Budget ComponentsDIRECT COST CATEGORIES
Proposal budgets include two basic categories: direct costs of the proposed project, and indirect costs or facilities/administration (F&A) expenses. This is a calculation of the cost, approved by the federal government, of Gallaudet's facilities and services provided for all projects.
DIRECT COST CATEGORIES
Personnel effort on sponsored projects is normally expressed as a percentage of an employee's annual base salary (called "percent of effort"), commensurate with the estimated time the person will devote to the project, and charged to the sponsor as a line item in the personnel section of the budget. Where unreimbursed time is committed, the University is required to document it as cost sharing. The availability of sponsored funds has no bearing on the actual employee rate of pay and does not provide additional pay.
Anticipated salary increases should be included when preparing a multi-year budget. Consult the Office of Sponsored Programs for current cost of living projections. These projections do not commit the Principal Investigator, department, or school to grant specific increases to individual staff members; rather, they allow the University to present a consistent picture of its best estimate of for future costs.
Faculty. Faculty members are generally appointed for the nine month academic year, and may seek reimbursement for academic year (AY) released time, when formally excused from teaching or other assignments by the department chair and dean, as well as for additional compensation for a maximum of two summer months (SM), subject to limits set by funding agencies. The approximate percentage of time per month should be computed and multiplied by 1/9 of the academic year salary to determine the monthly salary for the summer. Faculty with 11- month appointments should indicate the percentage of effort for the 11-month period (or nine-months and two-month periods); these are not fiscal year appointments and they should not be described in those terms.
Faculty members may not receive "overload" compensation for additional research duties during the academic year or summer months. In other words, faculty members may not commit more than 100% of their effort, in accordance with Federal regulations.
The University's agreement with the US Department of Health and Human Services covering sponsored projects precludes charging time or certifying effort during a sabbatical. Faculty who request and receive a full year sabbatical may commit up to 50% of their time to a sponsored project; the 50% may be spread over an entire year. If a faculty member is on sabbatical for 100% effort for only one semester, s/he may commit 100% effort to the grant for the second semester.
PCNMP. Some Pre-College Programs faculty/staff work 190 days during a 10-month period, while the actual contract runs August 16- August 15 (all are paid over 12 months). Summer compensation is derived by dividing the rate by 190 and multiplying by the number of days to be worked. Individuals may agree to a lower rate; any such deviation should be footnoted.
Staff. Staff are compensated for such periods as they are actually employed. Their remuneration is calculated on the basis of a 12-month year. Specify in the proposal budget the compensation for the period of employment. Calculate the charge based on the salary multiplied by the percentage of time to be devoted to the project.
Graduate Research/Teaching Assistants (GA). Graduate Assistants are graduate students whose time is divided between formal study and research or teaching responsibilities. During the academic year, they receive a fixed stipend, tuition, and fees for a commitment of up to 20 hours per week; fringe benefits are not charged if they are full time students. Summer GAs are paid on an hourly basis and fringe benefits are calculated at the part-time rate.
Undergraduate Students. Undergraduate students are called Student Assistants when employed on a research project. Wages are usually charged on an hourly basis and fringe benefits are calculated although these generally cover payroll taxes.
Administrative and Clerical Personnel. Recent revisions to the federal cost principles governing institutions of higher education have placed restrictions on the instances in which salaries for administrative and clerical personnel may be directly charged to grants. Eligible individuals must be identified specifically with a particular sponsored project and employed for non-routine tasks. Examples include projects involving:
- assembling and managing teams of investigators;
- accumulating and entering extensive data;
- making travel and meeting arrangements for large numbers of participants;
- principally preparing and producing manuals and large reports.
In addition, levels of effort of less than 10% are less likely to be found acceptable than larger blocks of time. Consult the Office of Sponsored Programs concerning the allowability of charges for these personnel.
Fringe benefits are charged as a percentage of salaries to cover such benefits as are provided by the University. There are two rates, one for full-time employees and one for part-time employees. The rates are applicable to all salaries for the above categories of employees, including summer compensation of faculty and hourly and/or part-time personnel costs. The fringe benefit rate is determined annually by the Controller; consult the Office of Sponsored Programs for current rate information. Fringe benefits are projected to increase at a rate of .5% (half a percent) each project year unless prohibited by the sponsor.
Consultant fees are a separate category of direct costs and are not listed as part of the personnel budget. Consultant fees may be paid only to individuals not employed by the University who can provide special knowledge or advice necessary for the project. University employees who may be called on for special services should be listed in the salary section of the budget for an appropriate portion of their salary. Federal agencies specifically prohibit the payment of consultant fees from grants or contracts to persons employed by the federal government in any capacity. Consultant fees may include any charges associated with the consultant's services, such as travel and subsistence.
Indicate briefly the purpose and frequency of expected travel and its applicability to the project. Per Diem rates, mileage, and air/rail travel are calculated using the University's rates. Consult the Office of Sponsored Programs for the currently approved schedule of foreign per diem rates permitted by the federal agencies and any limitations or restrictions imposed by specific sponsors on travel outside the United States. Gallaudet University policy prohibits per diem or lodging within a 50 mile radius of campus.
Itemize capital equipment ($5,000 and above) to be purchased, providing a description, cost estimate, and justification of need. The cost of a single unit of equipment should include related charges, such as those for accessories needed to make it operable, installation fees, delivery costs, insurance, and taxes, if any.
Consumable Project Related Supplies and Expendable Equipment
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 given for each category.
The same revisions to the federal regulations which restrict administrative and clerical salaries also identify general purpose office equipment and supplies as unallowable direct costs. Proposals, however, may continue to request these items in those circumstances where administrative and clerical salaries are appropriate (see above). In addition, it is important to differentiate certain items such as computer software and supplies (when they are necessary to the conduct of the project) from general office supplies in the budget justification.
Participant Support Costs
Costs of tuition and fees, travel, per diem, registration, books and manuals, and special supplies for program participants in conferences, symposia, and workshops may be allowable as a direct charge (consult Direct Costs for Training Proposal Budgets).
Publication and Printing Costs
This category includes manuscript preparation expenses, illustration costs, and page and reprint charges in established journals. Costs for publication of a book, monograph, or pamphlet usually cannot be charged to a project unless prior approval has been received from the sponsor.
This category includes the costs of bulk mailing, postage, commercial carrier, long-distance telephone, telegrams or cables, and computer time or space (e.g. supercomputer, server space fees, etc.) unless prescribed to be allocated to another category by the sponsor.
A subagreement may be either a subcontract or a subgrant, each of which is an agreement between the University and a third party that transfers a portion of the grantee/contractor's duties under a sponsored project to the subrecipient. The Principal Investigator/Project Director is responsible for collecting documentation from each intended subrecipient (signed by that institution's authorizing official) including an itemized budget, with justification, a statement of work to be performed, and qualifications to do that work. These must be signed by an authorized institutional official who may negotiate on behalf of that entity. These documents should be incorporated into the overall proposal. Many federal agencies require a completed cover sheet and certain certifications signed by the subrecipient's authorized official. Subagreements/Consortium Agreements may also require the prior written approval of the sponsor's grants officer. Refer to the Office of Contracts and Purchasing in Finance and Administration for guidance on issuing subagreements or participating in subagreements. The request for proposals will indicate if this is a requirement.
Other Direct Costs
- Equipment Maintenance.
- Miscellaneous. These may include security, health, safety, or advertising charges for professional staff recruitment.
- Rental and maintenance costs. Special off-campus installations, such as a field station or storefront location, should be a direct charge.
- Payments to subjects.
Direct Costs for Training Proposal Budgets
Some sponsors support training programs, special institutes, research participation programs, and similar activities for the benefit of graduate or undergraduate students, trainees in certain professions, or individuals outside the University such as high school or college teachers. Sponsors may pay tuition or actual training costs of the project as budgeted. Fees must be separately listed as costs and, if not provided by sponsors, must be paid by the trainees. Thus, the budget for such a program usually provides for the following direct costs:
Stipends for Participants. These usually are fixed by the sponsor; sums may vary with the level of study. If not specified by the sponsor, an appropriate stipend level may be developed in consultation with the department chair or dean and the Office of Sponsored Programs. As the stipend area is often problematic and may be accompanied by requirements for citizenship, student status, etc., discussions with the Office of Sponsored Programs are recommended.
Dependency Allowance. Where permitted by the sponsor, this is usually a fixed sum per dependent.
Participants' Travel Costs. Allowable travel costs vary with the sponsor and program and may include subsistence, commutation, round-trip fare and local travel for each trainee.
Other Expenses. Other expenses may include book allowances, application and other fees.
Tuition. Actual tuition is computed if the program costs are to be met through tuition rather than through program cost per participant.
Actual Training Cost Estimate. When the sponsor requires that the program be budgeted in terms of per participant costs, the estimated program costs must be developed in place of the tuition item. Such a budget includes those costs listed under DIRECT COST CATEGORIES, as well as stipends, dependency allowance, and fees per student.
INDIRECT COSTS (FACILITIES AND ADMINISTRATIVE COSTS / F&A)
Indirect costs represent those expenses not readily allocable to any single research or training project, but which represent the University's costs for carrying out research or training activities. These cost include such items as building maintenance and operation, utilities, libraries and other facilities, and payroll, accounting, purchasing, research administration, departmental administration, and personnel services. The U.S. Office of Management and Budget (OMB) has issued, in conjunction with college and university representatives, Circular A-21 entitled, "Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements with Educational Institutions," which identifies allowable direct cost categories and also prescribes a standard distribution and allocation method for recovery of indirect costs.
Like all other universities with federally funded research and training grants and contracts, Gallaudet University's Finance and Administration Office prepares and submits a periodic determination of indirect costs in conformance with the A-21 standards. The submission is reviewed by federal auditors and is negotiated by the University with representatives of the University's cognizant federal agency, the Department of Health and Human Services (DHHS).
Indirect Cost Rates
The current Indirect Cost Rate Agreement with DHHS outlines the rate that must be incorporated into all budgets. Indirect costs are charged as a percentage of salaries and wages. Please contact the OSP for the current negotiated rate or refer to the Finance Office Policy on Direct/Indirect charges on their web page at http://www.gallaudet.edu/Finance_Office.html .
Indirect Cost Rates on Training and Other Projects
Most training programs provide a modest fixed percentage of modified total direct costs as reimbursable indirect costs. Some sponsors, however, pay full overhead/indirect costs. These rates are generally identified in the program announcements.
Some agencies are precluded from reimbursing the University for the full costs of sponsored programs funded as grants. This means the University is required to share in the cost of each program. In accordance with University policy, cost sharing should not be offered in response to solicitations by federal agencies unless the regulations specifically mandate cost sharing. For those agencies with specific mandatory cost sharing requirements, two-column budgets (agency column and Gallaudet University contribution column) are generally prepared for submission. Cost sharing should generally be indicated on the basis of direct expenses, e.g., release time with associated fringe benefits and associated indirect costs etc.; cost sharing funds may be available and are subject to department and/or school/unit approval.