budget development.

3
Additional Course Objectives
  • Become familiar with the steps that must be taken
    before you begin preparing a proposal budget.
  • Be able to develop a proposal budget.
  • Become familiar with the major cost categories.

4
What is a Budget?
  • An estimate of costs required to perform a
    statement of work with a specific start and end
    date.




5
Proposal Budgets
  • Made up of costs that can be explained or
    verified and are reality-based
  • No Educated Guesses or Off The Wall estimates
  • May require several drafts before it is finalized
  • May vary in structure and complexity

6
Why Is a Budget Important?
  • It is the second most scrutinized part of the
    proposal
  • A clear concise budget supported by a strong
    budget justification can increase the chances of
    a proposal being funded
  • The University is held to pricing information
    provided in proposal
  • The proposal budget can become the actual award
    budget

7
Budgets are the reality check for the project.
8
Pre-Preparation Steps
  • Locate and review agency guidelines
  • Identify budget ceiling and any budgetary
    limitations or restrictions
  • Identify the start date and/or period of
    performance (If none, establish one)
  • Identify differences between general agency and
    specific program announcement budget guidelines
  • Identify limitations on overhead (FA costs) or
    administrative fees
  • Identify all special forms or formats, schedules,
    required cost breakdowns
  • Identify any other special conditions

9
  • Read the guidelines for budget preparation
    carefullytheyll become the rules when the
    project is funded

10
Basic Proposal Budget Components
  • Direct Costs
  • Facilities and Administrative Costs, or FA
    (a.k.a. Indirect Costs)

11
Direct Costs
  • Expenses identified specifically with a
    particular sponsored project, instructional
    activity, or other institutional activity
  • Must be allowable, allocable, reasonable
    necessary for the program, given consistent
    treatment and conform to sponsor limitations

12
Facilities Administrative Costs
  • Costs incurred for common or joint objectives
    which cannot be identified to a specific direct
    cost activity
  • Facilities and Utilities
  • Administrative and Clerical Salaries
  • DSR/Purchasing/HR/Controller
  • Postage
  • Local Telephone
  • Office Supplies
  • Data Processing/Computer Supplies
  • General Purpose Software
  • Memberships
  • Subscriptions

13
Major Budget Categories
  • Personnel Costs
  • Fringe Benefits
  • Travel
  • Research Supplies and Materials
  • Participant Support
  • Consultants
  • Tuition
  • Equipment
  • Subcontracts
  • Facilities and Administrative Costs (FA)
  • Other Direct Costs

14
Personnel Costs
  • Personnel Categories
  • Academic Personnel (includes Faculty Post Docs)
  • TEAMS/USPS
  • OPS (includes Graduate Research Assistants,
    Student Assistants Other Temporary Employees)

15
Domestic Travel
  • Airfare
  • Lodging
  • Car Rental
  • Per Diem
  • Mileage
  • Parking Fees
  • Registration Fees
  • Local Transportation (Taxi, Metro, Shuttle)
  • Includes travel to Canada

16
Foreign Travel
  • (Generally subject to prior approval from
    sponsor).
  • Airfare
  • Apartment Rental
  • Car Rental
  • Local Transportation
  • Lodging
  • Per Diem (Federal travel subject to GSA Schedule)
  • Registration Fees
  • Includes travel to Mexico

17
Budgeting Travel
  • Should include detailed information in budget
    narrative

18
Equipment
  • Costs more than 1,000
  • Has a useful life of one year or more
  • Some sponsors may require supporting
    documentation/quote at proposal submission

19
Tuition
  • All new proposals, including resubmissions,
    competing renewals and supplements, that include
    salary/stipend for graduate assistants and where
    tuition is an allowable cost, must budget
    appropriate amounts for tuition.

20
Consultants
  • Non-UF Employees
  • Not a subcontractor no substantial programmatic
    involvement
  • Normal daily rate
  • Supported by letter/quote from Consultant

21
Subcontractors
  • Can be
  • Other Institutions
  • Commercial Companies
  • Subcontractor has substantive programmatic
    involvement and may be co-author on resulting
    publications

22
Subcontractors
  • Before submitting the proposal obtain
  • Letter of Commitment from institutional
    authorized official.
  • Written Quotes/Budgets
  • Statement of work

23
Participant Support
  • Payments to individuals required on the project
    with no obligation to provide work or services
  • Typical costs
  • Stipends
  • Travel-related costs

24
Other Direct Costs
  • Student Support for Scholarships/Fellowships
  • Tuition, fees, stipends
  • Not providing ANY services

25
Other Direct Costs
  • Facilities
  • Rental Space
  • Renovation

26
Facilities Administrative Costs (Indirect Costs)
  • Applied to ALL sponsored projects unless sponsor
    policy/program limits indirect recovery
  • Following sponsor types have specified FA rates
  • State of Florida 25
  • Water Management Districts 25 TDC
  • Other Florida Governmental Entities 25 TDC
  • Clinical Trials 25 TDC

27
Facilities Administrative Costs (Indirect Costs)
  • University rates are based on the following
    factors
  • Function/Purpose
  • Research
  • Instruction
  • Other
  • AREC
  • Location of Project
  • On-Campus
  • Off-Campus

28
Facilities Administrative Costs (Indirect Costs)
Department of Defense
48.5 28.0
29
Calculating FA
  • Identify Exclusions
  • Equipment
  • Capital Expenditures (includes renovations)
  • Patient care charges
  • Tuition remission
  • Rental costs of off-site facilities
  • Scholarships
  • Fellowships
  • Subcontract amounts in excess of first 25,000
  • Modified Total Direct Cost Base (MTDC)
  • Total Direct Costs minus items not charged with
    FA.
  • Total Direct Cost Base (TDC) Total Direct Costs
    x FA rate without any exclusions.

30
Total Budget
  • Total Direct Costs
  • FA Costs
  • Total Budget

31
Cost Sharing in Budgets
  • Identifies necessary project costs not requested
    from sponsor
  • Should be a sponsor requirement
  • Should be referenced in budget as directed by
    sponsor
  • Shows UFs/Third Party commitment to Project
  • Should follow UF Cost Sharing Policy

32
Charging Costs Directly or Indirectly to
Sponsored Projects
  • In order to comply with (OMB) Circular A-21 and
    the Cost Accounting Standards Boards cost
    accounting standards, UFs policy for charging
    costs to federally sponsored projects is
  • Clerical and administrative salaries will be
    charged indirectly unless direct charging can be
    justified in accordance with OMB Circular A-21.
  • Postage will generally be charged indirectly.
  • Basic telephone charges will generally be charged
    indirectly, including cell phones.
  • Lab supplies will generally be charged directly.
  • Office supplies will generally be charged
    indirectly.
  • General purpose software will generally be
    charged indirectly.
  • Technical software will generally be charged
    directly.
  • Subscriptions will generally be charged
    indirectly.
  • Institutional and individual memberships will
    generally be charged indirectly.
  • Repair and maintenance charges for equipment
    purchased on the award will generally be charged
    directly.
  • Other related costs (photocopies, travel,
    technical and scientific equipment, animal care
    and other services provided by specialized
    service facilities) will generally be charged
    directly.

33
Arithmetic Double Check Budget!
  • Fringe Benefit Rates
  • GRA Tuition
  • FA Rate
  • MTDC Exclusions
  • On Off Campus
  • Budget Total
  • Correct?
  • Within Sponsor Limits?
  • For All Years?

34
Review and Finalize Budget
  • Review draft
  • ceiling price exceeded?
  • Revise
  • How much to cut? add?
  • Cut logical places
  • Should the technical proposal be revised due to
    budget changes?
  • Are Cost Share funds required?
  • Have cost-share commitments been secured?
  • Proposed effort documented?
  • Equipment match documented?

35
Final Budget Presentation
  • Prepare Sponsor budget forms
  • Accurate
  • Neat
  • Legible

36
Finalizing Budget
  • Prepare justification/budget narrative
  • Should be arranged in order of Sponsors budget
    form
  • Clear Concise
  • Explanation of request
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