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Intro to Budgeting
Shana McClellandSponsored Projects Administrator, Principal
Sponsored Projects ServicesSeptember 16, 2016
TODAY’S AGENDA
2
Where do we start?
Mechanics of budget building
Preparing the budget
Math and Stuff
Q&A
3
WHERE DO WE START?
Read the announcement!
Sponsor deadline
Total/annual dollar limits
Cost sharing
Required items of cost
Unallowed items of cost
Indirect cost limitations
Format
Submission details
Who else is involved?
Lead or a subaward? Prime?
Multiple UA PIs? Co-Is?
Other units?
Indirect cost waiver?
What is our timeline?
Have we done this before?
4
UNIVERSITY 3 DAY DEADLINE
Requests for Indirect Cost Waivers should be submitted to Sponsored Projects eight business days prior to our sponsor’s deadline
All proposals, paper and electronic, should be submitted to Sponsored Projects in final form three business days prior to our sponsor’s deadline
http://rgw.arizona.edu/sites/researchgateway/files/three_day_deadline.pdf
5
REALISTIC TIMELINES
Are we applying directly to the funding entity?
Are we a subaward? Who is the Prime Sponsor?
How many PIs, CoIs, and Units are involved?
How large or complex is the budget?
Does it require an Indirect Cost Waiver?
Are there other items of complexity?
http://rgw.arizona.edu/administration/proposal-preparation#Timeline
6
MECHANICS OF BUDGET BUILDING
Budget and Budget Justification or Narrative should make sense when read along with the science
Should follow the guiding principles set forth for federal awards
Should follow any specific Sponsor requirements or exclusions as set forth in the funding announcement
Are required for internal review even when not required by the sponsor
7
GUIDING PRINCIPLES FOR FEDERAL AWARDS
Uniform Guidance or 2 CFR 200
Reasonable (§200.404)
Allocable (§200.405)
Allowable (§200.403)
Consistent (§200.403 c-d)
8
CATEGORIES OF COSTS
Direct Costs
Identifiable with a particular sponsored project (§200.413)
Indirect Costs
Facilities & Administrative costs (§200.414)
Costs incurred for common or joint objectives that cannot be readily and specifically identified with a particular sponsored project
Administrative expenses (staff, office supplies, toner, copy paper)
Utilities
Building renovations, maintenance
Depreciation, debt service, central administration
9
DIRECT vs. INDIRECT
Costs must be treated consistently and in “like manner” - either as a direct cost or as an F&A cost
Institution’s DS-2 (Cost Accounting Disclosure Statement) often details which costs will be viewed as direct costs vs. indirect costs
UA Direct/Indirect Cost guidance -http://rgw.arizona.edu/administration/build-budget/budget-categories
10
DIRECT COSTS
UA PersonnelSalaries
Fringe Benefits/Employee Related Expenses (ERE)
Capital Equipment
Travel
Other Direct CostsMaterials and Supplies (includes non-capital equipment
Publications
Subawards/Contractual/Services
Tuition Remission
11
INDIRECT COSTS
Facilities & Administrative (F&A) costs, also known as indirect costs oroverhead costs, are defined by the Office of Management and BudgetUniform Guidance 2 CFR, Part 200.56 as "those costs incurred for acommon or joint purpose benefitting more than one cost objective, andnot readily assignable to the cost objectives specifically benefitted,without effort disproportionate to the results achieved."
All grants, contracts and other sponsored agreements accepted by the University of Arizona are subject to the current federally negotiated F&A rate.
http://rgw.arizona.edu/administration/build-budget/FA-Costs/FA-rates
12
COMMON DIRECT COST QUESTIONS
Can I charge a computer or mobile device to my project?
Can I charge office supplies to my project?
Can I charge administrative assistance to my project?
13
COST SHARING
Anything necessary for the completion of the project that is not directly funded/paid for by the sponsor
Effort
Portion of equipment
Supplies
Indirect Costs
Etc.
14
COST SHARING
General Rule: If it is not specifically required by the program, DO NOT include it.
When required by the program, be sure it is clearly stated in the budget and justifications
15
COST SHARING
Mandatory vs. Voluntary
Committed vs. Noncommitted
Matching funds and In-Kind contributions
“Leveraged Resources”
Cash vs. In-Kind
3rd party contributions
16
PREPARING THE BUDGET
Personnel
Senior/Key Personnel (generally PI, Co-Is, and Key Persons essential to the project)
Other Personnel (generally Postdocs, Other Professionals, Technicians, Administrative, Graduate Students, Undergraduates)
Are they academic or fiscal appointments? (determines how they are budgeted)
Fringe Benefits/ERE rates: http://rgw.arizona.edu/administration/build-budget/budget-categories/Salaries-and-Wages/ERE-Rates
17
PREPARING THE BUDGET
Personnel
Academic Appointment (Faculty and Graduate Students)
Academic salary hourly rates (Salary/1600 academic hours = Academic hourly rate)
Summer salary hourly rates (Salary/3 or Salary *0.00072 = Summer hourly rate)
Fiscal Appointment (Faculty, Researchers, Staff, Postdocs)
Fiscal salary hourly rate (Salary/2088 fiscal hours = Fiscal hourly rate)
Academic appointments consist of 1600 academic hours and 464 possible summer hours for a total of 2,064 hours while Fiscal appointments consist of 2,088 hours.
18
PREPARING THE BUDGET
Personnel costs are the largest portion of most budgets.
Most likely to be restricted:
NSF Senior/Key Personnel Salary – generally restricted to 2 months of regular salary in any one year unless justified/approved
Salary Cap – only applicable if specified by the sponsor
Currently $185,100 effective January 10, 2016 for NIH
Tuition Remission – Smith-Lever Act of 1914 - Indirect costs and tuition remission are unallowable.
19
PREPARING THE BUDGET
Equipment (specifically, capital equipment)
http://rgw.arizona.edu/administration/build-budget/budget-categories/equipment
Defined by our negotiated rate agreement
Tangible, non-expendable, useful life of >1 year
Acquisition cost of $5,000+/unit (includes tax, shipping, installation)
Depending on program and cost of equipment, may require formal quotes or informal quotes as cost-basis
20
PREPARING THE BUDGET
Travel - http://www.fso.arizona.edu/travel
Specifically for UA project personnel
Project-related conferences, required grant meetings, subrecipient site visits, project-related collaboration, field work, etc.
Transportation, lodging, per diem, parking, etc.
Cost basis must be provided and may be based on
Online searches for fares/rates (airline, rental car, etc.),
Historical costs for conferences (fees, hotel, etc.)
Lodging and per diem rates are mandated
Domestic rates – State of Arizona (https://gao.az.gov/travel/welcome-gao-travel)
International rates – U.S. Dept. of State (https://aoprals.state.gov/web920/per_diem.asp)
21
PREPARING THE BUDGET
Participant Support
OMB 2 CFR §200.75 extends Participant Support to all Federal sponsors
Direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (not employees) in connection with conferences or training projects
Typically excluded from indirect cost calculations
Not Subject Pay/Incentives
Group meals and coffee breaks not allowed in this category
Speaker fees, honorariums, and travel not allowed in this category
When in doubt, ask early! Participant support is a restricted category that usually does not allow rebudgeting.
22
PREPARING THE BUDGET
Materials and Supplies
Items to be used specifically for the project
chemicals/glassware for experimentation
printer paper for research surveys
computer to run lab equipment or for intensive data analysis
Contractual/Services
Services to be performed by another entity for the project
3rd party vendor to peform DNA sequencing
Evaluator to assess education program effectiveness
23
PREPARING THE BUDGET
Subawards
Collaborators from another institution
Distinguished from contractual/services by intellectual contribution to project outcome
Requires SOW, budget, budget justification at time of proposal
Single line on our budget
Subaward budget must comply with sponsor guidelines, subrecipient institution policies, and all federal regulations
F&A only charged on first $25,000 of each subaward
24
PREPARING THE BUDGET
Tuition Remission
http://rgw.arizona.edu/administration/build-budget/budget-categories/other-costs#TuitionRemission
No longer percentage of Fringe Benefits/ERE
Direct charged as “Other Direct Costs”
FY2016/2017 rate is $11,372 for a full (0.50 FTE) graduate student ($5,686/semester)
Tuition and Fees Calculator: http://bursar.arizona.edu/students/fees
25
PREPARING THE BUDGET
Indirect Costs (F&A)
Applies to costs specified in our Federally Negotiated Indirect Cost Rate Agreement (NICRA)
We are a Department of Health and Human Services (DHHS) institution
Default = Modified Total Direct Costs (MTDC)
Excludes tuition, capital equipment, patient care, off-site rentals, scholarships, fellowships, and all subaward costs exceeding $25,000
26
PREPARING THE BUDGET
Sponsor stipulations & F&A Waivers
Stipulations
Unless exclusions are specified by the sponsor, reduced indirect cost rates are calculated at a Total Direct Costs (TDC) base rather than our DHHS Modified Total Direct Costs Base (MTDC)
Watch for odd language that may imply Total Costs (TC) instead (30% of total funds)
Waivers
Required if reduced IDC is not stipulated by sponsor and our regular rate is not used
http://rgw.arizona.edu/administration/build-budget/F-A-Costs#FAWaiverProcess
27
MATH! AND STUFF
If a sponsor limits the project/annual budget total to $200,000 with no IDC stipulations…
AND the project budgets no exclusions (equipment, tuition, etc.)
How much money is available for direct costs?
Total / (1 + F&A Rate) = Direct Cost
Direct - $200,000/1.535 = $130,293
Indirect - $130,293 * 53.5% = $69,707
Total - $130,293 + $69,707
28
MATH! AND STUFF
If a sponsor stipulates indirect costs at 15% of the total annual grant amount of up to $400,000 per year
How much money is available for direct costs?
What F&A rate do you enter into UAccess Research?
Annual - (Annual * TC Rate) = Direct Cost
$400,000 - ($400,000 * 15%) = $340,000
$400,000 * 15% = $60,000
$340,000 + $60,000 = $400,000
TC Rate/(100 - TC Rate) = F&A Rate
15/(100-15) = 17.647% TDC
$340,000 * 17.647% = $60,000 (rounded)
$340,000 + $60,000 = $400,000