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Researcher's Handbook

Section 3

Preparing a Budget

Overview

Budgets are cost estimates applied to future research needs. They should be prepared with great care and provide a detailed breakdown of each proposed cost category. Faculty are encouraged to group costs according to sponsor requirements.

Budgets should be prepared for the entire project period (i.e., for all years of the proposed research) and provide a breakdown of costs for each budget period year. Both direct and indirect costs should be identified in the budget; direct costs are typically broken out into categories while indirect costs are a lump sum.

Direct costs are the costs specifically identified with a particular project. When budgeting for future years, estimating direct costs should be based on past experience as well as present costs with an added inflation factor for each year.
Indirect costs (now called Facilities & Administration or F&A) are the costs that cannot be tied specifically to a project, such as libraries, janitorial services, utilities, maintenance and depreciation of facilities, and general administrative costs. When preparing your budget, all of the direct cost items are listed first. Then the appropriate indirect cost percentage rate is assessed against the total of the allowable direct costs. When a proposal is submitted which as on- and off-campus indirect cost research, two budgets should be developed designating the direct costs for each portion, to which the appropriate indirect cost rate will be applied.

For current Indirect Cost rates, use our web site at http://research.ufl.edu/research/facts.html or contact DSR's Proposal Processing (392-9267) office.

Direct Cost Categories

The following is a list of typical direct costs, broken out by accepted cost categories. Faculty are encouraged to group costs according to sponsor requirements. State of Florida cost categories differ from other sponsors so, after an award is accepted, the sponsor-approved categories will need to be "translated" into the University's cost categories. Before funds can be expended or obligated, the Principal Investigator may be required to prepare an Allotment Worksheet/Transfer (form FA-CG-K-BW 441). Contact your departmental fiscal staff for assistance.

For federally-funded projects, please refer to the Cost Accounting Standards (CAS) section in this manual to determine which charges are appropriate; all direct charges must comply with these standards.

Salaries and Wages

The salaries and wages of faculty and staff who are directly associated with the University constitute appropriate direct costs in proportion to the time each expects to spend on a project. Grant funds may not be used to augment the total salary or rate of pay of UF faculty or staff; they are replacement funds, releasing a percent of time of the regular employee for work on the project.

The University of Florida has two broad employment categories: Salaries and Other Personal Services (OPS). Salaried appointments are used for long-term staffing needs and must be classified in one of three SUS pay plans: General Faculty, Administrative & Professional (A&P), or the University Support Personnel System (USPS). OPS appointments are used for temporary or short-term staffing needs, including faculty.

Among the various budget components, the salaries and wages category is one of the most crucial. Agency staff will want to know the title of each position, the name and employment level of the person filling the position, possibly even a job description if the position is to be advertised. The reviewers also request the salary base per annum, the type of appointment (e.g., 9 or 12 months), and the level of effort to be spent on the project by each participant. Effort may be expressed either as a percentage or in terms of person months for salaried faculty, A&P, or USPS appointments, and in terms of hours for OPS employees.

Salaries and wages should reflect the current compensation level of employees. However, in view of the length of the federal review process and duration of the project, it is appropriate to build salary increases into the budget. If an investigator fails to anticipate such needs, there will be a shortage of funds when the award is made. Investigators appointed on an academic year base are reminded that summer salaries should be projected at the rate of one-ninth of their academic year salary for each month. Note that some agencies have restrictions on summer salaries.

No faculty or staff member, regardless of base of appointment may get reimbursed for more than 100% effort in any given time period, without a special justification and permission. Dual compensation is a system whereby faculty can be approved for more than 100% effort. This approval must be obtained from the Office of the Vice President for Academic Affairs. Overload is paid by the Division of Continuing Education to faculty who participate in continuing education activities such as short courses, summer workshops or brief conferences. In cases where overload is unavoidable, special permission must be obtained from the Division of Continuing Education (392-2137).

Salaries charged against grant funds must follow a scale that is consistent with the policy and regular practices of the University of Florida. To obtain guidance on pay levels, job categories or employment policy contact the University Research Personnel Coordinator (392-1213), IFAS Personnel Office (392-4777), or Engineering Personnel Office (392-0904).

Fringe Benefits

The fringe benefits rate is based on a percentage of salaries and wages and a fixed amount for health insurance. For salaried employees, the total benefit package provided by the University of Florida includes Workers' Compensation, Unemployment Compensation, Social Security Benefits (FICA) and State Retirement--these four items are expressed as a composite percentage rate--and health insurance. Non-student OPS employees and Postdoctoral Associates do not receive health insurance and have a separate composite percentage rate based on Workers' Compensation, Unemployment Compensation and Medicare. A minimal fringe rate may be assessed for student employees to cover Workers' Compensation.

Grant budgets should include reimbursement for fringe benefits according to the percent of effort which the employee will spend on the project. Both the salary base and the respective fringe benefits rate should be stated in the budget or in the budget explanation.

For current fringe benefits and health insurance rates please refer to our web site, http://research.ufl.edu/research/facts.html or contact the Proposal Processing Office (392-9267).

Consultant Services

Consultant or lecturer charges for travel, lodging, per diem and professional fees may be included as a single direct cost item. Federal employees may not be paid from grant funds, nor can University of Florida faculty get dual compensation in this way. If a faculty member is needed as a consultant on a research project, it is necessary to appoint that individual to the project account, or request that the services be provided as professional courtesy in the form of cost sharing. Some federal agencies may limit reimbursement for consultants.

The use of paid consultants must be justified and the budget explanation should state the time period of the consultant's service. Investigators are advised to explain in the narrative that the specific expertise either does not exist on campus or is not readily available.

Equipment

Equipment means an article of nonexpendable tangible personal property having a useful life of more than one year, and an acquisition cost of $1,000 or more per unit. Equipment must be listed in the budget with a justification. Some agencies require price reference and detailed stock numbers from catalogues, especially for contractual agreements.

Government agencies will normally not approve purchase of general office equipment or furnishings (e.g., calculators, typewriters, desks, chairs, copy machines, and air conditioners). Many agencies will make approval of specialized equipment for scientific purposes dependent on whether it is or is not readily available at the institution.

If freight and installation charges are to be billed on the same invoice as the piece of equipment, these charges should be included in the acquisition cost. Service contracts should be listed in the "other" direct cost category as they are expense items and not part of the equipment costs.

Supplies

Direct charging of general office supplies should be restricted to projects with a high demand for these items and must be in compliance with the university's Cost Accounting Standards policy; all such charges must be project-specific and justified in the budget. Even though supplies are estimations, it is advisable to have a breakdown of these items by general classification as substantial amounts are usually challenged by agency reviewers.

Travel

Travel charges may include airfare, hotel charges, taxis, visas, passports, entry or exit taxes, and rental cars. Most agencies require (in the budget justification section), the purpose, destination and time span for each trip, and the number of individuals for whom funds are requested. This must be fully explained, noting the relationship of the trip to the project. Sponsored research funds are subject to both funding agency and State of Florida rules and regulations. Domestic and foreign travel have some differences:

Domestic Travel

Domestic travel reimbursements are subject to the state's travel regulations and payment rates. Out-of-state travel should be requested on the basis of actual expenses for lodging and round trip economy airfare. Meals for State of Florida employees are reimbursed using the State per diem rate. In addition, some agencies may have set fixed maximum per diem limits. Reimbursement for any trip which includes both in and out-of-state travel should be requested on the basis of as close an estimate as possible.

Foreign Travel

Foreign travel requests must specify the destination and the U.S. Department of State's foreign per diem and hotel plus meal payment rates should be used. In today's funding environment, it may not be possible for a funding agency to cover travel for conference attendance unless there is active involvement of the faculty in the program to be presented, and/or unless the meeting has direct relevance to the research project. Typically, for international travel, only American flag carriers may be used. RGP may be required for foreign travel.

For assistance, please contact the appropriate travel office:

University Travel Services, 114 Elmore Hall, 392-1245
Engineering Travel Office, 545 Weil Hall, 392-5981
IFAS Travel Office, 2030 McCarty Hall, 392-2797

Travel Information is also available online, http://fa.ufl.edu.

Contractual or Third Party Costs

When subcontracts are planned, the total required dollar amount must include the direct as well as indirect costs of the subrecipient (party to whom the subcontract is to be issued).These will appear as a direct cost in the University of Florida's budget and are subject to the assessment of UF's indirect cost rate and if a federally funded project IDC is assessed on the first $25,000 of each subcontract. All individual line items of the subcontract must be detailed on a separate budget page. The need for subcontracting part of the proposed research must be justified in the narrative. In addition, subcontractors should indicate in writing their intent to provide services. Please refer to Section Four, Item 4 and Section Seven, Item 54 for further details on subcontracts.

Patient Care Costs

Patient care costs are those charges that are usual and customary for a particular process or procedure. Indicate in detail the basis for estimating costs in this category, including the number of patient days, estimated cost per day, and cost per test or treatment. If both in-patient and out-patient costs are requested, provide information for each separately. If multiple sites are to be used, provide the information by detail by site.

Alterations and Renovations

Any alteration or renovation project (e.g., repairs, painting, removal or installation of partitions, shielding, air conditioning) must have formal approval from the sponsor before funds can be obligated. The Physical Plant Division's Architecture and Engineering office (392-1155) will assist faculty in obtaining cost estimates.

Tuition on Grants, Contracts and Other Sponsored Agreements

All proposals, including resubmissions, competing renewals and supplements that include salary support for graduate students and where tuition is not prohibited by the sponsor, must also include the appropriate tuition amount in the budget.

For budgeting purposes use the current in-state tuition rate for new graduate students (06/07 $242.81 per credit hour). Add a 15% escalation factor for estimating tuition in future budget periods. The tuition table contains information for a quick budget calculation. Fees are not charged on Research Grants, but may be charged on Training Grants. To calculate tuition and fees use the University’s Financial Services’ tuition/fee calculator. Remember to add the 15% escalation factor to current rates to avoid shortfalls in future budget periods.

Training Costs (Training Grants Only)

This category may include fees, tuition, trainee travel costs and stipends. While the budget cost category reflects the total required cost, faculty should still provide individualized breakdown of costs for each trainee on a separate page to allow agency reviewers an independent assessment of the level, scope and need for the training activity. Agencies may have specific rules and regulations for training costs.

Other Direct Costs

Other direct costs could include long distance telephone charges; field trips; participant travel to and from institute or conference; equipment maintenance and repair; facilities rental; some types of data processing; postage; freight; computer services; conference registration fees; subject payments; statistical or technology service center fees. According to Cost Accounting Standards, direct charging of certain costs such as telephone charges, postage, and data processing, must be project-specific, justified in the budget, and restricted to projects for a high demand for these items.

Faculty may budget the anticipated costs of publishing the results of research, the cost for reprints, page charges and illustration costs if necessary. However, on federal grants, this budget category may not include charges for publication of books, monographs or pamphlets which will need special agency approval.

The Florida Department of Administration requires a State Personnel Assessment be included for all USPS employees, prorated by percent FTE with a minimum charge required. Obtain the current rate at http://research.ufl.edu/research/facts.html or contact the Proposal Processing Office (392-9267).

Cost Sharing

Cost sharing is a term describing any situation where a granting agency does not fully reimburse the University for all allowable costs associated with a specific project and the University or a third party assumes such costs in some manner. (See Cost Sharing policy, Section Four, Item 20).

Office of Research