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Budget Preparation

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Budget Preparation & Rates

These templates are provided here as a courtesy; however, it is recommended you contact your Proposal Development Specialist (PDS) so they can provide a template adjusted to fit the solicitation/parameters involved in your proposal (if you are not sure who your PDS might be, submit an information sheet for the proposal in Word or contact ORS). Use of an OU generic budget template is required for any proposal being submitted by OU personnel. These spreadsheets are preloaded with the current Fringe Benefit, GRA Tuition, and IDC rates. 

CAUTION: Using any other budget template either from a sponsor, another organization, or one that is self-developed may delay the proposal process. Only the proposal budget developed by the PI with ORS assistance is considered an official budget.

Read the notes on the first page of the spreadsheet; contact your Proposal Development Specialist if you have any questions or if you believe you need a modified spreadsheet such as one with other than full indirect costs or with cost share requirements. 

If you wish to request Activity Codes other than Research (like Other Sponsored Activity) and/or if you want to request a lower indirect cost rate such as Off Campus then please read the instructions and then complete a Request_Activity_Code_Reduced_IDC_ Form and send it (with appropriate documents) to you PDS prior to finalizing your budget for internal routing of the proposal.

The OU budget is just for OU Norman campus entries apart from funds put under consultant or subcontract lines. It may also be beneficial to look at Post Award Object Codes to see examples for types of common research expenditures. Only a budget prepared by the OU PI with OU ORS is considered the official budget (after routing). If someone else is preparing a budget for you or if you are not using the OU spreadsheet template, you will be delaying your proposal process because the budget will have to be redone by the appropriate people on the internal form.

As you consider the budget for your research proposal, CHECK THE SPONSOR GUIDELINES – many times they will say in detail what they want to see in the budget and if there are any required or excluded items. If the solicitation does not cover the budget items, see if the sponsor has general guidelines (most do). Be aware that some sponsors may give you the start date, budget limits or ranges, and year range/duration. The timing of actions in your research (milestones, tasks, objectives, deliverables) should affect your budget. Take into consideration if the budget has a need to be set on a certain calendar or fiscal year basis and what the sponsor’s fiscal year is.

Salaries & Wages
Support for salaries and wages is requested as a percentage of your effort based on your current income and appointment. Calculate your current salary, divided by your appointment (9 or 12), times the percentage of effort, times the number of months. Note that the OU Generic Budget template (or the spreadsheet received from your PDS after the info sheet is submitted) will automatically calculate the amount of salary when you enter the effort and time.

Things to consider:

  • Are there any salary restrictions in the guidelines?
  • Does your department have any policy regarding academic year salary recovery? (Check with the financial assistant or chair/director.)
  • Does your department have any policy regarding summer year salary recovery? (Check with the financial assistant or chair/director.)
  • Does your department have a usual and customary graduate or undergraduate student salary rate? (Check with the financial assistant or chair/director.) Don’t forget the Provost has a GRA minimum.
  • Salaries of administrative or clerical staff usually are included as part of the Facilities & Administrative (indirect) Costs. A large amount of clerical support can be used to justify some funds here or you might want to consider including a project coordinator or director at least part time under ‘other personnel’. If you have questions about including administrative or clerical support, contact your Proposal Development Specialist (PDS).
  • Cost of Living Allowances (COLA) and merit-based increases are usually estimated at 3% in subsequent years of the proposal. Depending upon the start date of the project, you may want to include an estimated increase in Year 1. (COLA is adjusted based on sponsor limitations and PI desires.)
  • If applying to NIH, be aware of the NIH salary cap, or contact your PDS.

Fringe Benefits
Fringe benefits are costs associated with salaries that are incurred by the university and must be included on sponsored programs. The rate for the fringe benefits is tied to the appointment of the person/position. Included are:

  • FICA
  • Retirement
  • Disability insurance
  • Worker's compensation insurance
  • Life insurance
  • Unemployment insurance
  • Health insurance
  • Defined contributions

Things to consider:

  • If you have personnel in the budget who are not taking OTRS or who are working part time, let your PDS know so they can adjust your spreadsheet.
  • A few sponsors consider tuition remission for graduate research assistants to be a benefit; talk to your PDS.

Equipment
Equipment, as defined by the Federal government AND the university's rate agreement, means an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost of >$5,000 per unit.

Things to consider:

  • Check the guidelines. The sponsor may have their own requirements regarding equipment costs/allowability. The state threshold for equipment is usually less than 5k; if they are the sponsor, this will impact what you submit in the proposal.
  • Generally, indirect costs are not allowed on these expenses.
  • Obtain vendor quotes where appropriate (some sponsors want to see them).
  • Some agencies allow equipment costs to include installation costs, shipping costs, warranties, and training in use – check your guidance.
  • If purchased outside the United States, have you included duty/US Custom fees?
  • Will the equipment be fabricated? If so, parts/pieces may cost less than the required $5,000 threshold but must be essential and integrated to the final fabricated equipment, which must be valued at $5,000 or more and be a taggable piece of equipment. If you propose items as being part of a fabricated test set and then at award stage do not purchase them as fabricated equipment, then they will be charged indirect costs as a supply.

Travel
Travel expenses may include:

  • Airfare
  • Apartment rental (less than 6 months)
  • Car rental
  • Conference fees/registration
  • Local transportation
  • Lodging
  • Mileage (under Rates)
  • Parking fees
  • Per Diem (under Rates)
  • Travel agency processing fees

Things to consider:

  • Note whether the travel is domestic or foreign. Always check the guidelines for definitions (depending upon the sponsor, Mexico/Canada may be domestic or foreign).
  • Federal sponsors usually are limited by Fly America Act.
  • It is not uncommon for travel to be restricted in cost or destination/purpose at the proposal stage.
  • Note that at award stage, travel may require sponsor approval prior to travel or for any travel changes.
  • Foreign travel may have export control implications and is usually scrutinized closely.


Participant Support Costs
This budget category refers to costs of transportation, per diem, stipends, and other related costs for participants or trainees (but not OU employees) in connection with sponsored conferences, meetings, symposia, training activities, and workshops.

Things to consider:

  • Many sponsors do not allow Participant Support Costs.
  • Generally, indirect costs are not allowed on these expenses.
  • Check the guidelines for specific details or contact your PDS.
  • At award, funds usually cannot be shifted easily into or out of Participant Support Costs area.

Patient Care Costs
This budget category refers to human subject care costs in connection with sponsored research. Check the guidelines for specific details or contact your PDS.

Other Direct Costs
This budget category refers to costs directly associated with the project that fall into the following subcategories:

  • Materials & Supplies
    • Project-related expendables
      • Lab fuels
      • Lab gases
      • Lab supplies (includes lab animals)
      • Project supplies (pencils, paper, etc.)
    • Non-capital equipment (if this includes computers/laptops for field work or student use, be sure to justify)
  • Publication/Documentation/Dissemination (page charges, journal fees, poster costs)
  • Computer Services
    • Computer-based retrieval of scientific, technical, and educational information
    • Leasing of computer equipment, if reasonable and allowable
  • Consultant Services
    • Must be reasonable and allowable
    • Include rate, number of days of expected service, travel costs, and subsistence
    • Letter of intent (confirmation) or email where the SOW and budget (if any) are agreed to is recommended
  • Subcontracts
    • Include statement of work, budget, budget justification, and official letter of intent
    • May also include other sponsor forms as needed
  • Other Direct Costs
    • Tuition remission (see GRA tuition policy)
    • Communications
      • Express mail charges
      • Fax charges
      • Cellular phone services
      • Pager fees
      • Postage (fee, no stamps)
      • Telecommunications/telephone equipment/long distance charges
    • Copying
    • Computer software
    • Animal care costs
    • Shop charges/usage fees (example NMR fee)
    • Maintenance/service contracts
    • Audio/visual services
    • Direct rental of space
      • Utilized 6 months or more
      • Over $1,000
  • Construction/renovation/remodeling costs (be sure to talk to your PDS if these are involved)

Facilities & Administrative Costs (F&A) (also known as indirect costs or IDC)
The applicable F&A rate, negotiated with the cognizant Federal agency, should be used in computing F&A (IDC) for a proposal. Check the guidelines for any restrictions.

The University of Oklahoma's rate agreement is based on Modified Total Direct Costs (MTDC), which consists of all total direct costs (salaries and wages, fringe benefits, travel, other direct costs, and subcontracts/subgrants up to the first $25,000 of each subcontract/subgrant).

MTDC shall exclude equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subcontract/subgrant in excess of $25,000.

If the sponsor restricts rate collection, then the ORS policy is to calculate on Total Direct Costs base, provided the sponsor has not also restricted that.

Cost Share
OU normal policy on cost share is not to voluntarily commit cost share when the sponsor does not require it. When you have started formulating your cost share package, work with your PDS to depict it on the OU internal budget (they may need to add lines or adjust formulas). Various approvals/proof may be needed to validate the cost share availability.              

The budget justification for your proposal is the word picture that provides more detailed explanations for your budget (spreadsheet, chart, form). There are some agencies such as DOE with a budget spreadsheet they call a budget justification which merges some numbers and written explanation of the budget into one location. Some sponsors want the budget justification in more than one format or may ask for special charts or other information to be included.

Be sure to check for sponsor guidelines in the amount of detail they want to see in the budget justification. Most want an entry for each line of spending in your budget spreadsheet; some want very detailed information on the figure and how you arrived at it plus the source of your calculations.

YOUR BUDGET JUSTIFICATION SHOULD NOT LOOK THE SAME FOR EVERY PROPOSAL THAT YOU DO (NEITHER SHOULD YOUR BUDGET). If you submit to the same programs on a routine basis, the review panel may see more than one proposal from you and it will be very apparent that you have taken no time to really develop a budget for the work you are proposing to do. Also, while the proposal is your best guess at the budget now, many sponsors do not like huge shifts in the funding, and you may need to ask for permission to move funds around.

Sample Budget Justification (pdf)

It is very common that sponsors may request changes to the budget after submission especially as a step prior to award (usually for a budget reduction). Whenever any change is to be made in the budget of a pending proposal that has been submitted to a sponsoring agency, ORS must be notified. Most sponsors will contact the PI to initiate this change. It is very important for the PI to immediately notify ORS so all necessary actions can be taken; usually these are relatively quick turn items of less than two weeks.

Once ORS is notified, the appropriate Sponsored Programs Coordinator will work with the PI to determine if the revised budget must be processed and rerouted for university approval (on a major revision your Proposal Development Specialist may also become involved). If a reroute is necessary, the revised budget, justification, and any accompanying change in the scope of work must be processed with the same signatures/levels of approval as the original proposal to ensure that all parties who signed the original are aware of any changes which might affect the original approval.

PI are cautioned, should you be informed of a budget reduction, you should not automatically respond to the sponsor that the original proposed objectives/statement of work can still be accomplished. It is acceptable to modify the scope or reduce tasks/objectives if you have a significant budget reduction. If the scope is not going to be modified then you need to address in your Budget Impact Statement how this is going to be accomplished (possibly by institutional support). Otherwise, it appears to the sponsor that you initially asked for more funding than was needed to accomplish the proposed work.