Proposal Budget Development

Before Preparing Your Proposal Budget

Always read the guidelines of the sponsoring agency and review the forms and formatting requirements for the budget.

Familiarize yourself with the Office of Management and Budget (OMB) policies for proposal budgets as well. All grants, contracts and other types of awards must comply with the principles in the OMB Circular "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards." (See Part 200-Uniform Administrative Requirements for full text.)

Budget Categories: Information & Resources

Go to:
Alterations and Renovations • Budget Justification • Consultant Costs • Cost Sharing & Matching • Direct Costs • Equipment • Facilities & Administrative Costs • Fringe Benefits • Graduate Student Fees • Modified Total Direct Cost • Other Direct Costs • Participant Support • Salaries & Wages • Salary Scales: Students & Postgraduates • Sub-Awards & Sub-Agreements • Subcontracts & Contracts for Services • Supplies • Travel • Budget Templates


Alterations and Renovations
Alterations and renovations costs include expenses necessary to convert an existing space and to install new equipment.  back to top

Budget Justification
In general, a budget justification provides the rational for your proposed expenditures. Follow the sponsoring agency's guidelines to prepare your justification.  back to top

Consultant Costs
You may budget for fees for consultants who provide special knowledge required for the proposed research project. In general, you may only budget for consultants who are not employed by UC campuses or laboratories. Be specific about the daily rate and amount of days you will pay the consultant. In addition to budgetary information, include the same information you provide for other project personnel (biographical sketch, for example).  back to top 

Cost Sharing and Matching
Some funding agencies and grant solicitations require you to find outside sources of funds to cover portions of the project costs. This practice is called cost sharing. You may acquire funds from an outside source in the form of cash contributions, volunteer services, donated property, from the University's own funds (e.g., personnel effort without salary recovery), or from shared resources or facilities. Include these costs in your proposal only when the sponsor requires cost-sharing as condition of appying for an award. 
 
> Commitment Letters for Cost Sharing
If the proposal guidelines require cost sharing, you must have signed commitment letters for each source of funding identified in your proposal as a cost share. The individuals responsible for each funding source must sign the commitment letters.  back to top
 
Direct Costs
Direct costs include salaries, fringe benefits, consultant costs, equipment, supplies, travel, participant support, sub-agreements, alternations or renovations, and other costs such as tuition, fees, and health insurance for graduate student researchers (GSRs).  back to top
 
Equipment
Only items that cost more than $5000 each qualify as equipment. Include a list and description of each piece of equipment you are requesting as well as a copies of quotes.  back to top
 
Facilities and Administrative (F&A) Costs (Indirect Costs)
F&A costs, or indirect costs (IDCs), represent expenses that can't be easily identified but which research projects incur for common or joint objectives. These types of costs include: facilities operation and maintenance including building depreciation; library expenses; space, utilities; payroll; accounting; and other administrative services. 
 
Determine the correct amount of F&A rates for your budget by applying the current federally negotiated percentage rate. UC Merced's current F&A or IDC rate is 55% of modified total direct costs (MTDC). You must apply this rate to all proposals unless the UC Office of the President has approved an indirect cost waiver for a sponsoring agency.

F&A Rate Agreement Letter
Archival F&A Rates 

> How to Obtain an F&A or IDC Rate Waiver
If a sponsor has written guidelines stating that it will not reimburse F&A (indirect costs) at the full rate, contact the Sponsored Projects Office (SPO) as soon as possible to ask whether the agency has a class waiver in place. If no waiver exists, SPO will request approval for an exception from the Vice Chancellor of Research. Leave adequate time to obtain the necessary approval.   back to top

Fringe Benefits
Include in your proposal budget fringe benefits based on actual or composite rates:

• For named project personnel, request actual fringe benefit rates from RDS.
• For unnamed project personnel, use the the following UC Merced Composite Fringe Benefits Rates:

Staff Career .........................................................................35%
Academic Appointment .......................................................25%
Visiting Faculty .....................................................................7%
9-month Academic Appointment .........................................22%
Summer Salary for 9-month Academic Appointment ............11%
Casual Staff/Core Benefits .....................................................6%
Casual Staff/No Core Benefits ................................................2%
Graduate and Undergraduate Students ..................................1.4%  back to top

Graduate Student Fees

  1. Non-Resident Tuition
    When your project includes an unnamed graduate student researcher (GSR), include non-resident tuition for the first two years of your budget period. Do not add non-resident tuition for students who have advanced to candidacy.
  2. Include an escalation Rate for Graduate Student Fees & Insurance of 10% per year.
  3. Include an escalation Rate for Graduate Student Non-Resident Tuition of 4% per year.

For a list of all fees, see Fees and Expenses in the UC Merced General Catalog  
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Modified Total Direct Costs (MTDC)
This total includes all costs except the costs of equipment and fabrication of equipment, capital expenditures, charges for patient care, tuition remissions, rental costs of off-site facilities, scholarships and fellowships, and the amount of each subaward over $25,000. 

To determine what costs should be in this category, check the sponsoring agency's guidelines.  back to top

Other Direct Costs
This category of expenses includes: materials and supplies; publication costs; consultant costs; computer services; subawards; and other costs. "Other" costs include: graduate student fees, tuition and insurance; rental charges; facility charges; etc.  back to top

Participant Support
Costs in this category include: stipends or subsistence allowances; travel allowances; registration fees paid to or on behalf of participants or trainees in connection with meetings, conferences, symposia, or training projects. Participants cannot be UC Merced employees, graduate or undergraduate students.  back to top

Salaries and Wages
Information required for this category of costs includes: name, university payroll title, appointment type, annual or monthly salary, number of months or percentage of time on the project, and the total salary requested for all project personnel.  back to top

Salary Scales: Undergraduate Students, Graduate Students, Postgraduates

SubAwards and SubAgreements
Include the totals for any subwards or subagreements in the budget. List the total(s) as a line item on the budget form(s).

  1. Additional documents required for proposals with sub-awards and sub-agreements
    Submit the following documents for proposals with subawards or subagreements authorized by the appropriate official of the subawardee (PIs cannot authorize these documents):
            • a separate, detailed budget for every subaward or agreement,
            • authorized scope of work,
            • authorized budget and budget justification.
  2. Facilities & administrative (F&A) rate for subawards and subagreements
    Apply the F&A rate (55% MTDC) to only the first $25,000 of each subaward or subagreement.  back to top

Subcontracts and Contracts for Services

  • Include these costs in the budget as a line item. 
  • Apply the F&A rate (55% MTDC) to the total amount of the contract. 
  • Any contracts for services worth more than $50,000 will go through a bidding process.  back to top

Supplies
Items that cost less than $5000 each qualify as supplies. Include a list and description of all supplies you are requesting.  back to top

Travel
Separate travel costs into subcategories for domestic and foreign travel. In addition to the costs, indicate the purpose of the travel, destination(s), number of people traveling, number of days in transit, and type(s) of transportation.  back to top


Sample Budget Templates

Non-NIH Budget Templates: