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Budget Development

Every proposal submitted to a sponsor should include a type of budget outlining the intended use of the funds. Total cost of the project should be made up of direct and indirect costs. Direct costs are those costs directly associated with the project and essential to the completion of the project. For budgets submitted to Federal sponsors, Uniform Guidance (UG) establishes principals for determining costs applicable to grants, contracts, and other agreements with institutions of higher education. See the link for Uniform Guidance below for more information.

Facilities and Administration (F&A) costs, also known as indirect costs, are the expenses incurred for general University operations while conducting a sponsored project. F&A rates are expressed as a percentage of direct costs. The applicable rate used on a sponsored project is determined by several factors, including activity type, on/off campus location, and sponsor requirements. For more information on F&A rates see below.

Budget Considerations

Things to consider when developing your budget:

SALARIES are established by the University. Multiple year budgets should include estimated salary increases. A 1.5-3% increase may be projected unless the sponsor specifies salary inflation rates. Principal Investigators are required to include at least 1% effort on every proposal. All effort expended by a PI and not covered by the sponsor will be charged to a discretionary account as cost sharing.

GRADUATE ASSISTANT STIPENDS are set by the departments.

FRINGE BENEFITS are applicable to all University salaries and wages. The University has negotiated a fringe benefit rate with the Department of Health and Human Services (DHHS). When preparing a sponsored project proposal budget in Coeus, calculations for the sponsor’s contribution to employee fringe benefits should be computed using the fringe benefit rate found on the general budget form.

FACILITIES AND ADMINISTRATIVE COSTS (F&A), also known as Indirect Costs, are the expenses incurred for general University operations while conducting a sponsored project. F&A rates are expressed as a percentage of direct costs.  The University negotiates the rates approved for use with Federal grants, contracts and other agreements with the DHHS acting on behalf of all federal agencies.  Federal F&A costs are calculated based on the project’s Modified Total Direct Costs (MTDC).  Be sure to apply the correct F&A percentage to each JHU fiscal year, as they may change from year to year.

Calculating Modified Total Direct Costs

MTDC = Total Direct Costs minus the following:

  • Equipment
  • Capital expenditures (includes alterations and renovations)
  • Patient Care
  • Student Tuition remission
  • Rental costs of off-site facilities
  • The portion of individual subawards over $25,000
  • Scholarships and Fellowships

F&A rates for non-federal sponsors vary widely. F&A costs for private awards should be calculated on Total Direct Costs (TDC) unless the sponsor has written policies exempting certain line items from F&A.

University F&A Rates for FY2019

Name On Campus Off Campus
Research 63.75% 26%
Instruction 50% 26%
Other Sponsored Activities 29.50% 17%

 

FOR NIH MODULAR APPLICATIONS, the applicant is not required to submit detailed budget information in the application. In lieu of the standard budget forms, the applicant requests total direct costs for each year of support requested. The request must be accompanied by budge narrative for all personnel (by position, title, and level of effort), including consultants and “to be appointed” positions, and, when applicable, for consortium/contractual costs. NIH will request additional budget information in exceptional circumstances only. Other support information will be requested only for modular applications likely to result in an award. An internal, line-item budget must be uploaded into Coeus.

Uniform Guidance describes the 3 different types of activities that may take place on a sponsored award: Organized Research, Instruction & Training or Other Sponsored Activities. Each activity type has its own associated F&A rate.

F&A Rates graphic

Organized Research

Organized Research is described as all research and development activities that are sponsored by Federal and non-Federal agencies and organizations and which are separately budgeted and accounted for. This generally means there is a scope of work, a specific time frame, deliverables (whether technical or financial) that the University is obligated to deliver, and a specific budget and indirect cost recoveries. This term includes activities involving the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities and where such activities are not included in the Instruction function. Research activities include the rigorous inquiry, experiment, or investigation to increase the scholarly understanding of the involved discipline.

Examples of Organized Research include:

  • Awards to JHU faculty to support research activities, such as literature surveys, investigations on efficacy of new vaccines, disease prevention or therapeutics, etc.
  • External funding to maintain facilities or equipment and/or operation of a center facility which will be used for research
  • External support for the writing of books, when the purpose of the writing is to publish research results
  • Research data collection and evaluation, and/or analysis
  • Corporate drug development/clinical trials

Instruction and Training

Sponsored Instruction is defined as teaching and training activities at JHU funded by grants and contracts from Federal or non-Federal sponsors. Sponsored Instruction includes agreements which support curriculum development as well as all types of teaching and training activities, whether offered for credit toward a degree or certificate, on a non-credit basis, through regular academic departments or by separate divisions, summer school or external division.

Examples of Instruction and Training include:

  • Any project for which the purpose is to instruct any student at any location; recipients of his/her instruction may be JHU students or staff
  • Curriculum development projects at any level, including projects, which involve evaluation of curriculum or teaching methods. Note that such evaluation may be considered “research” when the preponderance of activity is data collection, evaluation, and reporting
  • Projects which involve JHU students in community service activities for which they are receiving academic credit
  • Activities funded by awards to departments or schools for the support of students
  • Fellowship support for pre-doctoral and post-doctoral training activities, which may include grants to fund dissertation work and travel in relation to a dissertation
  • General support for the writing of textbooks or reference books, video or software to be used as instructional materials

Other Sponsored Activities

Other Sponsored Activities means programs and projects financed by Federal and non-Federal agencies and organizations which involve the performance of work other than Instruction and Organized Research. Since most projects in this category do not directly involve students and gain little, if any, benefit from libraries, the F&A rate applicable to Other Sponsored Activities is less than the rate for Organized Research or Sponsored Instruction.

Examples of Other Sponsored Activities include:

  • Consultancy projects
  • Social and/or community service, or health services projects
  • Travel grants
  • Support for conferences, seminars or workshops
  • Support for student participation in community service projects which do not result in academic credit
  • Support for projects pertaining to library collections, acquisitions, bibliographies or cataloging
  • Programs to enhance institutional resources, including computer enhancements

Determining On v. Off Campus

In order for a project to be considered off campus, all three of the following qualifications must be met:

  1. The PI will be away from his or her campus facilities (i.e. office and laboratory) for a minimum of three consecutive months; and
  2. The on campus facilities will be made available for use by other faculty and/or students during the employee’s absence; and
  3. The PI will be performing work in accordance with the statement of work of the proposed and funded project while at the off campus location.

These qualifications are a fiscal determination based upon space utilization and it is not simply a definition of where some of the project work is being performed.  If one University employee meets the above standards but the entire project does not, it may be acceptable to split the budget into on and off campus accounts. Contact ORA for a determination.

Off campus rates can only be used relative to the University’s effort expended on a project. Performance of work on project by non-university personnel are handled via a subcontract to another institution, which takes on campus F&A for the first $25,000, or a consulting agreement, which takes full F&A for the entire amount.

Contact

Johns Hopkins University
Research Administration

1101 E. 33rd Street, B001
Baltimore, MD 21218

(443) 997-1922
Email: jhura@jhu.eduSend an email to jhura@jhu.edu

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