Betty Farbman, Associate Director, Office of Sponsored Programs

Nancy Daneau, Associate Director of Research Administration Training & Institutional Liaison

What we’ll cover….Resources and budget categoriesWhat can (or can’t) be charged to a sponsored

project?Making the calculationsHow to treat and incorporate a budget from

collaborator(s)F&A: what is it and why do we care?Cost sharingJustifying the cost estimateTools and references

Common Budget CategoriesDirect Costs

Salaries and Wages Fringe Benefits Equipment Materials and Supplies Travel Consultant Services Participant Support Costs Patient Care Costs Subcontracts Other Direct Costs

Tuition remission Stipends Rent Human Subject Payments

Facilities and Administrative (F&A)/Indirect Costs

Salaries and WagesPrincipal Investigator (PI) and Senior/Key

PersonnelTechnicians (programmers, scientists)Post docsGraduate Research AssistantsUndergraduate StudentsAdministrative support (direct charge only

when allowable and justifiable)

Salaries and Wages (cont’d)…

To charge salary, individuals must be NYU employees External collaborators are not employees; correctly identify as

consultants or subawards PI must commit effort to conduct research or oversee project

activities $’s requested for faculty and other key personnel must be in

proportion to the effort devoted to the project For key personnel, entering $0 dollars and no effort is unacceptable Total dollars, equivalent to 100% effort may not exceed annualized salary

Define effort in person months To convert percent of effort to person months:

Utilize person-months/percent effort calculator found at: grants.nih.gov/grants/policy/person_months_conversion_chart.xls

On internal budgets, note both person months and percent effort

Salaries and Wages (cont’d)…

Check for agency limitations Ex: For NSF, no academic year salary may be

charged Summer salary across all NSF-funded grants may

not exceed two-ninths of academic year salary (2 summer months)

NIH imposes a cap on salaries charged to awards; refer to http://grants.nih.gov/grants/policy/salcap_summary.htm for current rates

Salaries and Wages (cont’d)…

To calculate amount of salary to be requested: multiply person months x monthly base salary

9 month appointmentsDivide 9 month base salary by 9, then multiply by the #

of person months devoted to project11 month appointments

Divide 11 month salary by 11, then multiply by the # of person months devoted to project

12 month appointmentsDivide 12 month salary by 12, then multiply by the # of

person months devoted to projectSalaries that span fiscal years should be

“weighted” to incorporate increases

Calculating salary across fiscal yearsProject period 1/1/2008-12/31/2008

Base Salary in FY’08 = $50,000 Base Salary in FY’09 = $51,500 (3.5%

increase) (12 month employee)

Salary calculation Jan – Aug = $33,336

Calculation - 8 mos @ $4,167/mo Sept – Dec = $17,168

Calculation – 4 mos @ $4,292

Budget for project period = $50,504

Salaries and Wages (cont’d)…

To calculate salary on NIH proposals subject to the capSalary for 9 month appt = $160,000Annualize to 12 months

$160,000 / 9 = $17,777/month x 12 = $213,333 With salary for FY 07 capped at $186,600, monthly

rate is capped at $15,550 ($186,600 / 12) Salary request for 2 person months in summer

totals $31,100 ($15,550 x 2)

Salaries and Wages (cont’d)…

Post-docsYears of experience in field typically drives

rates for post-docsCheck with Administrator or HR personnel for

salary rates specific to your school/deptFor NIH NRSA institutional training grants and

individual fellowship applications NIH sets rates, based on years of experience, for

post-docs http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-07-052.html

Salaries and Wages (cont’d)…

Graduate Research AssistantsCheck with Administrator or HR personnel for

salary rates specific to your school/deptNIH maximum: zero level postdoctoral stipendIn addition to salary, GRA’s entitled to tuition

remission Goes in “Other Direct Costs” budget category Rates

FAS & CIMS: 37% of salary All Other Units: 51% of salary

Salaries and Wages (cont’d)…

Undergraduate StudentsCheck with departmental administrator or HR

personnelHourly rate must be at or above minimum

wageNumber of hours per week limited to 15-20 for

enrolled students May work full-time (35 hours) during breaks

and summer Not entitled to fringe benefits

Salaries and Wages (cont’d)…

Administrative SupportSalaries of admin and clerical staff

Generally part of the administrative portion of the F&A/indirect cost pool and therefore not direct-charged

Exceptions: Major projects or center grants (defined in Exhibit C of

OMB Circular A-21, Cost Principles for Educational Institutions) http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html#exc

Projects requiring extensive data collection and analyses

Conference grants requiring administrative support for making extensive travel arrangements

Fringe Benefits Includes social security (FICA), retirement, unemployment,

worker’s compensation, health/life/disability insurance Fringe benefit rate applied to salary dollars requested for full-

time, eligible NYU personnel in proposed budget Portion of fringe benefits estimated in proposal budget tied to

person-months committed NYU’s federally negotiated fringe benefit rates

9/1/2007 to 8/31/2008: 27% 9/1/2008 to 8/31/2009: 27.5%

Increases by .5 points per year thereafter Fringe should be weighted across fiscal years

Ex: PI salary request = $25,000 Fringe Benefits request = $6,750

$25,000 x 27% = $6,750

EquipmentDefined at NYU as:

Acquisition cost of $3,000 or more per unit with at least one year useful life

Include fabricated items (even if individual components cost under $3K) Defined as sum of individual parts to procure and build

workable equipment itemOn proposals to *federal sponsors*, do not request funds

for desktop computers, laptops unless justifiable due to nature of project Deemed to be part of F&A/departmental research support

Exclude from F&A/indirect cost assessment

Materials and SuppliesLaboratory suppliesAnimals

http://www.nyu.edu/uawc/doc/animalperdiemrate.pdf

SoftwareTraining/curricula/workbook materialsPublication/reprint costsOn proposals to *federal sponsors*, do not

request funds for general office supplies, local telephone charges, postage, etc. unless justifiable due to nature of project

Deemed to be part of F&A/departmental research support

TravelAirfare, lodging, car rental, mileage if using personal automobile, per diem for meals

Foreign travel: Fly America Act—use of U.S. air carriers required except in exceptional circumstances Refer to Fly America Act:

http://acquisition.gov/far/current/html/Subpart%2047_4.htmlProvide detailed estimate

Number of trips, number of days per trip Number of individuals traveling Destination and purpose

NYU reimbursement rates Maximum Per Diem for Meals (unsubstantiated): $50 per day Maximum Expenses for Lodging & Meals (substantiated): $350

per day Business Mileage Rate: 48.5 cents per mile Refer to guidance on travel reimbursements:

http://www.nyu.edu/cdv/site20/policies/busexp.html#travperm

Consultant ServicesExternal collaboratorsProvide expertise, service and support, and/or skills not

found within NYU’s permanent staffDo NOT utilize NYU resources, space, facilities, etc. to

conduct workNo employer/employee relationship exists Identify name, affiliation, hourly or daily rate

No maximum, but must be reasonable, based on market value Estimate number of hours or days necessary Budget for travel costs if applicable, i.e. airfare, mileage,

lodging, per diem for meals, etc. Use NYU reimbursement rates

Participant Support Costs (specific to NSF)Transportation, per diem, stipends and other

costs of trainees for:Conferences MeetingsSymposiaWorkshops

Trainees may NOT be employeesException for NSF proposal budgets

Local school districts where teachers are trainees In this case, stipends may be categorized as participant

support as long as school district has accounting mechanism in place to track and report stipends separate from salary

Exclude from F&A/indirect cost assessment

Patient Care CostsIf inpatient and outpatient costs are

requested, separate and provide detail for both

IncludeNumber of participantsEstimated cost per day/per patientExpected number of visits/tests/trialsEstimated cost per visit/test/treatment

Subawards and Subcontracts with CollaboratorsTransfer of a substantive portion of the

programmatic effort to another organization/institutionStatement of Work drives the budgetDetermine $ amount required by subrecipient to conduct

assigned portion of the work Include direct and indirect costs at subrecipient

organization’s ratesCollaborating institution’s total budget estimate (direct

and indirect costs) is shown as a direct cost on NYU’s proposed budget

Assess NYU’s F&A/indirect rate on only the first $25K of each subaward; remainder is excluded from indirect cost assessment

Other Direct CostsTuition Remission

FAS & CIMS 9/1/97 to (until further notice): 37% of salary

All Other Units 9/1/90 to (until further notice): 51% of salary

StipendsNOT allowed on research grantsPermitted on training grants and/or fellowshipsDifferent from salaries in that fellows are not NYU

employees; they are NYU traineesA set rate, no fringe benefits charged, no taxes withheld

(yet income reported via 1099)Used for living allowance

Other Direct Costs (cont’d)…

Rental expense (only if off-site facility is to serve as project site)Specify rate per square foot and size of space

neededSpecify lease amount per month, annualize

Human Subject PaymentsFunds given to subjects for following protocol Set amount for each visitCan be lump sum based on completed

participation

Facilities and Administrative (F&A) CostsCosts that can’t readily be identified with one

specific projectCalled F&A, Indirect, Overhead

Cover a portion of institution’s operating costs including, but not limited to:maintenance and management of research laboratories,

libraries, and other facilitiesdepartmental administration and supportcentral administrative support including payroll, OSP,

SPA, University Animal Welfare Committee (UAWC), and University Committee for Activities Involving Human Subjects (UCAIHS)

Facilities and Administrative (F&A) Costs (cont’d)…

Indirect cost rates are negotiated with NYU’s cognizant agency DHHS and based on costs for research operations incurred during the previous FYRate applied to a modified total direct cost (MTDC) baseMTDC = Total direct costs less:

Capital equipment Tuition remission Subawards beyond the first $25,000 Participant Support Costs

Apply stated rate to all proposal budgets unless F&A/indirect cost limited to a set amount or percentage in sponsor guidelines (sponsor policy must be in writing)

Facilities and Administrative (F&A) Costs (cont’d)… On Campus 9/2005 - 8/2007 53.0% MTDC 9/2007 - 8/2008 53.5% MTDC 9/2008 - 8/2009 54.0% MTDC

Off Campus 9/2005 - 8/2007: 26% MTDC 9/2007 - 8/2008 26% MTDC 9/2008 - 8/2009 26% MTDC

Per federally negotiated rate agreement with NYU’s cognizant agency DHHS, dated July 2, 2007

Off-site rate used only when a preponderance of work is taking place off-site and no NYU space or resources being utilized

Refer to OSP website to obtain current rates http://www.nyu.edu/osp/policies/basicinfo.php

Two Cents About Cost SharingCosts of conducting a project borne by NYU and not

charged to the sponsor Most often in form of time and effort (salaries, fringe benefits,

unrecovered indirect costs only when approved by sponsor)NYU policy

Cost sharing allowed only when mandated by sponsor in written guidelines

Quantified Specified as percentage or person months in proposal = Voluntary committed cost sharing Must be tracked in separate cost sharing account, reported to

sponsor and included in organized research base for F&A calculation

Unquantified Referenced in proposal or justification but not quantified =Voluntary uncommitted cost sharing

Two Cents About Cost Sharing (cont’d)…

Voluntary committed cost sharingRequires approval by Chair, DeanHas negative impact on NYU’s F&A rate

Costs included in the organized research base portion of F&A

Results in lower F&A rate recoverable

Voluntary uncommitted cost sharingDoes not need to be quantified, tracked, or

reported uponNo impact to the F&A base

Outside SupportThird Party Contributions

Cash Document commitment of financial resources by

letter of support stipulating amount and any restrictions

In-kind Value of non-cash contributions

Ex: value of volunteer services

Budget JustificationNarrative to accompany the cost estimateBreaks down each category of costProvides detailed explanation of how costs

derivedQuantify total costs of each line item and document cost

calculationSpecify line items for each year and time frame during

which you expect they’ll be expendedElaborate on line items—use narrative form to justify

necessity; how costs will be used for successful project implementation

Hints and TipsCosts must be allowable, allocable, and reasonable

A-21, Cost Principles for Educational Institutions http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html#j NYU and sponsor policies

Read the guidelines as they relate to budget development Comply with sponsor-imposed limits based on funds available

Specify the budget period start and end datesBudgeting in the out-years

Personnel (Salaries and Wages): Increase 3.5% each year Other than Personnel Services (OTPS): Increase 4% each year Tuition: Increase 5% each year

Hints and Tips (cont’d)…

Rules for federal sponsors differ from rules of foundations, corporations, othersProvides flexibility; it may be possible to direct charge

items not normally allowable under a federal awardAgency specific instructions take precedence

Put cost estimates into agency specific language or budget format and forms as necessary

Justification of costs should follow the order listed on budget sheet

Make it easy for reviewers to understand how cost estimate derived by walking through details

Reference for Unallowable CostsPer A-21, following are unallowable:

Alcoholic beveragesAlumni activitiesBad debtsCommencement or convocation costsCharitable contributions, donations,

remembrancesDevelopment/fundraising costs

Unallowable Costs (cont’d)…

Entertainment costs: tickets to shows or sporting events, meals, lodging, rentals, transportation, and gratuities associated with entertainment

Fines and penaltiesGoods or services for personal use of

employees (including gifts) Housing and personal living expenses of

University officersInvestment management costsLobbying

Unallowable Costs (cont’d)…

Cost overruns on other sponsored agreementsPre-award costs (unless approved by the

sponsoring agency or permitted under expanded authorities)

Selling and marketing costs of any products or services of the institution

Student activity costs incurred for intramural activities, student publications, student clubs

Travel: First class tickets (unless extenuating circumstances)

Questions?

Contact your Projects Officer in OSP

or

Betty Farbman – betty.farbman@nyu.eduNancy Daneau – nancy.daneau@nyu.edu

Permission granted for useBy Betty Farbman