Budget Basics

for
Administrators

Sean Hine
Branch Chief
Office of Grants Administration
National Cancer Institute

June 2014
What we will be discussing:
 Let’s discuss some logistics
 How do you start the request?
 Electronic submission
 Discussion of costs
 Overarching rules
 Types of budgets
 Dive into the nitty-gritty – budget specifics
 Pre-award considerations
 After the award
We have an idea for a project…now
what?
 All applications to the NIH must be in response to
a Funding Opportunity Announcement (FOA)
 Be sure you understand the specifics of the FOA
 Including: period of support, type of budget(s),
limits in $ levels, additional reporting, etc.
 Abide by any provided submission dates
Welcome to the
electronic world!
 NIH has completed the process of transitioning all
competing applications to the electronic (SF 424)
process
 This includes multi-project proposals
 More information at the following Guide Notice:
http://
grants.nih.gov/grants/guide/notice-files/NOT-OD-13
-075.html
 The
requirements may change from mechanism to
mechanism – be careful!
All about costs
 A grantee is responsible for following and NIH for ensuring that all
cost considerations are met
 Ensure your understanding of the applicable cost principles
 Particularly with the change to the uniform principles
 Grantees may shape their own systems as long as the principles are
followed and the CFR standards are met for financial management
systems
 Four tests for determining allowability:
1. Reasonableness
2. Allocability
3. Consistency
4. Conformance
Costs (cont.)
 Differentiationbetween a Direct Costs and Facility &
Administrative (indirect) Costs
 Directs – can be identified to a specific grant, project, etc.
 F&A – common or joint costs that cannot be readily
identified with a specific grant
 More information including discussion on cost
transfers, reimbursement of F&A, specific items of cost,
etc. can be found at the following within the NIH
Grants Policy Statement: http://
grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch7.ht
m
Costs (cont.)
 Itis NIH’s responsibility as stewards of Federal
funds to ensure that a grantee’s financial
management systems are adequate to receive
support and that all costs being requested within a
proposal are allowable
 If we have any concerns, we will be in touch!
Salary Cap
 EffectiveJan. 12, 2014, the salary cap for
Executive Level II has increased to $181,500
 Guide Notice announcing the change: http://
grants.nih.gov/grants/guide/notice-files/NOT-OD-14
-052.html
 This level also applies to consortia
General Rules/Considerations
 Bona Fide Need
 In any request, please be sure that the expenses you
are including can be reasonably expected to be
expended in the request time of support
 A budget tells NIH what is needed in terms of $
for the proposed research. It is not used to assess
the merit of that research; only accounted after the
merit has been established
General Rules/Considerations (cont.)
 Cost Sharing
 Not required
 Is assumed however when an expense is listed but there
is no reimbursement requested (includes personnel
contributing effort exceeding the level of salary
support)
 Application requesting more than $500,000 Direct
Costs (exclusive of consortia F&A) must seek
permission from NIH at least six weeks prior to
submission
 Understand the specifics of the FOA
General Rules/Considerations (cont.)
 Well-funded investigators should discuss
appropriateness and specific-Institute policies
prior to submission
 Responsibility for the Fiscal Management of the
award rests with the award recipient and listed
principal investigator(s)
Types of budgets
 Modular
 Categorical/Itemized
 Inclusionof consortia (modular & categorical)
 Program specific:
 SBIR/STTR
 Ruth L. Kirschstein National Research Service
Awards – Fellowship & Training
 Research Career Development Awards
Modular Budgets
 Availability of use is dependent on mechanism: R01,
R03, R15, R21, R34 and others as identified on FOA
 Application and associated review process does not
require a detailed (categorical) budget
 Capped at $250K direct costs per year (exclusive of
consortium F&A costs)
 If you exceed $250K directs, you are moving to the
categorical budget request
 If mechanism listed above, modular budget must be
used if at or below $250K
Modular Budgets (cont.)
 Grantee should begin with a categorical budget for all
years to craft the “module” request
 Module = $25K direct costs
 General example: All five years of an R01 budget is
$841,432. The average per year is $168,286. Modular
budget request per year (rounding to next module) would
be $175,000.
 No escalation per year
 Request may fluctuate if appropriate per FOA or one-
time expense (i.e. equipment) but it should be justified
Modular Budgets (cont.)
 Full justification on personnel
 Personnel should include names, person months and
description of role
 Include other information as you deem appropriate
to assist in clarification of request
 Consortia costs are calculated separately but same
justification (personnel) requirements apply
Modular Budgets (cont.)
 A few more things:
 If NIH needs further information, even a detailed
budget explanation, we may ask for it
 The NIH Salary Cap should be accounted for in your
calculation/estimate of the number of modules
needed
 Be thorough in your personnel justification
Time for the details – Categorical
Budgets
 Personnel
 Indicate level of effort (calendar months)
 Provide institutional base salary up to the NIH salary cap
 If salary exceeds the cap, welcome to include a statement indicating
as such in the justification
 Apply applicable fringe benefit for position
 Explain fluctuations in efforts!
 Equipment
 Generally, expected to be a one-time expense
 Be sure to comply with institution’s definition of equipment
(NIH defines as $5K or more and an expected life exceeding
one year)
Categorical budgets (cont.)
 Travel
 Dependent upon the needs of the research but be sure it
provides direct benefit to the project
 Must be consistent with institution’s own travel policies
 Comply with Fly America Act: http://
grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch4.ht
m#fly_america_act
 Participant/Trainee Costs
 With exception of Training grants, this section should be
left blank unless specifically identified within FOA
Categorical budgets (cont.)
 Other Direct Costs
 Highly dependent upon the type of research being
conducted – be realistic!
 Must be well justified – explain fluctuations and
atypical expenses in the justification section
 Include tuition remission in this section
Categorical budgets (cont.)
 F&A (indirect) costs
 Be sure to follow the rate agreement in place at the
time of the application explicitly
 NIH will utilize whatever rate is in place at the time
of award
 If the indirect cost base calculation is rather
complicated, it may be beneficial to include a brief
explanation in the justification
Consortia Expenses
 Modular budget
 May exceed the $250K direct cost limit only for consortia
F&A
 May round to the nearest $1,000
 Beneficial to explain the direct cost need per year
 Personnel justification still required
 Categorical budget
 Detailed budget and justification similar to the parent
grantee required
 Regardless, flow/pass-down rules are in effect!
Some Classic Mistakes
 Did not request permission for submitting
application greater than $500K directs
 Modular with multiple consortia without a clear
idea as to how much is needed for each site – we
need to reflect their costs including appropriate
F&A too!
 Categorical budget does not justify fluctuations
 Application indicates that the grantee is going to
take care of the PI’s salary BUT when the award
hits, not so much…
Some Classic Mistakes (cont.)
 The listed calendar months when applied to the
base salary does not equate to requested salary
 Base salary exceeds current salary cap
 Calendar months in budget differs from
justification
 Costs in budget differ from justification
 Indirect cost base calculation makes no sense
given rate agreement and costs
Reminder:
 If you are submitting an R01 and the request is:
 At or less than $250K each year, use a modular
format
 Above $250K in ANY year OR a foreign (non-US)
applicant, use a categorical format
 The $250K direct cost limit is exclusive of consortia
F&A
Special Programs
 Thefollowing programs have individual budgeting
requirements:
 SBIR/STTRs
 NRSA
 Career (K) awards
 Besure to comply with the specifics of the FOA
and the listed budget requirements
Pre-Award Costs
 Costs associated with a project that are incurred prior
to the receiving of the NIH Award
 Remember – only the award is a guarantee of the
Federal commitment
 Allowable up to 90 days prior the start date of a
competing award
 Beyond 90 days requires prior approval
 Cost considerations still apply
 Incurred at the grantee’s own risk and expense – no
requirement of the Federal government!
You got the $!! Now what?
 When receiving the award, be sure to:
 Check that it was sent to the correct location
 Ensure the funds are available in payment
management
 Understand the level of support - $ and time
 Account for any terms & conditions; keep an eye out
for any special restrictions on funds
 Any restricted funds must be tracked by the grantee
separately!
After the award (cont.)
 Funds not matching what you asked for?
 Study section cuts have been applied
 Can discuss these with your awarding Institute/Center
for reconsideration
 Funding policies have been put into place
 Not appealable and most likely being applied to all (i.e.
you are not the only one!)
 If there may be necessary changes, be sure to discuss
any potential changes in scope to the project with the
awarding Institute/Center
After the award (cont.)
 Build an internal budget utilizing the information
provided in the award
 Again, be sure to track restricted funds separately
 Follow all regulations and policies
 If you are encountering start-up issues that may
result in a large amount being unspent, have a pro-
active discussion with your NIH staff
 We are here to help!!
Last words…
 This is all of our Federal tax $ at work – we have a
mutual obligation to take care of it wisely!
 There is a lot that goes into putting forward an
application and conducting reviews – ask
questions prior to help the process go smoothly
 For investigators, learn what a great resource your
own sponsored programs office can be
Resources
 NIH Grants Policy Statement (10/13):
http://grants.nih.gov/grants/policy/nihgps_2013/
 SF424(R&R) Application and Electronic
Submission Information:
https://grants.nih.gov/grants/funding/424/
 NIH Modular Research Grant Applications:
http://
grants.nih.gov/grants/funding/modular/modular.htm
Thank you!!
QUESTIONS???