Budget Preparation

1. Budget Preparation Office of Sponsored Programs

2. Points of Contact • Loretta Derrick • Grant Development Specialist • Roberta Hohmann • Administrative Secretary • Dr. Paul E. Meyers • Executive Director University of Houston-Clear Lake

3. Budget Topics • Defining the budget • Getting started • Budget sections • University guidelines University of Houston-Clear Lake

4. What is the Project Budget? • Reflects costs of items and activities described in the project • Defines the project narrative with costs • Justifies the project narrative with costs • Puts all costs in one place to facilitate review University of Houston-Clear Lake

5. Why is the Budget So Important? • Generally reviewed before any other part of the proposal • Summarizes the proposal • Discloses the consistency of the proposal • A quick way for reviewers to tell if guidelines have been followed • Defines costs for each year of the project University of Houston-Clear Lake

6. Getting Started:Funds Available on Campus • What do you already have on hand to support the project? • personnel • facilities space • supplies • equipment • travel funds • external support University of Houston-Clear Lake

7. Getting Started:External Funds Needed • Personnel • Space • Supplies • Equipment • Travel funds • Other Hint -- Look to the Project Narrative for project needs University of Houston-Clear Lake

8. Getting Started • Funds Needed - Funds Available = Budget Proposal • Create a reasonable budget based on the funding you would need to complete the project if awarded by the sponsoring agency University of Houston-Clear Lake

9. Estimate Total Costs • Give a “best estimate” of your needs • The Grant Budget helps you determine what you want the sponsor to fund and what part of the project, if any, UHCL or other agencies need to fund • A fine line between “asking for too much” and “asking for too little” University of Houston-Clear Lake

10. Budget Principles • Think about the budget when searching for a sponsor • Think about the budget early in the proposal development University of Houston-Clear Lake

11. Budget Principles • Refer to budget lines frequently in the proposal, especially in: • Need Statement • Objectives • Management Plan (especially here) • Evaluation Plan • Dissemination Plan • Continuation Plan University of Houston-Clear Lake

12. Sections of the Budget • Direct Costs • Personnel (Generally 70%-80% of total) • salaries • fringe benefits • Maintenance and Operation Costs • Facilities and Administrative Costs (Indirect Costs) • Total Costs • Total Matching Costs • Total Cash + Matching Costs = Total Project Costs University of Houston-Clear Lake

13. What are F & A (Indirect) Costs? • General Costs that cannot be attributed to any one project -- for campus up-keep • Are negotiated with the Federal Agency DHHS • UHCL’s current rate: • 40% of Modified Total Direct Costs on campus • 17% of Modified Total Direct Costs off campus University of Houston-Clear Lake

14. Sponsor’s Maximum Award Limit • When the sponsoring agency states it will award no more than $300,000, what does that mean? • $300,000 including F&A costs? • $300,000 plus F&A costs? • Review guidelines for maximum award limit prior to completing the budget University of Houston-Clear Lake

15. What is Cost Sharing? • “. . . that portion of the project or program cost not borne by the sponsor . . .” OMB Circular A-110 University of Houston-Clear Lake

16. To Qualify as Cost Sharing, A Cost Must Be . . . (A-110) • Verifiable from the recipient’s records • Necessary and Reasonable for accomplishment of project objectives • Allowable under OMB Circular A-21 (Section 23) • Un-recovered indirect costs may be included only with prior approval of sponsor (usually stated in guidelines) University of Houston-Clear Lake

17. What About A-21? • A-21 does not mention cost sharing • may use same allowable items as funded by sponsor (e.g., personnel, fringes, materials, travel, equipment, space, etc.) • Same rules apply to verifying use of cash from the sponsor: • “separately budgeted and accounted for” • “internal application of institutional funds” • “consistent cost accounting standards are applied” University of Houston-Clear Lake

18. Reporting Cost Sharing • A-21 Requirements: All costs must be classified consistently regardless of the funding source • A-110 Requirements: Actual expenditures must be verifiable from the recipient’s records • Sponsor Requirements: Commitments are a condition of the award and must be met University of Houston-Clear Lake

19. Most CommonCost Sharing Problems? • Tendency to over commit • PIs generate many proposals, receive fewer awards • Offering cost sharing when not required • Proposals which include no cost sharing • Does sponsor expect some institutional cost sharing from PI? • What do we accumulate and report; how do we capture project-related effort? University of Houston-Clear Lake

20. The Facts on Cost Sharing • Look for sponsors that do not require cost sharing first • FYI--Two kinds of cost sharing: • Cash • In-Kind (also know as “non-cash”) • Use only if sponsor requires • Meet the minimum required • Think of in-kind sources first University of Houston-Clear Lake

21. UHCL Cost Sharing Sources • Departmental salaries and fringes • Dean or VP • Materials and supplies • Travel • Equipment • Internal Grants (during the same award period) • Other External Grants (not federally funded) University of Houston-Clear Lake

22. Sources of Cash Cost Sharing • Your department--discuss with Department Chair • Your Dean’s Office • External partners • Cannot use an existing external federal award to cash cost share in a new federal proposal • Cannot use money from an award you anticipate receiving University of Houston-Clear Lake

23. RecappingCost Sharing • See Dept. Chair, Dean, and OSP early in proposal development if you need cost sharing • Think of value of non-cash direct and indirect infrastructure (UHCL & partners) that can be applied first • Then think of UHCL cash sources • All sources used must be reasonable and certifiable for audit and sponsor University of Houston-Clear Lake

24. In-Kind (Non-Cash)Cost Sharing Sources** • Volunteers • calculate salaries and fringes • Space • Materials • Travel • Equipment • Facilities **(i.e, outside of UHS) University of Houston-Clear Lake

25. In-Kind Cost Sharing • Certifiable non-cash costs not drawn from any UHCL account • Examples: • facility space totally dedicated to the project • equipment depreciation for items over $500 totally dedicated to the project • volunteer salaries and fringes • Add an itemized in-kind cost section immediately below the cash cost section University of Houston-Clear Lake

26. Calculating Salaries • Determine personnel needed to accomplish project objectives and activities • Obtain current salaries for all personnel from the school business coordinator • Determine the amount of time each person will dedicate to the project • Determine if there are cash or in-kind cost sharing requirements from the sponsor’s guidelines University of Houston-Clear Lake

27. Calculating Salaries • Determine how much personnel time you want the sponsor to fund and how much you want to cost share • Calculate salaries using % release time, or by number of estimated days on the project • Tie the method to project objectives • Don’t forget about in-kind volunteer help Calculate their salaries and put in the in-kind section of the project budget University of Houston-Clear Lake

28. Release Time • The part of an employee’s contract dedicated to the project • May be funded by • Sponsor • UHCL • Sponsor and UHCL University of Houston-Clear Lake

29. Calculating Salaries • For multiple-year projects, figure a 3% Cost of Living Allowance increase for each consecutive year of the project. UHCL fiscal year is September 1 through August 31 • Disclaimer: 3% increase for each year of grant budget is only an estimate • This standard is university-approved for planning grant and contract budgets • Sponsors award this amount University of Houston-Clear Lake

30. Fringe Benefits • Fringes include: • Retirement • FICA • Unemployment • Workers’ compensation • Disability • Life Insurance • Health Insurance • The OSP can calculate current rates for UHCL employees University of Houston-Clear Lake

31. Fringe Benefits • Fringe rates are based on actuals and change periodically • Check with the Office of Sponsored Programs for current fringe benefit rates. University of Houston-Clear Lake

32. Maintenance and Operations Costs • Operating costs known as M & O are the second part of the budget • Operating costs consist of the costs of the materials, travel, equipment, and other costs that enable accomplishment of objectives to solve the problem • Operating costs need to be defined in the itemized budget and budget justification University of Houston-Clear Lake

33. The Proposal Signoff Sheet • Project Budget Summary • UHCL Cash Cost Sharing Commitments • Indicate In-Kind cost sharing • Supplemental Pay and/or Summer Pay University of Houston-Clear Lake

34. The Budget Narrative • Is a narrative justification of your costs • Follow the format of your budget • Describe all costs in terms of UHCL and/or standards of the sponsor • Must be familiar with sponsor’s guidelines • This is where you “show your work” University of Houston-Clear Lake

35. Organizing the Proposal • Need Statement • Goals/Objectives • Project Plan • Management Plan & Key Personnel • Evaluation Plan • Dissemination Plan • Continuation Plan University of Houston-Clear Lake

36. Organizing the Proposal (cont.) • Facilities and Equipment • Budget and Budget Explanation • and • Abstract • Table of Contents • Appendices University of Houston-Clear Lake

37. Review Guidelines for Submission • The number of copies that should be submitted • How the proposal should be submitted • Some proposals are submitted via U.S. mail • Some proposals require electronic submission • When the proposal should be submitted • Target date vs. deadline • Postmark date • Receipt date University of Houston-Clear Lake

38. Pre-submission Check Off • Proposal packet has been reviewed for: • Content • Grammar/Spelling • Page numbering/order • Submit to OSP for review • Executive Director for OSP approves proposal • Proposal sent to Provost for signature University of Houston-Clear Lake

39. Proposal Process Completed • Next Step? • Breath a sigh of relief! University of Houston-Clear Lake