Budget Preparation

Budget Preparation

The budget is the financial representation of the statement of work and should provide the funding agency a clear picture of your anticipated financial needs. It is a crucial component of your application and reveals a great deal to the reviewer about your project and your ability to accurately assess its cost. Each sponsor has different budget formats, guidelines, allowable costs, and indirect cost restrictions, so carefully read and re-read their funding announcements before you begin creating your budget. All costs included in a budget must be reasonable, allowable and allocable. In the absence of specific guidelines by a non-federal sponsor, it is prudent to follow the federal government's Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards on award expenses.


Budget Categories

Your budget consists of two major categories:

  • Direct costs
  • Facilities and Administrative costs


Direct costs can be easily and accurately assigned to a specific research project, instructional activity, or any other institutional activity or program. These costs are essential to the project's fulfillment. The most common major categories of direct costs on grant applications are:

Salaries and Wages

The salaries and wages category is for employees providing effort on the project. The budget should show the employee's name, role on the project (e.g. PI, Research Assistant, Program Director, etc.), level of effort stated as a percentage or in person-months, and the amount requested (calculated as salary multiplied by the percent effort). The budget justification should include a description of the tasks the will perform and how their role assists in achieving the proposal's goals. Please request salary information from GSRD.

Course-release time should be discussed with your chair before completing the budget. Salary balances for this category are typically different than the faculty's regular salary because the adjunct faculty pay rate is used. This requires a different fringe benefit rate as it is a different employee classification.

Some sponsors impose restrictions on faculty salary. For example, the NSF will fund only two months of regular faculty salary in one year. Administrative and clerical staff salaries only are allowed as a direct charge if the project meets the federal requirements of a major program. Please note that once awarded, effort included in the proposal for a Principal Investigator and other key personnel becomes a commitment that requires permission to reduce.

Fringe Benefits

The fringe benefits rate is expressed as a percentage of salary and the dollar amount is calculated by applying the appropriate rate to the balance of each employee's salary to be charged to the grant. These rates vary based on employee classifications. Check with GSRD if you need assistance on determining which fringe benefit rates to use on your application.


Supplies are expendable items with a useful life of less than one year or a unit cost under $5,000. Office supplies are generally not allowed as they are items that should be provided by the home department and their cost is recovered through the F&A costs charged to the grant. In the budget justification, describe the purpose of each supply item and its estimated cost.


The travel category includes expenses for professional workshops, seminars, conferences and symposia, and program meetings. List travel expenses of project personnel by purpose, destination, and dates. Show the basis of computation. Include costs such as conference registration, airfare, hotel, per diem, ground transportation, parking, and mileage. Please follow the Winthrop University travel policy.


An item categorized as equipment must have a unit cost of $5,000 or more and a useful life of one year or longer. The cost includes shipping, installation, and fabrication. Equipment items that cost less than $5,000 per unit should be included in Supplies or Other/Miscellaneous categories.

Consultants, Professional Services

A consultant is an individual who delivers a certain service or product that assists in the achievement of project goals. They provide expertise that is not readily available with personnel employed by the University. This person is not an employee of the University, works independently, and should not be directly supervised. A Contract for Professional Services is the instrument that controls this relationship. It mandates the dates of service, services/products to be conveyed, and total payment.

Subcontracts, Subagreements, Subawards

A subagreement is a contract with or award to another organization that will contribute a significant portion of the project's design and/or scope of work. This institution must follow the same guidelines in the sponsor's funding announcement. The following documents should be included in the application package:

  • Work Statement/Scope of Work

  • Budget

  • Budget Justification

  • Biosketches of Key Personnel

  • Letter of Support signed by the sub-recipient's Authorized Official

  • Copy of the Subcontractee's/Subrecipient's F&A rate agreement (if applicable)

Make sure to request these documents well ahead of your proposal deadline as they will require a similar approval process at their institution.

Miscellaneous Expenses

Read your funding opportunity announcement and make sure that you do no include unallowable expenses. For each expense, explain its purpose and how it supports the scope of work and show calculations of the amount requested. Examples of miscellaneous expenses include:

Equipment Service/Maintenance Agreements

  • Equipment Rental

  • Publication Fees

  • Copying

  • Advertising

  • Participant Support Costs

  • Long Distance Phone Charges

Unallowed Costs

These costs are usually not allowed on sponsored program accounts:

  • Alcoholic beverages

  • Food and drinks (if these have a direct program benefit, the sponsor may allow)

  • Entertainment

  • Administrative and clerical salaries

  • General office supplies


Facilities and Administrative Costs, or Indirect Costs, are incurred for a common purpose or joint objectives. They are overhead costs that cannot be assigned to a particular sponsored project, an instructional activity, or any other institutional program or activity. The University has a negotiated rate that should be charged to grants in order to recover the portion of these infrastructure costs that support sponsored projects.

Examples of Indirect Costs

  • Salaries/wages and fringe benefits of support personnel, clerical staff, and administrators

  • General office supplies: pencils, pens, paper clips, file folders, notepads, etc.

  • Basic telephone hardware lease fees

  • Photocopying for general administrative documents

  • Network charges for e-mail and other general purpose software

  • Repairs and maintenance of general purpose, departmental equipment

Foundations and Non-Profit Organizations

Many foundations and non-profits do not allow F&A costs or they only will pay a reduced rate. Winthrop usually will accept the lower rate as long as GSRD is provided the link to their website stating their IDC policy. If the organization pays less than Winthrop's negotiated IDC rate, be sure the follow the instructions to apply their rate correctly.
Current F&A Rates

On-Campus: 60% of salaries, wages, and fringe benefits

Off-Campus: 26% of salaries, wages, and fringe benefits

See the F&A Rate Agreement


Cost Sharing

The terms cost sharing, matching, and in-kind contributions are used interchangeably. Carefully read your notice of funding opportunity to determine whether cost sharing is mandatory. Develop the budget including the required cost share balance. Combine this amount with the amount to be requested from the funder to determine the total project cost.

Mandatory Cost Sharing
The portion of the project budget that the sponsor requires the University fund. This balance can be in the form of a cash donation or an in-kind contribution. A cash match can come from the University's funds or a third-party organization that grants or donates cash to fund a portion of your project. An in-kind contribution is a non-cash donation of goods or services with an allocated value. Both types of cost share balances can help you to achieve your project goals. Most federal awards do not allow cost sharing from other federal awards. Be sure to read your funding announcement.

Some sponsors may strongly suggest but not require cost sharing. This means that any cost share balance included in the budget is voluntary. However, when you include a voluntary cost share balance in the budget and submit it with a proposal that is subsequently funded, it becomes mandatory. Voluntary cost share balances must be approved by the Provost.

Budget Justification

The budget justification is a clear, concise, detailed rationale for what, how, when, and why the funds requested are to be used. It should demonstrate an understanding of the estimated costs of performing the project efficiently in the given time frame. Be sure to include calculations of the balances requested. Your narrative should be as transparent as possible and not leave reviewers feeling ambiguous about any number contained within your budget. Do not add fluff or pad your numbers. Sponsors are extremely savvy and will be able to recognize this. This will most certainly reduce your chances of being funded.

See Developing a Proposal Budget (PDF - 624 KB) for a detailed tutorial on budget preparation.




Fringe Benefits Rates Chart

Facilities and Administrative Cost Rates

On-Campus: 60% of salaries, wages, and fringe benefits

Off-Campus: 26% of salaries, wages, and fringe benefits  

Facilities and Administrative Rate Agreement


Per Diem Travel Rates

Tuition and Fees





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