If there is no format provided by the agency. The key is to group items by type of cost rather than activity (e.g., all salaries should be together with a subtotal). Other types of costs include: fringe benefits, travel, project supplies, long distance telephone tolls, photocopy costs, and equipment. Think about your items as costs rather than tasks.

Salaries

What percent effort of personnel is needed to fulfill the project goals? Multiple percent effort by annual salary to arrive at the salary required for the project. If the budget period is for more or less than a full year, prorate the salary accordingly.

Faculty Summer Salary

Faculty on academic-year appointments may receive summer appointments on external grants or contracts at a weekly rate not to exceed 2.5 percent of the previous academic-year salary (AYS). Ordinarily, summer appointments are for nine weeks (22.5 percent of the AYS). Some agencies restrict the amount of summer salary that may be requested (e.g., NSF 22.2% of AYS). Appointments may extend to a maximum of eleven weeks (27.5 percent of AYS) if permitted by the agency.

While appointments to a maxi um of thirteen weeks full-time (32.5 percent AYS) may be requested, appointments in excess of eleven weeks, whether wholly or partly supported by grant or contract funds, are strongly discouraged. Exceptions to the eleven-week (27.5 percent) limitation will be made only with justification and with approval, in advance, by the Office of Academic Affairs and the Dean of Faculties.

Fringe Benefits

Fringe benefits must be included in proposal budgets for all Indiana University personnel. The rate varies depending upon the type of appointment. Rates change annually on July 1.

Travel

Indiana University reimburses lodging and per diem at the rates used by the federal government. . Mileage should be based on the established IU rate multiplied by the number of miles. Estimate the airfare using a domestic carrier if federal funds are involved.

Think about the needs for each trip and provide the detail for each expense item. It is also important to describe the purpose of the travel in the budget narrative. Agencies vary greatly in their requests for detail concerning travel. Keep this in mind when deciding how much detail to provide. Think about the reviewers point of view in providing justification. You want to make their job as easy as possible by providing enough information to understand the basis for costs for the funds requested.

Consultant Costs

Include a daily or hourly rate and the number of days or hours the consultant will be working on this project. The consultant's qualifications should be included in the proposal or budget narrative. Include a letter of support for the proposal.

At Indiana University the current threshold for equipment is $5000. An item, which you would normally consider to be equipment but costs less than $5000, should be called Expendable Equipment and be listed in the Other category.

Supplies

Supplies include expendable items used for the project. Include a description, estimate and subtotal for the category. Examples of supplies include: laboratory supplies, computer software costing less than $5000, film, medical supplies, computer supplies, and pharmaceuticals. General-purpose office supplies should not be included in a sponsored project budget.

• Letter of support signed by the authorizing official
• Budget including the subcontractor's indirect costs if allowed by the agency
• Statement of work
• Indirect cost rate agreement

The total of the subcontractor's budget is included in the Indiana University budget on one line called subcontractor or consortium costs. If you have more than one subcontractor, the documents are required for each and the total for each subcontractor is listed on the Indiana University budget.

Other Costs

This category is used to include various items such as telephone long distance tolls, photocopy costs, graduate student fee remission, expendable equipment, contractual services, honoraria, and subject payments.

Graduate Student Fee Remissions

Include fee remissions for all qualified graduate students. Check with your Dean's office for the amount to include in proposals.

Facilities and Administrative Costs (formerly called indirect costs)

All projects should include facilities and administrative costs unless the agency restricts these costs in their guidelines. Indirect costs are those cost that are not easily identified with a particular project. They include: costs for facilities, utilities, administrative support, and libraries among other things. The Indiana University indirect cost rate is negotiated with the U.S. Department of Health and Human Services. The rates change with new agreements and are published as an Important Notice.

To calculate the Facilities and Administrative costs you must first arrive at the modified total direct costs (MTDC). This is done by subtracting the fee remissions, equipment, subcontract amounts in excess of $25,000, charges for patient care, rental costs of off site facilities, scholarships, and fellowships from the total direct costs. The MTDC is then multiplied by the appropriate rate for your project.

If an agency restricts the rate to less than our negotiated rate, use the Total Direct Costs (TDC) as the base instead of the Modified Total Direct Costs (MTDC).

Budgeting for Future Years

It is advisable to estimate increases for future years. Current estimated increases in proposal budgets range from between 3 and 5%. Include the rate of increase in your budget justification or narrative.

Contributing a portion of the salaries, fringe benefits, and applicable indirect costs can usually provide the cost share. The cost share may also be made by the contribution of other direct cost items such as supplies, printing and duplicating, or travel. If these types of items are used for matching, adequate documentation must be available for audit purposes.

All cost share must be approved at the time of proposal submission. It is required that the availability and commitment of funds to be used for the match be documented in writing by a person in the submitting unit who has authority to do so. All third party matches (those to be made by funds from outside the University) must also be documented in writing. Additional information on cost share is available in Important Notice 03-4.

Third Party In-Kind Contributions

In-kind contributions, that is, contributions of goods or services by third parties (parties other than the grantor or grantee) in lieu of dollars may also be used as a form of matching when allowed or otherwise required by the funding agency. Examples include the waiver of a consultant's normal fee, the free use of an auditorium, or the contribution of supplies that would otherwise have to be purchased from grant funds. In all cases, documentation in the form of a statement or receipt from the contributor must be obtained and kept for audit purposes.

Note: Contributions of salaries, supplies, and indirect costs by Indiana University are "cash" contributions, not "in-kind" contributions. These contributions are actually charged to some University budget and are documented for bookkeeping and audit purposes. Nevertheless, agency guidelines should be checked carefully as agency definitions and uses of the term "in-kind" vary. To be certain of the correct interpretation, check with the sponsored programs staff.

Sponsored Research Services (SRS), Contact Information:

Indiana University - IUPUI
620 Union Drive
Room 618
Indianapolis, IN 46202-5167