Applying for a Grant/Contract
Grant applicants must make every effort to allocate and estimate project
expenses as carefully and consistently as possible. Direct expenses must also be
in accordance with federal cost principles 2 CFR 220, OMB-A21 as well as the
State of MD, USM and Salisbury University policy.
The budget is one of the most vital sections of the project proposal. The key to
preparing a strong budget is to adhere to the guidelines established by the
funding agency and to make sure the budget reflects the activities proposed. URS
will assist in the preparation of all budgets.
The budget section consists of the following sections:
- Fringe Benefits
- Participant Support Costs
- Other Direct Costs
- Materials and Supplies
- Publications Costs/Documentation/Dissemination
- Consultant Services
- Computer Services
- Other Costs
- Facilities and Administrative Costs (F&A/Indirect Costs)
- Total Costs
- SU Institutional Support (Matching Funds and/or Cost
- Budget Narrative or Budget Justification
Includes SU faculty, contractual employees, graduate and undergraduate
students. In general, faculty can receive re-assigned time and/or summer
stipends equivalent to a percentage of their academic salary. Contractual
employees may be hired by the University in accordance with Human Resources
policies. Students can be paid an hourly rate or may be awarded a Graduate
Assistantship (for research or teaching).
2. Fringe Benefits
Fringe benefits are charged as the University provides a percentage of
salaries for all employees to cover such benefits as social security,
unemployment, retirement and health care. Fringe benefit rates may vary; contact
URS for current rate information.
Travel costs should distinguish between International, Domestic, and Local
Travel. For budgeting purposes, the schedule of per diem rates permitted by the
federal agencies may be used to estimate costs. Indicate briefly the purpose and
frequency of expected travel and its applicability to the program. The
University, however, reimburses on an actual expense basis. In addition, some
sponsors may place limitations or restrictions on travel outside the United
States. Be sure to follow sponsor guidelines. Additionally, any foreign travel
to a country on the U.S. State Department Travel Advisory List requires special
approvals. Travel policies and reimbursement information are provided at
Equipment means an article of nonexpendable, tangible
personal property having a useful life of more than one year and
an acquisition cost which equals or exceeds the lesser of the
capitalization level established by the organization for
financial statement purposes, or $5000.
General-purpose office equipment may normally not be purchased
on federal awards. Further, it is necessary to check program
guidelines carefully to be sure special-purpose equipment
purchases are allowable. Itemize capital equipment to be
purchased, providing a description, a written vendor cost
estimate, and justification of need. The cost of a single unit
of equipment should include related charges, such as those for
accessories needed to make it operable, installation fees,
delivery costs, insurance, and taxes, if any. Under 2 CFR, 220,
OMB Circular A-21, where the purchase of equipment or other
capital items is specifically authorized under a sponsored
agreement, the amounts thus authorized for such purchases are
assignable to the sponsored agreement regardless of the use that
may subsequently be made of the equipment or other capital items
Additionally, when submitting a proposal, Principal Investigators should
estimate whether equipment purchases will require renovations, additional power
and the like over the life of the program. Principal Investigators should also
endeavor to identify several vendors who can provide bids for supplying the
equipment. Any proposed charges for equipment maintenance should be based on
charges for maintenance agreements specific to the equipment proposed.
5. Participant Support Costs
Participant support costs are direct costs for items such as stipends or
subsistence allowances, travel allowances and registration fees paid to or on
behalf of participants or trainees (non SU students or staff) in connection with
meetings, conferences, symposia or training projects. Participants may be paid a
stipend, per diem or subsistence allowance, based on the type and duration of
the activity, as outlined in the pertinent program solicitation and in the
6. Other Direct Costs
Following is a partial list of the more common types of Other Direct Costs
that are budgeted. The emphasis is on what information is needed to enable the
Principal Investigator to assemble information for proposing these Other Direct
- Materials and Supplies - This category includes, but is not limited to,
the following items: chemicals, glassware, small electronic components,
computer and printer supplies, and animal purchases. Provide estimated costs
for each category. In proposing these types of supplies, differentiate
between allowable items, such as computer software and supplies, and
general-purpose office supplies in the budget justification.
Costs for general purpose office supplies such as paper, pens, paperclips
and the like are recovered indirectly through SU's F&A rate and are
generally not allowable as a direct charge. The same federal regulations
that restrict administrative and clerical salaries also identify
general-purpose office equipment and supplies as unallowable direct costs.
There is an exception to this rule that allows these items to be proposed in
the relatively rare cases where Major Project status has been conferred on a
program. This categorization allows administrative and clerical salaries as
well as general office supplies to be appropriately charged if such a Major
Project status exception to normal 2 CFR, 220 OMB Circular A-21 principles
meets requirements under exhibit C and the sponsor agrees.
- Publications Costs/Documentation/Dissemination - This category includes
preparation expenses, illustration costs, and page and reprint charges in
- Consultant Services (anyone not employed by SU) - Consultants are
expected to come from outside the proposing institution. Consultants are
paid a Honorarium for performing distinct, short- term tasks such as
evaluation, workshop presentation, or technical advisement.
- Computer Services - An annual fee will be applied to all computer
purchases for service, internet usage, etc.
- Subawards - When SU plans to enter into a subaward with another
organization, the Principal Investigator/Project Director will indicate on
the Internal Routing Form that a subaward is required. A budget and scope of
work must be attached to the proposal along with any additional funder
requirements. URS will review the subrecipient's budget to determine if the
costs proposed are reasonable and realistic for the work being performed.
- Other Costs - May include telephone, postage, subsistence, rental costs
and payments to human subjects. This is not an exhaustive list. There may be
other costs not mentioned above based on project need and allowability.
7. Facilities and Administrative Costs (F&A/Indirect Costs)
The F&A cost category covers all the costs associated with a grant project
which, for reasons of practicality, cannot be directly assigned to specific
grant activities. For example, virtually all projects require the use of
University facilities which must be heated in the winter, cooled in the summer
and lighted at night. It is impossible to determine exactly how much of the
University fuel and utility bills to assign to the grant project based on this
use. Nevertheless, these costs are real. Similarly, all grants require the
preparation of financial reports. It is impractical to divide and assign the
administrative cost of staff time spent on different accounts. Without full F&A
cost recovery, each grant project which Salisbury University conducts costs the
The University's F&A cost rate is determined through negotiation with a
federal "lead agency." This rate should be used for all federal, state and
private foundation grants. The calculated F&A cost rate for Salisbury University
is currently 48 percent of salaries and wages and fringe benefits of the
project. For example, if there is $10,000 in salary and wage costs on a project,
the F&A costs of the project would be $4,800. This should be added to the grant
request. Note: At this time, this is an externally approved federal rate.
Some funding agencies stipulate that F&A costs cannot be recovered as part
of the request for funding or limit F&A cost recovery to a specific percentage.
In these instances the F&A costs, or the unrecoverable portion of these costs,
should be listed as institutional support. Obviously, handling of indirect costs
in this way simply indicates the magnitude of the costs that the University will
incur in conducting the proposed project.
8. Total Costs
Includes total direct plus indirect costs.
9. SU Institutional Support (Matching Funds and/or Cost
Some funding agencies require that the University make a substantial
contribution to the completion of the proposed project. The categories of
institutional support funds are essentially the same as those for the grant
Applicants must keep in mind that, with the single exception of F&A costs, all
institutional support funds devoted to a grant project will have to be taken
from existing, approved University budget lines. Therefore the source of
institutional support funds must be of primary concern to Project Directors.
Determining from which accounts institutional support funds may be drawn is one
of the topics that grant applicants should address in early consultation with
the Chair of their Department and the Dean of their School (or appropriate Vice
Cost share may also come from outside the University from community based
organizations or state agencies, or as revenue generated by enrollment or fees.
It may be calculated as an in-kind contribution or be actual cash dollars
donated to the project. It is the Project Director's responsibility to obtain
documentation indicating off-campus contributions (i.e. letters of support)
which clearly indicate the amount of cost share. All documentation must be in
accordance with 2 CFR, 215, OMB A-110, section 23.
Budget Narrative or Budget Justification
The budget narrative section of the proposal is designed to explain the basis
for calculating the expenses contained on the budget page and the role of the
expenditures in conducting the project.
A budget narrative is mandatory for grant proposals. This is used both as an
internal and external tool for monitoring the project as well as the auditing of
the project. It is a good idea to include a budget narrative in grant proposals,
either as a separate section or an addendum to the budget itself.
This is intended to serve as a guide in preparing your budget. For additional
guidance, please contact University Research Services.