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HORT603 - Grants and Grantsmanship

Preparing a Budget

In this lecture, we will consider how to prepare a budget, so that by the end of this lecture you will be able to complete 2 or 3 more sections of your proposal:

  • Budget Justification
  • Budget
  • Facilities and Equipment

You probably will not be able to write a budget until you have already made an outline of your proposal and have started to seriously think about:

    1. what facilities and equipment are already available to accomplish the research you have in mind?
    2. what equipment is essential to your proposal but is not available?
    3. what personnel will be required for your proposal?
    4. how long will the research take?
    5. what supplies and expenses will be required to accomplish the research?
    6. will the research proposed require any travel (foreign or domestic)?

Assuming that you have begun to think about these questions, you can complete the budget justification and budget pages of your proposal. You should have available a blank paper copy of the budget form (CSREES-55). Use this for making notes for completion of the electronic version of this document that will be provided on the WebCT course page.

The budget of the proposal is split into several pages; the budgets for the individual years of the proposed research [each with a duration of 12 months], the total budget, and the budget justification page. The total budget is simply the sum of the individual rows and columns for the individual year budget pages.

Consider section A.1. Senior Personnel. For your purposes, I want you to figure that you will be the sole PI on the proposal and will be making $50,000 per year, and you will (as new Assistant Professors) commit 10% of your time to your proposed research. Therefore, enter in section A.1. .... No. of senior personnel = 1, Calendar months = 1.2, Funds requested by proposer = $5,000 for the year 1 budget period (include in year 2 a modest increase in this amount due to inflation or promotion!).

In section A.2a, you may wish to request funds for 1 post-doctoral associate who would commit 100% of his/her time to the project (i.e. 12 months during the first year), at a salary of $25,000 per year. Adding the salary items for senior personnel and post-doctoral associates would yield a Total Salaries and Wages of $30,000 for year 1.

To calculate the fringe benefits (section B) associated with the personnel charged to the project, as a rough guide you can estimate that fringe benefits will be about 18% of the Total Salaries and Wages. Use this estimate for your budget.

Knowing fringe benefits and Total Salaries and Wages, it is a simple matter to calculate C; Total Salaries, Wages, and Fringe Benefits (= A + B).

If you have any equipment (>$500) that it is essential to the project, enter this in section D (Nonexpendable Equipment), and be prepared to justify each item in the budget justification and facilities and equipment sections accompanying the budget, and as part of your Project Description.

Note that small pieces of equipment of <$500 would probably be considered more relevant to itemize in Materials and Supplies (section E). But note that equipment requests of >$20,000 would probably raise questions from the reviewers. It should be emphasized that in typical USDA-NRICGP programs for standard research projects, a limited amount of funds are available (generally awards are approximately $50,000 - $60,000 per year for 2 to 3 years), and the awards are mainly intended to support the training of post-doctoral and graduate students and provide routine supplies and expenses associated with the project. Typical USDA-NRICGP programs are not intended as programs which will allow the purchase of large, expensive items of equipment. There are a host of other programs that deal with grant requests for specific, costly pieces of equipment (i.e. programs that deal specifically with equipment grant proposals). However, note that if you propose to do certain research that will require an expensive piece of equipment (e.g. a mass spectrometer) that is too costly to itemize in your proposal, and do not demonstrate that you have access to that equipment in the Facilities and Equipment section of your proposal, then your proposal may well be doomed on the grounds of inadequate facilities and equipment to accomplish the research proposed.

Make an estimate of the materials and supplies you will need to accomplish the research. A typical request would be $10,000 per year for Materials and Supplies (section E). These expenses need to itemized in the budget justification page.

[It should be clear to you at this point, that if you don't have any idea about what specific research you want to accomplish, what specific experiments you want to perform, and over what time-frame, you will not be able to prepare this budget. Part of the reason for discussing the budget so early in your proposal preparation, is that it should force you (if you have not already done so) to think carefully about your precise experimental plan, and start making detailed notes on what experiments you wish to perform; when; how; and at what approximate cost? It should also be clear to you that preparing a budget requires knowledge of the Facilities and Equipment available to you.]

Foreign and domestic travel expenses associated with the project should be itemized in section F; e.g. $1,000 per year for domestic travel to attend meetings (etc). These requests are again explained in the Budget Justification.

Publication costs/page charges (i.e. the costs of publishing the research that you propose to accomplish) should be entered in section G. A request of $500 per year would be appropriate. Computer costs (section H) can be separately itemized if desired. Other Direct Costs (section J) would include sub-contracts with other Institutions.

Having entered all your budget request for items C through J, you then derive the sum of these Total Direct Costs (section K).

Indirect Costs should be entered in section L. Each University will have it's own Indirect Cost percentage. In the case of Purdue University assume that a 52% Indirect Cost rate is in effect.

Indirect Cost Rate at Purdue University

Suppose that the Total Direct Costs amount is $52,000, then the University is entitled to $27,040 for indirect costs. Line L. of the CSREES-55 would appear as follows: 52% of MTDC = $27,040; Amount Requested = $27,040. [Please note, however, that CSREES is prohibited from paying indirect costs exceeding 19 per centum of the total Federal funds provided under each award made on a competitive basis. This limitation is equivalent to 0.23456 of the total direct costs of an award].

The sum of Total Direct Costs and Indirect Costs (Line M = K + L) = Total Amount of this Request for the first year.

Once you have estimated a budget for year 1, repeat this for year 2, allowing for some modest salary increase for the personnel, and any additional specific equipment and expenses that may be associated with research to be performed in the second year (etc. for year 3). Then simply sum the 2 (or 3) individual year budgets to arrive at your 2 (or 3) year total budget [the final dollar amount in section N of the total budget should appear on the Cover Page of your proposal (section 14. FUNDS REQUESTED)].

The Budget is the most important part of your proposal as far as the University (that will approve your proposal submitted to the grant agency) is concerned. Your proposal will not make it to the agency by the required deadline if the Budget is not satisfactory!

Your job normally would be to provide your Departmental Business Office with a fairly crude outline of your proposed Budget (salaries, approximate fringe benefits, equipment, materials and supplies etc.), and the Business Office of your Department would then compute the complete budget for you with the exact fringe benefit rates and indirect costs that the University requires. You would then enter the Business Office-generated figures onto the Budget pages of your application, using Work Papers provided for you by the Department Business Office. These budget pages and Work Papers would then be scrutinized by the School of Agriculture Business Office, and by the Division of Sponsored Programs which oversees all grant requests, before the proposal is actually submitted to the designated granting agency.

After a proposal is funded, generally a revised budget is requested designating a certain $ amount of the award, which may typically be less than the original amount requested. Again you would need to work with the Business Office of your Department to generate a revised budget that satisfied the $ amount and Indirect Cost limits set by the agency, which satisfied your own research objectives (which can be revised to accommodate the reduced funding level), and which is agreed upon by the School of Agriculture and the Division of Sponsored Programs.

In your proposal writing, I will spare you the task of having to have your proposal budget prepared by the Business Office in your Department, and I will spare you the task of having it approved by the School of Agriculture and the Division of Sponsored Programs at Purdue University. Simply follow the guidelines I have provided, estimating a 18% fringe benefit rate applied to salaries, and a 52% Indirect Cost rate applied to the Total Direct Costs, and this will be entirely satisfactory. However, when you accept a position as Assistant Professor and start writing grant proposals DON'T UNDERESTIMATE HOW LONG IT TAKES TO PREPARE A BUDGET AND HAVE IT APPROVED! Prepare your budget well in advance, so that potential problems can be addressed early, before the program deadline!

In a later lecture we will consider the Review Process for grants submitted to USDA-NRICGP. Hopefully this will give you some further important tips on how to organize your proposal, with special emphasis on the Project Description section, and will further convey to you the importance of the Project Summary page in your proposal.

www www.hort.purdue.edu
David Rhodes
Department of Horticulture & Landscape Architecture
Horticulture Building
625 Agriculture Mall Drive
Purdue University
West Lafayette, IN 47907-2010
Last Update: 01/07/08