Budget Development
- The Budget
- Cost Principles That Guide All Sponsored Budgets
- Budget Components
- Indirect Cost Distribution Policy
The Budget
The budget should include all costs associated with the successful completion of the project. It must be as accurate as possible, based on estimated costs. All budgets should be developed using the ORSP Excel Budget template, which includes institutional rates and formulas to help develop budgets in accordance with federal and University guidelines.
Cost Principles That Guide All Sponsored Budgets
All costs proposed on sponsored projects must be allowable under Title 2, Subpart A, Chapter II, Grants and Agreements, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (aka “Uniform Guidance”). Allowable costs are those costs that are reasonable, allocable, treated consistently, and conform to specific programmatic limitations. In rare instances, an exception to these requirements can be made. These exceptions are called “Unlike Circumstances”. An example of an Unlike Circumstance exception is if a project seeks to test inebriated drivers’ response times. Alcohol is prohibited under the Uniform Guidance (Section 200.423) However, alcohol would be allowed due to its direct application in the study. Costs and their allowance are described in detail in Subpart E, Cost Principles (Sections 200.400-.475). Please contact the ORSP if you believe that your project meets an Unlike Circumstance exception.
When developing the budget section of a request for sponsored funding, it is standard practice to identify all costs as one of the two following types of expenses: Direct Costs or Indirect Costs. Most funding sources expect a proposal budget to include a breakdown of both the direct and indirect costs.
Direct Costs
Costs that can be readily and specifically identified with the activities of a particular sponsored project, an instructional activity or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Examples of direct costs include: compensation of faculty, administrators, staff, and students for work performed under the sponsored agreement, equipment acquisition, and the costs of materials consumed or expended in the performance of the work.
Indirect Costs
Indirect Costs are institutional expenses that cannot be practically, or in a cost-effective manner, directly tied to a single project, but contribute to the ability of the University to support research and instructional programs. Also referred to as Facilities and Administrative Charges (F&A), or overhead, these costs include building maintenance, electricity, water, technology infrastructure, accounting services, and other expenses necessary for the operation of the institution. Indirect costs stem from proving research space and administering the activities, not for the actual performance of the activities under the sponsored agreement. They are real costs associated with every externally funded project that operates through Jacksonville University.
Budget Components
I. Budget period
Usually 12 months; typically one year projects are dated for July 1 through June 30 (fiscal year) but they do not have to be. Use projected dates that work for your project and still align with the sponsor's guidelines.
II. Salaries & Wages
Payment for academic year or summer time allocated to a sponsored project; Any individual who will contribute a significant portion of his/her time and effort to a grant project should be included in the budget. Per the U.S. Office of Management and Budget, Title 2, C.F.R. 200.400 to 200.431, supplemental income from any sponsored award during an individual's appointment term (9 months or 12 months) is not permitted, except in very rare situations. For consistency with auditing requirements, JU treats all funding as federal funding regardless of the source of funds. Employees on 12 month appointments are ineligible for supplemental funding from sponsored awards. Employees on 9 month appointments may be eligible for supplemental income from sponsored awards during the summer months. Please check with the ORSP if you have any questions about salary restrictions.
When given the opportunity, please include a salary escalation rate of three percent for all project out years.
III. Fringe Benefits and Payroll Taxes
Fringe Benefits (FBs) are directs costs associated with salaries and wages. They include FICA (Social Security), retirement, health insurance (medical, dental, life) unemployment insurance, long term disability, and workers' compensation. JU uses the following rates:
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25% for Full-Time Faculty/Staff (Full FB)
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12.1% for Part-Time/Summer Salary (No FBs, required payroll taxes only)
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1.21% for Student Workers (Workers Compensation only)
IV. Travel
All travel attributable to the project should be itemized, and should be divided for domestic and foreign travel. Air fare, car rental, hotel, conference fees, etc. should be based on estimates from a reputable travel agency or similar service, such as Expedia. Please note that most government agencies require use of a domestic carrier for travel both in the U.S. and abroad. For additional information, please refer to JU's Policies and Procedures regarding Travel.
V. Equipment
Capital Equipment is defined as a tangible article that has a useful life of more than one year and an acquisition cost of $5,000 or more. Any request for equipment should be clearly justified in the proposal's budget.
VI. Materials and Supplies
Materials and supplies should be budgeted using quotes or costs from similar items that were recently purchased.
VII. Publication/Dissemination
If a publication is one of the expected results/deliverables of the project, a brief synopsis of the expected publication content and its costs should be included.
VIII. Sub Awards And Consultants
Sub awards and Consultants are non-JU participants that support a JU sponsored project. Both are similar in that each supports the efforts of a JU sponsored project; however, it's how each contributes to the project that determines which category to use. Sub awards must be issued through the Office of Research and Sponsored Programs, while the hiring and payment of Consultants is initiated at the Department level, and is processed through the Controllers Office.
Sub awards are those non-JU project participants that:
- Have their performance measured against whether the project objectives are met
- Have responsibility for programmatic decision-making
- Uses the project funding to carry out a program of the organization
- Are subject to the project compliance requirements
Consultants are those non-JU project participants that:
- Provide goods and services as part of their normal business operations
- Provide similar goods to many different purchasers
- Operates in a competitive environment
- Provides goods or services that are ancillary to the project
- Are not subject to the project compliance requirements
IX. Participant Support Costs
Participant Support Costs are those costs paid to or for participants in connection with JU hosting an event, meeting, or conference, etc., under a sponsored project. Applicable costs include but are not limited to event fees, food, stipends, and travel. Some sponsors, such as the National Science Foundation, have specific conditions associated with this category.
X. Indirect Costs
Indirect Cost rates are generated in collaboration with the federal government, and are based upon complex formulas and negotiations with our cognizant agency, the US Department of Health and Human Services.
For activities occurring on campus, JU applies a rate of 36.70% to a Modified Total Direct Costs (MTDC) base. For activities occurring off campus, JU applies a rate of 13.70% to the MTDC base. Click here for the current rate agreement.
Budget Modification Form
On occasion, a budget may need be modified to meet a given project's objectives. If, after an award has been issued, a Principal Investigator discovers funds needs to be reallocated, he or she must submit to the ORSP a Budget Modification Form, which identifies from where and to where the funds will be moved.
Indirect Cost Distribution Policy
JU distributes a portion of the recovered indirect costs generated through grant or contract awards to University stakeholders to spur additional sponsored program activity. CLICK HERE to read the full policy.
| Percentage of costs recovered | Stakeholder recovered costs will be returned to |
|---|---|
| 10% | Principal Investigator/Project Director |
| 5% | Provost |
| 30% | ORSP |
| 10% | Department of PI |
| 45% | JU Operating |
The Controller's Office will distribute IDC funds in April, July, October, and January of each year. The funds will be transferred directly into the IDC accounts of the Principal Investigator and the corresponding department. Funds must be applied to activities that advance faculty research and sponsored project activity (As examples: travel to meet with Program Officers or project collaborators, payment for student workers, equipment and supply purchases, publication fees, etc.). Any questions about IDC account balances may be directed to Renee Rossi at rrossi@edgepointedges.com or Gladys Gabriel in the Controllers Office at ggabrie@edgepointedges.com
Residuals from Fixed Price Contracts
When a project is completed and all deliverables and reports have been met and/or submitted to the sponsor, the PI has 90 days from the project end date to prepare the account for closeout. Remaining funds may only be used to further the research related to the original agreement, such as presentation costs, related travel, and related equipment to further the PI's research. After 90 days from the close out, balances less than $500 will be transferred to the ORSP IDC account to further the University’s research mission. Balances greater than $500 will be transferred to the appropriate IDC accounts using JU’s IDC distribution policy:
45% JU Budget 30% ORSP 5% Provost 10% Department 10% PI
Cost Sharing
JU strongly recommends cost sharing only those funds that are required under the program to which you are applying. All cost share must be approved by cognizant Department Heads and Deans. Cost share provided by non-JU entities must be documented in the JU proposal on the third party’s letterhead clearly indicating the amount of the cost and where the cost will originate, for example salaries or equipment.