Budget Development

6.4 Budget Justification

A budget justification explains the basis for each line item in the proposed budget and demonstrates how requested costs are necessary, reasonable, allocable, and directly related to the project's scope of work. The justification should clearly describe why each cost is needed, how amounts were calculated, and how the costs support the proposed research activities. Templates and sponsor-specific formats should be used when required.

The level of detail provided should be sufficient to address sponsor expectations regarding cost necessity and allowability. In general, competing or new applications require more detailed explanations than non-competing continuations or supplements.

Common elements sponsors expect to see in a budget justification include (but are not limited to):

Personnel costs:
Explanation of salary calculations, including percent effort, institutional base salary, and role on the project.

Fringe benefits:
Description of how fringe benefits were calculated, including whether estimated or actual institutional rates were used.

Travel:
Purpose of travel and a reasonable breakdown of costs (e.g., number of travelers, airfare, lodging, per diem, and duration).

Materials, supplies, services, and equipment:
Description of how costs were derived (e.g., historical data, vendor quotes, catalog prices) and why items are essential to the project.

Facilities & Administrative (F&A) costs:
Identification of the applicable F&A rate and the basis used for calculation (e.g., MTDC or TDC).

Restricted or sensitive cost items:
Justification for items that are typically limited or scrutinized by sponsors, including an explanation of why they are integral to the project.

Subawards and other direct costs:
Brief description of the scope of work performed by subrecipients or justification for other cost categories, as applicable. 

Investigators should not include voluntary cost sharing or statements indicating that unfunded effort or additional resources will be provided unless cost sharing is explicitly required by the sponsor and approved through the appropriate institutional process. Any indication that costs will be covered from other sources constitutes a cost-sharing commitment and must be reviewed and documented accordingly. 

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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
      10. Participant Support
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