Budget Notes
1. Personnel: This section of the budget
will show only those personnel who are or will be employees of the applicant
institution (also known as the prime grantee or contractor). Reimbursement
for employees of subcontractors will be shown on separate subcontract budgets.
2. Full Time Equivalent (FTE) on Project:
This should show the actual time to be spent on the project for each named
employee for each budget year. Note that for employees to be hired
(e.g., the Project Coordinator, Research Assistant, Interviewer, and Data
Entry person) the FTE for the first year has been adjusted by the number
of months the employee will actually work. The Project Coordinator,
for instance, is a full-time (1 FTE) position, but this person will probably
not be hired until the third month of Year 1. For that reason, only
75% of the salary has been budgeted. Likewise, the Interviewer, a
half-time (.5 FTE) position, will only work 6 months of Year 1, so this
position is budgeted only for .25 FTE in this year. These adjustments
to personnel activity are based on the project timeline.
3. FTE to be Reimbursed: Note that for
some personnel already employed by the institution, the amount of work
time to be reimbursed by the grant is less than the actual amount of time
to be spent on the project. The difference between these time commitments
represents contributed time (or an "in-kind" contribution).
4. Base Salary: To accommodate likely raises
in subsequent years of the project, base salaries are increased by 3% in
Budget Years 2 and 3, with the exception of the Principal Investigator's
salary (see Note 6). If you anticipate that the project will start
in the next fiscal year, you should increase today's salaries by 3% for
Year 1 as well.
5. Fringe Benefit Rate: The appropriate fringe
benefit rate can always be obtained by calling your finance office (or
the Hektoen Institute if it will be the employer
of your project staff). In subsequent budget years, this rate has
been raised by 1% increments to anticipate higher rates. Note that
part-time employees, who do not receive health insurance and other benefits,
must still have funds put aside for Social Security, workman's compensation
and other legally mandated benefits.
6. PI's Salary: Since this budget was prepared
for submission to NIH, the federal base salary reimbursement
limit of $125,900 applies. This base salary is not increased
for budget Years 2 and 3.
7. Consultants: You may negotiate any reasonable
compensation for necessary consultants, but be aware of the difference
between consultants and employees. Note that
the consultants' time fluctuates from year to year with the needs of the
project. Statistical consultation, for instance, will be most needed
in Year 3.
8. Equipment: Many funding agencies will
ask that equipment be itemized separately from other expenses. The
NIH, however, requires that only equipment
with a usable life of more than 1 year and a unit price of $5,000 or more
be itemized in this category. For this reason, in the final PHS 398
page for this project, these items will be included under "Supplies" rather
than "Equipment".
9. Itemized Expenses: If you can
easily show the rationale for the total amount budgeted, as with this monthly
telephone charge, put it in the budget worksheet and in the final document.
This will provide at-a-glance justification for your expenses.
10. Patient Care Costs: Not all grants
allow patient care costs. Be sure yours does, and that the costs
are well justified. For some grants you may have to show any revenue
generated by the project, including patient care revenue, which may be
used to offset grant costs.
11. Consortium/Contractual Costs: Each
subcontract will require its own budget, as detailed and well justified
as this one for the prime contractor. The subcontract costs are summarized
as line items in the main budget.
12. Indirect Costs for Subcontractors:
NIH now requires that subcontract direct and indirect costs be shown separately.
Make sure the correct indirect cost rate is used for each subcontractor:
Both the rate and the basis against which it will be calculated vary from
institution to institution. To avoid mistakes, the subcontractor's
grants office or finance office should approve the subcontract budget.
13. Calculation of Indirect Costs: To
carry this out, you must know both your institution's negotiated indirect
cost rate and the basis (direct costs) against which it will be calculated.
If you are unsure, call the Office of Research Development.
14. Direct Cost Basis: The indirect cost
agreement for this sample institution specifies that the basis will be
total direct costs, minus equipment and patient care costs. This
kind of basis is called "Modified Total Direct Cost" or MTDC basis.
Recall that the "equipment" listed is not considered equipment under NIH
guidelines, but rather supplies, so it does not have to be deducted to
find the direct cost basis here.
15. Indirect Cost Rate: Once you know the direct
cost basis, simply multiply it by the negotiated indirect cost rate to
find the indirect costs to be charged on this project.
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