Budget Development

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Budget Development

The budget is a detailed statement outlining the estimated project costs that support a sponsored program. With rare exception, a budget is required for every proposal to an external sponsor. In addition, the University of Mississippi Medical Center (UMMC) requires a detailed budget for all submissions, even if the sponsor does not.

Budgets should include all direct costs, as well as the appropriate facilities and administrative (F&A) costs required to carry out the project objectives. The proposal budget should be derived directly from the project description and serves as the financial expression of the project. The Office of Research and Sponsored Programs (ORSP) maintains detailed budget templates that are recommended for use by the Principal Investigators (PI). They can be found on our forms and templates page.

The costing principles found in the Uniform Guidance apply to all sponsored programs at UMMC. Costs must be allowable, allocable, reasonable and given consistent treatment.

Uniform Guidance

The Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance") was officially implemented in December 2014. The Uniform Guidance – a "government-wide framework for grants management" – is an authoritative set of rules and requirements for Federal awards that synthesizes and supersedes guidance from earlier OMB circulars. Uniform Guidance establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions.

The principles are designed to provide that the federal government bear its fair share of total costs, determined in accordance with generally accepted accounting principles, except where restricted or prohibited by law. Agencies are not expected to place additional restrictions on individual items of cost. Provision for profit or other increment above cost is outside the scope of the UG.

Direct costs

Direct costs are expenses that are specifically associated with a particular sponsored program or activity or can be directly assigned to that project or activity with a high degree of accuracy (e.g., PI salary/effort, specific grant supplies or equipment, grant-related travel, participant costs, etc.). Direct costs are essential to the project’s fulfillment.

Salaries and benefits

The largest category of expense on any sponsored program budget is normally personnel expenses - salaries and benefits. Proposals should accurately represent the amount of direct research effort that personnel are committing to the project. Salary figures should be based on the percentage of effort by each individual on the project applied to his/her annual salary. UMMC calculates salaries using calendar months, not academic or summer months. Fringe benefits are non-wage benefits expressed as a percentage of salary, at a negotiated rate. Fringe benefits include, but are not limited to, employee insurance, pensions, and benefit plans. UMMC’s fringe benefit rates are negotiated with the Department of Health and Human Services. Current rates can be found here. An effort calculation example can be found below. For more information, please visit or salaries and benefits page

                Calendar Months: Percent Effort x 12

                Ex: 20% x 12 = 2.4 Calendar Months

                Requested Salary: Institutional Base Salary or Salary Cap x Percent Effort

                Ex: $192,300 x 20% = $38,460

                Fringe Benefits: Requested Salary x Applicable Fringe Benefit Rate

                EX: $38,460 x 27.6% = $10,615

                Total salary and benefits requested: requested salary + fringe benefits

                EX: $38,460 +10,615 = $49,075

Salary Cap

A salary cap, at Executive Level II or $192,300, is required by many federal DHHS agencies as well as many non-federal entities. The following sponsors adhere to the DHHS salary cap (among others):

  • National Institutes of Health
  • Agency for Health Care Research and Quality
  • Center for Disease Control
  • Health Resources and Services Administration
  • Substance Abuse and Mental Health Services Administration
  • Food and Drug Administration
  • Cystic Fibrosis Foundation

Equipment

UMMC adheres to uniform guidance equipment thresholds. The threshold for equipment is $5,000. If an item is less than $5,000 per unit, it should be budgeted as supplies. Equipment expenses are not computed as part of the indirect cost base.

When equipment is planned to be purchased using grant funds, it is recommended that investigators reach out to UMMC’s Procurement team well in advance. The best point of contact is Lief McDonald. The Pre-Award team can facilitate a conversation if necessary.

Travel

Estimated travel costs should normally include and itemize airfare and other modes of transportation, the number of days of per diem, and ground transportation in accordance with federal regulations and UMMC policy. Planned travel costs should be both reasonable and specific to the grant. Federal and UMMC per diem rates can be found below. For more information, please visit or travel page

Subcontracts and other consortium/contractual agreements

A subcontract is a formal, legal agreement between UMMC and another organization. This agreement is used when a substantive portion of the programmatic work outlined in the proposal is conducted at another organization. Other consortium/contractual agreements include other vendors and suppliers who provide routine services for a fee. These are generally paid by an invoice or purchase order and typically require a formal contract which is processed through Contracts Administration. UMMC requires the below forms for subcontracts (templates can be found here). For more information, please visit our subcontracts and other consortium's page

  • Letter of Intent signed by institutional officials at both sites
  • Detailed Scope of Work
  • Detailed budget/budget justification
  • Biosketches for key personnel (if applicable)
  • Subrecipient Questionnaire (if UMMC is the lead)
  • Collaborating institutions’ negotiated rate agreement (if UMMC is the lead)
  • Collaborating institutions’ latest W9 (if UMMC is the lead)
  • Collaborating institutions’ 3B contact page (if UMMC is the lead)
  • Any other documents required by the prime sponsor

Consultants

A consultant is an independent contractor who is not an employee of UMMC. Consulting services are generally provided by an individual who is considered an expert in the field. The proposal should include a letter of collaboration including dates of service, rate of pay, other expenses and deliverables. Proposal requirements vary by sponsor. If awarded, consultant agreements are processed by Contracts Administration.

Other direct costs

This category generally includes materials and supplies, publication costs, equipment or facility rental/user fees, animal care costs, patient care costs and human subject incentives.

F&A costs

F&A costs are UMMC expenses that cannot be specifically identified with a particular project or activity. Also known as "indirects" or "overhead," these costs are for buildings, utilities, services of administrative offices, and other expenses necessary for operation of the institution. See UMMC's Fast Facts page for our current F&A rates. If a sponsor has policies regarding F&A rates, budget rates should reflect those policies.

Cost sharing

Cost sharing occurs when an application commits allowable expenses (e.g., personnel, equipment, materials) for which the sponsored program will not be charged. UMMC policy is to not cost share.

Budget justification

The budget justification provides details about how the sponsor's funds will be spent. It also demonstrates the expertise of the personnel, explains the use of supplies and equipment for the scope of work, and assists reviewers in understanding how the costs requested will benefit the project. Budget justification templates can be found on our forms and templates page.