Proposal Preparation Guide

A budget will ordinarily consist of Direct Costs (DC) and Indirect Costs (IC)

See Basic Budget Building Tutorial (OUTDATED - awaiting revision), a Powerpoint tool that provides detailed step by step pointers on budget building.  This is strongly recommended for new faculty, infrequent fliers of the proposal process, or those just seeking a refresher.

Budget construction is often the most difficult part of the proposal. The difficulty arises because research itself is unpredictable; therefore, it is often difficult to estimate the resources needed to accomplish the project. The past experience of the principal investigator should serve as a guide for correct budget estimation.  If new to the process, consult with a more senior colleague or contact your OGCA Pre-award Administrator for assistance.

A well developed budget is accompanied by a budget explanation. A complete and realistic budget justification demonstrates that your project is well conceived. It also tends to minimize the chances that sponsors will arbitrarily reduce or eliminate budget categories. Sponsors have a good idea of what a project should cost, and generally know when you are over or under budgeting.

The budget is reviewed by OGCA and the sponsor to verify that costs are reasonable, allowable, allocable and necessary to carry out the proposed project, and if it conforms to the sponsor's instructions. During award negotiations a budget is sometimes subjected to further analysis by the sponsor's audit staff. Thus it is important to maintain all the documentation and justification you can assemble for each cost element and category, in case the sponsor questions items and estimates.

For newcomers to the process, consult with experienced faculty or staff within your department for advice, or contact the OGCA proposal team to discuss potential costing.

Principal Investigators submitting proposals to fund the creation of Centers or Institutes must simultaneously submit a proposal to the Rules Committee of the Faculty Senate as the first step in a formal approval process. Please indicate on page 2 of the Internal Processing Form (IPF) that this step has or will take place. Awards will not be processed until the Center is formally approved.

Commitments beyond the period of support

Commitments beyond the period of support should not be included in a proposal unless it is required by the sponsor.  In the event the commitment is required, please provide a letter from the department documenting support of the proposal's commitment to resources or funding beyond the life of the grant/contract, for examples: supporting fellows beyond that committed by the sponsor; or purchasing equipment; running a center or program. This letter should be signed by the individual authorized to commit funds for the anticipated costs.

Third party

Non-monetary Third Party contributions should not be part of a proposal unless required by the sponsoring agency.  In the event of such a requirement, and if a non-UMass/Amherst third party pledges significant contributions to the project so that without that resource, the thrust of the project could be jeopardized, it is necessary to provide OGCA with a letter of support/commitment from the third party. This letter would provide some detail about the non-monetary resources committed at no cost and should be signed by the individual authorized to make such commitments (OGCA equivalent; contracting officer, business official, etc).  Monetary Third Party Cost share requirements and instructins are covered in the cost share section of this document.

Third party contributors should use this model Third Party Cost-Share letter on their official letterhead and have it signed by the authorizing official as noted above.

 Also see Cost-share.

Proposals submitted to the Office of Grant and Contract Administration (OGCA) are accompanied by the Internal Processing Form (IPF) that includes questions relating to a variety of compliance considerations.  Any proposal involving these considerations should follow this procedure.

Confidential information should not be included in proposals unless necessary.  If confidential matter or proprietary information is involved or uncertain in its definition, please bring it to the attention of the OGCA proposal team. For your protection, a proprietary rights legend should be added to the cover page of your proposal. Two versions are provided here for your consideration:

1)  This data shall be disclosed only to sponsor employees or outside evaluators under contract to the sponsor and shall not be duplicated, used or disclosed in whole, or in part, for any purposes other than to evaluate the proposal; provided that, if an award is made to this offeror as a result of, or in connection with, the submission of this data, the sponsor shall have the right to duplicate, use or disclose the data to the extent provided in the contract, grant or cooperative agreement. The data subject to this restriction is contained on page(s):

And mark each page that is to be restricted with the following:

Use or disclosure of proposal data is subject to the restriction on the Cover Page of this proposal.

OR

when the proposal contains ideas and information that could lead to patent applications and stronger, more specific language is desirable, the following sample legend is recommended:

2)  This document, or portions of it, contains confidential information that is or may become the subject of a United States patent application and that is important to future commercial efforts based on such confidential information. Accordingly, this document and the confidential information is exempt from disclosure under the Freedom of Information Act, Sections 552(b)(3) and (b)(4) of Title 5 of the United States Code and corresponding regulations of United States government agencies.

Each page containing confidential information should be marked " CONFIDENTIAL"

Also see Intellectual Property

Simply put, a Conflict of Interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly influence the motivation for an act in the other.

For potential conflicts of interest, see

 Faculty with questions about the COI Policy and workings of the COI Committee should contact the Vice Chancellor for Research & Engagement.

If after consultation with the VCRE it is determined that a potential COI exists, be sure to check "Yes" to COI on the Internal Processing Form and alert your OGCA administrator when submitting a proposal for external support.

Perceived "Nepotism"

Direct supervision of relatives, including spouses, must be fully justified and explicitly approved by the Chancellor. Payroll will not process appointments without prior approval. A letter addressed to the Chancellor requesting approval should be generated which includes an outline of the proposed arrangement and clearly discloses and justifies any familial relationships associated with the request, as well as other supporting information. Before the letter is submitted to the Chancellor, the signatures of the Department Chair and Dean, indicating their support should be obtained. A completed Ethics Commission conflict of interest disclosure form must accompany the letter. The form may be obtained at the following link: http://www.mass.gov/Ieth/docs/legal/disc_appearance_23.pdf. Proposals may be sent prior to Chancellor’s Office approval, but an award will only be processed when OGCA has received written approval from the Chancellor’s Office. PI must coordinate matters of nepotism or conflict of interest.

Because the Internal Revenue Service issued findings against UM in a recent audit regarding the payment of individuals as consultants rather than employees (temporary), special consideration must be taken in the appointment of consultants. Please consider the following when budgeting:

  • UM personnel cannot be paid as consultants on UM payroll
  • A consultant lends their expertise and advice in their given field without actually "working" on the project
  • A consultant does not conduct independent research
  • Intellectual property or publishing rights are not anticipated
  • A consultant is neither affiliated with UM nor using its facilities
  • Consultant costs should not be budgeted under UM personnel costs but rather in the "Consultant" or "Contractual" category
  • Honoraria are budgeted under consultant costs
  • When possible, identify the proposed consultant by name, indicate the number of days/weeks charged to the grant and provide daily or weekly rate.  Do not guesstimate; please confer with the potential consultant and verify their rates.
  • Include consultant's curriculum vitae and their letter of support in the proposal

The following guidelines are provided to assist in the determination of consultant status:

Establishing control: To determine whether a worker is an employee or a consultant, you should apply the common law test of control. Under this test, if you have the right to control and direct what a worker does and how he or she does it, a relationship between you and the employee exists. In the absence of such control, a worker may be classified as a consultant.

To determine whether control exists in an employer-employee relationship, the IRS uses the following 20 common law factors:

  1. Required compliance with employer’s instructions
  2. Training of worker by employer
  3. Integration of worker’s services into employer’s operations
  4. Services required to be rendered personally
  5. Hiring, supervising, and paying worker’s assistants
  6. Continuing relationship
  7. Set hours of work
  8. Full time work required
  9. Working on the employer’s premises
  10. Set order of sequence of work
  11. Required oral or written reports
  12. Payment by hour, week or month
  13. Payment of business expenses and/or travel expenses
  14. Furnishing of tools and materials
  15. Significant investment by the worker
  16. Realization of profit or loss
  17. Working for more than one firm or company at a time
  18. Making services available to the general public
  19. Right of employer to discharge
  20. Right of worker to terminate

If the individual does not qualify as a consultant, see Temporary Employee

If the collaborator's facilities (Industry or University) will be used preponderantly for that part of the research s/he is responsible for, the vehicle for funding is not a consultant’s contract but rather a subcontract. (see Subcontract)

If the transaction is for a fixed service at a set fee, such as published "per analysis" costs, the procurement may qualify as a so-called Fee for Service in place of consultant appointments or subcontracts.

If you are unsure as to how the worker should be classified, contact Human Resources for a ruling. All Contracts for Services are screened by Procurement prior to further processing. Questionable contracts are referred back to the requesting departments

Maximum federal rate

As of 2006 there no limitations on the maximum federal rate for consultants set by NSF and therefore considered a good rule to follow for other federal agencies. Payments, however, should be comparable to the normal or customary fees charged and received by the consultant for comparable services, especially on non-government contracts and grants. See this and other information regarding consultants at Payments to Consultants under NSF Awards.

A consultant’s fee should be consistent with the rate s/he charges other organizations for the same or similar services.

CAS consists of a set of standards and rules promulgated by the United States Government for use in determining costs on sponsored research agreements.  The University largely developed the following policies and procedures in response to these requirements:

Cost of Living Adjustments (or Allowances) must be budgeted in order to cover cost increases ranging from union mandated raises for salaries and generic inflationary forces for other direct costs.

Salaries

Budget 3% to 5% COLA’s for future years on multiple year projects.  Some sponsors set limits on COLA's:  NIH limits them to 2%.

If the budgeted rate of pay exceeds the employee's current rate of pay by more than 5%, or is otherwise out of line with bargaining unit agreements, please provide an explanation. Are there any pending personnel actions? Since OGCA is required to assess reasonableness of cost, provide detail either in a note to OGCA or in the text of the proposal.

The PI should be prepared with supporting documentation when sponsor award negotiation occurs in case any questions arise.

For the latest bargaining unit contracts and information on COLA's and merit raises, visit the Human Resources website.

Curriculum fee

The COLA for the Curriculum fee must be set at 5%, regardless of potential limits set by sponsors.

Non-salary inflation factor

Anywhere from 3 to 5% is also recommended. Some sponsors place limits on the rate of inflation built into the proposal – check sponsor guidelines for any restrictions.

Cost of living increases should not be applied to indirect cost (F&A) rates: use current (predetermined) rates or provisional rates as applicable – see the Fact Sheet.

Administrative/Clerical

Direct charging of administrative, secretarial or clerical salaries on federal funds is appropriate only where all of the following conditions are met:

  • an extensive amount of administrative or clerical work is required to carry out the project, and
  • the administrative or clerical personnel are specifically listed and justified in the budget proposal, and
  • the individuals have responsibilities specifically related to the project and the effort devoted to the project is documented, and
  • the sponsoring agency accepts the cost as part of the project’s direct cost budget

Clarification: Account monitoring, meeting arrangements, or typing general correspondence or reports on behalf of a grant/contract would be considered the normal services to be provided by the University and treated as an indirect cost; consequently they would NOT be allowed as a direct cost. However, when administrative/clerical services involve extensive data collection literature/ library searches, analysis, surveying or similar services required for accomplishing the programmatic objectives of the grant/contract, such services may be direct charged. Also, if a grant/contract requires an extraordinary amount of normal services such as large, complex programs, admin./clerical services may be direct charged. Other examples are projects that require travel arrangements for large numbers of participants, such as conferences and meetings; projects whose principal focus is the preparation and production of manuals. Large reports, books and monographs (EXCLUDING routine progress and technical reports); projects that are geographically inaccessible to normal departmental administrative services; projects requiring project-specific database management or project- specific regulatory protocols.

Review these sample secretarial justifications to get a flavor of allowability.

Charging for administrative/clerical costs on federally funded projects is not normally allowable on Federal funds but if the criteria listed above is met, the position can be budgeted, but only at 25% effort or greater and justification must be provided in the proposal itself. If budgeting for less than 25%, a policy waiver request must be submitted to and approved by the Mike Malone Vice Chancellor for Research and Engagement.

Proposals containing secretarial expenses, whether temporary or permanent, require adequate justification. Federal regulations permit the direct charging of administrative and clerical costs only when the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support which is significantly greater than the routine level of such services provided by academic departments.

 Office Supplies

This type of expense may be appropriate as a direct charge to a grant/contract only when it clearly benefits/supports programmatic objectives. Examples would include research notebooks and computer paper used during the technical course of a project . Items such as pencils. paper clips, memo pads and post-its are normally considered an indirect cost and therefore not allowable as a direct charge. Reasonable judgment should be exercised when charging office supplies directly to a grant/contract because they are likely to be highly scrutinized during sponsor proposal review or during an audit.

Postage

The direct charging of postage to an award for purposes such as the shipment of materials, mailing of research surveys to human subjects and submitting deliverables is appropriate if reasonable care is taken to assure that such costs are for the sole purpose of the grant/contract and can be specifically identified and justified as such. Routine correspondence is considered to be an indirect cost and not an allowable direct charge.

Telephone Service

Toll calls are allowable if they are allocable to the project.  Cell phones are generally not allowable and are only allowed in extremely unique situations.  For further guidance, please contact OGCA.  Charges for land lines and data access are also not allowable except for extremely unique situations.  For further guidance on allowability, please contact OGCA. Review these sample administrative cost justifications for a flavor of allowability.

For further details on administrative cost restrictions, see Policy on Administrative Costs.

Applicability: Applies to all federal and non-federal sponsored agreements.

For details, please see UMASS Policy & Procedure on Cost Sharing

Definition of Cost Sharing:

The portion of the total project costs of a specific sponsored agreement that is borne by the Amherst campus (or in some cases, a third party), rather than the sponsor.

Cost sharing normally represents a reallocation of departmental or school resources to partially support an externally sponsored project. Cost sharing on federal projects must be from non-federal sources.

Examples of cost sharing include contributions of personnel effort and associated fringe, equipment, tuition waivers, and the associated indirect cost.  Please note that cost share of personnel effort cannot comprise of volunteer unpaid effort.  Faculty on nine month appointments may not show as cost-share unpaid summer effort. Should the indirect cost rate the sponsor allows be lower than the University’s negotiated rate, the difference between the two rates may also be used as University cost share. In the event of an indirect cost waiver from the Vice Chancellor for Research and Engagement, those indirect costs may also be cost shared.

Cost sharing is classified as either mandatory or voluntary. Cost sharing that is classified as "mandatory," is a written requirement of the sponsor, and the ability to apply for and receive an award is contingent upon the campus's willingness to comply with this requirement. Cost sharing is classified as "voluntary" when it is not a requirement of the sponsor and the campus voluntarily proposes to cost share an expense, whether it is included formally in the budget or, included within the text of the proposal. Voluntary cost share also includes situations where a commitment is not made in a proposal, but the campus absorbs costs which directly benefit the project. It should be noted that UMass policy does not allow for the inclusion of voluntary cost share in proposals unless the Principal Investigator has the approval of the Chancellor for Research and Engagement to include such voluntary cost share.

An agreement to cost share, whether voluntary or mandatory, represents a commitment, subject to audit, of the Amherst campus to provide the stated services or assets during the performance of the project. Principal investigators are urged to discuss proposed cost-sharing arrangements well in advance of submission of the sponsored agreement proposal with their department chair and pre-award staff of the Office of Grant and Contract Administration (OGCA).

In regard to key personnel effort, keep the Minimum Effort on Sponsored Projects policy in mind in regard to PI and Co-PI effort.  Also, if cost sharing Academic Year Effort, you must receive the prior approval of the Provost and include a copy of the approval in the routing of your proposal to OGCA.  Please Refer to Procedure for Requesting Provost or Vice Chancellor Funds For use as Cost Share.

Guidelines

  • Unless required or strongly suggested by the sponsoring agency, DO NOT cost-share. Cost share adds an administrative burden to the Departments who must track & report the cost share to an auditable standard.
  • The sponsor must have a written policy in place in order to cost-share. Provide OGCA with a copy of this policy if not otherwise included in the guidelines
  • If the sponsor requires cost sharing or otherwise strongly suggests it, cost share from (order of preference): salary, associated fringe, indirect costs, equipment, graduate student tuition waivers, and subcontractor cost share. 
  • All cost-share amounts and their associated account numbers must be listed on the Internal Processing Form. This cost-share must also be authorized with a signature, where indicated, by the individual authorized to commit the shared funds.  Typically for Salaries, it is the Department Head or Dean.  Please remember that if you are cost sharing Faculty AY effort, you must receive prior approval from the Provost.  The Provost approval  request must be made by the PI to the Dept. Head, the Dept. Head to the Dean, and then the Dean to the Provost.  Only the Dean should put the request forward to the Provost.  Please do not copy the Provost in on any of the requests prior to the Dean's approval.    A copy of that approval shall be routed with your IPF and the cost share must be approved on the Internal Processing From as noted above.
  • Cost-sharing on federal projects must be from non-federal sources
  • Cost-shared items must contribute directly to the project
  • Cost share is expended during the project's period of performance

When is Cost Sharing Permissible?

Mandatory Cost-Sharing: Although mandatory cost sharing was eliminated as a requirement by the National Institutes of Health in the eighties, mandatory cost sharing is still a requirement of some private and government sponsors. Mandatory cost sharing can include any direct cost budget item and indirect costs, depending upon the specific requirements of the sponsor. The campus accepts mandatory cost sharing requirements when the following conditions have been met:

  • The cost-sharing requirement is documented in the written application guidelines of the sponsor and those policies are available to OGCA in its review of the proposal.
  • The person responsible for contributing the funds to cover the cost sharing has reviewed and approved the proposal to signify the ability and willingness to provide the required cost sharing resources (e.g. percent of principal investigator's salary to cover the effort devoted to the project).

Non-Mandatory or Voluntary Cost-Sharing: It is the policy of the Amherst campus to assume a cost-sharing commitment only when required by the sponsor or by the competitive nature of the award, and then to cost share only to the extent necessary to meet the specific requirements.

Unnecessary cost-sharing adds an administrative cost and burden to the principal investigator, the department, the Controller’s Office, and other administrative functions on campus due to the need for creating an adequate and auditable paper trail for those costs. Undocumented or improperly documented cost-share leaves UMASS vulnerable to audit findings.

Principal investigators are strongly encouraged to request reimbursement of the total anticipated costs of a project in the proposal budget. Proposals which voluntarily offer to provide personnel effort of other resources at no cost to the sponsor are offering cost sharing which is generally discouraged by the campus. The campus accepts voluntary cost sharing on grant or contract proposals only when the following conditions have been met:

  • The person responsible for contributing the matching funds has reviewed and approved the proposal to signify the department's ability and willingness to provide the cost sharing resources.
  • The competitive need for cost sharing has been well documented and reviewed by OGCA and the cost shared items are easily documented as defined further below.
  • If the sponsoring agency does not require cost-share but the PI feels voluntary cost sharing is justified, permission to include such Voluntary Cost Share Approval must be obtained from the Vice Chancellor for Research.  Such approval shall be requested 2 weeks prior to submission to OGCA. 
  • All cost sharing (mandatory and voluntary) must have a signature of approval and an account reference for the source of funds to cover the cost sharing, typically the department head's approval is in order.

Cost share categories:

The following categories for cost sharing are in order of preference for cost sharing commitments

1.  Salaries

Cost share of salaries is allowable for the portion of salary associated with any UMass employee's effort committed to the proposed project.  Facts to consider:

2.  Fringe

  • Cost share of faculty on nine-month academic appointments can only be committed for the academic year.  Summer pay cannot be cost-shared on academic appointments unless there has been a special arrangement where the Department Head or Dean has agreed to use other University sources such as RTF or State funding to pay the faculty summer compensation.  This is an unusual circumstance.
  • The dollar value of the shared time must be listed on the IPF and signed for by the Department Head, Dean, Vice Chancellor who is in charge of the account from which the salary is paid.
  • Cost-share of salaries must be from a non-federal account, typically the state ledger from which the individual is paid from.  If uncertain, check with your bookkeeper or Department Head
  • Cost share of Graduate Research Assistant salaries typically represents real cash vs. the in-kind share of a faculty member's time.  Take care not to sign up to what may turn out to be burdensome financial commitments for the department.

Only cost-share fringe that is associated with cost-shared salary.  See the Fact Sheet for current rates.

3.  Indirect Costs

Sample (Please note – 55% for the indirect rate in the following table is used for exemplary purposes only. For current UMASS Indirect rates, please see the Fact Sheet

  • Indirect costs may not be cost shared without the approval of the Vice Chancellor for Research or designee.  For more information on the process, see Procedure for Indirect Cost Waivers/Reductions
  • Unless the guidelines explicitly state otherwise, cost-share can be claimed on the indirect costs associated with the direct charges being shown as UM cost-share.
  • Cost-share of indirect costs are always MTDC rather than TDC

 

 

Sponsor

UMass

Total

 

 

 

 

Salary

$50,000

$10,000

$60,000

Fringe

$15,000

$3,000

$18,000

Equipment

$10,000

$1,000

$11,000

Supplies

$1,500

 

$1,500

Other

$500

 

$500

 

 

 

 

Total Direct Costs

$77,000

$14,000

$91,000

Total Indirect Costs (55% MTDC)

$36,850

$7,150

$44,000

Total Cost

$113,850

$21,150

$135,000

 

 

 

 

 

 

 

 

Waiver of indirect costs:

If indirect costs ordinarily charged to the sponsor are totally or partially waived by the Vice Chancellor for Research and Engagement, or if the sponsor forbids the charging of indirect costs, the percentage value of the waived amount can be cost-shared - unless restricted by the sponsor.  See below for sample calculation of the scenario where the indirect cost rate has either been waived or restricted by the sponsor.  Contact the OGCA pre-award administrator responsible for the sponsor in question if any questions arise.

MTDC & TDC cost share issue

When the indirect cost rate in effect for the sponsored program is less than the UM indirect cost rate, cost-share on the difference between the two rates can be utilized (see example below). 

Since the basis for the calculation of cost-shared indirect costs is always MTDC, the value of indirect costs assessed on the sponsor funded equipment and subcontracts - that portion of subcontracts in excess of $25,000 - are then subtracted from the shared amount of indirect costs (see example below).

When the sponsor indirect cost basis is Total Direct Cost (TDC) and the Sponsor limits indirect costs to an amount less than UM rate for project type (i.e., 8%, 10%, etc), consider the following example where the sponsor only allows a 10% TDC rate.  The example rate of 55% MTDC research rate is used for illustrative purposes in the UMass column. For current UMASS Indirect rates, please see the Fact Sheet

 

 

Sponsor

UMass

Total

 

 

 

 

Salary

$50,000

$10,000

$60,000

Fringe

$15,000

$3,000

$18,000

Equipment

$10,000

$1,000

$11,000

Supplies

$1,500

 

$1,500

Other

$500

 

$500

 

 

 

 

Total Direct Costs

$77,000

$14,000

$91,000

Total Indirect Costs (SP: 10%, UM: 55%)

$7,700

$36,300

$44,000

Total Cost

$84,700

$50,300

$135,000

 

 

 

 

 

 

 

 

Explanation of indirect cost share:

Sponsor budget:

  • 10% x $77,000 = $7,700

UMass cost-share:

Two components of shared indirect costs:

I.   Cost share indirect costs at the rate of 45% on the sponsor direct costs.  This rate represents the sample rate of 55% MTDC rate for research less the rate allowed by the sponsor (10%).  The base is $77,000 less $10,000 (equipment) = $67,000

  • 45% x $67,000 = $30,150

The difficult part, because the overall project indirect cost cannot exceed our federally negotiated sample indirect rate at 55% MTDC, it's necessary to subtract the value of 10% of the equipment cost that is charged to the grant in the sponsor column.

  • $30,150 - $1,000 = $29,150

II.   Cost share indirect costs at the sample rate of 55% (MTDC) on the direct costs shared by UMass.

  • 55% x $13,000 = $7,150

Total Indirect cost-share:  $36,300

4.  Equipment:

Equipment can be cost-shared only if it meets the following criteria:

  • Has not already been purchased
  • Will be purchased specifically for exclusive use on the project
  • Purchased during the project’s period of performance
  • Ownership of equipment will remain with UM at the end of the project period

For those situations when the sponsor does not require matching funds on equipment and it is anticipated that the amount budgeted for sponsor support will only fund a portion of that equipment, please adhere to the following procedures:

  • Submit a request for voluntary cost share to request permission to include cost-share in the budget 

If the Vice Chancellor approves inclusion of non-mandatory cost-share:

  • Show the dollar amount of the UM contributed portion of the equipment in the cost-share column of the IPF and provide authorized sign-off of the person in charge of the cost share account, typically the Dean or Deapartment Head
  • University-wide Research Area matching funds for equipment are signed by the Chancellor for Research and Engagement’s office. All other matching funds should ordinarily be signed by the person in charge of the cost share account, typically the Dean or Department Head
  • List equipment in the sponsor budget as "partial funding for equipment"; show value of contributed amount as applicable

Contact the OGCA proposal team with any questions.

 5.  Tuition

Cost share of tuition is allowable as long as graduate student(s) have a "working" vs. a "non-working" appointment. A "working" appointment results in the waiver of tuition and fees. "Non-working" appointments may result in tuition waivers as well. For help in defining "working" vs. "non-working" graduate appointments call the Graduate School Business Office for assistance and on the determination of graduate student appointments (5-5289) or see The Graduate School Homepage, "Assistantship information for....(current year here)."  The minimum qualifying per semester salary required to earn a tuition waiver is noted top right in the box marked "TUITION and CURRICULUM FEE WAIVER".

See the OGCA Fact Sheet for the current annual cost-share allowance for in-state and out-of-state tuition. This figure is the result of an audit worthy equation that blends the value of in-state and out-of-state rates since the graduate student’s residency is often unknown at the time of submission.

Further considerations on Tuition:

  • Tuition is exempt from indirect costs.  Do not assess indirect costs on shared tuition
  • Place tuition in the "Other" budget line item category
  • Shared tuition can derive from either RA's being charged to the grant or cost-shared RA's allocable to the project
  • In order to earn a tuition waiver, the student must earn a specific minimum salary.  See memo on Assistantship Information to determine current minimum.
  • The tuition waivers must be explicitly approved on the IPF by The Graduate School Business Office.  Hard copy IPF's requires their signature, while the routing of the eIPF's requires their inclusion in routing approval map.  Show dollar value of cost-shared tuition waivers on the IPF.

6.  Subcontractor

If the budget includes a subcontract to another organization, that organization can include shared costs in their own budget if the following is observed:

  • The cost sharing is specifically signed off by the authorizing official of that organization, their OGCA equivalent 
  • Shared costs must be auditable.  A rule of thumb to follow is to show only those type of costs allowed by UM (salaries, fringe, indirect costs, etc -- items with audit trails)
  • Due to the administrative burden at the Departmental level of tracking cost sharing from a subcontractor, cost sharing from this category is recommended only as a last resort.

Subcontractor cost share would be detailed in the subcontractor detailed budget and appear in the overall UMass budget as follows (dollar figures are hypothetical):

 

 

Sponsor

UMass

Total

 

 

 

 

Salary

$50,000

$10,000

$60,000

Fringe

$15,000

$3,000

$18,000

Equipment

$10,000

$1,000

$11,000

Supplies

$1,500

 

$1,500

Other

$500

 

$500

Subcontractor

$25,000

$14,000

$39,000

 

 

 

 

Total Direct Costs

$102,000

$28,000

$130,000

Total Indirect Costs (55% MTDC)

$50,600

$7,150

$57,750

Total Cost

$152,600

$35,150

$187,750

 

 

 

 

 

 

 

 

Further considerations on subcontractor shared costs from sample:

  • The $14,000 includes shared subcontractor indirect costs
  • Shared indirect costs are NOT assessed by UM on the subcontractor's $14,000

7.  Third Party cost share

Cost share from third-parties are not allowed unless specifically required by the sponsor.  If the party providing the third party match is not an official subcontractor included in your proposal and it only providing this match by letter of commitment, approval of the Vice Chancellor is needed.  The reasoning behind the approval is that this type of cost share is very high risk to the institution.  Should it not come through, or be disallowed by the sponsor, the amount of cost share must come from other University sources, or will result a cost disallowance and payback to the sponsoring agency. An email request should be submitted to the Vice Chancellor for Research and Engagement, Mike Malone.  Your request should include very specific details regarding why the third party match is needed, a copy of your budget with the third party match as well as one without the third party match,  docmentation on how the match will be tracked and reported, documentation from the authorized representative of that agency's commitment to provide the match.

Contact the OGCA proposal team to discuss before submitting your waiver request to the Vice Chancellor for Research and Engagement.

If the Vice Chancellor for Research and Engagement formally approves third party cost-share, the following considerations must be taken into account:

  • The third party contributor must provide OGCA with a letter of support/commitment. This letter would provide some detail about the resources committed and should be signed by the individual authorized to make such commitments (OGCA equivalent; contracting officer, business official, etc)
  • Shared costs must be auditable and directly allocable to the project and documented as such in a letter to OGCA. Third party contributors should use this linked model Third Party Cost-Share letter, on their official letterhead and have it signed by the authorizing official as noted above.
  • Do not assess indirect costs on third party cost-share as part of the UMass indirect cost cost-share.

Documentation of Cost Sharing:

  1. Faculty, Student or Staff Effort:

When such effort is committed in a sponsored project proposal, or is otherwise provided to a sponsored project, it must be identified and tracked on the annual effort survey. The campus is responsible for documenting to sponsors and auditors that the proposed expenses were actually cost shared. Each faculty or staff member who provides a cost sharing contribution to sponsored project(s) must identify the percentage of his/her effort from campus funding which is devoted to the project(s). The account number used to fund the cost shared effort is also identified on the effort survey. The campus computes the total cost sharing payroll and fringe benefit dollars related to sponsored research and then adds it to the research modified total direct costs for the indirect cost proposal.

  1. Other Expenses:

The campus discourages the cost share of(non-payroll) expenses primarily due to the difficulty in documenting these types of costs. If cost sharing of other expenses is anticipated on a sponsored agreement, the principal investigator must provide an account reference and means of documenting the costs to OGCA. Annually and upon completion of the sponsored agreement the principal investigator must provide a report of cost shared expenditures to the Assistant Controller or designee for the Grant Accounting Section.

  1. Third Party Cost-Sharing:

In kind contributions from non-university sources is only allowed in unusual circumstances. If allowed, documentation of the commitment from the non- university source must be provided with the submission of the proposal to OGCA. Should the project be awarded, the third party would be required to enter into a formal agreement with the University indicating its commitment to provide the University reports and supporting documentation on their contribution for auditing purposes.

 

This page is authored and maintained by the Office of Grant & Contract Administration.  If you have any questions, please contact us at (413) 545-0698 or by email ogca@research.umass.edu.

Direct costs are those costs which can be directly attributed to the project.

Types of Direct Costs

Salaries and wages, fringe, equipment, research supplies, consultants, subcontracts, maintenance contracts, and "other direct costs."

Guidelines

Costs must be 1) Reasonable, 2) Allocable to the project, 3) and Allowable

Reasonable: "Padding", "cushion", or utilizing a "fudge factor" results in "defective cost-pricing". Gross defective cost-pricing can result in audit disallowances if the costs cannot be reasonably substantiated. Although it is difficult to predict the future development and direction of the majority of sponsored projects, especially research and development, it is therefore all the more important to provide the sponsor with adequate justification for each budget line item at the proposal stage. This will impress upon the review panel and the sponsor’s contracting/grants office that the costs are substantiated and directly linked to the needs of the project and therefore less prone to reduction or elimination at award stage. Costs should be based on current and accurate rates with reasonable increases for inflation or anticipated changes to the project, see COLA’s.

With the advent and implementation of the Federal Government’s Cost Accounting Standards (CAS), costs must also be consistently treated across campus.

Allocable: costs must be directly related to the sponsored project activity.

Examples of unallocable costs:

  • Charging 100% of a maintenance contract to one project although the covered piece of equipment is only utilized 50% time on that project.
  • Including personnel costs for a temporary replacement Lecturer to cover a professor’s time while that professor is out of the classroom conducting research for the sponsored project activity.

Allocable solutions to the above:

  • Charge the allocable portion (50%) of the maintenance contract.
  • Include academic year salary commensurate with the percentage of effort the faculty member anticipates working on the project. The faculty members’ Department will not have to lay out funds to cover the sponsor funded academic salary, thus the Lecturer can be paid from those cost savings.

 

Allowable: costs must be allowable according to the governing cost principles, the policies of the sponsor, and UM procedures. For federally supported projects, The Office of Management and Budget’s (OMB) Circular A-21 is the document - other than sponsor guidelines - that determines allowability of cost. (see, Cost Restrictions On Federally Supported Projects.)

OMB circular A-21 is not applicable to non-federal projects unless the UM is subcontracted to by a non-federal sponsor with flow through federal terms and conditions.

Click here, to access OMB Circular A-21 for further discussion on direct costs on federally supported sponsored projects.

Emeritus (retired) faculty are eligible to be principal investigators as long as both the Department Head and Dean sign the IPF.

Salary charged to sponsor when combined with retirement salary cannot exceed the base annual salary upon retirement. If the Emeritus had an academic year appointment, summer salary can be charged to the sponsor without effecting the retired salary equation: retirement + sponsor funded salary = not greater than base salary upon retirement.

Fringe is assessed on summer and academic salary as follows:

  • Worker’s Compensation, UI, UHU, MTX

See fringe information on the Fact Sheet for current rates on Worker’s Compensation et al.

Emeritus Status is available only to those faculty who have permanently retired from the University. Normally, it is granted only to those with ten or more years of service to the University and who have attained the rank of full professor. Emeritus status is awarded by the Chancellor only upon recommendation by the Provost.

For information and proposal relevant factoids, refer to the Fact Sheet.  The following items are covered:

  • Benefited Positions (fringe)
  • Non-benefited positions (fringe)
  • Non- Benefited Positions  (fringe)
  • Faculty Summer Salary (fringe)
  • Graduate Students (fringe & curriculum fee)
  • Postdoctoral Fellows (post doc fringe)
  • Student Summer Payroll (fringe)
  • Federal Indirect Cost Rates
  • Non- Federal Indirect Cost Rates
  • Political Subdivision 
  • University's Authority to Enter Into Contractual Agreements
  • University's Legal Name
  • University's Tax Exempt Status
  • Authority to Sign Applications and Proposals and to Accept Grants and Execute Contracts for Sponsored Programs
  • Miscellaneous Pertinent Information
  • Full Fact Sheet For Printing

When a vendor provides a service for a set fee according to a published rate schedule routinely charged for same or similar items to all potential customer, the procurement may fall under the rubric "Fee for Service" as opposed to a Subcontract, or Consultant contract.  Examples of fee for services have included items such as assay services, catscan services, MRI facilities use, aerial photography, etc.  The vendor would not be responsible for conducting a portion of the research but simply provide a defined service for a set, published fee.  Fee for service items should be budgeted under "Other".

Check the Fact Sheet for latest fringe rates. For a sample budget demonstrating fringe use, see Basic Budget Building Tutorial

The Grant Application Management System, or GAMS, is a software tool available to faculty and staff to assist them with creating proposal budgets, creating and routing the IPF and attached proposal, and in the case of Grants.gov, submitting the proposal electronically to the sponsor via FastGrant, a system-to-system interface between GAMS and Grants.gov.

You will need a username and password to take advantage of GAMS. Please contact Leanne Every, Paul Kelley or gams@research.umass.edu.  For more on GAMS, see Electronic Proposal Preparation/GAMS.

This calculator will reliably calculate Graduate Research Assistant (RA) costs for fringe and curriculum fee while also accommodating for sponsor specific Cost of Living Adjustments (COLA).

Select, Graduate Student Fringe and Curriculum Fee Calculator

Definition

Indirect costs, also known as overhead and more recently defined by the federal government as Facilities and Administration (F&A), Definitions of Project Types for F&A purposes, are those costs that the UM incurs for common or joint objectives that cannot be identified easily with a particular project. Such costs are for UM facilities and services as a whole. The following are some examples of the pooled costs used by the University in determining its indirect cost rates: maintaining and operating a physical plant; utilities; general administration; library; use of capital assets; and staff services such as purchasing, payroll, grants and contracts, and accounting.  See Section F of OMB Circular A-21 for more details.

If it is anticipated that an Indirect Cost Waiver or reduction will be requested, please follow the Procedure for Indirect Cost Waiver or Reduction.

Application

Indirect costs are assessed on the direct costs of the project -- including salary, fringe, supplies, administrative costs, travel, consultants, subcontracts, maintenance contracts, etc.

Example based on research rate of 55% used on federal and industry sponsored research:

  Total
   
Salary $50,000
Fringe $15,000
Supplies $1,500
Other $500
   
Total Direct Costs $67,000
Total Indirect Costs (55% MTDC) $36,850
Total Cost $103,850
   
   

Important considerations:

1)  Indirect cost rates vary according to the following factors:

  • Project type - Research; Instructional; or Other sponsored activities such as conference funding, short term workshops
  • Sponsor type - federal/industry/non-Massachusetts governmental agencies; foundations and non-profits; Commonwealth of Massachusetts and Local government agencies
  • Project location - on or off-campus
  • Sponsor mandated restrictions on indirect costs - provide a copy of sponsor guidelines or published policy to OGCA along with the proposal for review.  If the rate is not supported by a published policy or in written guidelines that applies to all applicants, you must request an indirect cost waiver.
  • Award type anticipated: unrestricted grant vs. restricted grant. (See Unrestricted grant)**propnote

For current rates by project type and sponsor type see the OGCA Fact Sheet.

  2)  MTDC vs. TDC -- Indirect costs vary depending on the indirect cost base

Indirect costs are assessed either on a Total Direct Cost (TDC) basis or a so-called Modified Total Direct Cost basis (MTDC).  Check sponsor guidelines for direction.  If the guidelines are inconclusive, please confer with the OGCA pre-award administrator assigned to that particular sponsor.

Total Direct Cost basis (TDC)

Important considerations:

  • Indirect costs are assessed on all direct costs less the curriculum fee 
  • Curriculum fee is always exempt from indirect costs 
  • TDC is the default base for foundations/non-profits unless the guidelines specify otherwise
  • Commonwealth of Massachusetts grants and unrestricted grants are on a TDC base
  • Consult sponsor guidelines for applicable rates/bases

Sample TDC budget:

(10% Commonwealth of Massachusetts indirect cost rate used below is for illustrative purposes)

 

  Year 1 Year 2 Year 3 Total
         
Salary $50,000 $51,500 $53,045 $154,545
Fringe $15,000 $15,450 $15,914 $46,364
Equipment $10,000 $5,000 $0 $15,000
Supplies $1,500 $1,545 $1,591 $4,636
Subcontract $10,000 $15,000 $15,000 $40,000
Curriculum fee $4,696 $4,931 $5,177 $14,804
         
         
Total Direct Costs $91,196 $93,426 $90,727 $275,349
Total Indirect Costs (10% TDC) $8,650 $8,850 $8,555 $26,055
Total Cost $99,846 $102,276 $99,282 $301,404
         
         

Modified Total Direct Cost basis (MTDC)

Indirect costs are NOT assessed on the following costs on an MTDC basis:

  • Equipment (with a unit cost of $5,000)
  • Curriculum fee
  • Tuition
  • Subcontract (only assessed on first $25,000 of each subcontract)
  • Patient care costs
  • Rental costs of off-site facilities (not owned by UMass)
  • Fellowships and Scholarships
  • Capital Expenditures (construction costs)

Sample MTDC budget:

(55% indirect cost rate for research used below for illustrative purposes)

  Year 1 Year 2 Year 3 Total
         
Salary $50,000 $51,500 $53,045 $154,545
Fringe $15,000 $15,450 $15,914 $46,364
Equipment $10,000 $5,000 $0 $15,000
Supplies $1,500 $1,545 $1,591 $4,636
Subcontract 1 $10,000 $15,000 $15,000 $40,000
Subcontract 2 $50,000 $50,000 $50,000 $150,000
Curriculum fee $4,696 $4,931 $5,177 $14,804
         
Total Direct Costs $141,196 $143,426 $140,727 $425,349
Total Indirect Costs (55% MTDC) $55,825 $45,922 $38,802 $140,549
Total Cost $197,021 $189,348 $179,529 $565,899
         
         

To summarize, indirect costs are not assessed on the following:

  • Equipment ($5k or greater)
  • Curriculum fee
  • Subcontract 1:  indirect costs are not assessed in year 3
  • Subcontract 2:  indirect cost are only assessed on the first $25K in year 1, thus $125K is exempt.

Other important considerations:

  • Confer with the on-line Fact Sheet for current rates when crafting a proposal.  Do not print up this document since it is subject to change
  • If sponsor guidelines don't put a ceiling on the indirect cost rate, the full rate will be used, and, per the UM’s negotiated Rate Agreement, an MTDC basis will be employed
  • As a general rule, use the following when sponsor guidelines do not specify:  MTDC: Federal, Industry, and non-Massachusetts agencies.  TDC: Foundations, non-profits, Commonwealth of Massachusetts, Unrestricted grants

On-Off Campus indirect cost determination

For purposes of determining the appropriate on or off-campus indirect cost rate the following guidelines shall apply:

 

  • Off-Campus Rate:  for all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off-campus rate (26%) will apply.  Actual costs will be apportioned between on-campus and off-campus components.  Each portion will bear the appropriate rate.

  • On-Campus Rate:  for all other conditions which do not meet the requirements of A above, the on-campus indirect cost rate shall be applied to the modified total direct costs of the project.

Processing Procedures:

An explanation of the indirect cost rate(s) applied in the project budget should be included in an accompanying memorandum from the Principal Investigator to the Director of OGCA and included in the budget explanation to the sponsor.

Sample budget:

(55% indirect cost rate for research used below for illustrative purposes)

  On Off Total
Indirect cost rate 55% 26%  
       
Salary $50,000 $25,000 $75,000
Fringe $15,000 $7,500 $22,500
Supplies $1,500   $1,500
Space rental   $12,000 $12,000
Travel $2,000 $4,000 $6,000
       
Total Direct Costs $68,500 $48,500 $117,000
Total Indirect Costs (55%; 26% MTDC) $37,675 $12,610 $50,285
Total Cost $106,175 $61,110 $167,285
       
       

 

For more details, see Determination of On and Off Campus Indirect Cost Rates on Grants and Contracts

Consult with the University’s intellectual property policy statement prior to discussing intellectual property issues with prospective sponsors, especially industry and other non-federal sponsors.  Some industry sponsors will require the completion of a Non-Disclosure Agreement before faculty and industry personnel collaborate on the proposal since potentially proprietary information could be exchanged between each party without the proper legal protections.  OGCA can assist you when the NDA is project specific, CVIP will negotiate the NDA when it's generic and not necessarily proposal specific.

See Intellectual Property Policy, Amherst & Boston and Policy on Conflict of Interest Relating to Intellectual Property and Commercial Ventures.

If you have any questions regarding this policy, contact Commercial Ventures and Intellectual Property (CVIP) at 545-3606.  See CVIP homepage.

  • All proposals to external funding sources ("sponsors") in support of sponsored programs, are submitted by the Office of Grant & Contract Administration (OGCA.) This is a University policy spelled out in Trustee Document T94-034.  Your complete proposal is due to the OGCA 5 working days before the sponsor deadline See T94-034.  Your complete proposal is due to the OGCA 5 working days before the sponsor deadline See "Five Day Proposal Submission Procedure"  The steps for submission are as follows:

    Proposal Development:  The proposal is written and prepared at the PI's departmental level.  For early-stage proposal development support please contact the a member of the Research Development office.  OGCA will gladly answer questions while you are preparing your proposal, and would appreciate hearing from you when you are planning to submit an unusually large or complex proposal, especially those in response to RFP's. This will enable both parties to be more prepared and effective in the submission to the sponsor.  Pertinent information required for your proposal are contained in the FACT Sheet.    Please also be sure to pay very close attention to he requirements spelled out in the sponsors guidelines/RFP.  If you have any questions, please contact the OGCA fiscal administrator handling the specific agency.

    Proposal routing and submission Steps:

    - Complete an Internal Processing Form (IPF)  -   The IPF can be generated electronically or downloaded from the website and submitted in hard copy.  All categories must be completed and accurately reflect the characteristics (i.e. regulatory compliance, title, etc.) of the proposal being submitted.   Please be particularly careful when inputting the deadline date.

    - Electronically Route or obtain approval signatures  on the IPF.  The required signatures are the Principal Investigator (PI), Department Head/Chair, and the Dean. If this is a cross-disciplinary project, other signatures may be required; refer to instructions for electronic routing or for hard copy routing (** need links) . If other institutions are involved as subcontractors, please list them appropriately on the front page of the IPF.

    If electronically routing - follow instructions on how to attach proposal to the routing.  Please monitor the progress of the approvals to insure that your proposal does not get stuck at one of the approval levels.

    If hard copy submission, deliver the proposal, the  fully signed IPF and the guidelines to OGCA at the Research Administration Building ground floor lobby, which is across from the Newman Center, and adjacent to parking lot # 52 (visitors parking slips available at the the Reception Desk).

    REVIEW:  OGCA will review the proposal and be in contact with you if there are changes that need to be made or questions relevant to their review.  Status of your proposal is available to you on line. If there is not a deadline associated with your submission, we will make every effort to send it within 5 working days of receipt.

    SUBMISSION - Once everything is in order and the proposal is approved for submission, we will either electronically send or, xerox, package and mail the proposal to the sponsor, whichever is appropriate. A copy of the final submission if not electronic, will be forwarded to the PI along with a copy of the IPF and transmittal letter.  If an email submission, you will be cc'd in the email. 

    Please contact us at any time if you have questions (413) 545-0698 or by email ogca@research.umass.edu 

The Research Development (RD) team serves investigators by facilitating the initiation and expansion of research and scholarly activities on campus.   

Research Development staff members assist with the coordination, development and refinement of proposals for sponsored research; link faculty to prospective partners across disciplines and institutions; offer guidance on funding strategies and information about upcoming opportunities; organize faculty research development workshops, seminars, and peer-to-peer mentoring programs; and provide federal and state government relations services.  In short, we are continually exploring new and improved ways to help members of the campus research community initiate, expand, or supplement sponsored projects.

The Office of Research Development strives to deploy a suite of activities that reflect national best practices in professional staff services for research development.   Three broad types of Research Development services are:

  • Proposal Development
  • Faculty Development Programs
  • Government Relations

For more details, see Research Development staff contacts.

Definition

Generally a subcontract or subrecipient, as compared to a consultant or fee for service vendor, is defined as an entity, often another university, who helps the grantee carry out the activities of the award by independently performing a portion of the research work using their own facilities.

Documentation needed by OGCA

  1. A letter signed by the subcontractor's business official (OGCA equivalent) endorsing the work referenced in an attached statement of work and budget 

  2. Statement of work (subcontractor specific – does not include UMass effort)

  3. Subcontractor budget, use sponsor budget forms as applicable

  4. Additional sponsor forms,  including certifications as applicable

  5. Indirect Cost Rate Agreement (if subcontractor charging indirects)

  6. Sole source justification.

Items 1-5 must be handled by the subcontractor's PI and grant's office and then forwarded to the UMass PI..  Item 6 is addressed by the UMass PI.  The Sole source justification would explain why the sub is uniquely qualified to carry out the work needed.  Sole source justifications can be forwarded to the OGCA pre-award administrator assigned to the proposal  via email or campus mail.

The subcontractor's grant's office should forward items 1-5, listed above, to the UMass PI well in advance of the deadline.  The UMass PI will review their budget and statement of work, and if it looks in keeping with expectations, incorporate the subcontractor budget in the lead proposal.  All other items are not typically incorporated into the proposal but forwarded to OGCA for review and held on file in case of audit.

Formatting Budget

UM budget should not blend subcontractor costs with UM project costs. That is, two budgets should be submitted to the sponsor:

  1. The UM budget with an annual line item for Subcontractor Total Costs with a note: "see attached Subcontractor budget for detail"; and
  2. The Subcontractor line item budget. Call the OGCA Proposal Team with questions

See Basic Budget Building Tutorial for example of subcontract budget format.

Indirect costs

Overhead is assessed on the first $25,000 of each and every subcontract. For example, if the subcontract has only $15,000 the first year, then overhead is assessed on that amount, and then on $10,000 of the next year, if it’s a multiple year contract, see Indirect Costs (**link to IC in this node).

Sole Source

Any federal procurement over $1,000 must be put out to bid. If it’s a subcontract and bids were not solicited, sole source justification is required and must be kept on file at OGCA for auditing purposes.

A sole source justification will explain why the chosen subcontractor is the only qualified entity to perform the work in question, and how its selection will benefit the government. This should be provided at proposal stage.

Subcontract vs. standard procurement

If the individual or company in question provides a service for which a flat fee is charged for the work to be done and they are not involved in the research effort but simply provide a service, this transaction of services is classified as a standard procurement rather than a subcontract. As such, no statement of work, budget, or letter of intent is needed. Standard procurements are budgeted as "Other".  See Fee for Service.

If salary is budgeted for an individual who doesn’t otherwise have an appointment nor will s/he be appointed on a permanent basis if the proposal is awarded, and this individual will be using UM facilities to help conduct the actual research, that person qualifies as a Temporary Employee. For non-students-- classified, professional, or faculty--hired below 50%-time, benefits are not applicable, only FICA and Worker’s Compensation are assessed, see Fringe.