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General Information for Preparing Proposal Budgets

Definition of a Budget
Project Costs
Budgeting Facilities and Administrative Costs as Direct Costs
Cost Estimation
Escalation Factors
Cost Assignment and Allocation
Documentation
Special Consideration: Industry Sponsors and Clinical Trials

 

Definition of a Budget

A categorical list of anticipated project costs that represent the Principal Investigator's best estimate of the funds needed to support the work described in a proposal. A budget consists of all direct costs, facilities and administrative costs, and cost sharing commitments proposed.

Project Costs

All proposed costs must clearly benefit the project and must be allowable under OMB Circular A-21, sponsor policies, and University policies.

Budgeting Facilities and Administrative Costs as Direct Costs

Do not propose as a direct cost any expense that is normally treated as a facilities and administrative cost without adequately documenting in the budget justification the project-specific needs necessitating the expense.

Cost Estimation

Use generally accepted cost estimation methods such as catalog prices, price quotations, or historical or current costs appropriately escalated. For patient care costs that will be incurred at UCIMC, contact the Office of Clinical Research Finance Assessment.

Escalation Factors

Use inflationary or escalation factors as appropriate. The current escalation rate for non-personnel cost categories is 3%. Personnel costs should be escalated in accordance with guidance provided on the Salary and Wages page.

Cost Assignment and Allocation

When developing a budget, it is necessary to estimate how the project will incur costs during each phase or year. The budget must itemize costs by major cost category for each project year as required by the sponsor's guidelines.

When assigning costs to budget categories, use UCI's major cost categories (i.e., salaries, fringe benefits, supplies, equipment, travel, other direct costs, and facilities and administrative costs), unless a sponsor's budget form or policies require more detailed categorization.

Describe the details of the costs proposed within each major cost category. Use general descriptions that can be tracked and reported through UCI's financial system. For example, if the supply costs proposed consist of test tubes and beakers, these costs should be included in one general description as lab glassware. UCI's accounting system can track lab glass under object code 8030, but does not have an object code specifically for test tubes. The budget justification should disclose the details that make up each cost category, and may include more detailed information regarding the items in each general description, as well as explain the method used to estimate these costs.

Documentation

The principal investigator and/or department must maintain supporting documentation related to project cost estimates (on a proposal-by-proposal basis) for negotiation and audit purposes. This documentation should clearly describe or demonstrate the processes, methods and data used to estimate project costs.

Examples of supporting documentation include:

  • Current University salary and wage scales
  • Projected range adjustments (cost of living increases) and merit increases for personnel costs and the periods to which they apply
  • Source of the benefit rate used (composite rate or actual rate)
  • Vendor quotes
  • Catalog prices
  • Historical records indicating the supply/material costs incurred for like projects

Special Consideration: Industry Sponsors and Clinical Trials

Projects funded by industry sponsors are performed, at least in part, for the benefit of the industry sponsor, the University, and the public of California. Generally, industry sponsors are concerned with the total cost of conducting a project rather than the classification of costs. Accordingly, direct charging costs normally treated as facility and administrative costs may be appropriate under such circumstances.
See Clinical Trials for further information about developing budgets for industry sponsored clinical trials.

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