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Guide to Creating Budgets                                                                             Home > Grants/Contracts > Budget Creation

The proposal budget should be derived directly from the project description. Cost estimates are usually required for each year of a multiple-year project. It is important to include funds to cover expected cost increases between the proposal preparation date and the project start date, up to a year later, and in subsequent years of the project. Keep in mind that a proposal budget contains estimates of the cost to perform the project.

Review guidelines to determine funding agency guidelines for format and to determine what costs the sponsor allows. For example, some sponsors do not allow equipment purchases on a project. Proposal budgets typically include some or all of the following cost categories:

Salaries and Wages
Fringe Benefit Rates
Materials and Supplies
Equipment
Subcontracts
Consultants
Travel
Facilities and Administrative Costs (Indirect Costs)
Cost Sharing
Contact

ODU Research Foundation's Grant & Contract Administrators are available to assist with proposal preparation and budget development.

SALARIES AND WAGES

For each person involved in the project, list name (if known), position and percentage of time on the project. Include annual salary increases, effective each year. When projects are charged for personnel salaries, the associated fringe benefits are also charged in the same proportion.

Faculty
Most faculty members are on a ten-month contract with a nine-month performance-period. Others are on contracts of differing lengths, such as twelve months or eleven months. The nine-month, also referred to as academic year, performance period is from August 16 through May 15. In computing salaries for proposal budgets, amounts charged per project period are calculated as follows:   base salary divided by 9 gives the rate per month; rate per month multiplied by number of months in period times percent effort in period equals charge per period; and the percent increase in salary for nine-month faculty is decided annually and is effective each January 1st of the project's duration. Currently, we use a rate of five percent in budget projections. The maximum that can be paid in the summer for full-time work is calculated by multiplying the academic year base amount by two-thirds, in other words, dividing the academic year rate by 9 (to get a monthly rate), multiplying by 2 (to bring 50% to 100%) and then multiplying by 3 (three month period).

Graduate Research Assistants
A Graduate Research Assistant (GRA) is a Master's or Ph.D. candidate meeting criteria set by ODU. During the nine-month academic year, graduate students generally have 50% appointments and usually may not work more than twenty hours per week. During the summer, GRAs may be appointed for up to 100% effort. GRA compensation during the summer is based upon the rate in effect for the academic year. Pay rates for GRAs are determined by each department. Please check with your department chair for the most current rates.
Another consideration is whether tuition and fees for GRAs should be budgeted on the sponsored program or paid from another source.

Full-time Research Foundation Employees
(Research Scientists, Other Professionals)

Research Scientist is a professional level assignment and must be recruited following the same procedures as for other hires at the Research Foundation. All full-time Research Scientist positions are eligible for the full complement of benefits available to regular full-time Foundation employees. Individuals in this category are usually compensated solely from sponsored programs. Salaries are established by the Research Foundation Human Resources Director in consultation with the principal investigator. The usual performance period is 12 months.

Postdoctoral Associates
"Postdocs" are employees who, having completed the doctoral degree, are appointed to a project to enhance research proficiency or for additional training. Appointments as a Postdoctoral Associate are for a limited term, approximately one to two years, and are not intended to be a permanent or continuing position. As this is an academic appointment, the salary is based on competitive salaries for the particular field and set by the individual department. While the primary employment activity for this position is research and research-related tasks, some teaching assignments may be allowed. This category of employee is entitled to all "regular status" employee benefits EXCEPT contribution in lieu of retirement and education assistance program.

A Postdoctoral Fellow or Trainee is an individual appointed to a specific type of funding mechanism, unlike the more general Postdoctoral Associate category. Fellows are supported by individual fellowship awards. Frequently these awards are made directly to the fellow rather than to the institution. Trainees are supported by training grants. The sole obligation of a trainee is his or her education.

Other Full-time and Part-time Employees
(Technical, Clerical, Etc.)

Pay rates for these positions vary with requirements. These positions normally are budgeted for on an hourly basis. Contact the Research Foundation Human Resources Director for current hourly and salary rates.

Secretarial, clerical, and administrative salaries and wages should normally be treated as indirect cost. The direct charging of these costs may be appropriate where the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support that is significantly greater than the routine level of such services provided by academic departments, centers and institutes. The costs would need to be identified specifically with a particular sponsored project relatively easily with a high degree of accuracy, and the special circumstances requiring direct charging of the services would need to be justified to the satisfaction of the awarding agency in the grant application or contract proposal.

FRINGE BENEFIT RATE

 


Contact a Research Foundation Grant & Contract Administrator for assistance.


MATERIALS AND SUPPLIES
Materials and supplies are items consumed in the course of accomplishing a particular project's objectives that can be documented as relating to that project. A subdivision of this category is "Small Equipment". Small Equipment is any tangible item with an acquisition cost of less than $2,000, the current equipment threshold, and a useful life of at least one year. General supplies or small equipment items that will be used more broadly than for one particular sponsored program are generally considered part of indirect cost and not appropriate as charges to a project.


EQUIPMENT
"Equipment" means an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost that equals or exceeds $5,000, the capitalization level established by the institution for financial statement purposes. The cost of equipment generally includes needed accessories, installation, and delivery costs.

"Special purpose equipment" means equipment that is used only for research, medical, scientific, or other technical activities. Examples of special purpose equipment include microscopes, x-ray machines, surgical instruments, and spectrometers. Capital expenditures for special purpose equipment are allowable as direct costs, if items with a unit cost of $2,000 or more have the prior approval of the awarding agency.

"General purpose equipment" means equipment, which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles. Capital expenditures for general purpose equipment are unallowable as direct charges, except where approved in advance by the awarding agency.

SUBCONTRACTS
Subcontracts are agreements with other entities ("Subrecipients") for substantial programmatic contribution to the project. Subcontracts require specific approval of the sponsor, thus a proposal must include, at minimum, a work statement, budget and subrecipient institutional official's endorsement for the services to be performed. Subcontracting arrangements are shown in the proposal to provide a clear delineation of the work to be performed by each organization and its cost. There also must be a complete budget itemizing the direct and indirect costs for each subrecipient. Upon award to the Foundation of the grant or contract, a subcontract will be awarded to the subrecipient institution.

CONSULTANTS
Consultants are experts outside the University and Foundation who bring a particular expertise to a project that is otherwise not available within the institution. University faculty members are normally not eligible to receive compensation from the Research Foundation for consulting services on sponsored projects. Federal cost principles do allow consultation in unusual cases, and in those instances the faculty should be listed as project personnel. Federal agencies specifically prohibit the payment of consultant fees from federal monies to persons employed by the federal government. The Internal Revenue Service provides guidelines for determining if an individual should be categorized as a consultant or employee.

TRAVEL
Describe who will be traveling, where, and for what purpose. The Foundation's Travel Policy includes considerations for planning travel and provides information on reimbursement rates for mileage, meals, lodging, and other expenses. When computing travel expenses, include transportation, lodging, per diem, registration, and other allowable expenses.

INDIRECT COSTS
Indirect costs, also called Facilities and Administrative (F&A) or overhead costs, are real expenses that cannot be readily identified with certain activities. Examples include library costs, utility costs, the costs of operating and maintaining the University's buildings and grounds, and the costs of administering sponsored projects. Indirect costs are associated with maintaining the infrastructure of the University that supports its research, public service, and instructional functions. 

The current indirect cost rate agreement for the ODU and the Research Foundation is negotiated with the Office of Naval Research and is dated March 19, 2015. The procedure for determining an educational institution's indirect cost rate is promulgated by the federal Office of Management and Budget in OMB Circular A-21, Cost Principles for Educational Institutions.


The rates listed below are valid until the next rate agreement goes into effect:
On campus rate: 55 percent of MTDC 
Off campus rate: 26 percent of MTDC 
Instruction rate: 53 percent of MTDC
IPA rate:  10 percent of MTDC

DOD contracts and subawards have different rates depending on where research is performed and when the original award was issued. Contact your assigned GCA for assistance.
Rates are applied to modified total direct costs (MTDC). MTDC is the sum of all budget categories except: equipment in excess of $5,000; subcontract amounts in excess of $25,000; graduate student tuition; rental costs; and participant support costs.

COST SHARING
In addition to funding from the sponsor, cost share or matching funds may be required. This requires a contribution toward the total costs of a project. The amount may vary from less than 5% to greater than 50% of the total project cost. Common sources of matching funds include a portion of the faculty member's project time for which no support funds are being requested ("Contributed Release Time") or cash to fund project costs contributed from the Department or College. Cost sharing should be included only if it is absolutely required by the sponsor. If cost sharing is included in the proposal then the sponsor will hold the institution accountable for contributing to the project the funds committed in the proposal. Documenting cost sharing imposes a substantial burden on the Principal Investigator to provide supporting documentation.

CONTACT
Contact your assigned Grant & Contract Administrator for assistance with budget development or questions regarding budget preparation or policies.

 

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