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 OPAS 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 OPAS pre-award administrator assigned by sponsor to discuss potential costing.
The budget justification is a categorical description of the proposed costs. Generally, it explains staffing and supply/service consumption patterns, the methods used to estimate/calculate (including escalation or inflation factors) and other details such as lists of items that make up the total costs for a category. The budget justification should address each of major cost categories (salaries, fringe benefits, equipment, travel, supplies, other direct costs and indirect costs), as well as any additional categories required by the sponsor.
A thoroughly written justification that explains both the necessity and the basis for the proposed costs must accompany the budget. The justification section is critical as it enables the principal investigator to emphasize the importance of essential project costs. A budget that is adequately and appropriately justified is the best way to assure a positive cost analysis by the sponsor.
Below are some helpful tips:
- Organize the budget justification listing items in the same order and format as the sponsor’s budget categories.
- Only include budgeted items. Some sponsors like NSF will disqualify a proposal if contributed items are listed. Do not list cost-shared items unless cost-sharing is mandated by the sponsor.
- Budget narrative must match the budget in terms of dollar amounts and language – double check everything.
- Explain why items are essential in relation to the aims and methodology of the project as well as meeting the goals of the project.
- Explain the line items. Do not merely restate the proposed expenditure.
- Provide detail sufficient to justify the rationale for acquiring the item under the proposed project.
Salaries and Wages
Also see Budget Development: Personnel Costs.
- List all personnel and positions to be paid with project funds and briefly describe their role in the project.
- Only list paid personnel unless cost-sharing is mandated by the sponsor.
- In addition to how the sponsor requires effort to be shown, also always list effort in person months for faculty and staff. For Graduate Research Assistants, list number of months and hours per week.
- When listing effort, do not use approximations. Show effort out to two decimal points (e.g. 1.52 months) as applicable.
- Include a COLA of 3% to 5%. Verify any sponsor-driven limitations on COLAs. Currently for example, UMass budgets only 2% with the NIH.
Also see Budget Development: Consultants.
- List consultant name and describe in detail the services to be performed.
- Include number of days, rate of compensation, and total amount per year. This must be corroborated in a letter provided by the consultant.
Also see Budget Development: Equipment.
- Definition of Equipment: a unit cost of $5,000 or more and a useful life of at least one year.
- Get accurate price quotes
- Explain why the equipment is needed in support of the project aims.
- Confirm equipment is dedicated to the project. If equipment is shared with other projects, budget an amount that corresponds to expected project use and verify the rationale. Split funding of equipment should only generally occur with large equipment purchases.
Materials and Supplies
Also see Budget Development: Materials and Supplies.
- Only request supplies directly relevant (allocable) to the research plan.
- Explain in detail why specific supplies are needed.
- Do not request general office supplies if federal (allowability).
- Budgeting should be based on actual experience or quotes (reasonableness).
- Use an inflation factor (COLA) for future years (verify any sponsor limits).
- The breakdown should be more detailed when the total supplies cost is substantial. Where large amounts of supplies or expensive items are budgeted, specify items and justify their necessity.
Also see Budget Development: Travel.
- Ask for reasonable amounts.
- Indicate basis of cost (historical, quotes, etc.)
- State exactly which relevant meeting/conference you plan to attend. If not known, provide examples.
- Include breakdown of costs for airfare, meals, lodging, and ground transportation. Some sponsors like NSF will reject a proposal if insufficient details are provided.
- Include number of people, number of days, purpose and location of travel.
- Budgeting should be based on actual experience or quotes.
- Use an inflation factor (COLA) for future years.
- Avoid partial financing of travel requirements.
Other Direct Costs
See also Budget Development: Other Direct Costs.
- Fee-for-service: Justify use; show the University approved rate, or if an external vendor, their published rate. (internal link here to “Fee-for-service)
- Equipment maintenance and service contract (justify need) and verify that the covered equipment is dedicated to the project; If proportional use on the covered equipment is anticipated, provide the proportional cost/use rationale; Cost/usage should not generally fall below 50%; Note the basis of the cost (quotes, etc.)
- Software should be identified by brand, type, and unit cost; verify in the justification that it is dedicated to the project; and provide a strong justification for why it is needed especially emphasizing what aspect of the project will benefit from its use; the software should not be general purpose software but rather specialized in a manner that supports the specific technical aims of the project; verify basis of cost (quotes, catalog prices, etc.) (link to software costing info above)
- Human Subject Payments (breakdown # of subjects and cost to each)
- Provide details for publication costs.
- Give detailed breakdown of each cost.
- Tuition – provide details. See OPAS Fact Sheet for current rates and provide them to the sponsor. Use the Salary Guide (Excel).
See also Budget Development: Subcontracts.
- Clearly identify subcontracting organizations and their key personnel.
- Briefly explain their scope of work.
- Explain the need to contract with a particular organization, expertise of subcontractor PI, institutional facilities.
- Keep in mind that subcontractors will provide their own detailed budgets and corresponding budget justifications. These should be separate and distinct from the UMass budget and budget justification and follow the UMass budget and budget justification.