Getting Started; The Basics

This page contains information on what you should know if you have never before prepared a budget for a sponsored project.

Why is a proposal budget important?

  • It justifies your request and shows how you calculated costs.
  • It provides a financial "blueprint" for your project if you are funded.
  • It shows that you—and the University—will manage the sponsor's funds, which are usually public money, responsibly.

allowable allocable & reasonableThree key words: Allowable, Allocable & Reasonable

If you remember nothing else when calculating costs for your proposal budget, it is this: the Office of Management and Budget (OMB) Circular A-21, Section C says, "The recipient institution is responsible for ensuring that costs charged to a sponsored research agreement are allowable, allocable, and reasonable ...."

What does allowable, allocable, and reasonable mean?

Allowable:

  • Costs must not be expressly prohibited by the sponsored program regulations, the sponsored agreement, the University's own policies, or the Federal Cost Principles (found in OMB Circular A-21).
  • Costs must be treated consistently by applying the generally accepted accounting principles appropriate to the circumstances (such as the Federal Cost Principles).

Allocable:

  • Costs are incurred solely to support or advance the work of a specific sponsored research award (and only during the sponsor-approved project period).

Reasonable:

  • Costs must be able to withstand public scrutiny, i.e., objective individuals not affiliated with the institution would agree that a cost is reasonable and appropriate.
Further Tips for Budgets
  • Calculate what the project will cost, and make sure your budget is realistic; do not "pad" costs - but don't short-change yourself in an effort to be more "competitive" either (though you will want to check whether or not the sponsor has a maximum request amount).
  • Be sure everything in your budget is referenced in the project description/project narrative—and be sure everything mentioned in your project description that would incur cost is shown in the budget.
  • Discuss your project and its costs with your chair/director and/or your dean.
  • Start early!!
  • Check to see if cost-sharing is required.
    • If so, where will it come from?
    • Discuss this with your chair/director and/or your dean.
  • Read the sponsor's guidelines!
    • Does the sponsor have a minimum and/or maximum request amount?
    • Does the sponsor want you to use a specific budget form?
    • Do they require a budget justification as well?
    • Check to see if the sponsor REQUIRES certain items (example: travel to a conference or planning session).
    • Check to see if the sponsor DOES NOT ALLOW certain items (example: salaries & wages, foreign travel, F&A/indirect costs, etc.).
  • You may find it helpful to refer to the Start and Manage Projects section of this website when constructing your budget.

Contact

Office of Research
John E. Thomas Building
287 Rivers Street
Room 382
PO Box 32174
Boone, NC 28608-2174
Ph: (828) 262-7459
Fax: (828) 262-2641
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