Detailed Budget Information and Procedures
The following is general information regarding budget preparation for federal grants. Please note that every organization, whether it be a federal agency or a foundation or corporation, will have its own requirements regarding budget preparation. For additional information, please view the tutorials, below.
Grants Budgeting Video Tutorial
NOTES CONCERNING CERTAIN DIRECT COST CATEGORIES
When projecting costs into the second and subsequent years of a project, it is customary to work on the basis of an increase that is consistent with increases in the collective bargaining agreements for faculty and professional salaries which could also be utilized for other categories unless unique circumstances (e.g. anticipation of a promotion decision) justify a different rate.
B. Salaries and Wages
Graduate Students supported by grants must be paid neither more nor less than those funded by the University's own assistantships. Current rates for each department or school may be obtained from the Dean's Office of each College/School.
Certain agencies permit listing the costs of tuition for graduate students employed on sponsored projects as a direct cost of the research. Others forbid it. The Grant Administrator can advise you about this.
Under certain circumstances, the individual Colleges/Schools may be able to offer tuition remission to graduate students whose stipends derive from grants or from contracts. However, this possibility must be explored with the appropriate individual within the College/School before the grant proposal is submitted and cannot be regarded as an entitlement.
C. Fringe Benefits
The current fringe benefit rates are contained on the OSPRA Fact Sheet. The full time rate applies to on-term (academic year) faculty salaries and other full time (calendar year) employees. The part time rate applies to off-term (summer) and overload salaries and other part time employees.
Fringe benefits do not apply to graduate and undergraduate student salaries and wages.
D. Equipment vs. Supplies
- Equipment may be broadly defined as an article of tangible personal property that is complete in itself; is of a durable nature; has a useful life of more than one year; and has an acquisition cost of $5,000 or more per unit. Any incidental costs such as installation, shipping, or accessories are included.
- Supplies are those items of disposable property purchased for less than a $5,000 unit price with an expected useful life of one year or less. On grant-funded projects, this definition is used for both office and laboratory expenditures.
- Both supplies and equipment must be ordered using the standard procedures established by the Purchasing Department. The Grant Administrator will gladly help those new to this process to learn what is required.
- Some funding agencies have specific travel restrictions and rules. Certain federal programs, for example, permit air travel only on U.S.-flag carriers. The Grant Administrator can supply you with this information.
- Most agencies, however, will reimburse on the basis of consistently applied institutional rules. For this reason, the University requires externally funded researchers to follow the Travel Policy established for the University as a whole and promulgated by the Controller's Office.
That policy document includes information about ticketing procedures; about travel advances; about restrictions on air travel; about car rental and personal vehicle reimbursement rates; about local transportation; about hotel and meal expenses; about Expense Report forms; and about supporting documentation required for reimbursement.
Copies of this important policy document can be obtained from the Controller's Office. PI/PDs would be extremely well advised to request a copy well in advance of any trip they expect to take.
F. Consultant Services
Consultants are individuals contracted to offer to grant-funded projects specific services not available from persons employed under the grant.
University of Detroit Mercy employees normally cannot be hired as consultants.
All of the following documentation is necessary when hiring consultants:
a. A current curriculum vitae of the consultant including his or her Social Security number.
b. An itemized bill or invoice from the consultant showing all work done and date(s) involved.
It should be noted that the Public Health Services (PHS) guidelines for grants, which govern all NIH awards among others, set the following minimum standards for documentation in support of consultants:
a. There must be evidence that the services to be provided are essential and cannot be provided by persons receiving salary support under the grant.
b. There must be evidence that some selection process has been employed to secure the most qualified person available and that the selection has been approved by a senior officer of the institution. (For the University of Detroit Mercy this is the Vice President for Business and Finance.)
c. There must be evidence that the charge is appropriate, considering the qualifications of the consultant, his or her normal charges, and the nature of the services rendered.
However, for University purposes, it will be assumed that the provision of a curriculum vitae and of a bill or invoice implies that the principal investigator/project director (PI/PD) has already given proper consideration to the standards stipulated above.
In any instance where a consultant will be utilized on a recurring basis over a period of time, it is also advisable that the following information be documented by letter both to the consultant him-or herself and to the Grant Administrator: (a) work to be performed; (b) rate, frequency and basis for payments to be made; and (c) duration of the agreement.
NOTES CONCERNING INDIRECT COSTS
It is important to remember that the governmentally approved IDC rate (see Fact Sheet) is an audited percentage which the University is entitled to claim. Whenever a rate lower than that is to be adopted, the "shortfall" in grant income represents a legitimate University "contribution" to the project and should be listed as cost sharing on all internal budget documents (and on those submitted to the sponsor where appropriate).
COMPLETION OF THE UDM INTERNAL SUMMARY FORM BUDGET PAGE
In an effort to simplify the budget preparation process, for multi-year grants, which include yearly budget detail as part of the proposal, only a grand total summary budget needs to be completed on the appropriate page of the Internal Summary Form.
NOTES CONCERNING POST-AWARD ACTIVITIES
- Establishing an Account. When they receive either a cash award or a formal grant award letter, the Grants Administrator in the Controller's Office will establish a restricted fund account based on the information available. After the fund is established, the PI/PD will be able to view their grant activity on TitanConnect (Banner).
- Changes to Budgets. Changes to grant budgets (or monies appropriated) are allowable only with the approval of the PI/PD and within the guidelines established by the federal granting agency.
Prior approval may be obtained by making a formal written request to the Grant Administrator, who must then request the approval of the granting agency. This brief request should explicitly address three considerations:
i) that the purposes for which you wish to use the funds do reflect the purposes for which the grant was made;
ii) that taking money from the category that you propose will not inhibit the work for which the grant was made; and
iii) the reason why excess funds remain in the category from which you propose to make the transfer.
Transfers can not be made from the indirect cost to a direct cost category or vice versa.