Major Budget Categories for Non Modular Budgets

6.4 Major Budget Categories for Non Modular Budgets
Most non-federal sponsors require line item budgeting. The major budget categories include the following:

6.4.1 Direct Costs

Direct costs are those costs that can be directly attributed to carrying out the work of the proposed project, and may include the following:

6.4.1.1 Personnel Costs should include only BU personnel. Collaborators at other institutions should be included either as consultants or within a subaward budget. Proposed salaries should be in accordance with approved salary scales and position grades, and the budget should reflect the actual person months or percent effort that is anticipated. In developing multi-year project budgets, salary increases should be considered (consult with OSP to determine the appropriate escalation factor). Some sponsors have salary caps, or limitations on the amount of salary that may be charged to a grant. Check with OSP for current limitations.

Personnel costs included in proposal budgets should be based on institutional base salary. This is salary paid by BU for work performed in accordance with the faculty’s letter of appointment and excludes clinical bonuses and extra compensation.
Note: Faculty working at the University under a Memorandum of Understanding (MOU) between BU and the Veteran’s Administration (VA) do not include the salary received from the VA as a VA employee as part of the total compensation when calculating institutional base salary and applicability of the salary rate cap.

6.4.1.2 Fringe Benefits include such items as health insurance, retirement benefits, and Social Security and Medicare. BU’s fringe benefit rates are negotiated with and approved by BU’s cognizant federal agency. The rate must be charged to the grant in relationship to the salaries and percentage of effort committed to the grant.
For Additional Information see: Proposal Preparation Information

6.4.1.3 Consultants are provided only for tasks where on-campus technical expertise does not exist or is not readily available. Consultants are not considered to be employees of the University and should be accounted for separately in the budget. Some sponsors limit the rate at which consultants can be paid. Generally, consultants are paid a fee plus travel and other expenses. Some sponsors do not permit payments to consultants, and some restrict or limit such payments. If in doubt as to the allowability of or rates paid to consultants, check the sponsor’s program literature or contact OSP. Conflict of interest and nepotism issues sometimes arise in the hiring of consultants. Care should be taken to comply with institutional policies on the hiring of relatives as consultants.

BU is finalizing revised procedures for determining when an individual may be treated as an independent contractor (consultant) and when that individual must be placed in an employee position. In addition, a standard contract, contract amendment, and invoice have been developed for use with consultants.
For Additional Information see: Under Development

6.4.1.4 Graduate Students

CRC
Graduate students should be budgeted at the standard salary level set annually by GRS/ENG. For 2010-2011, the eight-month stipend level has been established at $18,200 ($27,300 for 12 months). Engineering increases this amount by 5% for post-comprehensives and 10% for post-prospectus students. Fringe benefits on graduate student salaries should be budgeted at the applicable graduate student rate.  Please refer to the Proposal Preparation Information page for specific rate information. Under the guidelines of the Graduate Research Assistant Support Program (GRASP), in order for graduate students to qualify for a full tuition scholarship the grant or contract providing the salary support must carry the University’s full Indirect Cost (IDC) or F&A rate, or at the rate accepted by OSP for foundations or other not-for-profit entities. GRASP funding in the future may be available for students supported from internal BU funds. GRASP tuition scholarship support is available for BU graduate students supported on a qualified CRC sponsored program and any CRC student supported on a qualified BU sponsored program. The program is administered by the Graduate School of Arts and Sciences.

MED
At BU-MED, graduate students are currently budgeted at $30,500 for 12 month pay. This stipend is increased by $1000 (to $31,500) for students who have passed their qualifying examinations. Effective July 1, 2011, the University will be employing a fringe benefit rate for certain populations of graduate students on the Medical Campus.  Please refer to the Proposal Preparation Information page for specific rate information.

6.4.1.5 Equipment needs should be itemized and justified. Most sponsors rely on the University’s definition of “capital equipment” to differentiate between equipment and supply categories. At BU, the equipment capitalization threshold is $5000 per item of equipment with a useful life of one year or more. Whenever possible, estimated costs should be based on catalog prices or written quotations, copies of which should be included with the proposals.

6.4.1.6 Materials and Supplies includes all consumable materials including the purchase cost of animals as well as small items of equipment that do not meet the threshold for “capital equipment.” Each item or group of items should be listed and carefully justified. Federal sponsors do not allow general office supplies or equipment unless their use can be specifically justified because the project qualifies as a “major project” under OMB Circular A-21.

6.4.1.7 Travel must be justified on the basis of its benefit to the project being proposed. Travel expenses may include trips to professional meetings, fieldwork, and meetings required by sponsors. Allowable costs include meals, lodging, airfare, and ground transportation. Local travel related to subject recruitment and interviews is also allowable. Some sponsors limit per diem reimbursement rates, modes of travel, foreign travel, etc. For all federally sponsored travel, the use of U.S. flag carriers is required. In the case of allocating costs to two or more awards, care must be taken to allocate based upon the benefit received by each award.
For Additional Information see:

6.4.1.8 Patient Care Costs for inpatient or outpatient participants in a research study are allowable. Expenses directly attributable to research (e.g., research nursing, assays, etc.) are not considered patient care costs and should be included in other appropriate budget categories. Care must be taken to avoid double billing to the research project and the patient’s payers (e.g. Medicare, Health Plan) account.

6.4.1.9 Alterations, Renovations, and Construction Costs are rarely allowable on research grant proposals. Any exceptions must be fully justified, and it is strongly recommended that specific needs be discussed in advance with OSP and the sponsor.

6.4.1.10 Other Direct Costs may be used for other project expenses that do not fit into the above classifications. Examples include: publication costs, human subject participation fees, repair and maintenance of equipment, rent and utility expenses, animal housing, machine shop charges, communication costs, tuition (non-federal projects), and some types of telephone service (e.g., long distance, toll charges).

6.4.1.11 Subcontracts/Subawards are agreements by which some scientific or programmatic aspects of a grant, contract, or cooperative agreement made to BU are contracted out to another organization. The sub-recipient is expected to work with great autonomy and take full responsibility for its portion of the work. However, the BU PI/PD still bears the ultimate responsibility for the programmatic progress and financial oversight of the award. This level of independence and participation in the development and execution of the project distinguishes a sub-recipient from the provider of a purchased service (vendor). The primary proposal submitted to the sponsor must include evidence of commitment from the subcontractor, if the sub-recipient has been identified, as well as a statement of work and proposed budget. OSP will require evidence of the agreement of the sub-recipient institution before approving a proposal submission. Sponsor guidelines may vary; consult OSP for a discussion of typical requirements. In addition, OSP will issue to proposed subrecipients, with whom the University has no other active awards, the “Subrecipient Prequalifying Questionnaire” prior to issuing a formal subaward.
For additional information, please refer to the “Subrecipient Agreements” section of the Post Award Policies page.

6.4.1.12 Costs of Special Audits If the sponsor requires the conduct of an audit not subject to federal OMB Circular A-133, the cost of that audit report must be requested in the budget.

6.4.2 Facilities and Administrative Costs (F&A)
Facilities and Administrative (F&A) costs are costs that are not readily identifiable with individual projects, and are also called overhead or indirect costs (IDC). They include: library operations, utility costs, depreciation of buildings and equipment, operations and maintenance costs, grant and contract administration and accounting, and general administrative expenses for central offices such as the President, Provost, Human Resources, and Purchasing. On the CRC, the Provost or VP for Research makes the final decision on whether F&A costs can be waived or reduced; on the MED campus, that decision is made by the OSP director in consultation with the Provost and AVP.
For Additional Information see: Budgeting Fringe Benefits and BU F&A Policy found on the OSP Policy webpage

6.4.2.1 Federal F&A Rates Boston University’s Federal Facilities and Administrative costs (F&A) rates are established through negotiations with the U.S. Department of Health and Human Services. These rates are fixed for a specified period of time and should be used for all grant or contract applications to sponsors, unless there is a restriction prohibiting indirect costs or designating another rate for a special program.

Rate determinations are based on “predominance of effort” when there may be more than one site involved and work is being performed on-campus and off-campus at locations remote from BU, as in the case of field work. When more than 50% of the work is performed off-campus, the off-campus rate is used for the entire project. When more than 50% of the work is performed on-campus, the on-campus rate is used for the entire project.

Indirect costs are charged to a project by applying a percentage to the total direct costs of the project. For most sponsors, the total direct cost is modified to exclude capital equipment (any non-expendable equipment estimated to cost $5,000 or more and with a useful life of one year or more), rent and utilities, tuition costs, patient care expenses related to “standard of care” (the cost for in-patient and out-patient care, but not payments to human subjects), graduate research assistant tuition costs charged directly to the project, and subcontract expenditures in excess of $25,000. This rate is known as the Modified Total Direct Cost rate (MTDC). In addition, other sponsor and/or award-specific restrictions may also apply. For example, NIH limits F&A for Genomic Array supplies. If a project is carried out in space leased by the University and the rent is charged to the grant or contract, the off-campus rate is applied. Otherwise, if the lease is capitalized by the University, the on-campus rate will be applied.
For Additional Information see: Proposal Preparation, Review and Submission

6.4.2.2 Non-Federal Overhead Rates – Non-Profit Organizations For non-federal agencies such as the American Cancer Society and similar non-profit organizations, generally if a sponsor has a written policy that limits the allowable rate of indirect costs, BU will accept these rates (see Section 6.4.2.3 below).

6.4.2.3 Waiver or Reduction of Overhead Assessment of indirect costs to a sponsored project allows BU to recover some of its contribution to the support of the project. Therefore, assessment waivers are rarely given except in exceptional circumstances. Waiver requests should be directed to the OSP Director using the form provided in the waiver policy.
Request for Reduction/Waiver of F&A on the OSP Forms and Worksheets webpage