Office of Research Search

Preparing the Budget

Preparation of the budget is, for many researchers, the most difficult section of the proposal. Granting agencies see hundreds of proposals yearly and are proficient at comparing level of funding requested to the research work proposed. Therefore, it is important that the budget section of the proposal reflect, as accurately as possible, the funding needed to carry out the proposed research.

The investigator should neither overestimate the funds required nor underestimate budgetary needs. Either of these strategies may lead to proposal rejection. A budget, accurately detailing the funds necessary to carry out the technical statement of work, can strengthen the total proposal and increase the likelihood of funding. Furthermore, a carefully prepared budget can often identify weak areas in the proposal narrative and result in improvement of the technical proposal.

Personnel in OSP are experienced in preparing budgets, and encourage investigators to contact them when they have a draft of the budget. To make preparing budgets easier, OSP offers Standard Budget Preparation Template with formulas already written into the spreadsheet.

OSP staff can provide expertise in completing a budget request, applying fringe benefit and facilities and administrative cost rates, documenting subcontracts and/or subrecipient agreements, consultants, matching funds, and cost-sharing. In the case of more complicated proposal requirements, OSP will complete sponsor assurances and certifications, and when requested, will assist the investigator in interpreting RFP guidelines.

Direct Costs

Salaries and Wages

To determine total salaries and wages, list the amount of time to be spent by each person who will be working on the project. Time should normally be shown in terms of a percent of full-time effort. Show breakdown between summer and regular academic year for faculty.

No employee may be scheduled for activities in excess of 100% of effort in any given month.

Sponsored activities may not result in any employees receiving compensation at a rate in excess of their authorized salary or academic rate. For multi-year projects, the budget should take into consideration any possible salary increases.

Annually, Congress legislatively mandates a provision limiting (capping) the direct salary that an individual may receive under an NIH grant. For numerous years, they have restricted the amount of direct salary to Executive Level I of the Federal Executive Pay scale. However, effective with awards issued on or after December 23, 2011, direct salary is now restricted at Executive Level II of the Federal Executive Pay scale. The Federal Executive Pay scale is revised annually with an effective period of January 1 through December 31. For awards issued prior to December 23, 2011, the Executive Level I rate was established at $199,700/yr ($16,642/mo). For calendar 2012 awards issued on or after December 23, 2011, the Executive Level II rate $179,700 ($14,975/mo). [Note: During this transition year, it is conceivable that a faculty member with more than one NIH award could be subject to different capped amounts.] For awards issued on or after January 12, 2014, the Executive Level II rate is $181,500 ($15,125/mo).

A National Institutes of Health Salary Cap Calculator is available to calculate your cap.

Fringe Benefits

Fringe benefits are a direct cost to a sponsored project, are clearly related to the salaries and wages to be paid, and are shown as a separate entry in the budget. The Department of Health and Human Services (DHHS) no longer negotiates fringe benefit rates for the University. Fringe benefit costs have been calculated based on historical data. The actual costs for fringe benefits are charged (billed) to the sponsored project at the time the costs are incurred; the amount charged is based on salary, selected benefit package, and other variables applicable to the individual employee.

If the actual fringe benefit expenses for a project exceed the projected amount included in the budget, it is the responsibility of the Principal Investigator to pay these actual costs from the direct award funds provided by the sponsor. The OSP can provide advice in the preparation of budgets.

Consultants

Normally, consultants are paid a consulting fee plus travel expenses. Many Sponsors do not permit payments to consultants and some restrict or limit such payments. If in doubt as to whether consultants are allowed or rates paid to consultants, refer to the Sponsor's program literature or contact the OSP. Whenever possible, identify the proposed consultant by name, indicate the number of days of work, daily rate, and provide a curriculum vitae for the consultant in the proposal.

The participation of paid consultants in a sponsored project for periods longer than two weeks should be discussed with the OSP prior to submission of the proposal. Institutional consulting policies are contained in the Consultant's Policy.

Capital Equipment

Equipment means an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per acquisition components, other than on-campus machine-shop labor, used to fabricate an item of capital equipment may be considered as capital equipment for budgeting purposes and should be identified for inventory purposes.

Expendable Equipment and Supplies

These are items costing less than $5,000. Normally, a research project will consume expendable supplies such as laboratory items, teaching aids, computer software, and research supplies. A reasonable amount should be budgeted for these items.

Faculty who anticipate the use of a particularly large number of research animals or animals requiring special care should consult with the Animal Resources Center staff to see whether the funds estimated will be adequate and whether the Animal Resource Center has adequate facilities to accommodate the animals.

Publication Costs

Budget the anticipated cost of publishing the results of the research, keeping in mind that page charges may vary from journal to journal. Consider both page charges and reprint costs.

Travel

If foreign travel is anticipated, it must be specified. Travel costs expected to exceed institutional guidelines must be specified. For travel rates, refer to the following: State of Texas Travel Allowance Guide.

Subcontracts/Subrecipient Agreement

When a proposal contemplates a subcontract/subrecipient agreement to a named subcontractor, the subcontractor's statement of work, detailed budget, and a letter of commitment signed by the subcontractor's authorized institutional representative, should be provided to OSP. If the Principal Investigator(s) has any direct or indirect financial or other interest in the subcontractor/subrecipient organization, a disclosing statement must be submitted to the OSP as well. For clarification between a subcontractor, vendor, and consultant, click this page.

Other Direct Costs

Consider, as appropriate, costs for copying, long-distance telephone calls, postage, reference books and materials, tuition and required fees for participating graduate students, equipment maintenance, and contracted services. Revisions of OMB A-21 relevant to office supplies, postage, local telephone costs, and memberships: The Principal Investigator needs to justify the need for these items in relation to the project, and it is the Principal Investigator's judgment that this is the best way to spend the funds.

Indirect Costs

Facilities and Administrative Costs

Facilities and administrative costs must be included using the University's federally-negotiated rates unless the sponsor has a written policy applicable to all potential proposers which deviates from these rates. All deviations are subject to UT Dallas administrative approval. Sponsor guidelines limiting facilities and administrative costs must be provided with your proposal.

To calculate the facilities and administrative costs for a project, do the following:

Calculate the Total Direct Costs (TDC) which is simply the sum of all direct costs:

  • salaries
  • benefits
  • supplies
  • equipment
  • etc ...

Calculate the Modified Total Direct Cost (MTDC) by subtracting the following exempt items from the TDC:

  • capital equipment
  • graduate student tuition and required fees
  • participant support costs
  • subcontract/subrecipient agreement costs in excess of the first $25,000 of each subcontract/subrecipient agreement over the life of the subcontract/subrecipient agreement

Multiply the F&A rate against the MTDC base to calculate the facilities and administrative costs for the project.

Add the TDC to the F&A costs to calculate the Total Project Costs.

Summary:

  • TDC - exemptions = MTDC
  • MTDC x F&A rate = F&A costs
  • TDC + F&A costs= Total Project Costs

Please note that since the federally-negotiated facilities and administrative cost rates are subject to change annually, Principal Investigators should be prepared to make adjustments in budgets for such changes. See the Facilities and Administrative Cost Rate Agreement or contact the Office of Sponsored Projects, 972-883-2313, for more specific information.

On and Off-Campus Rates

Off campus rates are generally used when the principal investigator or other research staff is actually conducting research away from the campus for a period of no less than one long semester or all three summer months. Prior to submitting your proposal, please contact the Office of Sponsored Projects for assistance.

Updated: January 25, 2012