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Proposal
Submission, Approval, and Budget Development Guide
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To compete for funding, proposals submitted to funding agencies for review and consideration must be well developed and clearly defined. Successful proposal development is a team effort that involves cooperation among Faculty colleagues and the administrative staff of the University. The OSP team will provide assistance in proposal budget development and interpretation of guidelines from numerous funding agencies. While the OSP team is not staffed with experts in individual technical disciplines, they will assist in drafting or editing portions of the proposal text related to administrative or institutional issues as requested. Contract Administrators in OSP review proposals, assist in making corrections, assist in the completion of sponsor and institutional forms, provide guidance on budgetary issues, and obtain the signature of the institutional authorized representative. The proposal is returned to the Investigator for submission to the sponsoring agency. Additionally, in the case of sponsors such as the National Science Foundation who accept proposals electronically, the Contract Administrators in OSP assist Investigators in the use of the electronic system and with the actual transmission of the proposal to the sponsor. The Office is staffed with 5 Contract Administrators who review proposals and negotiate awards, an Assistant Director who oversees the daily activities of the office and a Coordinator who manages the office databases and supervises student workers in the management of our files. The OSP Director signs the proposals on behalf of the authorized institutional representative. While the OSP exists to be of service to you in preparing and submitting a proposal, it may not always be convenient to contact us for information. Therefore, in an effort to provide you with the information you will need to navigate the proposal process at Auburn University and to provide as much direction as possible, we have prepared this guidebook to get you started down the right path. If you have any questions about the guide or the process, a list of contact names, numbers and e-mail addresses is provided herein for your convenience.
Figure 1 represents the general flow of a proposal from the beginning when an Investigator develops an idea for a project through proposal preparation, submission for sponsor review, conduct of the project and starting over again. This Figure is intended to give a bird’s eye view of the general process. Some sponsors may skip a step depending upon the formality of their review process. In most cases, as the requestor, Auburn University does not have control over the process once we have submitted the proposal. We can, however, control the institutional review and approval steps in the process. Please note that the box marked, "Write the Proposal" is much more involved than one simple step. This guide will give some writing tips and identify the various components contained in a proposal. However, the focus is administrative rather than scientific in nature. Figure 2 shows the general flow of a proposal through the Auburn University system for various approval signatures.
3. How to Obtain Institutional Approval At Auburn University, the Principal Investigator is responsible for development and preparation of a proposal for routing and submission to external sponsors. Proposals are approved by the heads/chairs of the involved departments, directors of involved institutes or centers, and deans of the colleges involved in the proposed project. Any institutional resources committed to the project must be approved in advance of the proposal’s submission to OSP. Likewise, if animal or human subjects are involved or if safety issues are involved in the project, the sponsor may require you to obtain approvals from the appropriate institutional committees/offices before the proposal is submitted to the sponsor. In this case, the Investigator should contact the appropriate office prior to routing the proposal for Institutional approval. OSP will review proposals to ensure nothing has been overlooked and will obtain official institutional approval and signature. The approved proposal will be returned to the Investigator for photocopying and mailing to the sponsor. OSP should have at least one day to process a proposal for submission although there is no formal time requirement for OSP review and approval. The more time provided, the more assistance can be given for completing forms and addressing budget concerns.
Faculty Investigators usually have very little time for making corrections before the proposal submission deadline. OSP assists whenever possible but to save time, some of the following errors should be avoided:
Although proposal formats differ among sponsors, all proposals tend to contain basically the same important information. Please note that some sponsors have specific forms corresponding to some of the items on the following list. However, in the absence of formal instructions from a sponsoring agency, the following provides a general guide for what a proposal should contain. A. Transmittal Letter (See Appendix A for an example.) Letter printed on University letterhead, signed by the Principal Investigator or an institutional administrator indicating the contents of the proposal submission packet. The transmittal letter is used to help identify the Investigator and any special characteristics of the proposal or the submitting institution. B. Title Page (See Appendix A for an example.) The title page (or cover sheet) contains:
C. Abstract (See Appendix A for an example.) The abstract is a of the proposal and is usually written last. The abstract presents the essential elements of the proposal. The agency may use it to disseminate the proposal idea for comment from individuals outside the primary review group. It is short usually 200-250 words but is extremely important in creating a favorable first impression. The table of contents lists the major sections with just enough detail so that the reviewers can quickly locate the section(s) of most interest to them. It is also useful in comparing the proposal to any guidelines provided by the agency. The introduction includes the statement of need for the project. It emphasizes the importance of conducting the project and sets forth the major focus of the proposal. It generally contains a review of current literature on the topic showing what has already been done so the argument for what needs to be done is stronger. The objectives are statements showing what the Investigator(s) intends to do to resolve the issues addressed earlier. Each is tied to a specific need shown in the introduction. The procedures section contains the details of how the Investigator will accomplish the objectives. Generally the procedures are tied to each objective that is tied back to a specific need to be addressed. Often this is the section containing the description of collaborations and the timeline of the activities to be performed. This section describes how the Investigator will evaluate the success of the project, that is, how the Investigator will show that the proposed scope of work was actually accomplished. An unbiased expert in the field sometimes performs this task. I. Equipment, Facilities, and Personnel This section describes the resources available to the Investigator for conduct of the project. It includes equipment, facilities of the institution or any other facilities available, as well as the personnel and the expertise they bring to the project. The references section indicates that the Investigator(s) is aware of the current work in the field and that the proposed project can contribute to the expansion of the current knowledge base. The appendices contain information that can not be easily included in the body of the proposal but is vital to the full evaluation of the work being proposed. This is the place to put the vitae of the Investigator(s) and any pertinent information about the need for the project. Keep the information brief and current. Watch for sponsors that have page limitations or prohibit the use of appendices. L. Budget (See Appendix B for examples.) The budget shows the sponsor how much the total project will cost. It shows the cost of the entire project, that is, the costs paid for by the sponsor as well as the cost covered by the institution or a third party. Some sponsoring agencies require use of their own printed budget form. All amounts should be rounded to the nearest whole dollar. M. Budget Narrative (See Appendix B for examples.) The budget narrative provides sufficient detail to show how the cost estimates were calculated and an explanation as to why the cost is necessary for the completion of the project.
A proposal budget is a best estimate of the actual cost that will be incurred during conduct of the project. There are three major issues to consider when preparing a budget for a proposal submitted to an external sponsor.
When a project is performed for an external sponsor, that sponsor should reimburse the university for all of the expenses required to complete the project. Any time the university has project costs that the sponsor cannot pay, then university funds, or a third party, must be identified up front to subsidize the project and pay the costs. While some sponsors will give an Investigator a cost limitation for a project, most provide very broad and general guidance for how much a project should reasonably cost. An Investigator has to examine the work to be done and try to determine what expenses will be involved in completing all of the project tasks. For this reason most budgets should be finalized AFTER the details of the project scope are worked out. The listing below provides some things an Investigator should think about when preparing a proposal budget. The Investigator should plan the project carefully and include all costs necessary for successfully conducting the project. The Investigator should include only costs that relate specifically to the work that will be done on the project. He/she should avoid the temptation to include contingencies (i.e., padding the budget). He/she should include only those costs that can be explained in a budget narrative or over the phone if the sponsor asks. In order for the Investigator to work within the budget once the project is funded, he/she will need to incorporate known or predictable cost increases. If these costs are not included, he/she may find himself/herself struggling to make financial ends meet rather than spending effort on the technical aspects of the project. In order to be sure that the budget contains sufficient direct costs, it is important for the Investigator to:
The Investigator should develop an understanding of how the university has determined the Facilities and Administrative (F&A) rate. He/she should apply it to the proposed direct costs in the correct manner. For additional information: http://www.auburn.edu/research/vpr/contracts/forms/rate.pdf The Investigator should determine the sponsor’s requirements, if any regarding the sharing of total project costs. He/she should imagine all the possible resources that the university will be contributing to the project. He/she should determine whether the commitments are cash (out-of-pocket) contributions or in-kind (non-cash) contributions. These contributions should be included in the proposal budget, if necessary, and explained in the budget narrative. For additional information: http://www.auburn.edu/administration/iss/business_office/policy_manual/congrant.htm - cost_sharing The Investigator may follow these steps in preparing the budget:
For costs to be allowable on a sponsored project, they must be considered reasonable. That is, incurring the cost should reflect the actions of a prudent person engaging the principles of good stewardship of someone else’s money. Additionally, costs must be allocable. For a cost to be allocable, it should be charged only to the project account for which the cost was incurred. This means that costs incurred for the purposes of one project can not be charged to another project. For costs to be allowable, they must also conform to the limitations that are identified in AU policies and sponsor regulations. Some sponsors will not pay for certain types of costs. Finally, costs are allowable only if they receive consistent treatment. That is, each time a particular type of cost is incurred (office supplies or certain salaries) the institution must account for those costs in the same way (direct costs or F&A costs) assuming the circumstances for incurring the cost are approximately the same as before. If you have any questions about the allowability of a particular cost as either a direct cost or F&A cost, please contact the OSP (OSP). The following pages identify common categories that generally make up a complete proposal budget. These are the categories of costs generally considered allowable on sponsored projects. A brief explanation is given for each one. Additionally, Appendix D contains a list of common budget and costing terms. Salaries for exempt employees should be shown as the percentage of the employee's total Auburn University effort that will be devoted to the contract or grant multiplied by their full time base salary.
AU policies do not usually allow for payment of overtime or extra compensation for exempt employees. Salaries for non-exempt employees should be shown as number of hours at the employee's hourly rate.
If overtime is anticipated and necessary for the timely completion of the project, it should be clearly stated in the proposal. Some funding agencies assume all employees are exempt employees unless they approve otherwise and thus provide specific contractual language to address overtime. Overtime for the person in the previous example would be shown as follows:
For graduate research assistants (GRAs), salaries are usually shown as a percent of time, and other students are usually shown as number of hours times some specified rate per hour.
Current salary information is available from Departmental Administrative support staff, the Department Chair or the OSP. In preparing a budget for personnel costs, the Investigator should watch for pending promotions or salary increases that may take effect after a project is funded. If the proposed activities of the consultant do not meet Internal revenue Service (IRS) rules for designation as an independent contractor, the consultant will need to be hired as an employee of the University. Persons who are already or have been AU employees within the last year cannot be categorized as consultants in a proposal for budget purposes. AU employees must be budgeted as regular employees with fringe benefits (or as Temporary Employment Services (TES) as appropriate) and a description of the work they will perform provided in the proposal narrative or budget explanation. To satisfy Internal Revenue Service and Department of Labor regulations, consultants are considered to be non-AU entity or person(s). Costs for an independent contractor (consultant) may include travel and other costs of the consultant in addition to the fee or the fee may be segregated from the consultant’s other costs in the budget. If a consultant will only be paid one time and is not providing a continuing service, the consultant can be paid an honorarium according to the AU Policies and Procedures Manual. Note that in the case of an honorarium the honorarium is paid in lieu of travel expenses and other fees/expenses. Sometimes it is difficult to distinguish a consultant from a subcontractor. Consultants are usually single individuals providing advice, feedback, guidance, or limited service to a project on a small scale and for brief moments in time. A subcontractor is generally an organization engaged in performance of a larger portion of the project scope of work. Employees of the subcontractor are often involved in making decisions about the focus and direction of a project working in very close collaboration with Auburn University investigators or working independently and later delivering a completed component of the overall project. This distinction is important for many reasons not limited to intellectual property ownership and calculation of F&A costs in a budget. The principal elements that comprise University faculty and staff employee fringe benefits are FICA, Retirement, Group Insurance, Worker's Compensation, Unemployment Compensation, and other University benefits. These costs are identified in a separate budget line item as a percentage of full time faculty and staff salaries. The current benefit rates used for proposal estimates are 19.06% (Division 1), 22% (Division 3) and 25% (Division 4). No benefits are identified for student salaries or part time employees. Mary Smith, 50% FTE, $30,000/yr = $15,000 Benefits at 20.00% of salaries = $3,000 This category includes most expendable items and miscellaneous expenses used exclusively for the project, including laboratory supplies, project specific resource materials, chemicals, glassware, long distance phone charges, express mail and shipping, project specific required subscriptions, photocopying, faxing, non-capital equipment less than $2,500 per item, etc. The Auburn University Direct Cost Policy provides additional guidance for these types of expenses. E. Temporary Employment Services This category is for employees hired through the University’s Temporary Employment Services. Remember that TES charges a fee of approximately 12.58% on top of the hourly rate paid to the employee. TES charges are considered Other Operating Expenses for purposes of the FRS accounting system but most sponsors will consider these as a personnel expense. Where these costs are shown on a proposed budget will depend in part on the sponsor's budget format requirements. In the absence of a sponsor format, these should be shown as other operating costs. Travel is frequently necessary to complete a project. Costs may include registration fees, airfare or mileage, hotel, per diem for meals, car rental, and miscellaneous expenses related to travel to conferences, fieldwork, etc. The Investigator should try to budget costs realistically based upon expected travel plans. Rates used must conform to the AU Financial Policies and Procedures Manual. Some agencies require specific authorization for a particular trip, even if it is included in the proposal budget. In some cases, the timing and destination is uncertain at the proposal budget preparation stage. An Investigator can use previous travel experiences from similar projects as a guide for estimating travel requirements. When travel is uncertain or a significant amount of fieldwork is involved, a conservative approach (budgeting a little more) is usually better. The definition of equipment currently used at AU is any item having a unit cost of $2,500 or more and a useful life of at least one year. Many agencies have proposal guidelines that specify the amount of detail needed for budgets that include equipment. Most agencies will not fund what they consider to be general-purpose equipment such as desks, chairs, shelves, file cabinets or office computers. They may also have regulations concerning ownership of equipment purchased under contracts and grants; equipment may have to be returned to the funding agency at the completion of the project. If the equipment is to be returned, it may be necessary to budget shipping costs in the proposal budget. Equipment costs are excluded from Facilities and Administrative cost (F&A) calculations if the award will include the full Federally negotiated F&A rate. If the equipment is to be returned to the sponsor at the end of the project period, please contact the OSP for guidance. Participant costs include payment to participants in workshops, surveys, studies, etc. Participant costs are usually small fixed amounts to compensate participants for their efforts. These costs are included in the calculation of F&A. In National Science Foundation (NSF) grant proposals participant costs usually refer to researchers or scientists outside of the proposing institution who may be attending a conference or participants of a foreign collaboration. These participant costs are excluded from the F&A calculations pursuant to NSF guidelines. If some work to be done under a contract or grant will be performed by another institution or a private company, include those costs related to the other entity as a subcontract. The subcontract will show on the AU budget as a single line item and the Investigator must attach a separate budget page for the subcontract. This should be in the same format as the full budget. To ensure that the subcontractor has obtained official endorsement, the proposal should contain a letter of commitment signed by the subcontractor's principal Investigator and the institutional/organizational representative. The first $25,000 of each subcontract is included in the F&A calculation if the award will include the full Federally negotiated F&A rate. Sometimes it is difficult to distinguish a subcontractor from a regular vendor of goods or services. The characteristics of a subcontractor are when the organization:
A subrecipient is most likely classified as a regular vendor if the organization:
In 1996, the Federal Government imposed four cost accounting standards on universities. CAS 501 requires that the proposal estimates be prepared in a consistent manner so that they are useable as a comparison for project expenditures if an auditor reviews the accounts. While the standard does not specify a format for budgeting, it does require that the budget not be more detailed than the accounting system can record expenses. Attached in Appendix G is a listing of the university accounting system (FRS) subcodes used to classify expenditures. This list can provide a guideline for what kinds of costs might be needed in a proposal budget and what the accounting system can or cannot account for. OSP can assist the Investigator or departmental support person in developing a proposal budget and can answer questions about sponsor and university policies. To assist Investigators in drafting a budget, the attached Excel spreadsheet can be used to prepare a budget based on FRS subcodes. This form is intended as a worksheet but is not required For assistance with budget development or completion of sponsor forms, please contact OSP and someone will assist. Please see the contact list at Appendix F. Appendix A. Examples of Proposal Components Sample
Proposal Transmittal Letter
Appendix B. Examples of Proposal Budgets Sample
Research Project Budget Sample
Testing Services or Product Evaluation Budget
Appendix C. Frequently Asked Questions About Proposal Budgets 1. The sponsor doesn't care about my budget so why do I have to devote so much valuable time to developing details of my estimated costs? The Investigator should have some reasonable basis for estimating the costs. We may not propose costs that would be considered unallowable by university or sponsor regulations. In order to ensure that budgets do not contain estimates for costs that would be considered unallowable an auditor may request review the detail behind the estimates. Using previous expenditure history for similar work is a reasonable way to estimate a budget. The Investigator should be prepared to explain the rationale for the cost estimates if asked.
The departmental administrative person or the Dean's support staff should have access to the institution's Human Resources System (HRS) to check salaries. If not, you may contact the OSP for this information.
The current fringe rate (as of 10/01/2006) is 24.5% for Divisions 1, 3, and 4 and apply to the salaries and wages of all full time employees. Employees less than 50% time for one year or less do not have fringe benefits assessed with, possibly, the exception of FICA and Medicare at 7.65%. These rates are used for budget estimation only. Actual fringe benefits will be charged to the project or cost share account.
Facilities and Administrative Cost (F&A) recoveries are for overhead type expenses such as electricity, police protection, the President's office, the Sponsored Programs and Dean's offices, building and equipment depreciation and other global costs of doing business at the university. These recoveries are placed in the University's general fund to pay the bills.
You can use previous
experience for similar trips or you can make assumptions about what
a possible airfare might be, what a possible hotel room might be, what
kind of rental car fee might be involved etc. A travel agent can give
conservative estimates of "worst case" scenarios for trips.
Since the acquisition cost of the computer is already included in the F&A calculation as depreciation or use allowance, and since you would be unable to accurately and easily reflect the actual costs involved with the use of the computer, the Federal cost principles state that these kinds of things should be considered F&A costs rather than direct costs on projects.
The current F&A rate is applied, based upon the type of activity involved in the project, to total direct costs less equipment, tuition and the amount of each subcontract that is over $25,000. For additional information, please see the institution's F&A rate agreement dated 10/1/01. The current rates are 45.0% for research, 50% for instruction, 38% for other sponsored activities, and 26.0% for off-campus projects regardless of type of activity.
The F&A rate agreement negotiated with our cognizant federal audit agency recognizes that there are some administrative and technical costs associated with monitoring subrecipients. They also recognize that the technical work for the subcontract is done in facilities other than ours. They agree to allow some recovery of F&A costs to cover administration and oversight of the subcontract but have placed a limit on our recovery.
The University's
F&A rate is calculated using ALL expenditures of the institution.
Each expenditure is classified as research, instruction, other sponsored,
other institutional activity or some form of overhead expense. The Federal
Government will eventually pay the resulting calculated rate. They have
a vested interest in how the rate is calculated and what costs are included
or not in the calculation. We have to ensure that ALL expenditures are
properly classified so as not to adversely impact the calculation of
future F&A rates. The University's Direct Cost Policy explains this
in further detail and provides for some very limited exceptions.
Total Project Costs - All allowable costs incurred by a recipient and the value of the in-kind contributions made by the recipient or third parties in accomplishing the objectives of the grant or other agreement during the project or program period. Allowability of Costs - for costs to be allowable on a project, the following criteria must be met.
Direct Costs
- Costs that can be identified specifically with a particular project
relatively easily with a high degree of accuracy.
Facilities and
Administrative Costs - (F&A, formerly known as Indirect Costs/Overhead)
- Costs that are incurred for common or joint objectives and therefore
cannot be identified readily and specifically with a particular project.
F&A costs are general operating costs incurred by the University in support of sponsored research, public service and instruction. F&A costs are often misunderstood or incorrectly construed to be "profit" in the proposal budget. As is true for any organization that receives external support, these costs are real and necessary charges for the University. F&A costs should be included as a separate line item in the budget of each proposal submitted to external funding agencies. These costs must be budgeted so the University can recover the true costs incurred by sponsored research, public service, and instruction projects that have not been supported in the state's annual appropriation to the University. If the funding agency allows the University to charge its full F&A rate but the principal Investigator wants to submit a proposal to a funding agency with no F&A costs or using a lower rate than that approved for the agency, the request must be routed through the department chair and dean or unit director to the Vice president for Research. Very few exceptions to charging full F&A costs are made. The current base used to determine F&A costs is modified total direct costs, which is total direct costs less equipment; space rental; subcontract amounts in excess of $25,000 per subcontract; patient care costs; and student support costs, including tuition. For a proposal budget, F&A costs are determined by applying the appropriate F&A cost rate to the base. For budgets to sponsors that will not pay the full federally negotiated F&A rate, total direct costs (TDC) should be used to calculate the F&A for the project. Agencies often request a copy of the University's current negotiated F&A rate agreement.
Cash Contributions - The recipient's cash outlay, including the outlay of money contributed to the recipient by non-sponsor third parties In-kind Contributions - the value of non-cash contributions provided by the recipient and non-sponsor third parties such as goods and services directly benefiting and specifically identifiable with the project or program Acceptable Cost Share - Cash and in-kind contributions are acceptable when they meet the following criteria:
Appendix
E. Information for Completing Sponsor Forms
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