Grant Process - Budget

The key proposal component driving activities and outcomes is the budget. Always refer to the agency guidelines to determine what activities and costs are eligible according to the sponsor. Only those costs that are approved may be requested.

Most federal agencies include budget forms as a part of their application package. If any assistance is needed in preparing the budget, call the OSRP Pre-Award staff member. OSRP staff will review the budget to ensure that it is aligned with sponsor and College guidelines.

Indirect Cost (ICR)

Direct Cost vs. Indirect Cost

Charges to a grant can be categorized as either direct costs or indirect cost recovery (ICR) charges. Direct costs are defined as the charges to a project or program that can be easily identified with the immediate operation of the grant (i.e. project personnel, supplies, equipment, travel and consultants). Direct costs to a sponsored program are as described by the RFP and the guidelines of the funding agency.

Indirect cost recovery (ICR), also called Facilities and Administrative (F & A) costs, pay for charges that are not specifically attributed to an individual project. Indirect charges are defined as costs that are incurred for common or joint objectives. Indirect costs reimburse the college or university for services to the grant such as: accounting services; salaries not reimbursed by the project, such as clerical and administrative involvement; computer laboratory fees; the institutions' infrastructure; office supplies, postage; local telephone charges; photocopying; and facility upkeep. If all or a portion of the ICR are not recoverable from the sponsor, the College is contributing to the cost of the project. ICR costs do not disappear simply because a sponsor refuses to pay for them; the College must pay these actual costs from other sources.

An important point to consider is that ICR costs are not recovered from sponsoring agencies until the direct costs have been incurred, The ICR rate is recognized by sponsors and the College as the legal basis upon which the College can make claims for reimbursement. The current ICR rate has been negotiated with the federal government through the Department of Health and Human Services at no more than 33 percent for on-campus activities and 13.5 percent for off-campus activities. Refer to the Negotiated Rate Agreement document on file in OSRP
How is the ICR Cost Rate Determined?

Cash Match
The Vice President of Institutional Advancement provides an annual amount of $150,000 to be used by faculty and staff as matching funds for grant projects; these funds are available to leverage increased dollars in public grants for mission-related projects in instruction, scholarly inquiry, creative activity and community partnerships.

Cash match funds may be used to pay for the following grant costs: personnel; supplies; equipment; travel; and/or consultants. Cash match is available on a "first come, first serve" basis. Funds can be requested for one to five years in conjunction with a grant project. These funds are to be utilized during grant years corresponding with Metro State's fiscal years. Cash match dollars ( of up to 10% of the requested funding) will be reserved for the grant until the year in which dollars are to be spent.

If a grant application is denied, cash match goes back into the fund for use by another grant applicant. Funds that are not utilized during the fiscal year for which they are designated, will transfer into the general fund pool for use by Metro State's Controller.

Cash match funds are to be used strictly to leverage additional grant funds and are not to be used to supplement grant funds. Consider all potential in-kind matches prior to requesting cash match.

The Cash Match Funds benefit Metro State by:

demonstrating to sponsors that the College is committed to the project;
generating indirect cost recovery (lCR) funds for the college; ICR provides more flexibility than general funds, and can be "rolled over" from year to year;
encouraging principal investigators and grant writers to pursue alternative funding for the College. An application with cash match will be more competitive with an institutional commitment to the project; and
helping Metro State fulfill its mission through the acquisition of alternative funds to meet and/or address institutional goals.

Creating the Budget

A budget template is available that may be utilized by investigators to prepare a preliminary budget. The template automatically computes benefit rates and indirect cost recovery (ICR) charges to grant. If Metro State’s negotiated federal ICR rate is to be charged to the grant, the current ICR rate of total direct costs may be used. If the sponsor dictates the amount of ICR that may be charged to a grant, the budget template provides a line item for, and automatically computes, the difference between the negotiated rate and the allowed rate as an in-kind contribution. When calculations have been completed using the template, figures can be transferred to budget forms provided by sponsors.

Faculty Release Time/Summer Month Calculations

It is not unusual in a federal or state project to find that the proportion of faculty time supported by a sponsor is limited. In proposing a project with grant funds, the principal investigator must select a workable and fundable methodology, including the amount of time that is available to work on a project as a faculty member. If the principal investigator is a faculty member, check with the respective Chair and Dean to ensure that proposed workload is feasible.

The Temporary Policy on Extra Duty Pay and Related Matters as adopted through December 2008 provides for Faculty Reassigned Time, Summer Work, and Extra Duty Pay, including Grants and Contracts, and states:

Faculty members can request reassigned time (up to 50 percent in the absence of extraordinary circumstances) during the academic year to work on such state-funded projects as may be available, or work on activities funded by public or private grants or contracts. Reassigned time applications must be approved by the faculty member’s Chair, Dean, and the Provost. Requests for grant funded reassigned time must also be approved at the time the grant is submitted.

Extra duty pay is available to the faculty member for non-teaching assignments only, and must also be approved in writing, in advance by the Chair, Dean, and Provost. Extra duty pay must be approved as consistent with this policy and budget limitations by the College’s Controller or his or her delegate. The recommendation for extra duty pay must specify:

the non-teaching assignment (this should include a specific description of the temporary extra work and the desired outcomes, time and effort reports required; documentary evidence that the work is not part of the employee’s regular and reassigned duties or previously planned professional development activities; that no other qualified employee is available to carry out the work as part of his or her normal work load (as required duties under the full time professional appointment), and evidence that the additional duties are not so burdensome as to interfere with the employee’s performance of regular duties including reassigned time;
a termination date for the extra assignment not to exceed one (1) year ; and
the amount of added salary to be paid and the market based data justifying that amount.

Faculty members may use qualifying accomplishments that result from paid extra duty work, as professional development and service accomplishments in their annual self evaluations, applications for tenure and promotion, and in post tenure review.

For non-teaching grant- and contract-funded work during the two week periods between the academic year and the summer semester) extra duty compensation will be calculated as follows:
for non-teaching grant work during this period, pay will be at the rate of 3.125 percent of the employee’s academic year base pay for each week of full time work.
For teaching work funded by grants, summer salary will be established and paid at the same rate as College-funded teaching, that is, up to 25 percent of the previous academic year’s salary (for full time faculty who teach a full time summer load of eight or more credit hours).
For research work funded by grants, summer salary will be established and paid up to 30 percent of the academic year’s salary.

The employee’s summer semester may combine teaching and non-teaching duties, but the amount of teaching duties will directly reduce the time available to compensate other grant-funded activities at the higher rate. For this calculation, one credit hour of teaching will equate to one full time week of non-teaching duties.

Extra duty pay in an aggregate amount over $500.00 in one semester will not be authorized or paid without a detailed contract, approved by all the above parties in advance, which describes the extra duty in detail and makes payment contingent upon timely submission of satisfactory, detailed time and effort reports and work product.

Contracts

If a faculty member’s entrepreneurial effort results in a consulting contract or service contract, extra duty pay based on a percentage of net revenue earned (up to 30 percent) may be authorized, if the faculty member’s time commitments under the consulting contract is expected to be substantially above the time spent performing duties under existing college appointments. The percentage used to pay must demonstrably represent a reasonable market value for the faculty member’s contribution to the work. The total amount of such extra duty pay will not exceed 25 percent of the faculty member’s academic year salary. A written agreement or contract such as an Agreement for Hire Delivery of Training Seminars, Agreement of a Strategic Alliance, or Work Made for Hire Agreement must be established, attached to a request for extra duty pay, and approved by the Chair, the Dean, and the Provost before the work is performed.

To qualify for consideration, the consulting or service contract should demonstrably benefit student learning, faculty teaching and advising, community service, and other College educational initiatives. Six (6) percent of the gross revenues generated are allocated to the College to defray administrative expenses. After other expenses including participant compensation, net revenues generated will support such items as listed below, for illustration only:

Funding for student classroom, field, and laboratory experiences
Equipment and supplies supporting student activities an d experiences
Scholarships for students
Student worker-study and lab technician positions
Recruiting new prospective students as well as new quality faculty
Faculty development and travel for professional development
Support for faculty service
Dues for professional organizations and subscriptions to professional journals
Administrative support for department offices and development
Administrative items such as computers, office supplies, printers, cameras

Recommendations for faculty reassigned time and extra duty pay on entrepreneurial contracts must specify:

the assignment [this should include a specific description of the temporary work and the desired outcomes, time and effort reports required, documentation evidence that the work is not part of the employee’s regular duties and that no other qualified employee is available to carry out the work as part of his or her normal work load (all required duties as well as a minimum of 40 hours per week), and evidence that the additional duties are not so burdensome as to interfere with the employee’s performance of regular full time duties];
a termination date for the assignment not to exceed one (1) year;
the amount that is the source of pay within the unit’s budget.

All agreements to work on grant- and contract-funded reassigned time and extra duty pay will incorporate the standards of time and effort reporting necessary to comply with the terms of the grant or contract.

Budget Categories

Typically, sponsored projects allow the grantee to request compensation for the following direct costs: personnel (salaries and wages); fringe benefits; equipment; materials and supplies; travel and other. Read guidelines carefully to determine what restrictions, if any, are placed on the categories, or if some line items are disallowed.

A. Personnel

The budget should reflect the name, title, and percentage of time each individual will be paid and/or contributing time to the project or program. For a multi-year project, include an annual escalation factor for all salaries.

B. Fringe Benefits
For a sponsored program budget, fringe benefits are calculated at a rate of 25 percent of the base salary for all grants and contracts. Fringe benefit rates are applied to salary charges for academic faculty, administrative professional, state classified. Temporary and student hourly employees are not eligible for benefits. Only work-study student employees are exempted. The fringe benefit costs are charged against the same account, in the same proportion, as salary charges, including periods when personnel are on paid leave, e.g. annual and sick leave. These fringe rates are subject to change on an annual basis.

Metro State fringe benefit rates for academic faculty, administrative professional, and State Classified employees may include the following benefit components:

Life insurance
Medical insurance
Retirement
Short Term Disability
Medicare, and
Others

C. Equipment
Capital equipment at Metro State is defined as property having a value of $5,000 or more, and a useful life of two years or more. Non-capital equipment is that equipment that has a value of less than $5,000. All equipment requested must be compatible with Metro State’s existing infrastructure; principal investigators should check with Information Technology if a question arises concerning compatibility. Since space is at a premium on Metro State’s urban campus, space for new equipment will have to be identified by the Principal Investigator and authorized by the Dean and Provost. When equipment is included in the application, make certain that costs for shipping and handling and installation are also added to the budget. An adequate justification should be written as part of the budget narrative, to explain the need for the equipment request.

D. Materials and Supplies
Relate the type of expendable materials and supplies needed with the estimated costs. When the charges for this category are substantial, provide a breakdown of the charges for each item.

E. Travel
Proposed travel should include the number of trips planned, number of individuals involved in the travel, the name of the conference, location, purpose and costs. Estimated travel should be divided into the following categories: transportation, including airfare, mileage, and/or rental of a vehicle; Per Diem expenses; and hotel costs. The purpose of the travel should be adequately justified in the budget narrative.

F. Other
Other direct costs may include items such as: consultant costs; publication expenses; subcontracts (subawards), computer services; and long distance telephone and/or fax costs. Funds may be requested for expenses related to publishing or disseminating project results or findings. All expenses in this category should be listed individually, and explained thoroughly in the budget narrative.