Budget Overview | Direct Costs | Indirect Costs | Matching - Cost Sharing

Direct Costs
Direct costs are costs which can be directly identified with your project. The federal government provides definitions of what are allowable and unallowable direct costs in Cost Principles for Education Institutions (OMB Circular A-21).

Summary of allowable costs for federal projects under OMB Circular A-21

Salaries and Wages
A project may employ current university employees or may hire new employees with the understanding that their employment is for the duration of the grant. Salaries and wages should be based on the amount of time to be spent by each person, including student / graduate assistants, who will be working on the project. Time commitments are usually shown in terms of months and a percent of full-time effort (not percent of salary) (i.e., 9 months at 25% time).

The time university employees devote to the project while under contract to the university can be release time, overload, or a change in employment status. According to the SFA Policy on additional compensation, a university employee may not work in excess of 125% of his or her base salary.

Fringe Benefits
For each dollar paid as salary or wage to an employee, the university incurs associated costs for fringe benefits. These benefits include F.I.C.A., worker's compensation, unemployment compensation, retirement, and health insurance.

You can use ORSP's Fringe Benefit Calculator (Excel) or the tables below to calculate the fringe benefits for your proposal budget.

Consultant Compensation
The use of paid consultants may be justified when the project calls for expertise of a well-defined nature for a fixed period of time. Consultants should be budgeted only for tasks where on-campus expertise does not exist or is not readily available. Normally, consultants are paid a consulting fee plus travel expenses. Some sponsors do not permit payments to consultants and some restrict or limit such payments and may require inclusion of travel costs in the contract fee. If in doubt as to the allowability of consultants or rates paid to consultants, refer to the sponsor's program literature or contact ORSP for assistance.

Whenever possible, provide the following information in the project proposal: the proposed consultant's name, the number of days of work, daily rate, and the proposed consultant's curriculum vitae.

SFA employees may be used as consultants on a project ONLY if the consultant is from a different department than the principal investigator and there is no other conflict of interest.

Equipment
List each piece of permanent equipment not already available that is needed to conduct the project. See the University's Department Property Manuals for information about property defintions and procedures pertaining to university property.

Travel
Travel costs include travel necessary to collect data, consultant travel, and travel (when allowed) to present research results at professional meetings. Some sponsored programs require pre-approval of all travel so be sure to consult the program guidelines. For complete information regarding university travel policies and procedures, access the Travel Office Web site or refer to the SFA Travel Policy.

Subawards and Subcontracts
Subawards are made by the University to other organizations that will perform a part of the scope of work for a project awarded by the sponsor to the University. Subawards may be sub-grants, sub-cooperative agreements, or sub-contracts, and are generally of the same type as the award to the University. Agreements to obtain goods or routine services are purchases and not subawards, and subject to all relevant University procurement policies.

The PI/PD should incorporate prospective subrecipient's work statements, budgets, administrative approvals, in the sponsor’s format if the sponsor so requires, with the University’s initial proposal to the potential sponsor. Failure to identify a subrecipient in a proposal can necessitate sponsor approval or competitive selection before the subaward can be executed.

If your project involves expenses associated with a cooperative organization or a tiered agreement, those expenses should be included as a subcontract in the proposed budget. The total subcontract cost should appear as a line item in your proposal budget, and a separate budget breakdown for subcontract costs should follow the proposal budget. In addition to a detailed subcontract budget, a letter signed by the individual authorized to contractually commit the subcontracting organization should be included in the proposal. Subcontract costs should include the subcontracting organization's fringe benefit expenses. Indirect costs in a subcontract must be in compliance with the sponsoring agencies guidelines. The university recovers the indirect costs on the first $25,000 of the subcontract at the university`s negotiated rate. Subcontractors may recover indirect costs on the amount of the subcontract in excess of $25,000 at the organization's negotiated rate. If the subcontracting organization does not have a negotiated rate, no indirect for the organization should be included.

Other Direct Costs
Consider, as appropriate, costs for copying, long-distance telephone calls, postage, reference books and materials, tuition and required fees for participating graduate students (as allowed by the program guidelines), equipment maintenance, and contracted services. The PI/PD needs to justify the need for these items in relation to the project, and it is the PI's/PD's judgment that this is the best way to spend the funds.