- All costs charged to a project must meet specific criteria defined by the federal government and described in Cost Considerations.
- Principal Investigators are encouraged to seek assistance from the Office of Sponsored Programs when preparing budgets.
- A well thought-out and properly prepared budget is directly connected to the success of most research programs.
- General cost categories found in routine proposal budgets with comments or suggestions are provided herein.
- A Review of Potential Causes of Audit Disallowances provides examples of common causes for program costs to be disallowed by sponsoring agencies.
Faculty and Staff Salaries
Charges for personal services by employees to a grant-supported project are allowable to the extent they are reasonable in relation to services rendered to the project and conform to established, consistently-applied salary and wage policy of the grantee institution. Such charges must be based on institutional payrolls documented and approved in accordance with generally accepted institutional practices.
Estimation and description of personnel effort to be applied to the project should be undertaken with the following points in mind:
- Personnel costs should identify:
- Named individuals or position type, e.g., research associate
- The percent of effort for a stated period of time
- The amount of salary associated with the percent of effort
- The institution’s payroll system is based upon the “percent of effort” concept. Periodically, each individual or their supervisor receiving salary support from a sponsored project will be required to sign an after-the-fact certification that the distribution of effort is in compliance with federal guidelines.
- Salary estimates provided on any other basis (hourly, and/or daily rates), are not supported by organization’s records and are therefore inappropriate.
- Personnel costs should identify:
Fringe benefits are allowable as a direct cost to the salary charged to the grant in conformity with applied organizational policies. Specific fringe benefits charged to grant and contract accounts include:
- Social Security
- Health insurance
- Dental insurance
- Unemployment insurance
- Worker’s compensation insurance
A percentage factor is applied against salaries and wages. Contact the Office of Sponsored Programs for correct rates.
When the use of computers or the purchase of computer equipment is anticipated, the project director should contact GHS IT for assistance in providing an estimate of costs.
- Funds for computing resources or equipment must be requested in the project budget.
- Computing devices must be well justified as to why the project cannot be carried out without these resources.
- Computing devices must be used solely for the grant project for which they are purchased.
Sponsors normally require the project director to justify the consultant’s necessity and the appropriateness of the fees charged.
- A letter from the consultant including the consultant’s scope of work, total budget request, project title, project dates should be submitted to the grant coordinator PRIOR to submission. This letter should be on the consultant’s letterhead and signed with a pen (wet ink signature).
- A written copy of the consultant’s fee is required for documentation.
- Travel expense reimbursement and the consultant’s fee should be budgeted and included as part of the consultant expenses.
- Contact OSP for additional information on use of consultants.
Personnel commitments necessary to perform program activities are normally expected to be provided within the individual’s officially-assigned job responsibilities. GHS personnel should include their effort on external projects and are not to provide consultant services.
In general, the organization views equipment as an asset costing $5,000 or more with a useful service life of greater than one year. Proposals should attach documentation showing the need for funded equipment with a clear description and estimated cost (quote). Include associated sales tax, shipping and installation expenses as part of the equipment costs. General-purpose equipment, for example, calculators, typewriters, computers and office furnishings are not allowable purchases on federal projects unless specifically approved by the sponsoring agency in the award document. To ensure compliance with the sponsor’s award, and to establish ownership for institution’s records of property purchased, Sponsored Programs Grant Management will review all requisitions for equipment.
In the case of certain federal contracts, (e.g., Department of Defense), equipment must be screened and approved prior to purchase by the funding agency’s contracting officer regardless of whether the item was included in the contract award budget. It is recommended sufficient lead time (30-45 days) be anticipated for processing of this approval prior to issuance of a purchase order.
Departmental Administrative Staff
In compliance with federal cost principles, an individual’s salary (typically secretarial) may not be charged directly to a sponsored program if any portion of that position is funded by department administration funds.
Office Supplies and Photocopying
Costs of this nature are normally not allowable. It is expected these resources are made available by the department for use by departmental faculty. However, provisions for large-quantity usage may be included in proposals where justified.
If a project will require additional space, the department head and, if necessary, the academic vice chair should be contacted regarding the availability and suitability of facilities within the space already allocated to the department. All arrangements for additional space must be discussed and agreed upon prior to submission of the grant application. Funds requesting the construction, alteration or relocation of campus facilities must be reviewed and approved by the Chief Operating Officer.
It may be necessary to contract for services of private companies or other institutions of higher education for technical performance of a portion of the project effort. The proposed costs for such services should be established through a written quotation from the company and be included with the proposal for internal review. A proposal from a collaborating university or other outside agency or firm signed by their authorized official must be attached or included as part of the proposal.
Phone instrument rental and monthly service fees are not normally allowed as a direct cost item in a grant budget. Phone instruments are assumed to be already available to most projects conducted on campus and are provided to a funded project as a result of the indirect cost calculation and collection by the organization. Long distance costs can be charged against the project.
Principal Investigators should anticipate the use of funds for necessary travel. At a minimum, it is recommended the following be provided in the proposed budget: destination, duration and purpose, number in party, costs of transportation, meals, lodging and registration fees. Mileage is reimbursed at the institutional reimbursement rate.
Indirect costs are computed as a percentage of a program’s direct costs and are calculated by excluding the following cost categories:
- equipment (includes capital leases)
Greenville Health System’s indirect cost rates for each fiscal year are determined through annual negotiations with the Department of Health and Human Services – DHHS (our cognizant funding agency). The federally negotiated rate is to be used for budget estimation purposes regardless of whether the funding is from a federal agency or a private foundation.