Preparing Your Budget

Read the guidelines, request for proposal, or other application instructions. They often contain important information including:

• Amount of funding available, average dollar amounts of awards, number of awards made
• The earliest possible start date, duration, and information on timelines
• Contact information for the program officer or sponsor contacts
• Allowable versus unallowable costs
• Cost-sharing requirements

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To develop your budget, consider the following budget categories and project needs in these areas:

• Personnel: faculty positions, professional/technical staff, postdocs, student assistants, administrative staff
• Fringe benefits
• Equipment: Check with your development specialist on the definition of equipment and if it is allowable or appropriate for your application
• Travel
• Supplies, including computers and printers
• Participant support costs: Typically expenses in connection with conferences or training projects, these costs can include stipends, travel, per diems, books, tuition and registration fees for participants or trainees (excludes employees). Please note: Check with your development specialist regarding the allowance of participant support costs and its restrictions. This is a restricted category, and rebudgeting outside of this category requires written approval by the sponsor.
• Other Direct Costs
  • Telephone, postage, duplicating
  • Publications
  • Rental of office space
  • Printing/Production
  • Subject incentives
  • Services (testing, lab work, use of labs/facilities)

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Each category must provide details and costs related to each line item. The MORE detail provided, the BETTER.

Personnel: Detail the personnel involved, including the names of participating personnel, the amount of effort (usually in terms of person-months), and the rate of pay.

• SDSU faculty
  • Must use the SDSU/CSU pay rate
  • Determine if it will be effort during the academic year and/or summer
  • Determine if it will be reimbursed time (“buy-out”) or additional employment
• Professional/technical staff
  • If current employee of SDSU or SDSURF, use current rate of pay
  • Determine the amount of effort for each individual
• Postdocs
  • If current employee of SDSU or SDSURF, use current rate of pay
• Students
  • Determine level of student (joint-doc program, graduate, undergraduate)
  • Is the student a teaching assistant?
  • Most students are limited to 20 hours/week
• Administrative staff
  • Use current rates/classifications

Fringe benefits: There are a variety of fringe benefits rates used for each type of employee, the number of hours worked, and whether retirement and health/dental benefits are included. The best approach is to consult with your development specialist in applying the appropriate rates.

Equipment: Each piece of equipment should be identified with its cost, any related tax, shipping and handling. The best approach is to get quotes from vendors. SDSURF has a purchasing department that can assist in obtaining quotes if needed.

Travel: Each trip should include the following:

• Destination
• Number of travelers
• Duration (in days)
• Airfare
• Per diem
• Lodging
• Ground transportation
• Incidentals

If the travel will be international, the U.S. Department of State has daily rates that should be used depending on the destination: Foreign Per Diem Rates by Location

Supplies: These costs should be detailed by the type of supply: lab/instructional, educational, computer, administrative.

Participant support costs: Direct costs for stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects.

• Tuition and fees
• Books
• Per diems
• Other costs

Other direct costs: Detail each other direct cost by type and amount: telephone, postage, photocopying, publications, office space rental, printing/production, human subject incentives, services (testing, lab work, use of labs/facilities).

Consultants: Provide the consultant’s name, hourly/daily rate, and number of hours/days. If showing an SDSU or CSU staff member as a consultant, it must be included in Personnel costs, not the Consultant section.

Consortium/Contractual:

• What institution/organization is involved
• Include both direct and F&A costs of the participating institution
• Detailed budget, scope of work, letter of cooperation from institution

Facilities/Administrative Costs

• Each institution has its own F&A cost rate agreement.
• SDSU Research Foundation’s F&A cost rate agreement includes several rates depending on the type or project an on/off campus designation.
• Currently, F&A for on-campus research is 50.5% of modified total direct costs (MTDC). MTDC excludes:
  • Equipment
  • Subagreements/subcontracts over $25,000 (SDSURF only charges F&A on the first $25,000)
  • Patient care costs
  • Scholarships/fellowships
  • Student tuition remission

Allowable/Unallowable

Proposal costs must meet the "AAR" test: Allowable, Allocable and Reasonable.

Examples of allowable costs:

• Personnel costs in proportion to performance of the scope of work
• Supplies
• Equipment
• Project related travel
• Services for the performance of the scope of work
• Pre-award costs

Examples of typically unallowable costs:

• Memberships to social clubs
• Alcohol
• Bad debt
• First class airfare
• F&A charged as direct
• Transportation to and from work in an institution owned vehicle
• Entertainment costs
• Costs not allowed by sponsor

Budget Justification

The budget justification is an important part of the budget. It needs to follow the sponsor’s guidelines and justify each budgeted category.

• Provides the “Why?” – a companion to the budget spreadsheet
• Explains fluctuations from year to year
• Gives a complete picture of costs

Tips for a Successful Budget

• Keep personnel at, or under, 100% effort across other proposed projects.
• Work within total maximum budget allowed by funding opportunity.
• Check for math/rounding errors.
• Make sure that your budget, scope of work, and justification are consistent.
• Only include allowable costs needed for the proposed project.
• Include only when required by the sponsor agency.
• Cost sharing must be allowable.
• Cost sharing must be substantiated with appropriate documentation, such as receipts and payroll records.
• Discuss any cost sharing needs with development specialist before offering it in proposals.

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