Budget Basics for Administrators

Sean HineBranch ChiefOffice of Grants AdministrationNational 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. Reasonableness2. Allocability3. Consistency4. Conformance

Costs (cont.) Differentiation between 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.htm

Costs (cont.) It is 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 Effective Jan. 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 Inclusion of 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.htm#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 The following programs have individual

budgeting requirements: SBIR/STTRs NRSA Career (K) awards

Be sure 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???