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Proposal Budgeting Basics

A detailed line item budget must be submitted for each proposal. The budget is reviewed by the CEHHS Office of External Funding and by UTK Office of Sponsored Programs staff for accuracy regarding salary, fringe benefits, direct costs, facilities and administrative costs, and cost sharing.

Most proposals use annual project periods. A separate budget should be made for each year of a multi-year project.


  • All UT personnel working on the proposed project should be listed in the personnel section of the budget form.
    • Names of personnel should be provided when known.
  • Define their role on the project, for example:
    • Lead Principal Investigator (PI)
    • PI and/or Co-PI
    • Post Doc
    • Other professionals such as Statistician, Data Manager, etc.
    • Graduate Research Assistant (GRA). Put all GRA’s on one line in the budget if possible.

Base Salary

  • Our office will help you determine the annual base salary plus longevity for the employee.
  • We will pre-escalate salary if necessary based on the start date.  3% is the standard inflation rate used for both pre-escalation and cost of living increases.
  • Enter number of academic months and number of summer months for each person for each year of the project.
  • Consider how much of their time is already committed to other funded projects.
  • Administrative and clerical salaries are a part of F&A costs. If there is justification to charge all or some of this type of salary to a federally funded project, please follow the instructions found here.
  • Graduate Students:
  • Hourly graduate students or hourly undergraduate students-fringe benefits rate is calculated at 8%.
  • Benefits are calculated based on actual costs.  Rates can often be different depending on the academic or summer months.  Our office will assist in calculating an accurate rate to be used for each faculty/staff/student included on the proposal.
  • For named personnel, use their actual fringe rate.  For TBD personnel, use 33%.
  • Benefits for graduate students include the student health fee only.
  • For undergraduates, include 8% of salary for social security, unemployment, and workers compensation.

  • Foreign and domestic travel costs should be separated.  If foreign travel is anticipated, be sure to discuss this in the budget justification.
  • Travel costs for UT personnel working on the project should be included in UT’s budget.
  • Travel for sub-recipients and consultants should be included in their budgets.
  • Consider virtual meetings via phone, Zoom, Skype, etc. at no additional costs, especially if the budget is tight.
  • Travel to relevant scientific conferences or meetings is allowable on most projects.
  • A detailed breakdown of travel costs is required by OSP, even if the sponsor does not require it.  Please include:
    • Who is traveling? PI, Co-PI, GRA, etc.
    • Determine the number of travelers for each year of the project.
    • What is the purpose of the trip?  Conference, collaborators meeting, etc. If conference, provide the name of the organization.
    • Destination if known.
    • Check Expedia.com or other site for airfare.
    • If destination is known, check CONUS for lodging, per diem, and incidentals.
    • If destination is unknown, such as for an upcoming conference, use CONUS rates for cities where the conference was previously held.
    • For conferences, budget for the conference hotel rate rather than the CONUS rate, if staying at the conference hotel.
    • Costs for car rentals or ground transportation.
    • For local travel, reimbursable mileage rate is .47 per mile.
  • Equipment is defined as non-expendable property with a cost that is equal to or greater than $5,000 and having at least 3 years of useful life.
  • Equipment can also be defined as a collection of components that can be put together to create one piece of equipment. In this case, each component should be classified as equipment, even if the cost per component is less than $5,000.
  • Must provide justification as to why this equipment is needed for this project.
  • Include shipping and maintenance costs if needed.
  • Vendor quotes not required but are helpful.
  • Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

    • Includes costs for transportation, per diem, stipends, and other related costs for participants or trainees attending project-sponsored symposia, workshops, meetings, etc.
    • Includes costs for human subjects in the form of stipends, transportation costs, child care, etc., when participating in a study.
    • Other related expenses to consider:
      • Parking for participant if on-site at UT.
      • Advertising costs to recruit participants.
      • Postage for return surveys.
      • Mileage for travel, if needed.
    • Incentives for participants are usually in the form of gift cards.  If using gift cards, they must be specified in the budget justification.
    • Consider number of human subjects and amount of incentive for each.
      • Consider the role and activity of the participants and an appropriate amount of compensation.
      • If there are various roles and activities, consider varying levels of compensation.

    Consultants

    • A consultant is usually an expert or a professional in a specific field.
    • A consultant either works for a consulting firm or is self-employed.
    • Consultants charge on an hourly rate basis.
    • Consultants are individuals or entities whose expertise is temporary, highly specialized, and required to perform the project.
      • They do not develop the objectives of the project.
      • They may provide recommendations, but are not responsible for programmatic decisions.
      • They should provide an hourly or daily rate, and number of hours or days to derive total costs.
      • Their costs should include travel if appropriate.
    • A letter of commitment might be required by the sponsor and if so, should be included with the proposal.
    • Consultants must complete the Consultant Commitment Form.

    Contractors

    • Contractors provide a specialized service and are a commercial enterprise, not an individual.
    • They are usually fee for service.
    • They provide similar goods and services to many different purchasers.
    • They have no substantial scientific input into the overall conduct of the study.
    • These can be services provided by other university departments such as laboratory sampling, equipment service agreements, data analysis, animal cage charges, etc.
    • Include a quote or other cost information with the budget justification if the contractor has been identified.  Otherwise, estimate the costs for the type of service.
    • Include a description of services to be provided in the budget justification.

    Professional Services

    • Professional services are provided by individuals under contract to the university.
    • Examples of services include: instruction, statistical analysis, subject matter expertise, joint faculty agreements.
    • Include a quote with the budget justification, or other cost information, and a description of services.

    Membership Fees

    • When membership fees to a professional association are paid by a sponsor, the membership is for the institution (UT), not the individual.

    A subrecipient agrees to perform a substantive portion of programmatic effort on the project and participates in making administrative and programmatic decisions.  Each participating subcontract organization must submit a separate detailed budget, budget justification, statement of work, and Subrecipient Information and Commitment Form.  UTK’s budget justification to the agency should at the least, include the name of the subawardee, their role on the project, and justification for their inclusion in the project.

    • Each subcontract should be listed separately in the budget.
    • F&A is collected on the first $25,000 of each subcontract, regardless of the number of years the subcontract is in place.
    • Determine how much of their time is needed each year of the project, whether it will be during academic or summer terms or a combination of both, and will their level of participation vary each year or remain constant.
    • Will they be required to travel to UT or to another location or institution at any time during the project?
    • Will they require a GRA with stipend and tuition?
    • Do they need a supplies budget?
    • What other costs will the subrecipient incur?
    • Their indirect costs might or might not be included in any sponsor cost limitations.
    • Most projects include some type of expendable, consumable supplies and materials.
    • Costs for supplies should be itemized, at least by category.
    • Animal costs are categorized as supplies in the budget.  Breakdown by cost per animal, housing, feeding costs, caretakers, etc.
    • Software packages and memory upgrades to existing computers are classified as supplies.  Software packages and any memory upgrade must relate specifically to the project.
    • Computing devices can be included on proposal budgets.  If your project requires a computer, and you plan to budget for it, the budget justification must include language based on the guidance found here.  Computers less than $5,000 can be budgeted as a supplies costs with detailed justifications:
      • Must be essential to fulfilling the aims and scope of the project.
      • Must be allocable to the project
      • Does not have to be solely dedicated to the project; the computer can have office productivity software and can be used for other purposes (this is new with Uniform Guidance).
      • The budget justification that goes to the sponsor must provide an explanation of why these charges should be made directly to the project.  It should clearly show the relationship of the charges to the scope of the work.
    • General office supplies are not allowed as direct costs on a federally-funded project without special circumstances.  Pens, pencils, paper, filing supplies, and post-it notes cannot be charged to the project.

    • If the GRA(s) is being paid salary on the project at 25% time or better, their tuition and student health fee must be included in the budget.
    • The department may elect to pay some or all of the GRA tuition. If so, a commitment letter from the authorized departmental representative is required.
    • Check here for the most current tuition rates.
    • Plan for a tuition rate increase of at least 6% per year.

    • Provide justification for the cost of documenting, preparing, publishing or otherwise making available to others the findings and products of the work conducted under the award.
    • Document costs for printing and duplicating materials for distribution at conferences or workshops.
    • Provide justification for maintenance and repair costs of equipment being purchased on this grant, or for equipment already in place and being used in support of this project.

    If F&A is not addressed in the RFP, contact the sponsor ASAP to find out if they pay F&A and how much.

    • If the sponsor pays 0% F&A or any amount less than our negotiated rate, documentation either from a website, RFP, or email from the sponsor is required.
    • The applicable F&A rate is based on the type of activity (research, public service, or instruction) and the location of 50% or more of the activities related to the project, either on-campus or off-campus.
    • In regards to F&A, the location of the activities related to UT’s portion of the work.  It does not relate to the location of a subrecipient or consultant.
    • When using an F&A rate derived from UT’s F&A Rate Agreement (a “full” rate), the rate is applied to a base of Modified Total Direct Costs or MTDC.  The base excludes GRA tuition, equipment over $5,000, and the costs of subcontracts over the first $25,000.
    • When using a lower F&A rate that is set by the sponsor, the base to which the rate is applied is usually equal to Total Direct Costs, rather than MTDC.

    • Rarely is it advantageous to commit to cost share if it is not required by the sponsor or specified in the call for proposals.  Therefore, it is best to not commit to cost share voluntarily.
    • Once committed, cost share must be tracked and we must meet the amount of cost share to which we have obligated ourselves.
    • Cost share must be reported to the sponsor, usually at the end of the project, to show we met our obligation.
    • Required cost share can be in the form of direct costs or unrecovered indirect costs.
      • For example, for unrecovered indirect costs, if our negotiated rate for a project is 51% but the sponsor only allows 25%, we can possibly use the difference between the negotiated rate and the allowable rate as cost share.
      • Some grants do not allow any F&A.  If there is a cost share requirement, we should investigate whether or not our unrecovered F&A can be used as cost share.
        • An example of cost sharing with direct costs is in the form of salary and benefits.  The department head will commit to a certain amount of effort for one or more personnel on the project as cost share.