Proposal Budget Information

Budget Templates

To facilitate budget development, internal templates are provided below.  If you have questions regarding proposal development, budget preparation, budget narrative, or with the template itself, please contact your departmentally-assigned pre-award specialist.  

To eliminate invoicing issues when awarded, ORSP requests an "internal budget" for all proposals.   

In order for these template to be current and user-friendly, they will be tweaked as necessary; as a result, always download the most current version from this page.

Budgeting Basics

A cardinal principle to keep in mind when preparing a proposal budget is that the elements of cost must be necessary to accomplish, and directly benefit, the supported activity.

Direct Costs

Direct costs are are costs that can be specifically identified with advancing a sponsored project activity, or directly assigned/allocated to an activity relatively easily with a high degree of accuracy.  

Indirect Costs

Unlike direct costs, indirect costs (also referred to as F&A - Facilities & Administration) are costs for general use items routinely purchased/provided by the University, such as those incurred for common or joint objectives that cannot be identified readily and specifically with a particular sponsored project.  Such activites include:

  • services by Purchasing, Human Resource Services, Facility Services, Business Services, and the like;
  • use of general office and/or laboratory space and equipment;
  • general use supplies;
  • fixed phone and data port/internet charges;
  • heat, light, power and janitorial services; and,
  • time spent by academic departments, deans' offices, the ORSP Office, and Library Services, etc., as all contribute indirectly to the sponsored-project.

Some projects require extensive use of the institution's services and facilities, other involve minimal use. The intent and purpose of an institution's F&A Rate Agreement is to provide a mechanism to recover and reimburse the institution for the services/facilities used by all sponsored projects during a fiscal year period; therefore, do not interpret that the indirect cost assessed to a project are the actual costs for a specific project.

On projects recovering full F&A, budgeting or charging for indirect cost items as direct costs is unallowable as the sponsor already "pays" for those items via an institution's F&A Rate Agreement.  

Budget Narrative

When writing the budget justification, consider:

  • Does the budget justification follow the same order as the budget?
  • Does it give additional details to explain the costs included in the budget?
  • Does it include only items that are allowable, reasonable, & allocable?
  • Is it easy to read (short paragraphs, headings to separate different budget categories, etc.)?
  • Is it concise?
  • Do the numbers in the budget justification match those in the budget?

The budget narrative should: 

  • Follow sponsor proposal instructions, providing as much detail as needed;
  • Approach the budget from the perspective of what the sponsor needs to know, not from the perspective of what the PI wants;
  • Explain why each of the requested items is necessary to accomplish the proposed research - don’t leave the reviewer wondering why an item was requested;
  • Unless required by the sponsor, do not include dollar amounts in the narrative.

See narrative examples under each category below.

Salaries/Wages

Units are expressed as hours, days, months or as an academic or fiscal year, depending upon the type of employee. Employee salary compensation rates change annually as of October 1. See this page for assistance in calculating salaries. 

Be aware that NIH / HHS agencies have a salary limitiation.   

Key/Senior Personnel

For each PI, Co-I, or Project Director, list name, title, amount of time to be spent on the project and what s/he will accomplish.

Example: Dr. Jones will serve as principal investigator and will commit 2 summer months of effort to this project and will be responsible for... A 3% salary increase has been budgeted in out years.

Other Personnel

Include Research technicians, Postdoctoral fellows, Graduate & Undergraduate research assistants, etc. When known, list name, title, amount of time to be spent on the project and what s/he will accomplish.  At UM, postdocs are employees of the University and paid salaries and benefits unless a particular sponsored program directs otherwise.   

Per 2 CFR 200.413(c) of the Uniform Guidance, charging administrative or clerical salaries may be appropriate only if 1) the services are integral to the activity, 2) individuals are specifically identified with the activity, 3) the costs are explicitly included in the budget or have prior written approval of the sponsor, and 4) the costs are not also recovered as F&A. 

Example: One post-doctoral fellow will be hired to work on this project. This individual will commit 12 calendar months and 100% of his/her time to this research. The post doc’s primary focus will be on... A 3% salary increase has been budgeted in out years. Sam Student will work as a graduate research assistant for this project and will commit 12 calendar months per year and dedicate 100% of his time during the 9 months of the Academic Year and 50% of his time during the 3 summer months to this research. Sam will be responsible for.. A 3% salary increase has been budgeted in out years.

Other Compensation 2 CFR 200.430

Extra compensation

Faculty and employees on professional contracts (e.g., salaried) may be eligible for extra compensation. Extra comp must 1) be identified by person or position in a proposal or otherwise approved in advance in writing, and 2) meet the federal requirements for intra-institution consulting or extra service pay. 2 CFR 200.430 (h)(3) and (4))

Overtime

Bi-weekly employees who work over 40 hours per week (for 1.0 FTE) are eligible for overtime per the Fair Labor Standards Act (FLSA). Employees must seek and secure supervisor approval in advance. The time must be closely recorded via an individual’s time sheet, which he/she signs and supervisor validates.  Overtime can be paid via grant funds as long as there are adequate funds in the salary line.  Written sponsor permission is not required.  Some LOA employees may be eligible for overtime if they are not earning enough to be considered salaried.  If eligible, the process would be the same as that for bi-weekly employees.  See HR's Compensatory & Overtime information or contact HR for more information.

Because overtime is allowable as described above, compensatory time is not appropriate on a sponsored activity. 

Bonus

Employees may be eligible for a lump sum bonus when exceeding institutional expectations under institutional policy per Human Resource Services. It is not an appropriate mechanism to compensate an individual for working beyond a 40 hour week.  

  1. Faculty - If intra-institutional consulting, refer to extra compensation requirements; if incidental activities, it must be specifically provided for in the award budget or otherwise receive written prior approval. 
  2. Non-faculty - If the activity contributes and is directly related to work under an agreement, and there are adequate funds in the salary line, it can be paid from grant funds. Prior written approval is preferred. 2 CFR 200.430 (h)(8))

Benefits

Fringe benefits apply to all employees and represent that employer share of fringe benefits including, when applicable: F.I.C.A. (Social Security), retirement, unemployment insurance, health insurance, workers' compensation insurance, and sick and annual leave costs. Contact the ORSP Office for rates applicable to your proposed employees.

PDF file Fringe Benefit Rates

Example: Employee Related Expenses are based on rates approved by the Montana Legislature.

Equipment

Equipment is identified as any one item  - or one item fabricated from several required components - having a unit cost of $5,000 or more and a useful life of one year or more. Some equipment may be fabricated, i.e., made up of several required components. When such components result in a single piece of equipement, they may be coded to equipment when their individual cost is less than $5K.  

Identify all items of equipment you plan to purchase for the project which the University does not currently have or which otherwise are not available for your use, but which are necessary for the completion of the project. When establishing your equipment budget, allow for inflation price adjustments, cost of freight from the supplier to your facility, and any other costs associated with procurement and installation.  For more information, see Capital Expenditures with Federal Funds.

Should building alterations or renovation be necessary to accommodate new equipment (including electrical or mechanical considerations) please contact ORSP. 

Example: In order to complete Aim #2, a high power microscopy lens is required. This powerful lens will enable researchers to detect the presence and number of damaged protons. This information will enable faster analysis and reengineering of experiment if required.

Travel

Explain the need for travel - how the travel will benefit the project’s aims - and your calculations of travel costs for domestic and foreign travel. Break our by airfare, hotel, per diem, etc. Note that the cost estimates for per diem, mileage, etc. are based on State of Montana information and University guidelines.

Example: Domestic Travel – $XXXX is requested in year 2 for Dr. PI and Dr. Co-I to attend the American Society of Clinical Psychologists annual conference in to share results. This estimate is based on $800 airfare per person, $210 hotel per night per person for four nights, and standard UM per diem rates.

Example: Foreign Travel – $XXXX is requested for Dr. PI to travel to Belize to collect data from Casa Verde Biological Station. This estimate is based on $1500 airfare, $110 hotel per night for 20 nights, and standard UM per diem rates.

Supplies/Materials

This category includes standard items to be used or consumed during the course of the project, such as chemicals, glassware, paper products, disks, and copying costs.

Costs can only be charged directly to a sponsor if they can be readily and specifically identified with that project. Costs that are essential to the project’s research and which will be used solely for the project may be budgeted with proper justification, so be as specific as possible. Always explain why purchases are essential to the project’s aims and dedicated only to research on this project.

Example: Materials & Supplies: Test tubes, beakers, chemicals, assay kits and lab consumables are required for this project to complete the blood tests and analysis. 

Tuition

UM's cost of education includes tuition and fees. For budgeting purposes, the line "Tuition" includes tuition and can include fees and health insurance, if allowed by the program or sponsor. Tuition is paid via a Scholarship mechanism. See Guidelines for Student / Participant Payments

Example:  Tuition for the graduate student follows established UM practice for the cost of education.  Tuition charges are exempt from Facilities & Administrative costs.

Contracted Services

Include here the estimated costs of procurement services to be provided by vendors on a per-sample or other unit-price basis; special testing, professional or consultant services, including travel; or subawards to be issued for a part of the sponsored project activity. The University of Montana complies with institutional and State procurement standards and meets requirements of 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, as appropriate. If unsure with the entity is a vendor or subawawrdee, refer Determining the Appropriate Tyoe of Subrecipient Agreement

For subrecipients, focus on the sub's scope of work and why they were chosen over any other subrecipient. The subrecipient will need to provide the budget justification narrative for his/her own budget. Plan accordingly. These justifications should not be intermingled, i.e., the personnel section should NOT include UM personnel and Subrecipient personnel. 

If you are collaborating with an individual from another organization, firm, institution, or agency, it will be necessary to secure documents reflecting that firm's approval, proposed budget, and assurances of compliance for inclusion with your project proposal. Contact the ORSP Office early regarding minimum requirements.

Example: Subrecipient - Funds are requested for Utah State University to perform all clinical trial work in year 2. Utah State was chosen because Dr. Smith is the leading expert in subject recruitment, evaluation, and retention, and because of his extensive experience with clinical trials dealing with TB strains resistant to antibiotics. A detailed budget narrative for Utah State's budget request is included for reference. 

Example: Vendor - Consultant: John Q. Consultant, CEO of Micobiology Data Inc, will consult with project personnel on an ongoing basis, 3 trips per year, 5 days each in Missoula. She was chosen because of his expertise in X. Dr. Consultant’s compensation rate is $400 per day. Airfare is estimated at $800 per trip. Per diem is estimated at $100 per day. Hotel is estimated at $125 per night.

Other Direct Costs

Include under this heading those cost items that may be unique to your proposed activity, such as: communication costs, computer mainframe use, repair and maintenance costs for equipment, etc.

Items which may be necessary for the successful completion of your project not identified elsewhere but which may warrant consideration for your specific project may include the following:

  • Advertising
  • Aircraft Flight Time
  • Animal Care/Maintenance
  • Art Work/Graphics
  • Audit Costs
  • Bonding Costs
  • Building Alteration/Renovation
  • Conference Room Rental
  • Computers
  • Drama Lighting, sets, etc.
  • Dues/Subscriptions
  • Equipment Rental
  • Equipment Repair/Maint.
  • Equipment Service Contracts
  • Facility/Space Rent or Lease
  • Freight/Shipping
  • Hazardous Waste Removal
  • Instructional Aids
  • Insurance
  • Legal Fees
  • License/Permits
  • Memberships
  • Participant Support
    • Stipend
    • Transportation
    • Per Diem Allowance
    • Books
    • Tuition/Fees
  • Printing/Binding
  • Professional Fees
  • Proposal Costs
  • Publications
  • Recording Devices
  • Recruiting Costs
  • Reference Materials
  • Release Time
  • Relocation/Moving
  • Report Production
  • Reprints
  • Royalties
  • Scientific Apparatus
  • Service Contracts & Agmnts.
  • Utilities
  • Vehicle License
  • Vehicle Rent or Lease
  • Veterinary Services
  • Work-Study Help*

*Discuss these items with your ORSP departmentally-assigned pre-award specialist when reviewing your draft budget. They may be necessary for your project.