Budget Development

Budget Development

Create a budget: Budget Worksheets are available here.

The budget represents the PI's best estimate of the costs of doing the work described in the proposal. The general rule of thumb is that a budget should include all costs necessary to carry out the project in a cost-effective manner. A "padded" budget is usually obvious to reviewers, who themselves have an idea of the approximate cost of doing the proposed research. An artificially small budget may seem to indicate a PI who doesn't have enough knowledge to know what resources will be necessary to complete the work.

 

The amount requested should be supported by descriptions of the items included and estimates of their costs in an accompanying budget narrative.

 

The Office of Sponsored Research will assist you with pre-award budget preparation and review. Assistance will include help with identifying resource needs as you plan your budget, as well as compliance checks against the financial and budgetary requirements of the program sponsor and Wellesley College. Keep in mind that projects lasting more than one year usually require a budget request for each year in addition to an overall total. Multiyear budgets should provide for inflation. Current inflation estimates are included in the budget templates that are available on the Office of Sponsored Research website.

Common Cost Categories

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Salaries and wages

Salaries and wages for all personnel who will be working on the project should be included. IRS regulations require that any individual hired to work on a grant must be considered an employee of the College unless the person qualifies for hire as an independent contractor. The policy on paying independent contractors is available here. Independent contractors should not be included in the salaries and wages section of a budget; see the External Collaborators and Services section below.

For each person, indicate the time to be spent on the project (e.g. full-time 12 months, ten hours/week for academic year, etc.) and the amount to be paid by the funding agency. Use the current academic year salary as a base for calculating salaries. If you have questions about salary figures, contact the Human Resources Office.

For National Science Foundation (NSF) Budgets: Please note, NSF limits salary requests in the proposal budget for PIs, Co-PIs, and other senior personnel to no more than two months of regular salary in any one year. This limit includes salary compensation received from all NSF-funded grants.

PI academic year salary (released time): Reductions in teaching load must be approved by the department chair and by the provost of the College. Before including release time from teaching in a grant budget, consult the College's policy on grant-funded course buy-outs.

  • PI summer salary: To calculate the monthly summer salary base, divide the academic year salary by nine (be sure to account for any annual salary increases which occur on July 1st).
  • PI leave salary: Faculty members scheduled for leave during the period of a proposed grant budget are expected to included leave salary in the budget. The leave salary amount included in a grant budget must be calculated from the faculty member's Wellesley College base salary.

Salaries for other key personnel or support personnel (e.g. faculty collaborator, postdoc, technician, research assistant, interviewer): salary included should be adequate to cover the current average compensation for the level of expertise and the degree of experience required for the position. Amounts can be estimated by consulting with the Human Resources Office.

Student assistants paid hourly wages: contact the Student Employment Office for the current wage scale.

Non-service stipend payments may be included only when permitted by the sponsor. If the nature of the activity meets the IRS definition of a "service" (i.e. teaching, research, or other services are required as a condition for receiving the funds), payment must be budgeted as salaries or wages and NOT as stipends. Student housing is generally not an eligible expense.

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Fringe Benefits

Fringe benefits are considered a direct cost to a sponsored project. Fringe benefits are calculated as a percentage of salaries and wages and include all benefits: retirement, health and life insurance, Social Security, etc. The fringe benefit rate is negotiated periodically with the Department of Health and Human Services (DHHS) and is subject to change. The current rates are 34.6% for all full-time faculty and staff, in both the academic year and the summer, and 7.7% for all temporary employees and for summer student employees.

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Equipment

The federal government and Wellesley College define capital equipment as property with a purchase price of $5,000 or more and a useful life of more than one year. Equipment purchased under a grant must be necessary to the research and not otherwise available or easily accessible. It is the PI's responsibility to determine the lack of availability or accessibility before including an equipment request in the budget. An inventory of equipment is available from the Associate Controller.

Each item of equipment requested should be listed separately (with as much specific information about name, model number and manufacturer as possible) and justified in the budget justification. The costs of shipping, installation, and maintenance should also be included.

Ordinarily, the purchase of general purpose equipment (e.g. office furniture, printing equipment, etc.) is not allowed.

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Travel

Costs for travel necessary to accomplish program goals should be included in the budget. This includes travel for program team meetings and for professional conferences related to dissemination of findings. Travel costs should be itemized by category. The budget justification should indicate who will travel, where, and why, estimated air fare (or other cost of transportation), cost of meals and lodging, meeting registration fees, etc. Unless further restricted by sponsor regulations, all travel is subject to general College policy. In addition, all foreign travel funded by federal agencies is subject to the Fly America Act.

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Materials and Supplies

Materials and supplies include consumable items (e.g. chemicals, laboratory breakables, poster board, etc.) required for the project. Computers are considered supplies if the purchase price is less than $5,000. In the case of computer and software purchases, the project director should contact Library Technology Services (LTS) for cost estimates.

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Publication Costs

Publication costs include journal charges, cost of illustrations, and costs of preparing and reproducing reports required by the sponsor. They should be itemized in the budget.

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Stipends

Non-service stipend payments may be included only when permitted by the sponsor. If the nature of the activity meets the IRS definition of a “service” (i.e. teaching, research, or other services are required as a condition for receiving the funds), payment must be budgeted as salaries or wages and NOT as stipends.

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External Collaborators and Services

Whenever payments to external collaborators and service providers are included in a proposal budget, it is important to determine whether or not the collaborator will be classified as a subrecipient or as a contractor. This is because Wellesley College is required to hold subrecipients responsible for compliance with sponsor regulations. Contractors are not usually subject to sponsor regulations, although similar requirements may apply.

  • Subrecipients: A subrecipient is an outside entity that performs substantive, programmatic work in support of proposal goals. Each subrecipient must provide an itemized budget and budget justification along with a scope of work and subrecipient commitment form signed by an authorized organizational representative. The total cost of each subaward, including both direct and indirect costs, is usually included in Wellesley College’s proposal budget as a separate line item.
  • Contractors: A contractor is an outside entity that provides goods, services, or professional advice necessary for a project. Such entities include businesses and independent contractors (i.e., consultants). The College’s policies on paying outside entities are available here. The independent contractor’s rate and expenses (such as travel and other miscellaneous expenses) should be included in the budget. Many sponsors restrict or limit independent contractor payments. If in doubt as to the allowability of independent contractor fees, refer to the sponsor’s program guidelines or contact the Office of Sponsored Research. 

 

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Other Direct Costs

Other expenses may include such items as postage, photocopying, animal care, human subject incentives, and printing costs.

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Indirect Costs

Indirect costs (a.k.a. "facilities and administrative costs," "F&A," "overhead,") are incurred for expenses that cannot be identified specifically with a particular sponsored project. The cost of building operations and maintenance, equipment upkeep, general and departmental administrative expenses, sponsored research administration, and library expenses are usually considered indirect costs. These costs are essential to the support of sponsored program activities. Wellesley College's indirect cost rates are based on a federally negotiated agreement that is unique to Wellesley College. To remain in compliance with federal policy, our federally negotiated rates must be used in all sponsored agreements unless the sponsor has an explicit policy regarding indirect costs that dictates another rate be used by all proposal applicants.

The current indirect cost rate is 75% of all salaries and wages, expressed as a percentage of salaries and wages found in the budget. Wages of College faculty, staff, and student employees are included in total salaries and wages when calculating the amount of indirect costs. Participant Support Costs are not counted as part of this base number.

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Cost Sharing & Matching

If sponsor guidelines require cost-sharing or matching funds (cash contribution or donation of in-kind services such as contributed effort by the Principal Investigator), a separate budget for the cost-sharing commitment must be prepared and approved in advance by the Office of Sponsored Research. If cost sharing is proposed to and accepted by a sponsor, it becomes a legaly binding obligation of the College once the award as been granted. The College is required to maintain records of all costs that are claimed as committed cost sharing. If a cost sharing commitment includes in-kind contributions the basis for determining the value must be documented.

Voluntary commitments to cost share reduce the flexibility PIs have to use college resources (e.g., expenses counted as cost share must conform to sponsor regulations) and increase the requirements for auditable recordkeeping. For these reasons, voluntary cost sharing is strongly discouraged. The College's policy on cost sharing is available here.