Putting together your proposal budget can be a challenge. Maybe you’re not sure if certain costs are allowed, or how they should be listed. We’re here to help. Below we’ve tried to provide clarity on some budget categories that have the potential to cause confusion and general rules for allowability.
There are differences in the financial management and regulations governing grants, cooperative agreements, and contracts. In order to utilize the information presented below, be sure to understand which type of project you are developing. Definitions can be found here.
When developing your budget, it is important to understand what can and cannot be charged to your award. Allowable costs are governed by a number of laws, policies, and regulations, as well as varying sponsor requirements.
The Office of Management and Budget (OMB) Uniform Guidance for Federal Awards establishes cost principles applicable to federal grants and other award types. These principles are:
Allowable costs are necessary and reasonable to carry out the aims of the project. They must be treated consistently and abide by any limitations or exclusions in federal regulations or the sponsor agreement.
Please Note: The cost principles also apply to sub-recipients on applications. Their budget items must meet the same standards outlined above.
Costs are allocable if they are; (1) incurred to benefit a specific research award; or (2) are incurred to benefit the research award and other work at the institution and proportional benefit can be estimated using reasonable methods.
Costs are reasonable if a "prudent person", e.g. someone not affiliated with CNE, would have made the same decisions related to the costs under similar circumstances at the time the costs were incurred.
All costs must be consistently treated, such that costs incurred for the same purpose, in similar circumstances, must be consistently treated as direct or indirect costs.
Defined as having an acquisition cost of $5,000 or more and a usable life of >1 year.
General office supplies (pens, printer paper, laptops, copiers, etc) are not an allowable expense and should be covered by F&A unless they are specifically justifiable for technical or scientific use on a project.
A non-federal entity that has agreed to work with a CNE PI to perform substantive programmatic work. Sub-recipient personnel are designated as senior/key personnel and their effort requires a budget, justification, and scope of work. Sub-recipient personnel cannot include individuals who directly benefit from the program. They have some authority to make administrative and programmatic decisions about the work and must comply with the requirements of the funding agency and sub-award agreement. Sub-recipient personnel may author/co-author reports and publications.
Individual, business, or entity which provides goods or services to CNE generally on a purchase order. Contractors/vendors provide goods and services as part of their normal business operations and provide them to many purchasers in a competitive environment. Contractors/vendors do not contribute significantly to the design of the research project, nor provide a scope of work, nor make programmatic decisions. The goods and services they provide are ancillary to the research project. Contractors/vendors do not author publications from project data.
An individual or business who provides temporary, expert services from outside CNE and whose expertise is required to perform the research generally on a professional services agreement. A consultant may advise on research objectives but is not responsible for designing, implementing, or reporting programmatic objectives and are usually not considered senior/key personnel. The CNE PI determines the scope of work and the consultant is paid for completing specific objectives as opposed to being reimbursed for their time. Consultants do not typically author publications from project data.
Federal contracts are legally binding agreements between the federal government and another party. The federal government is acquiring goods or services in return for (in most cases) monetary compensation. Federal contracts are subject to a strict set of terms and conditions, including clauses from the Federal Acquisition Regulation (FAR).
When Principal Investigators/Project Leads are working under Federal Contracts they are required to fulfill the tasks outlined in the contract within the specified timeframe and remain on budget. There are usually strict reporting requirements, limited ability to change project scope or budget, and compensation based on deliverables and milestones.
As defined in 2 CFR 200.75, are “direct costs for items such as 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.” The “participant” in this case is a non-employee, for example, students, scientists, private sector employees, or visiting scholars, who are the recipients of a service or training such as a conference or seminar. Uniform Guidance requires prior approval of the Federal Agency in order to incur these costs under federally sponsored awards. These are most often applicable to NSF grants.
Participants who agree to participate as a human subject in a research project are NOT categorized as participant support costs. Rather, these payments should be budgeted as Other Direct Costs.
Expenses incurred to meet cost-sharing commitments require the same accounting, financial, legal, and regulatory burdens as expenses charged directly to CNE sponsored awards. Expenditures recorded as cost sharing must follow the guidance in this document and the CNE Cost Sharing Policy which will be available soon.
In most cases, the sponsor will provide a draft budget that includes all reimbursable procedures, services, and personnel along with the proposed reimbursement. Each line item within the proposed budget needs to be carefully reviewed to determine if it is feasible from an operations perspective and also to assess our organization’s actual cost as compared to what the sponsor proposed.
Refer to the Clinical Trials page for the research price request procedure.
It is also critical to ensure that reimbursement for PI and research personnel effort is reflective of the actual cost and that consideration is given to fees assessed by other service areas (eg IRB, Pharmacy, Lab, etc). Examples of costs incurred by our organization that a sponsor may not include in their original budget proposal include:
Preliminary budget negotiation between the PI and the technical contact for the sponsor is encouraged. However, PIs should reach out to SPRA for established rates for fringe and facilities and administrative costs.
The Principal Investigator should not attempt to negotiate rates for facilities and administrative costs (or fringe benefits) that are different from the federally-approved rates for CNE and Affiliates, nor should it be implied that a reduction in the approved rates would be acceptable to CNE. Contact SPRA if the sponsor indicates they do not wish to pay fully approved rates.
It is CNE institutional policy to inflate salary by 3% in the out years of grant proposals as long as it is allowed by the sponsor. Before preparing your budget you should ensure salary inflation is allowed by the sponsor. In the case of NIH applications, confirm the institute you are applying to allows inflation.
National Center for Complementary and Integrative Health
National Eye Institute
National Heart, Lung, and Blood Institute
National Institute of Allergy and Infectious Diseases
National Institute of Child Health and Human Development
National Institute of Nursing Research
National Institute on Deafness and Other Communication Disorders
Per NIH the definition of indirect costs is: “Necessary costs incurred by a recipient for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of F&A (indirect) costs. F&A (indirect) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.”A visual representation can be found here.
Yes, it is Care New England policy to inflate salaries 3% in the out years of new grant submissions unless forbidden in the FOA or by the funding agency.