Developing a Budget

Last updated on August 5, 2016 7 min read Proposal Submission - Developing a Budget

Based on the guidelines provided by the sponsor, the proposal budget should delineate the entire cost of a project and accurately reflect costs that are necessary to complete the work. The budget should reflect the methodology described within the proposal narrative. Reviewers should be able to determine whether sufficient funds are being requested to complete the project successfully and that those requests are reasonable given the scope of work. Accuracy and detail are essential in this section. PI/PDs are encouraged to follow a sponsor’s guidelines exactly and provide information in the precise format as specified. Departmental business office personnel may be available to assist investigators in developing budgets that are consistent with University policy and agency requirements.

Please utilize these useful resources as you develop your budget:

Direct Costs

Direct costs are those costs that can be directly attributed to carrying out the work of the proposed project.

Direct costs may include the following:

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 Sponsored Programs and the sponsor.


Provided only for tasks where on-campus technical expertise does not exist or is not readily available. Consultants are generally 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 Sponsored Programs. 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 .


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 $5,000 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 may be required as part of the proposal.[/collapsible]

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 (DHHS). The rate must be charged to the grant in relationship to the salaries and percentage of effort committed to the grant.

Related FAQ: Why is my account charged fringe when it has non-benefit employees?

Graduate Students

Please consult with the administrative official at the appropriate school to determine stipend levels when budgeting for graduate students.

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 Sponsored Programs 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.

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 justified. Federal sponsors do not allow general office supplies or equipment unless their use can be specifically justified for this project.

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, animal housing, machine shop charges, communication costs, tuition (non-federal projects), and some types of telephone service (e.g., long distance, toll charges).

If your proposal includes the use of animals, please reflect per diem rates for the corresponding year from the grant proposal budget development table on the animal care page.

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.

Personnel Costs

Should include only BU personnel. Collaborators at other institutions should be included either as consultants or within a subaward budget as appropriate. 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 Sponsored Programs 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. Refer to sponsor guidelines.

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.


Subawards and subcontracts 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. Sponsored Programs will require evidence of the agreement of the sub-recipient institution before approving a proposal submission. Sponsor guidelines may vary; consult Sponsored Programs for a discussion of typical requirements. In addition, Sponsored Programs will issue to proposed subrecipients, with whom the University has no other active awards, the “Subrecipient Prequalifying Questionnaire” prior to issuing a formal subaward. Please see Policies and Procedures for the Administration and Monitoring of Subrecipient Agreements Issued to Third Parties.


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.

Facilities and Administration (F&A) Costs / Indirect Costs

Details about Facilities and Administrative (F&A) costs and indirect costs (IDC), including Boston University’s current rate and an explanation of F&A rates, can be found here

National Institutes of Health (NIH) Modular Budgets

The NIH has instituted budgeting guidelines for many of its applications. Unless directed otherwise in funding opportunity announcements, under these guidelines, for application of $250,000 or less of direct costs, no detailed budgets are provided to NIH, although details on personnel and subcontracts are provided in a budget justification. Amounts requested per year cannot (currently) exceed $250,000 in direct costs and funding must be requested in $25,000 increments. PI/PDs should remember to budget for merit increase for personnel salaries up to the NIH cap. NIH provides instructions on how to average costs over the years of the award to provide for such increases, as well as one-time purchases, such as equipment.

Cost Sharing

Cost sharing is a financial commitment by the University toward the total cost of a project from a source other than the granting organization. Types of cost sharing may include:

  • Mandatory Cost Sharing
  • Voluntary Committed Cost Sharing
  • Voluntary Uncommitted Cost Sharing
  • In-Kind/Matching

As of September 1, 2016, all cost share budget worksheets have been condensed to one Excel file. In addition, all cost share requests are now part of the Proposal Summary Form (PSF). If you have any additional questions or suggestions, please do not hesitate to contact your Sponsored Programs RA or

If your proposal requires approval from the Vice President and Associate Provost for Research, please forward the relevant material to Linda Martin.

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