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
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
A facilities and administrative cost may be budgeted as a direct cost only when special circumstances exist that would necessitate or require treating the cost as a direct cost. In such a case, the budget justification must explain the special circumstances and the Principal Investigator and department are responsible for maintaining and retaining all appropriate documation that evidence such special circumstances.
Cost Estimation
Use generally accepted cost estimation methods such as catalog prices, price quotations, or historical or current costs and appropriately escalate costs over time.
Escalation Factors
Use inflationary or escalation factors as appropriate.
- The current escalation rate for non-personnel cost categories is 3% (excluding vivaria sales and service rates). Effective November 1, 2012, please use a 10% annual escalation rate for vivaria sales and services.
- Personnel costs should be escalated in accordance with guidance provided on the Quick Reference 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 proposal budget categories, use UCR's financial system budget categories, unless a sponsor's proposal budget form or policies require more detailed categorization.
As appropriate, describe the details of the costs proposed within each major cost category. Use general descriptions that can be tracked and reported through UCR's financial system. 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