Budget Development

6.4 Budget Justification

The budget justification (see Templates) should be used to state why an item costs what it does, and to indicate how each item relates to the research plan or statement of work. The information should be sufficiently detailed to address all sponsor concerns with respect to cost and need.

In general, explanations should be more detailed for competing than for non-competing applications. Common sponsor requests include (but not limited to):

• How project salary amount is calculated, including percent of effort and total salary base.
• How fringe benefits were calculated.
• Explain what the travel is for and break it into number of persons traveling, airfare, lodging, per diem, etc.
• How expenses were derived for supplies, analyses and/or equipment (i.e., from past experience, quotes, etc.).
• How the F&A rate was calculated
• Justification of any restricted items (unallowable costs), specifying why they are unique to the particular project.

Some investigators mention in the budget justification that additional effort not listed in the budget will be provided. In other cases, they indicate that the funds requested in other budgetary categories are insufficient for the proposed research and will be supplemented from other sources. This is considered a cost-sharing commitment and should only be included if required by the sponsor.

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1. Cost Accounting Standards
   1. Reasonable
   2. Allocable
   3. Consistent
   4. Allowable
2. Major Budget Categories
   1. Direct Costs
      1. Personnel Costs
      2. Fringe Benefits
      3. Consultants
      4. Equipment
      5. Materials & Supplies
      6. Travel
      7. Other Direct Costs
      8. Subcontracts/Sub-Awards
      9. Patient Care Costs
3. Indirect Costs/Facilities and Administrative Costs (F&A)
   1. Facilities & Administration (F&A)
      1. F&A Cost Calculations
      2. Waivers
      3. F&A Activity Types
   2. Interdepartmental/Inter-collegial F&A Distribution Agreement
4. Budget Justification
5. Cost Sharing & Approval Requirements
6. Cost Share Management