Budget Preparation

This section provides guidance to principal investigators (PIs) and their staff in the development of budgets that comply with sponsor requirements and the Research Foundation and school policies.

Procedures of implementation

Every grant application needs a detailed budget, and its functions are as follows:

• It estimates the cost of completing a proposal’s objectives. The sponsor will use budget details to determine whether the proposal is economically feasible and realistic.
• It provides a means of monitoring the project’s financial activities over the life of the award against the original proposed budget and project objectives.

PIs must work closely with a Grants Officer from the SPaR office to develop of sponsored program budgets to ensure budget compliance. Whether a PI is putting together a proposal for federal funding or preparing an application for submission to a foundation, the proposal guidelines will almost always have specific directions and restrictions for preparing a budget.

You can contact SPaR via email at SPaR@sph.cuny.edu

Federal cost principles

Although not all budgets are for federal grant proposals, the federal cost principles below are good practice in developing any sponsored budgets. The cost principles address four tests to determine the allowability of costs.

Reasonableness (Including Necessity) A cost may be considered reasonable if the nature of the goods or services acquired or applied and the associated dollar amount reflects the action that a prudent person would have taken under the circumstances prevailing when deciding to incur the cost.

Allocability A cost is allocable to a specific grant, function, department, or other component, known as a cost objective, if the goods or services involved are chargeable or assignable to that cost objective in accordance with the relative benefits received or other equitable relationship.

Consistency Recipients must be consistent in assigning costs to cost objectives. Costs may be charged as either direct costs or F&A costs, depending on their identifiable benefit to a particular project or program. However, all costs must be treated consistently for all work of the organization under similar circumstances, regardless of the funding source.

Conformance This test of allowability-conformance with limitations and exclusions as contained in the terms and conditions of award, including those in the cost principles-varies by the type of activity, the type of recipient, and other characteristics of individual awards.

Budget Development

A budget is divided into two cost classifications:

1. Direct costs; and
2. Facilities & Administrative costs (also referred to as F&A, indirect, or overhead costs)

With this in mind, one should create budget estimates using the following questions as a guide to completing budget categories (PS, OTPS, and F&A):

Direct Costs

Personal- Service (PS)

• Who will work on the project (Principal Investigator(s), Research Assistants, etc.)?
• What tasks will each person need to complete, and what concrete deliverables will comprise their principal duties and responsibilities?
• How much effort will they need to dedicate to complete program tasks?
• At what rate will personnel be paid?

Any payment to employed personnel will also incur additional fringe benefits costs. The Fringe Benefit Rates Chart details current fringe benefit rates.

Other Than Personal Service (OTPS)

Equipment: CUNY’s Capital Asset Policy defines “equipment” as “fixed or movable tangible assets to be used for operations, the benefits of which extend beyond one year from the date of acquisition… with an acquisition cost of $5,000 or more…” All amounts related to putting the asset into service, including shipping, set up, etc., must also be included in the cost of equipment. Therefore, for projects with assets purchased below the $5,000 threshold, equipment may not be required to be budgeted. However, check sponsor guidelines to ensure that any segregation of sensitive assets below the capitalization threshold is included in the budget.

Supplies: Include necessary items (unit cost under $5,000) which are directly related to the project’s objectives.

Note: Office supplies, furniture, phones, and phone lines are generally considered unallowable in proposals for federal funding, as they are considered part of the indirect cost. However, guidelines permitting, these items may be included in some foundation submissions.

Additionally, NIH proposals may permit the cost of paper and printing associated with producing data collection if these costs are included in the budget.

Travel:

• Where will the research project take place? Will the PI need to travel to a remote location several times in order to coordinate data collection?
• Will data collectors need to travel locally in order to recruit and engage study participants? How many trips will they need to make? What is the cost per trip?
• Will the PI need to attend conferences to disseminate study findings? What conferences are critical to attend? Where will these take place in the years of the proposed activity?

The definition of domestic travel is travel within the United States and Canada. Sponsors may have restrictions on foreign travel. Refer to the sponsor’s RFP, announcement, etc.

Additional travel policies and procedures may be found under the RF page Adhering to Travel Guidelines.

Note: All travel by either a CUNY or RFCUNY employee to North Carolina or Mississippi using RFCUNY-held funds is banned irrespective of funding source (Federal, State/City, private, or college funds). Any exceptions to the ban must be authorized by the Office of the CUNY General Counsel or the University Controller’s Office.

Consultants

• Consultants are individuals outside of CUNY whose expertise and skills will add value to the project; faculty or other institutional staff should not be listed as paid consultants on a project.
• Consultants are never listed in the Salaries & Wages section of a proposal’s budget.
• Some sponsors, such as NSF, have per diem rate limits.
• Generally, the consultant relationship may be considered a contract or procurement of vendor services.

Subaward Costs

Some proposals represent a collaboration of work by more than one institution. Costs of such other institutional collaborations are represented in the budget as a single line item and are generally accompanied by a separate budget.

Per CUNY and federal guidance, the total budget of subawardee should include both:

• Direct costs (include any estimated travel costs to the subawardee); and
• F&A costs (if the collaborating institution does not have an F&A rate, a 10% de minimis rate should be used instead).

Budget details should categorize costs as outlined in this document (e.g., PS, OTPS, and F&A).

Other Expenses

Charges to this cost category are frequently subject to specific program restrictions, and therefore sponsor guidelines should be reviewed to guarantee the allowability of expenditures.

• Will the project require shipping materials and supplies to or from a remote performance site?
• What is being shipped, and how often?
• Will the project require registration in professional organizations to disseminate study results? Which organizations? What is the annual membership fee?

F&A or Indirect Costs
F&A costs include:

• General institutional expenses;
• Costs incurred for common or joint objectives;
• Cannot be identified readily and specifically with a particular sponsored project;
• Not a specifically budgeted figure, but a calculation based upon a federally negotiated rate unique to the CUNY College/Institution;

Indirect costs are a negotiated charge added by the CUNY College Budget preparer to cover costs such as administering paychecks and providing the space associated with the sponsored project. At CUNY SPH, the negotiated F&A rate is 62.5% and only applies to salaries and wages.

Facilities & Administrative Rates for Colleges of The City University of New York are available here.

The general policy of CUNY and RFCUNY is to recover full indirect costs. This policy is consistently applied except where there are limitations imposed by the sponsor, where a private foundation sponsor has no formal policy on the reimbursement of indirect costs, or where the project’s uniqueness warrants exceptional action.

If the full indirect cost rate cannot be applied, approval from the Associate Dean for Research will be required.

Additional Resources

On this page, you will find relevant forms and templates including:

• Internal budget template
• CUNY SPH F&A rate agreement