Preparation of the budget is, for many researchers, the most difficult section of the proposal. Granting agencies see hundreds of proposals yearly and are proficient at comparing level of funding requested to the research work proposed. Therefore, it is important that the budget section of the proposal reflect, as accurately as possible, the funding needed to carry out the proposed research. The investigator should neither overestimate the funds required nor underestimate budgetary needs. Either of these strategies may lead to proposal rejection. A budget, accurately detailing the funds necessary to carry out the technical statement of work, can strengthen the total proposal and increase the likelihood of funding. Furthermore, a carefully prepared budget can often identify weak areas in the proposal narrative and result in improvement of the technical proposal.
Personnel in the OSP are experienced in preparing budgets, and encourage investigators to contact them when they have a draft of the budget. The OSP staff can provide expertise in completing a budget request, applying fringe benefit and facilities and administrative cost rates, documenting subcontracts/subrecipient agreements, consultants, matching funds, and cost-sharing. In the case of more complicated proposal requirements, the OSP will complete sponsor assurances and certifications, and when requested, will assist the investigator in interpreting RFP guidelines.
- Direct Costs Salaries and Wages
To determine total salaries and wages, list the amount of time to be spent by each person, including secretaries and clerical assistants, who will be working on the project. Time should normally be shown in terms of person-months and a percent of full-time effort. Show breakdown between summer and regular academic year for faculty.
- No employee may be scheduled for activities in excess of 100% of effort in any given month.
- Sponsored activities may not result in any employees receiving compensation at a rate in excess of their authorized salary or academic rate. For multi-year projects, the budget should take into consideration any possible salary increases.
- The Uniform Guidance (2 CFR 200) relevant to secretarial and other clerical support: The Principal Investigator needs to justify the need for administrative support to perform the project, and it is the Investigator's judgment that this is the best way to spend the funds.
- Fringe Benefits
Fringe benefits are a direct cost to a sponsored project, are clearly related to the salaries and wages to be paid, and are shown as a separate entry in the budget. The Department of Health and Human Services (DHHS) no longer negotiates fringe benefit rates for The University. Fringe benefit costs have been calculated based on historical data. The actual costs for fringe benefits are charged (billed) to the sponsored project at the time the costs are incurred; the amount charged is based on salary, selected benefit package, and other variables applicable to the individual employee. A table that provides an analysis of actual fringe benefits for full time employees is available on the web at the following link: fringe benefits/indirect costs (PDF).
If the actual fringe benefit expenses for a project exceed the projected amount included in the budget, it is the responsibility of the Principal Investigator to pay these actual costs from the direct award funds provided by the sponsor. The OSP can provide advice in the preparation of budgets and the Contracts and Grants section of the Office of Accounting can assist in the transfer of funds to the fringe benefit subaccount as may be appropriate.
Normally, consultants are paid a consulting fee plus travel expenses. Many Sponsors do not permit payments to consultants and some restrict or limit such payments. If in doubt as to the allowability of consultants or rates paid to consultants, refer to the Sponsor's program literature or contact the OSP. Whenever possible, identify the proposed consultant by name, indicate the number of days of work, daily rate, and provide a curriculum vitae for the consultant in the proposal.
The participation of paid consultants in a sponsored project for periods longer than two weeks should be discussed with the OSP prior to submission of the proposal. UT Austin employees may be used as consultants on a project if the consultant is from a different department than the principal investigator. Institutional consulting policies are contained in 3.19 of the Handbook of Operating Procedures and Policy Memorandum 7.205.
- Capital Equipment
Equipment means an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per acquisition. Components, other than on-campus machine-shop labor, used to fabricate an item of capital equipment may be considered as capital equipment for budgeting purposes and should be identified for inventory purposes. The on-campus machine-shop labor component is subject to facilities and administrative costs. Additionally, service/maintenance agreements are not considered a capital equipment charge; therefore, such agreements are subject to facilities and administrative costs. A separate subaccount is required for each capital equipment item being fabricated.
- Expendable Equipment and Supplies
These are items costing less than $5000. Normally, a research project will consume expendable supplies such as laboratory items, teaching aids, computer software, and office supplies. A reasonable amount should be budgeted for these items.
Faculty who anticipate the use of a particularly large number of research animals or animals requiring special care should consult with the Animal Resources Center staff to see whether the funds estimated will be adequate and whether the Animal Resource Center has adequate facilities to accommodate the animals.
- Publication Costs
Budget the anticipated cost of publishing the results of the research, keeping in mind that page charges may vary from journal to journal. Consider both page charges and reprint costs.
If foreign travel is anticipated it must be specified. Travel costs expected to exceed institutional guidelines must be specified. For travel rates, refer to the current procedures noted in the Handbook of Business Procedures. Outside the state, the limits are set by the Federal government and vary by locality. These rates are available in the *DEFINE system on the administrative computer (GG1 command). Federal funds cannot be used to make trips to secure new or additional research support or funds.
- Computer Time
Computer time costs should be included as a budget item, if appropriate. If non-Sponsor funded computer time is needed, arrangements must be made in advance with your academic department or research unit. Overhead applies to all types of computer time, and to all computer supply budgets.
- Subcontracts/Subrecipient Agreements
When a proposal contemplates a subcontract/subrecipient agreement to a named subcontractor, the following is required of the subcontractor and must be submitted with the Proposal Review Form: a statement of work , a detailed budget and budget justification, a negotiated rate agreement for Federal/Federal pass-through funding and a letter signed by the subcontractor's authorized institutional representative. Only rates from a negotiated indirect cost rate agreement will be allowed for proposals submitted to Federal sponsors. Should the subcontractor not have a negotiated rate for a Federal proposal, indirect costs will be calculated based upon 2 CFR 200 Uniform Guidance and no more than the 10% modified total direct costs (MTDC) de minimis rate will be allowed.
All subcontract Principal Investigator(s) and Covered Individuals must follow/be in compliance with pertinent Financial Conflict of Interest Policies. Some institutions are compliant by virtue of their participation in the Federal Demonstration Partnership’s FCOI Institutional Clearinghouse and do not have to submit additional training or disclosure. If, however, a subcontracting institution is not listed in the FDP Clearinghouse, then individuals must fulfill either Requirement A or B of UT’s Financial Conflict of Interest Policy and file the appropriate Financial Interest Disclosure, if necessary. Please refer to the Conflict of Interest section of the Office of Research Support and Compliance’s website at https://research.utexas.edu/ors/conflict-of-interest/proposals-awards-and-contracts-guidance/ and https://research.utexas.edu/ors/conflict-of-interest/investigators-and-collaborators/#sponsored-research for more information.
In the event that the total amount to be subcontracted represents a substantial portion (> 50%) of the proposed direct costs, the Principal Investigator should contact the OSP for guidance.
- Other Direct Costs
Consider, as appropriate, costs for copying, long-distance telephone calls, postage, reference books and materials, tuition and required fees for participating graduate students, equipment maintenance, and contracted services. The Uniform Guidance (2 CFR 200) relevant to office supplies, postage, local telephone costs, and memberships: The Principal Investigator needs to justify the need for these items in relation to the project, and it is the Principal Investigator's judgment that this is the best way to spend the funds.
- Facilities and Administrative Costs
Facilities and Administrative (F&A)/indirect costs must be included using UT Austin's federally-negotiated rates unless the federal or not-for-profit sponsor has a statutory policy applicable to all potential proposers which deviates from these rates. All other deviations are subject to UT Austin administrative approval by the Associate Vice President of Research/Director, Office of Sponsored Projects. Sponsor guidelines limiting facilities and administrative costs must be provided with your proposal. Projects funded by the for-profit sector must accrue F&A at the appropriate negotiated rate.
The F&A rate for clinical trials is 25% of total costs.
To calculate the facilities and administrative costs for a project, do the following:
- Calculate the Total Direct Costs (TDC) which is simply the sum of all direct costs (salaries, benefits, supplies, equipment, etc.)
- Calculate the base against which the F&A rate will be multiplied by subtracting exempt items (capital equipment, graduate student tuition and required fees, stipends, and subcontract/subrecipient agreement costs in excess of the first $25,000 of each subcontract/subrecipient agreement over the life of the subcontract/subrecipient agreement) from TDC. This will give the Modified Total Direct Costs (MTDC).
- Apply the F&A rate against the MTDC base to calculate the facilities and administrative costs for the project.
- Add the TDC to the F&A to calculate the Total Project Costs. TDC - exemptions = MTDC MTDC x F&A rate = F&A TDC + F&A = Total Project Costs
Please note that since the federally-negotiated facilities and administrative cost rates are subject to change annually, Principal Investigators should be prepared to make adjustments in budgets for such changes. See facilities and administrative costs/fringe benefits rates or contact the Office of Sponsored Projects, (512) 471-6424, for more specific information. For other contact information, see OSP staff directory.
- Off-Campus Rate
The off-campus rate is 26.0% and should be calculated on modified total direct costs (MTDC) for projects conducted off-campus. The use of the off-campus rate must be approved in advance by the Office of Sponsored Projects. Requests for the off-campus rate must be received at least seven business days prior to the proposal deadline.
In order for the off-campus rate to be considered, the off-campus portion of the project must take place for at least 90 consecutive days. In addition, at least one of the following criteria must be met:
- The combined proposed effort of all involved UT personnel working off-campus must be greater than the combined proposed effort of all involved UT personnel working on-campus. This includes unpaid contributed effort.
- The budget must include leasing or renting an off-site facility as a direct cost, and the personnel paid from the grant and any equipment must be located at that facility.
- The total direct costs incurred off-campus must exceed the total direct costs incurred on-campus.
- Budget Guidance and Tools