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Budget Preparation Guidelines

The following information is intended to assist you in the preparation of budgets for all types of proposals for external funds. Additional assistance and information is available from the Office of Grant Services staff. The Grant Services budget template can help you get started on your budget.

When preparing a budget, you must work with the Office of Grant Services to insure the costs are allowable, allocable, and reasonable based on guidelines of the sponsor and according to federal cost principles.  Allowability, allocability, and reasonableness are defined and determined by the Office of Management and Budget (OMB), the sponsor's requirements and/or College policy.  Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Programs, states that "The recipient institution is responsible for ensuring that costs charged to a sponsored project award are allowable, allocable, and reasonable ..." 

From the Uniform Administration Requirements, Cost Principles, and Audit Requirements of Federal Awards, 2 CFR 200 (effective 12/26/14)

Allowability

§200.403   FACTORS AFFECTING ALLOWABILITY OF COSTS.

Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also §200.306 Cost sharing or matching paragraph (b).
(g) Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of this part.

§200.404   REASONABLE COSTS.

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to:

(a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award.
(b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award.
(c) Market prices for comparable goods or services for the geographic area.
(d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government.
(e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014]

§200.405   ALLOCABLE COSTS.

(a) A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost:

(1) Is incurred specifically for the Federal award;
(2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and
(3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.

(b) All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs.
(c) Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards.
(d) Direct cost allocation principles. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Where the purchase of equipment or other capital asset is specifically authorized under a Federal award, the costs are assignable to the Federal award regardless of the use that may be made of the equipment or other capital asset involved when no longer needed for the purpose for which it was originally required. See also §§200.310 Insurance coverage through 200.316 Property trust relationship and 200.439 Equipment and other capital expenditures.
(e) If the contract is subject to CAS, costs must be allocated to the contract pursuant to the Cost Accounting Standards. To the extent that CAS is applicable, the allocation of costs in accordance with CAS takes precedence over the allocation provisions in this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014] 

Standardized Rates for Proposal Budgets

Personnel

  • Faculty/Administrative Staff: Calculate all salaries using current, accurate figures. If you have a nine-month appointment, monthly calculations should be based on 1/9 of your annual salary. Use the same formula to calculate summer stipends (one month of summer salary should be based on 1/9 of your annual salary). For projects that begin in the current fiscal year, use your current salary. For projects beginning in the next fiscal year, include a 3% increase to your current salary and for each additional year.

    Faculty cannot be paid for more than 100% of their time and effort for teaching, research and service activities. This means that if a faculty member receives a stipend for grant activity that takes place during the academic year, he or she must obtain release time from teaching responsibilities to equal the amount of time and effort expended on the grant.
  • Support Staff: Calculate salaries using current, accurate figures. Contact Human Resources (ext. 3638) to obtain current rates for different support staff classifications.
  • Graduate Students: Graduate Student Assistants must be paid at least an hourly minimum wage and tuition remission. The number of credits of tuition remission given to the student depends upon the type of work and expected number of hours per week. The value of the tuition remission depends upon the cost per credit, which varies by graduate program. Project directors can contact the Office of Graduate Services (ext. 3360) to find out current tuition rates as well as examples of how many credits of remission have been given to students in similar positions.
  • Undergraduate Student Workers: The hourly wages for student workers can be set by the project director in conjunction with the Student Employment Opportunities Coordinator. The typical range is between minimum wage and a few dollars higher. For help with determining appropriate student wages, contact the Student Employment Opportunities Coordinator in the Career Development Office (ext. 4880).

    During the summer, students can work up to 40 hours/week for up to 14 weeks. During the academic year, students can work up to 20 hours/week for up to 16 weeks per semester. More typically, students should be expected to work 10 hours/week. ***After January 2015, new policies may be in effect per the Affordable Care Act. Please contact the Office of Grant Services to discuss.

Fringe Benefits

Fringe benefits should be budgeted for all university personnel who will be paid all or in part from grant funds. Matching salaries shown to the funding source in actual dollar amounts as evidence of institutional support should also include fringe benefit calculations. Current fringe benefit rates are:

  • Faculty and Administrative Staff: 30%, Academic Year; 10% Summer (faculty) and overload
  • Support Staff: 40%
  • Students: 1%, When enrolled in classes; 10% Summer (if not enrolled in classes)

Consultant Costs

Consultants should be limited to those off-campus individuals needed to complete a specific component of a project. The use of consultants is dependent upon a funding source guidelines. Some funding sources may not allow compensation to consultants or may stipulate a cap on the amount of compensation to be paid to a consultant.

Travel

Flight costs can be obtained from the University's travel agent, AAA Travel (763-8848). If you drive, using your private vehicle, refer to the Financial Administration's website for current reimbursement rates. University travel policies are available from the Controller's Office (ext. 3434).

Equipment

As defined by Xavier University, capital equipment has a purchase price of $1,000 or more and a useful life of one year or more. Capital equipment must be purchased under the object codes for capital items, 6xxx.

To obtain current prices for computer equipment, software and instructional materials (these may be available with an academic discount), contact Central Procurement and Accounts Payable (ext. 3676).

Indirect Costs

Indirect costs are real costs to the University for conducting the project but are costs that cannot be computed or detailed. Examples of indirect costs include utilities, building use, libraries, and general clerical support.

Whenever indirect costs are permitted by the funding source, University policy requires that they be applied. Funding sources may have different policies regarding indirect costs. If the maximum indirect cost rate is allowed (usually true of federal funding sources), the project budget should include an indirect cost rate of 43% of salaries and wages, excluding fringe benefits. Please contact the Office of Grant Services for clarification regarding the application of indirect cost rates.

Any waiver to including indirect costs (when indirect costs are allowed) or using a lower indirect cost rate than allowed must be requested in writing and sent to the Office of Grant Services.

Cost Sharing (Cash or In-Kind)

Institutional cost-sharing is often used to document the University's commitment to the proposed project. Xavier University has limited funds for matching or cost-sharing on proposed budgets. Therefore, if the funding source requires matching by the University, this should be discussed with the Office of Grant Services as soon as possible in the development of a proposal. In-kind contributions must comply with federal and some private funding source regulations in the same manner as actual cash expenditure (i.e. they must be documented and auditable).

General Budget Items

  • Postage: Contact mailing services (ext. 3558) for current postal rates.
  • Xerox: Budget $.055 per copy.
  • Printing: Contact the FedEx Office (ext. 1937) for cost estimates.