The Nuts and bolts of grant Proposal budget preparation

1. The Nuts and bolts of grant Proposal budget preparation Office of Sponsored Programs and Research Activity (OSPRA) University of Detroit Mercy

2. Your Goal: • To develop a budget that is • Reasonable • Allowable • Allocable Draft a Rough Budget Early!

3. Where do I start? • Analyze the budget section in the RFP • Use the Agency Forms included in the RFP • Read the full RFP for additional details • Expenses are allowed unless the RFP specifically prohibits, but all expenses written in federal grants MUST align with OMB Circular A-21and A-110

4. Resources You Will Need • Agency RFP/Budget Forms • UDM Budget Form http://www.udmercy.edu/academicaffairs/ospra/forms/index.htm • UDM Rates: • Indirect Costs (F&A) and Fringe Benefits, found on the UDM Fact Sheet on the OSPRA site: http://www.udmercy.edu/academicaffairs/ospra/facts/index.htm • Travel Policies, listed on the Employee Expense and Reimbursement Form http://www.udmercy.edu/purchasing/forms/pdf/EMPLOYEE_EXPENSE_AND_REIMBURSEMENT_42009.pdf

5. Basic Budgets Types of Costs • Salaries and Wages (Fringes) • Equipment and Permanent Property • Travel • Other Direct Costs • Materials • Publication • Tuition • Consultants/Subcontracts • Other • Indirect Costs (F&A)

6. Salaries and Wages Which UDM faculty/staff will work on the project? • You • Co-PI • Graduate Students • Post docs • Undergraduates For how much time?

7. On-term Salaries • Full-time faculty, on-termmonths • Will you be spending 25% of your time on this project for an entire year? If yes, write 25% of your annual salary into the grant per year and request a course release for each semester (fall/winter) from your Dean (for one semester, use 12.5% of your annual salary) • No stipends (in excess of annual salary) for on-term months according to federal regulations • Salary estimate increases 3% every fiscal year • UDM budget sheet (see page 2 of the year 1 tab) will make many of the calculations for you.

8. Off-term Salaries • Full-time faculty, off-term months • Eligible for stipends “not in excess of base salary divided by the period to which the base salary relates,” so that one month’s summer salary will equal the same as one month on-term salary. • Fringes are 8.5% for summer months • Many granting agencies limit summer salary to 2 months

9. Effort Reporting • 100% of your time equals all UDM related work, including teaching, research, administrative, vacation, etc. • In the on-term, 75% of a typical faculty appointment is for teaching (three classes, 25% per class), with 25% for other duties (research, committees, administrative, etc.) A typical course release is, therefore, 25%. • In the off-term (summer), there are three summer months total for teaching, research, administrative, vacation, etc. This is 100% of time. Be sure to be reasonable when allocating time to a grant, taking into consideration teaching, vacation, administrative and other duties. If you allocate three months of your time during the summer to a grant, for example, then there is no time for vacation, much less teaching. • http://www.udmercy.edu/academicaffairs/ospra/effortreporting/index.htm

10. Fringe Benefits • Fringe Benefit Rates: • Full Time Pay - 34% • Part Time Pay - 8.5% (includes off-term) • Enrolled graduate and undergraduate students are exempt from FICA and should be excluded from fringe calculations.

11. Equipment • Equipment = Nonexpendable property more than $5,000 and useful life of more than one year. • Check with agency to be sure equipment and other capital costs are allowable. • Best to have either quotes, catalog references, on-line pricing (including shipping, installation, maintenance) to make a case that cost is reasonable.

12. Travel • Is it required for the project? • Does it benefit the project? • Dissemination of project results? • Check UDM’s Purchasing Site for policies on travel reimbursement http://www.udmercy.edu/purchasing/policies/index.htm

13. Other Direct Costs • Materials and Supplies • Publication/Dissemination/Documentation • Consultant Services • Contract/Subcontract Services • Tuition Remission • Yearly increases in tuition written into budget sheet • Other Costs

14. Other Direct Costs • Are these costs directly billable to the project? • Laptops, software, etc. Is it specifically for the project, and is it necessary to conduct research? Usually these will fall under indirect costs. • Similarly, postage, telephone, printing, photocopying will usually fall under indirect costs unless project specific. Double check the RFP to see if allowable. • Costs for food are usually not allowed unless adequate substantiation of business purpose, for instance, in the case of conducting workshops/seminars, food is often allowable as a participant cost.

15. Other Direct Costs -Participant Costs • Typical Costs include: • Training (tuition, books, materials, fees) • Stipends • Meals • Lodging • Travel • Calculate the cost per participant, may be a limit • Check the RFP, some costs may be disallowed

16. Contract Services • Employee or Contractor? • Special Consultants • Maximum day rate? Check with agency. • Vendor Contracts • Negotiated by procurement.

17. Subcontracts or Sub-Awards • Must have: • Letter of Commitment – authorized signature • Statement of Work • Deliverables • Timeline • Detailed Itemized Budget • Budget Justification/Narrative

18. Indirect Costs • Also called Facilities & Administrative costs (F&A) or overhead • Costs borne by UDM to support sponsored projects that cannot be clearly identified with a specific project • Includes • Infrastructure • Facilities • Administration

19. Indirect Costs • Federally negotiated indirect cost rate is 50% of Salary and Wages (Fringes are not included in this basis and should be calculated as a separate direct cost line item). • Check limits on indirect costs in the RFP, may be less (for instance, HRSA limits indirect costs to 8% of modified total direct costs) • Recovering indirect costs can be significant

20. Unallowable Costs (federal) • Some examples: • Alcoholic Beverages • Advertising (some types allowed) • Entertainment (though sometimes food is allowable with adequate substantiation of business purpose) • Lobbying • Organized fund raising • Student Activities • Athletics

21. Other Considerations • If your proposal includes renovations to a facility, has the Facilities Department been consulted? • If the proposal is a collaboration between more than one department, have all Deans signed off? • If equipment bought through the grant will require regular maintenance, has this been accounted for? • Are there any hidden costs to the University? • What happens when the grant period is over?

22. Cost Sharing • Check the RFP to see if match is required and only cost share if it is required. • Third-party cost-sharing requires a letter from the funder (non-federal). If this cost-sharing is not met, UDM will need to cover it. • If a match is required, the following apply: • Allowable as direct or indirect costs • Reasonable, justifiable, and verifiable • Cash or in-kind • Can’t match federal grants with other federal grants • Don’t use the same match twice

23. Budget Narrative • Make your case that the budget is reasonable, appropriate, adequate • Provide detail about items to be purchased • Indicate how costs were calculated (can include spreadsheets) • Make sure budget narrative is consistent with grant narrative and detailed budget

24. Routing • OSPRA and/or the Restricted Fund Accountant are available to assist with early drafts of budgets. • When you have a final budget, you will need your Dean to sign off. • When your Dean has signed off, please route budgets directly to OSPRA. • OSPRA will obtain signatures from the Budget Office and the AVP. • Please begin the signature process seven days in advance of the agency deadline. Let me know when you have given your proposal to your Dean.

25. Contact • OSPRA Cate Caldwell313-993-1544caldwecr@udmercy.edu • Budget Office Terra Dews313-578-0390dewstm@udmercy.edu