The cost elements of a budget must be those necessary to accomplish the proposed activity. Cost estimates of individual line items should be carefully calculated so that the requested funds are adequate, but not excessive. As you develop your budget, it is important to keep in mind that sponsored project costs fall into two broad categories: direct and facilities and administration costs. Because the definition of "facilities and administration" versus "direct" costs vary at each institution, no blanket definitions of these types of costs exist.
Generally speaking, direct costs are those which can be specifically identified and allocated to a single sponsored project. These costs usually include salaries/wages, fringe benefits, contracted services, supplies, equipment, travel, communication, awards (tuition remission) and participant support costs.
- Salaries and Wages
- Use current salary figures adding an inflation factor up to a maximum of 10% per year if desired. No extra compensation may be paid from a sponsored project unless it is specifically identified as such and requested from the agency in the proposal and approved.
- Fringe Benefits
- Fringe benefit rates should be obtained from your accounting office.
- UAMS employees should contact the UAMS accounting office
- ACH employees should contact the ACH accounting office
- Equipment
Only items costing $5,000 or more, each with a useful life of two years or more should be listed here. Cost estimates should include any tax and shipping costs associated. Parts or pieces of equipment to be fabricated (totaling $5,000 or greater) should also be included in this category.
- Travel
- Check with local travel agencies for transportation costs.
- Mileage rates are equal to the current IRS rate which can be found at www.irs.gov
- See if your sponsor requires a separate category for domestic and foreign travel.
- Always provide justification of budget for ACHRI review as to how you arrived at your figures.
- Agencies are often asking for detail when they do proposal review. Keep in mind that a lump sum travel figure with no destinations and/or detail may hold up your award process.
- The ACH travel policy can be found on MyACH under ACH Policies
- Materials and Supplies
Principal Investigator's best estimate or catalog price, plus tax and shipping costs for each item.
- Publications
Principal Investigator's best estimate of page charges, etc.
- Consultant and Contracted Services
This category consists of services rendered by others EXCEPT equipment rentals, repairs, and maintenance. It includes consultant/professional services, honorariums and speaker fees
- Subcontracts
- Have each subcontractor prepare and submit a detailed budget and a scope of work.
- Each subcontract should be listed separately on your budget. Math on budgets submitted by subcontractors should be checked.
- If the subcontractor is requesting facilities and administration costs (formerly known as "indirect costs"), include them as a direct cost to ACHRI under subcontract costs.
- ACHRI should have a letter of intent on file for any subcontractors who are included on ACHRI proposals
- See Lee Smith in the Pre-Award office for assistance with subcontract negotiations
- Communication
This includes long distance telephone communication, postage, FedEx, advertising and associated costs.
- Repairs and Maintenance
This includes costs of maintaining property (e.g., maintenance contracts for office equipment and repairs of that equipment) and repairs to vehicles.
- Participant Support Costs
Typically used on federal awards for the costs of the travel, meals and lodging of project participants (not UAMS/ACH employees); for example, the participants in a conference.
A budget narrative should follow your itemized budget to fully identify and explain unusual items or activities. For example, the need for the use of contracted services, use of subcontractors or other collaborating organizations, items of equipment having a unit cost of $5,000 or more, or the necessity for foreign travel should be highlighted in the budget narrative.
Facilities and administration costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
Because facilities and administration costs are specific kinds of costs, not all proposals will allow a request for facilities and administration cost reimbursement from the sponsor. If payment of facilities and administration costs is not allowed by the sponsor, or the sponsor has an established facilities and administration cost rate which is different from the ACHRI federally negotiated rate, a copy of the sponsor's statement to that effect should be attached to the Grant Proposal Submission Form when it is submitted for approval by ACHRI. Since ACHRI's facilities and administration cost rate is negotiated periodically with the U.S. Department of Health and Human Services, contact the pre-award office for the current rate before assembling your proposal budget.
A. The full facilities and administration cost rate will generally be applied on all proposals unless the funding agency prohibits facilities and administration costs, has its own rates, or has been approved in advance by the pre-award office.
B
. Facilities and Administration Costs are charged on all costs with the exception of:
- Equipment items costing $5,000 or more for each item
- Costs over $25,000 on each subcontract
- Participant Support Costs
- Tuition Remission
Cost sharing is the contribution to a sponsored project that supplements agency funding. In general, cost sharing and matching represent the portion of project costs not borne by the project sponsor.
There are generally two types of cost sharing; they are referred to as hard dollar and soft dollar.
An example of hard dollar cost sharing would be:
A. Cash Contributions
These represent the grant recipient's cash outlay, such as supplies purchased with internal funds, and outlay of money contributed to the recipient by non-federal third parties to the project.
Examples of soft dollar cost sharing could be:
B. In-Kind Contributions
These represent the value of non-cash contributions provided by the recipient and non-federal third parties. These may be the value of goods and services directly benefiting and specifically identifiable to the project.
Example: Faculty release time, i.e., PI works on the project during a portion of the academic year, and does not charge the project his/her salary during this period, plus the payroll fringe benefits relating to the release time.
C. General guidelines for computing cost sharing or matching
- The recipient's records must document cost sharing.
- You cannot cost share federal funds from one federal project to another federal project unless you have written authorization from both federal agencies.
- Cost sharing charges are expenses that are necessary and reasonable to the project and that are allowable under ACHRI, state, and federal cost regulations (if your project is federally funded) and within the period of the grant award.
If cost sharing is in the proposal, a commitment will be set up at the time the fund is set up. For soft dollar match, the time spent working on the grant will be recorded on the monthly Time and Effort Reports.
If cost sharing obligations are not required, they should not be listed on the budget page and should not have a dollar value assigned in the narrative. Lab or office space should not be shown as an ACHRI/UAMS contribution without checking to see if that space is being billed to the agency as part of our facilities and administration cost rate. Be sure you are not over-committing a person's time beyond 100% effort. As a general rule, cost share the minimum amount required.
Arkansas
Children's Hospital Research Institute
1120 Marshall Street
Little
Rock, AR 72202
(501) 364-7373
Fax (501) 364-2705