When preparing the budget the PIs need to ensure that they request the funds to accomplish the scope of work of the sponsored project and comply with the rules and regulations involving sponsored projects' expenditures. This section of the manual provides guidance on how to complete the common categories of a proposal budget.
OSP staff can advise faculty members as they are preparing their budget and its justification, and help identify costs that may be included as cost share or match, when required, if an appointment is made well before the 5 day deadline for final proposal submission. When a proposal is submitted through OSP, the budget will be reviewed to ensure that all potential costs have been identified, that fringe benefit and indirect cost rates are used and calculated correctly, and that it conforms to solicitation requirements and federal, state, and university policies and procedures. The budget must always include a listing of all the direct costs and indirect costs associated with the project, as described below under budget categories. A budget worksheet is also available on URSA's Proposal Preparation webpage.
Budget Categories
Costs of a sponsored project are divided into direct and Facilities &Administration (indirect) costs as well as cost-sharing. These categories are described below.
Direct Costs
These are costs that can be distinctly identified as benefiting the project, such as salaries and fringe benefits, equipment, supplies and travel.
Rules and regulations governing allowable direct costs in budgets
When preparing a budget, be mindful that certain costs may be unallowable as a direct cost of a sponsored project. Georgia State University is required to comply with the US Government Cost Accounting Standards, in addition to state regulations, in determining if an item is an allowable direct cost for a sponsored project. The distinction between allowable and unallowable costs is summarized here, with more detailed information available in the awards management section of this manual.
Allowable costs are those categories of costs that can be charged to a grant or contract and represent a direct benefit to the project (i.e., salaries, equipment, travel, participant stipends, supplies, etc.).
Unallowable costs. Certain types of costs (e.g., cost of alcoholic beverages, etc.) are not allowable because of the nature of the costs and may not be charged to a contract or grant. Other unallowable costs are not allocated to sponsored projects as either a direct cost or as indirect costs (see below for definition) because they are treated either as part of the Other Institutional Activities base for determining facilities and administrative indirect cost rates, or are included in an administrative cost pool, neither of which is allocated to sponsored agreements. Generally, unallowable costs include:
If a charge is unallowable as a direct cost, it is usually unallowable as a match or cost sharing unless prior agency approval is attained.
If there are extenuating circumstances that require including costs that are considered unallowable in the direct costs of a sponsored project, then the rationale for this needs to be included in the budget justification and these costs need to be approved by the sponsoring agency.
Definitions of different types of direct costs are listed below:
Personnel Salaries
This includes GSU personnel only, their roles on the project, titles, the percentage of effort/time each will devote to the project, the rate of pay, the amount requested from the sponsor to support each person per year (or for the entire budget period) and the amount of cost share. Administrative and clerical salaries are generally not charged to sponsored projects. However, such charges may be appropriate in certain large complex programs. Please consult OSP for further information.
GSU Faculty and Staff Base Salary
Faculty and staff salaries typically are based on a percentage of effort (expressed either as an actual percentage of number of months) and are compensated based on a nine month academic year appointment; however, some faculty are compensated based on a 12 month calendar year. An appropriate percentage of the academic year or calendar year salary should be specified in the budget.
Daily/Hourly Rates
Some proposal budgets may require that faculty or staff time be reported on an hourly, daily or weekly basis. The number of hours worked will depend upon whether the person listed in the budget is a nine- month faculty member or a 12 month employee. The hourly rate is computed as follows:
Academic Year (9 month faculty): 9 month salary ÷ 1560 hours = Hourly Rate
Calendar Year (12 month employees): 12 month salary ÷ 2080 hours = Hourly Rate
The daily rate would merely take the hourly rate and multiply it by 8 hours. To calculate the weekly rate, just multiply the daily rate by 5 days.
Sponsored activities may not result in any employees receiving compensation at a rate in excess of their authorized institutional salary. However, for multi-year projects, the budget should take into consideration any possible salary increases (typically a 3% - 6% yearly increase). In no case can funds be requested or used to augment salaries of any faculty or staff beyond University-approved rates
Nine Month Faculty Summer Salary
For summer salary, a maximum of three months of summer effort and salary (calculated up to 33 1/3 % x 9 month base salary for the current fiscal year) may be requested when this is acceptable to the sponsor. This summer salary must be identified as such in the budget.
Faculty Extra Compensation
Occasionally, there will be times when a faculty member may request and receive additional compensation beyond the base salary. This is an allowable direct cost only if the funding agency specifically allows extra compensation. Extra compensation must be labeled as such in the budget submitted to and approved by the funding agency. Please note that Federal funding agencies and some state agencies do not allow extra compensation during the academic year.
When a proposal requesting extra compensation has been submitted to OSP, a letter, signed by the PI, the person(s) receiving extra compensation, their Department Chair(s) and their Dean, must be attached to the proposal stating that all four of the following conditions of the Board of Regents Policy Manual (section 803.1404) for extra compensation will be fulfilled.
When extra compensation is paid, it must be in line with the compensation paid for the performance of the faculty member's normal duties. (Policy Manual, Board of Regents of the University System of Georgia).
If extra compensation is not included in the original proposal, extra compensation can not be paid without seeking agency approval, especially in federal and federal flow through projects.
Graduate Research Assistants
A graduate research assistant (GRA) may be assigned research duties each semester or on a monthly basis.
Non - GSU Personnel
If your proposal includes individuals who are not employed by GSU, those individuals cannot be included in the "Salaries" section of the budget. They must be listed in either as Consultants or as a Subcontract (see sections below.)
Fringe Benefits
Fringe benefits require a separate category in the budget and should not be combined with salaries. Current fringe benefits rates are shown on the Proposal Fact Sheet available at the URSA website. The rate includes the University's contributions to Social Security, retirement programs, health insurance and employment compensation.
Permanent Equipment
Permanent equipment is defined as any item of non-expendable, tangible, personal property having a useful life expectancy of two or more years and an acquisition cost of $5,000 or more per unit. Equipment needs must be itemized and justified. In addition, the Principal Investigator must determine that the equipment requested is not already available within the University. The cost of equipment generally includes needed accessories, installation, and delivery costs. In some cases the sponsor may provide the equipment directly rather than provide acquisition funds or a short-term rental may be preferred. Permanent equipment costing more than $5,000 is not included in the base amount for calculating F& A (indirect) costs for a proposal.
Travel
The need for Project Directors to consult with colleagues and disseminate new knowledge through scholarly meetings is an expected practice and an accepted cost in most projects. There must be a correlation between the project and the purpose of the meeting. Such costs may include transportation, lodging and meals (per diem). If the project requires travel to various locations in order to perform the work, these costs should be identified; an itinerary may be required if travel is a significant portion of the total cost. Some examples would be travel to various localities to collect samples, to interview respondents or to make special measurements. Special costs should be identified and justified. Once again this category is for travel costs associated with GSU employees only. Travel for non-GSU personnel is to be listed under "Consultants", "Subcontracts" or "Participant Costs."
Domestic Travel. Domestic travel on most sponsored project accounts is subject to the University's Institutional Travel Policy (be sure to get the most up to date version from Disbursement). In some instances, however, the agency may put forth more restrictive travel regulations. In those cases, the agency's regulations must be followed. For example, some federal agencies limit reimbursement for meals and lodging to the federal per diem rates. GSU uses the federal government CONUS rate for meals and lodging for cities located in the United States. Their website is located at: http://www.policyworks.gov/org/main/mt/homepage/mtt/perdiem/perd04d.html
Also see the state of Georgia travel regulations at http://www.audits.state.ga.us/internet/nalgad/trvlreg.pdf
Foreign Travel. Because of certain agency regulations for prior approval and the requirement of federal agencies for utilization of U.S. flag carriers, OSP should be contacted as far in advance of such trips as possible. The Foreign Travel and Per Diem Rates can be located at the U.S. State Department's website: http://www.state.gov/m/a/als/prdm/2004/
Participant Support Costs
This budget category refers to direct costs for items such as stipends, subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees in connection with meetings, conferences, symposia, training activities and workshops. Participant support costs are NOT human subject payments (which are considered miscellaneous expenses). Participant support costs are excluded from the base for calculating F&A (indirect) costs.
Materials, Supplies, and Expendable Equipment
Expendable equipment is defined as any item of an expendable nature, regardless of service life, and having an acquisition cost of $4,999 or less. These items should be specifically identified and justified. They include, for example, chemicals, disposable lab ware, glassware, small electronic components, animals and animal rations, and unusually large quantities of paper supplies as in the preparation and distribution of questionnaires or other brochures and forms. General office supplies should not be included as a direct cost of a grant except when the scope of work requires unusual amount of a certain type of supplies (e.g., paper for distribution of a large quantity of surveys) and such inclusion must be approved by the sponsoring agency.
Publication
This should include manuscript illustrations, cost of reprints and page charges to be incurred in publishing articles resulting from the project. In some contracts a large number of copies of the project's final reports is required; this cost should be estimated and included in the budget. The publication costs of a book or monograph are generally not allowed (except at NIH); special permission should be obtained from the sponsor before including these costs in the budget.
Consultants
Consultant fees may be paid only to experts not employed by Georgia State University who provide a unique contribution to the project. While a Consultant may contribute their expertise on a project, they can not be named as a Co-PI or Co Director, nor can they be considered as "Key Personnel". University System and State of Georgia employees are not eligible to receive compensation for consulting services on sponsored projects unless prior approval from both chief executive officers is received. Federal agencies specifically prohibit the payment of consultant fees from Federally-supported projects to persons employed by the Federal government. When listing a consultant in the budget, include all their travel expenses and supplies as line items under the "Consultant" subheading. Since they are not employed by GSU, their travel and supplies cannot be listed under the normal "Travel" and "Material & Supplies". Fees for consultants are generally listed as a daily/weekly rate or a flat fee for services. Typically, consultants should supply a letter of agreement to be included in the application.
Subcontracts
Work to be done by individuals from other institutions, businesses, corporations or organizations (other than consultants) must be listed here. Each subcontractor must have their own itemized budget which includes: salaries, fringe benefits, equipment, travel, supplies, other direct costs, indirect costs and cost sharing. Proposals which include subcontracts must be accompanied by a statement from the authorized signatory of the subcontractor of their intent to participate in the program, their agreement to the proposed budget and include any cost sharing dollars they maybe providing. It should also include specific language explaining how cost sharing will be documented. This should include a statement of work and an estimate of the time required to complete the work. Any subcontracts from other Universities must be routed through the subcontracting Institution's approval process to obtain the necessary approvals prior to the proposal's routing through GSU.
The Principal Investigator must submit to OSP a statement disclosing any direct or indirect financial interest in the subcontractor organization; see GSU Policy on Conflict of Interest on URSA Research Integrity webpage.
Only the first $25,000 of each subcontract for the entire project period is included in the base for calculation of indirect costs. Contact OSP for assistance in preparing subcontracts.
Miscellaneous Expenses
These expenses include, but are not limited to, the following: renovation of space that is necessary in order to carry out the project; rental of space; maintenance of specialized equipment which is necessary to the project; communication costs such as regular and long distance telephone costs; postage charges when large volumes of mailing are required, and human subject or informant fees.
Facilities and Administrative (F&A or Indirect) Costs
These are expenses that are incurred by the University through the cost of facilities and services for common or joint objectives. F&A Costs also are frequently called indirect costs. These costs reimburse the University for laboratory and office space, utilities, and administrative services (e.g., purchasing, accounting, research, personnel, telecommunications, security, custodial services, buildings, grounds and street and parking lot maintenance). Specifically, they include all the essentials to support sponsored activities that cannot be broken down and directly charged to a specific grant or contract. The University calculates its F&A cost rates from actual cost records through a detailed cost accounting procedure. The F&A cost rates are subsequently negotiated and accepted by the Department of Health and Human Services (DHHS) Audit Agency acting on behalf of all federal agencies. There are off-campus and on-campus F&A cost rates depending on where the project is performed. Some funding agencies will ask for the date of our negotiated Indirect Cost Agreement and our "cognizant agency." The Proposal Fact Sheet has all this information (and is available on the URSA Proposal Development Webpage).
The rates are calculated on a modified total direct costs (MTDC) base, which means total direct costs less:
F&A costs may change from year to year, primarily due to the federally-imposed calculation methods. Check the Proposal Preparation Fact Sheet available on the Proposal Preparation webpage for the updated indirect cost rate.
It is the policy of Georgia State to charge the appropriate F&A rate on all grants. All requests for F&A modifications/waivers should be submitted to the Vice President for Research for approval. See F&A (Indirect) Cost Waivers for more information.
Budget Justification
Documentation and justification of budget requests should be provided in narrative form on additional page (s) immediately following the budget in the proposal and should be identified by line item.