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Budgeting, Budget Justification, & Templates. Jim Childers, Grants & Contracts Accounting Candice Ferguson, Office of Sponsored Programs. Housekeeping. Handouts Slides Books Budgets Modular Budgets Practice Exercises Allowable and Unallowable Questions on Budgets. Agenda. Welcome - PowerPoint PPT Presentation
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Office of Sponsored ProgramsAll rights reserved GTRC
Budgeting, Budget Justification, & Templates
Jim Childers, Grants & Contracts Accounting
Candice Ferguson, Office of Sponsored Programs
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Agenda
WelcomeTerminology:
Cost Principles, Budget, Direct Costs, F&A
Terminology: Cost Share, Audit
Agency SpecificsAdjourn…
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Goals
To give an overview of the guidelines and fundamentals of a proposal budget
Discussions will include2 CFR 200
Cost Accounting Standards (CAS)
Direct Cost
Indirect Cost
Project Budgeting
Cost sharing
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Cost Principles
2 CFR 200 Establishes principles for determining costs applicable to grants, contracts, and other agreements with non-federal entities.Determines what costs can be included in the F&A calculationRemember: addresses both direct and F&A costs as well as specific allowable costs Electronic Code of Federal Regulations http://www.ecfr.gov/
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Cost Principles – Cont’d
2 CFR 200 It incorporates four Cost Accounting Standards (CAS)
Consistency in estimating, accumulating and reporting cost
Consistency in allocating cost
Accounting for unallowable cost
Consistency in periods
The intent of CAS
Standardize university costing practices
Standardize requirements for recipients
Preclude a perceived over charge to the government
Prevent charging unallowable costs to the federal award
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
The Budget Where to begin?
Read the Program AnnouncementWrite the research proposalCreate the budget and budget justificationRe-read the Program AnnouncementMake any changes to finalize the budget
Initial DecisionsHow much should I request?What costs should I include?
Function of the Budget?
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Budget & Budget JustificationBudget
A competitive budget is one that will provide the sponsor with a complete financial picture of the proposed project.Budgets are reviewed by the sponsor to verify if the costs are reasonable and necessary to carry out the proposed project, and if it conforms to the sponsor's instructions.
Budget JustificationProvides further explanation of the direct costs involved with the project.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
FY16 Provisional RatesFiscal year: Begins on July 1st and ends on June 30thFringe Benefits 30.0%
Yes - Employees (includes Post Docs)No- Grad & Undergrad Students
Limited Benefits (50-74% time) 21.3%Partial Benefits 1.5%
Tech TempsOthers
Graduate Student Health Insurance 3.0%
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Mock BudgetSalaries (Faculty) $10,0001 GRA $20,000Fringe Benefits (FB) $3,600Equipment (Radar) $10,000Subaward $52,000Tuition Remission $17,868M&S $5,000___________________________Total Direct (TD) Costs: $118,468
Do the proposed cost directly assist in the performance of the project during the award period? Will the service or materials comply with the sponsor’s rules for allowable expense?Do the proposed cost exceed any budget category limitations
Do the proposed cost directly assist in the performance of the project during the award period? Will the service or materials comply with the sponsor’s rules for allowable expense?Do the proposed cost exceed any budget category limitations
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Direct CostsDirect costs are those that can be specifically identified with a single sponsored project. Direct costs should be reflected by major budget categories with an attached narrative detailing how the costs were calculated.
Salaries/wagesFringe benefits
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Direct CostsDirect costs are those that can be specifically identified with a single sponsored project. Direct costs should be reflected by major budget categories with an attached narrative detailing how the costs were calculated.
EquipmentTravel Participant support costs.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Direct CostsDirect costs are those that can be specifically identified with a single sponsored project. Direct costs should be reflected by major budget categories with an attached narrative detailing how the costs were calculated.
Contracted servicesSuppliesCommunicationAwards (tuition remission)
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
F&A Facilities & Administrative
(“Indirect Costs”)
Costs incurred for common or joint objectives
and, therefore, cannot be readily identified with a
particular project or program.
e.g., Utilities, Plant Maintenance
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
F&AFacilities:
building depreciationequipment depreciationmaintenance & repair utilities
Administrative:
Salaries, supplies, telecomm, etc. of admin depts :
Purchasing DeptPayroll DeptController’s OfficeDeans’ OfficesPresident’s Office
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
F&A Costs are RealReimbursement of expenses from the past to cover future costs.
Annual F&A rate proposal for negotiation with ONR
Some sponsors do not pay the fully negotiated rate (e.g., Ed, NIH training grants)
Negotiated rates may not cover our real costs
2 CFR 200 limits the recovery of certain costs (i.e., administrative capped @ 26%)
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
A Brief History of Indirect Cost Policy1942 Green Book Navy Department
1947 Blue Book Navy Department (ONR)
1958 Budget Circular A-21 Bureau of the Budget
1970s Fed Mgmt Dir 73-8 General Services Agency
1979 Circular A-21 Back to OMB
1990s #!%?*#&!!!!
2014 2 CFR 200 Circular Reform
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
F&A Cost Calculation
Facilities & Administrative Expense
----------------------------------------- MTDC Base
F&A Rate
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
MTDCModified Total Direct Cost
F&A Rates are based on Modified Total Direct Costs which is the total direct cost (TDC) less equipment over $5,000, subcontract expenses in excess of $25,000, student tuition remission, participant support costs, and rental of off-campus space.
i.e., Total Direct Cost
minus Equipment Purchases > $ 5,000 Sub-Contract expenses > $ 25,000 Tuition Remission Participant Support Costs Rental of Off-Campus space
= MTDC
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Building and Equipment
Depreciation
Operations &Maintenance
General Administration
Department Administration
Sponsored Project
Administration
Library
Student Services
Interest
Allocation Base
Instruction & Departmental
Research
Organized Research
Other Sponsored
Activities
MTDC Instruction &
Dept. Research
MTDC Organized Research
MTDC Other Sponsored Activities
F&A CostAllocated To
DistributionBase
F&A CostRate
%
%
%
Other Institutional
Actives
Space
Space
MTDC
Space
F&A Cost Pools
MTDC
MTDC
MTDC
MTDC
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
FY16* Facilities & Administrative Rates
Research Capped 55.9%Off Campus 26.0%
Research Uncapped (DoD Contracts only) 59.6%Off Campus 29.7%
Other Sponsored 34.82%
Instruction 53.92%
Industrial (Non-Government) 61.8%
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Mock BudgetSalaries (Faculty) $10,0001 GRA $20,000Fringe Benefits (FB) $3,500Equipment (Radar) $10,000Subaward $52,000Tuition Remission $16,392M&S $5,000______________________________Total Direct (TD)Costs: $116,892
1
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Modified Total Direct CostItems NOT included in MTDC
EquipmentTuition RemissionParticipant Support CostsRental of Off-Campus Space
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
SubAwardsF&A charged on 1st $25,000
I.E., $50,000 subaward still only $25,000
GTRI subawards = Interdivisional TransfersBudget Justification with GTRI include a few lines explaining what GTRI is, why they are using them to do some of the research effort and include a short summary budget with only major category lines (Personnel, M&S, travel, consultant, tuition remission, overhead-combined)
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Calculating MTDC
Total Direct (TD)Costs: $118,468 (Salaries, FB, Travel, M&S etc.)
Equipment Costs -$10,000
SubAward -$27,000
($52,000 - $25,000)
Tuition Remission -$17,868
------------------------------------------------
Modified Total Direct Costs $63,600
1
2
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
F&A (Indirect) Cost Calculation:
$63,600 (MTDC Base)* 55.9% = $35,552
Project Total (Direct & F&A)
$118,468 (TD) + 35,552 (F&A) = $154,020
Calculating F&A Costs
1
2 3
43
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
$118,468 (TD) + 35,552 (F&A) = $154,020
Project Total
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
GTRIGTRI recovers costs under the Federal Acquisition Regulations.
FAR 31.2 – Contracts with Commercial Organizations Reg.
Cost Categories:
Lab Overhead
General & Administration Rates
Cost Of Money(2)
Additional fees can be added
Contact your “SPA” rep.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Cost Sharing Voluntary committed cost share is prohibitedCost Sharing is the difference between the effort expended on a project and the effort that is paid by a sponsor. Cost sharing must be written down (& authorized) by the department and the VP for Research. Cost sharing dollars can only be used once (can’t count the same effort on two grants!) and must be verifiable.Cost sharing cannot come from federal funds.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Types of Cost SharingCash
Salaries & Fringes, Travel, Equipment, etc. VP Research, Dean, Chair, External Partners
Non-cash (In-Kind)Volunteers, Materials, Facilities, etc.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Audits: Documentation is Key
Defend the Debit!
Why did you charge the award this expense?
May be 4+ years before the award is audited. Document the file!
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
How Departments Influence Cost Recovery
Correct coding of expenditures
Correct assignment of expenditures
Treatment of sponsored direct costs
Treatment of “normally indirect costs”
Identification of unallowable costs
Understanding CAS
Know the requirements associated with Cost Sharing
Office of Sponsored Programs
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Agency Specifics: NSFInclusion of voluntary committed cost share is prohibited in solicited & unsolicited proposals
Only 8 programs have been approved to require cost sharing:– Innovation Corps Program (I-Corps)– Major Research Instrumentation Program– Robert Noyce Scholarship Program – Engineering Research Centers– Industry/University Cooperative Research Centers– Experimental Program to Stimulate Competitive Research – Small Business Innovation Research (SBIR) Program (where
applicable)– Small Business Technology Transfer (STTR) Program (where
applicable)
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Agency Specifics: NSFSenior/Key Personnel– If no person months and no salary requested, person
cannot be listed in Section A of budget– Consistency with NSF’s Cost Sharing Policy– GT personnel listed in Section A of NSF proposed budget
should adhere to the GT 1% minimum effort policy– If no person months and no salary requested, remove from
Section A. Their names will remain on Cover Sheet– Role should be described in Facilities, Equipment, and
Other Resources section of the proposal
Office of Sponsored Programs
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Agency Specifics: NSF
Facilities, Equipment, and Other Resources– New format in FastLane– Consistency with NSF’s Cost Sharing Policy– No reference to cost, date of acquisition, and whether
the resources are currently available or would be provided upon receipt of the award
– If no resources to describe, then a statement to that effect should be included in this section of the proposal and uploaded to FastLane
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
NIH Modular GrantsModular Grants
Less then or = $250,000 per year in direct costsIndividual Awards (R01, R03, R15, R21, R41, and R43)Proposals can be rejected without review if format not followed
Key FeaturesDirect costs will be in $25,000 modulesSubawards are rounded to the nearest $1,000 Utilize salary cap ($183,300)
October 1, 2013 through January 11, 2014 $179,700January 12, 2014 through September 30, 2014 $181,500
Typically modular grants request the same number of modules in each year. [Can be increased for one year if purchasing equipment]Biographical Sketch Page Increase to 3 PagesOther Support Form GG deleted (captured in Bio-Sketch)
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
National Institutes of Health NIH Information
Georgia Tech still requires an internal budget! The university is required to adhere to many rules and regulations.
Policy: Subawards F&A are not included in the capped amount (i.e., $250,000 does not include the subs F&A costs – separately accounted form)
> $500,000 Need prior approval to send proposalJust In Time (JIT)
NIH requires an itemization of all key personnel’s IRB training.
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Mock Budget
Remember to stick to your budget!
(Grad Student vs. Post Doc!)
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Review
Fundamentals of a proposal budget
Discussions will include2 CFR 200
Cost Accounting Standards (CAS)
Direct Cost
Indirect Cost
Project Budgeting
Cost sharing
Office of Sponsored ProgramsAll rights reserved GTRC
Budgets, Budget Template & Budget Justification
Any final questions?
Thank you for attending the class.
Remember we are here to help.
Please ask questions!