The Budget Section. The budget should be worked out with the appropriate DRDA project representative. Sponsors customarily specify how budgets should be presented and what costs are allowable. The overview given here is for preliminary guidance only.
The budget section may require not only the tabular budget (a simple format is illustrated in the sample given here) but also a budget summary and explanation or "budget justification" if the budget is complicated or if all its details are not made completely clear by the text of the proposal. The need for consultants, for example, or the unavailability within the University of an item of equipment proposed for purchase may need to be explained. Foreign travel should be specifically detailed and justified, not combined with domestic travel, and the need to travel to professional meetings should be tied specifically to the proposed project, if possible.
Typical divisions of the tabular budget are personnel, equipment, supplies, travel, and indirect costs. Other categories, of course, can be added as needed. The budget should make clear how the totals for each category of expenses are reached. Salary information, for example, often needs to be specified in detail: principal investigator (1/2 time for 3 months at $24,000 [9-month appointment]) = $4,000. If salary totals involve two different rates (because of an anticipated increase in salary during the budget period), this should be made clear.
The category of personnel includes not only the base salary or wage for each person to be employed by the project but also (listed separately) the percentage added for staff benefits. The current figure used for approximately the average cost of staff benefits is 30% of the total salaries and wages. Project representatives should be consulted on the calculation of staff benefits, because the rate may vary significantly owing to the kinds of personnel involved and the selected benefit option. A table is available from DRDA.
Graduate Student Research Assistants who are to be employed on research projects for more than 1/2 time, may have part of their tuition costs covered by their unit. The remaining tuition costs must be included as a line item in the budget to the sponsor.
Any costs absorbed by the University should be shown as cost sharing. A more detailed description of this procedure may be found in the " Administration of Sponsored Projects" booklet available from DRDA.
Indirect costs are shown as a separate category, usually as the last item before the grand total. Indirect costs are figured as a fixed percentage of the total direct costs (modified by various exceptions). Exceptions include equipment, graduate research assistant tuition, the amount of subcontracts over $10,000, and the separate indirect cost centers: Computing Center Services, Unit for Laboratory Animal Medicine, and the Michigan Memorial Phoenix Laboratory. Because these fixed indirect cost percentages change each year, after negotiation with the federal government, proposal writers should consult a DRDA project representative before calculating this part of their budget.
Cost sharing, which is required by many sponsors, can be shown as a separate column labeled U-M, as illustrated in the sample budget. Frequently a portion of the salary of the principal investigator, paid from University funds, with its related staff benefits and indirect costs, can be used to satisfy cost-sharing requirements.
To call attention to the variety of expenses that might arise in the conduct of a research project, a checklist of possible budget items is included here. This checklist suggests many of the expenses that might be appropriate to your budget, but consultation with the project representative is still very important. He can help ensure (1) that the budget has not omitted appropriate elements of cost, such as page charges for publication in professional journals, or service charges for the use of certain University facilities (for example, surveys conducted by the Institute for Social Research), and so on; (2) that any estimates for construction, alterations, or equipment installation have been properly obtained and recorded; (3) that costs are not duplicated between the direct and indirect cost categories; (4) that the budget complies with any cost-sharing requirements of the sponsor; (5) that provisions are made for the escalation of costs as may be appropriate; and (6) that costs in all categories are realistically estimated.
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