Budget examples

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12-Month Salary

Example:

Dennis Connolly is a full-time employee with a 12-month appointment and an institutional base salary of $100,000/yr. Dennis plans to spend two months working on Project X during the year. What is Dennis’ full time equivalent (FTE), percent of effort, and salary?

Solution:

2 months effort ÷ 12 x 100 = 16.7% of effort
16.7% effort x $100,000 = $16,700 Proposed Salary

9-Month Salary

Example 1:

Bob LeRoy is a full time employee with a 9 month appointment who makes $80,000/yr. Bob plans to devote two months work during the school year on Project X. What is Bob’s full time equivalent (FTE), percent of effort and salary?

Solution:

2 months effort ÷ 9 x 100 = 22.2% of effort
22.2% effort x $80,000 = $17,760 Proposed Salary

Example 2:

Frank Martin is a half time employee with a 9 month appointment who makes $45,000/yr. Frank plans to devote 100% of his time for two months during the school year on Project X. What is Frank’s FTE, percent of effort and salary?

Solution:

2 months effort ÷ 9 x 100 = 22.2% of effort
22.2% effort x $45,000 = $9,990 Proposed Salary

Summer Salary

Example:

Mike Mitchell is a full time employee with a 9 month appointment that makes $60,000/yr. He plans to have two months effort during the summer months on Project X. What is Mike’s FTE, percent of effort and salary?

Solution:

Step 1: 2 months effort ÷ 3 * 100 = 66.7% of effort

Step 2: $60,000 ÷ 9 months * 3 months = $20,000 Summer Salary

Step 3: 66.7% of effort * $20,000 = $13, 340 Proposed Summer Salary

Escalation

Example 1:

Dr. Dave Cunningham is being proposed on an NIH grant. Dave has an Institutional Base Salary of $100,000/year. The current date is February 2nd and the proposed start date of the grant is October 1st of the same year. What salary would you propose for Dave in year 1 of the grant?

Solution:

(Institutional Base Salary) $100,000 x (Escalation rate) 1.03 = $103,000 Escalated Base Salary

Example 2:

Dr. Andy Dougherty is a qualified UNC PI who is submitting a five year proposal to NSF. Andy’s base salary is $150,000/yr and he has a research assistant that makes $50,000/yr. Per the Office of Sponsored Research, NSF has approved 3% increases in salary on similar proposals in the past. What is the escalated annual salary for Andy and the research assistant in each of the five years?

Solution:

Year Dr. Andy Research Assistant
1 $150,000 $50,000
2 $154,500 $51,500
3 $159,135 $53,045
4 $163,909 $54,636
5 $168,826 $56,275

Fringe Benefits

Example 1:

Daron Jones requested salary is $15,000. Daron is a full time employee with a 12 month appointment. How much should be proposed for Daron’s fringe dollars?

Solution:

$15,000 x (Fringe Benefit rate for FT EPA/SPA) 19% = $2,850 Fringe Dollars

Example 2:

Chris Miller is a full time employee with a 9 month proposed salary of $60,030 and $9,990 proposed salary for the summer months. What is Chris’ fringe benefit amount?

Solution:

($60,030 + $9,990) x (Fringe Benefit rate for FT EPA/SPA) 19% = $13,304 Fringe Dollars

Example 3:

Shelly Mackey is a Post Doc that makes $25,000 per year. What is Shelly’s fringe benefit amount?

Solution:

$25,000 x (Fringe Benefit rate for Post Docs) 7.65% = $1,913 Fringe Dollars

Example 4:

Tora Mills is a grad student with a 6 hour class load during the school year and makes $15,000 per year. Tora is being proposed on an NSF project during the school year. What is Tora’s fringe amount?

Solution:

There is no fringe because Tora’s class load is greater than 3 hours.

Example 5:

Saul Hernandez is proposed as a PI on an NIH proposal. Saul is a part time EPA employee that makes $24,000 per year. What is Saul’s fringe amount?

Solution:

Since Saul is a part time employee, in order to be proposed as a PI, he would need an exception letter signed by his dean. $24,000 x (Fringe Benefit rate for PT employees) 7.65% = $1,836

Health Insurance

Example 1:

Lola Eubanks is a full time SPA employee with 25% effort. What is Lola’s proposed health insurance cost in year one?

Solution:

25% effort x (Annual Insurance Premium for FT permanent employee) $3,432 = $858 Health Insurance Cost

Example 2:

Shelton Irvin is a full time employee with a 9 month appointment. Shelton is proposed at 66.7% effort for the academic year and 50% effort for the summer. What is Shelton’s health insurance cost?

Solution:

(9 month effort) 66.7% x (Annual Insurance Premium for FT permanent employee) $3,432 = $2,289 Health Insurance Cost

Example 3:

Raj Yetsmar is a Post Doc proposed at 50% effort. What is Raj’s health insurance cost?

Solution:

50% effort x (Annual Insurance Premium for Post Doc) $1,659 = $830 Health Insurance Cost

Example 4:

Lawrence O’Brien is a graduate student proposed at 90% effort. What is Lawrence’s health insurance cost?

Solution:

First, determine if Lawrence is an eligible graduate student (see DDD memo dated 6/1/04). If Lawrence is eligible then 90% effort x (Annual Insurance Premium for Grad Student) $1,302 = $1,172 Health Insurance Cost

Example 5:

Dina Hall is a half time employee with 75% effort. What is Dina’s health insurance cost?

Solution:

Zero. Since Dina is a half time employee, she must be employed greater than 75% to receive health insurance.

Physicians & Associates Supplement

Example 1:

Dr. Roland Regimen is a full time MD with the School of Medicine earning $100,000 per year. He is proposed to work 25% effort on the proposal. What is Dr. Kreizman’s P&A Supplement?

Solution:

First, verify Dr. Kreizman is eligible to receive P&A supplement. If he is, 25% effort x (Institutional Base Salary) $100,000 x (P&A Fringe rate) 5.5% = $1,375 P&A Fringe Supplement PLUS 25% effort x (P&A Health Insurance) $1,800 = $450 P&A Health Insurance Supplement

Example 2:

Keith Morris is a full time employee at the School of Medicine making $60,000 per year. He is proposed to work 50% effort on the proposal. What is Keith’s P&A Supplement?

Solution:

None since Keith is not a physician and therefore cannot receive P&A supplemental benefits.

Equipment

Example:

Dr. Emily Milheiser is creating a research facility in support of a DOE grant. Emily has a list of the following items to be procured:

Item Amount
Harris Z8HDC transmitter $59,000
Harris ZHD Exciter Rack Assembly $3,000
Harris RF transmission line $1,000
Dell PC $4,000
Dell 19 inch Flat Screen Monitor $1,000
Dell Printer $500

Which items qualify as equipment?

Solution:

Item Amount
Harris Z8HDC transmitter $59,000
Harris ZHD Exciter Rack Assembly $3,000
Harris RF transmission line $1,000

Travel

Example:

Dr. Berna Handler proposes to travel to Australia with her research assistant for a six-day conference in support of an NIH grant. Roundtrip airfare is $2,000 per person. They will need a car while in the country at a rate of $50 per day. Lodging is $150 per night and per diem is $40 per day. There is a $500 registration fee for Berna while the fee is waived for the assistant. What needs to be considered when estimating travel costs? What is the proposed cost of the trip?

Solution:

The following criteria should be considered when estimating travel for this proposal:

  • Carefully read sponsor guidelines for special travel requirements
  • Since this is a Federal grant, the ‘Fly American’ rule applies
  • Compare the UNC-CH travel allowances, GSA rates and State Department International per diems and select best costing method
Destination Persons Registration Per Diem Airfare Car Rental Nights Trip cost Trips Total Costs
Australia 1 $500 $190 $2,000 $50 6 $3,940 1 $3,940
Australia 1 waived $190 $2,000 n/a 6 $3,140 1 $3,140

Subcontracts

Example 1:

Dr. Albert Costco is working on a proposal to the DOE. Albert has a subcontract to Duke in the amount of $1,000,000. Duke is subcontracting to NCSU for $500,000 of which NCSU is subcontracting $200,000 to Alamance Community College. How much subcontract dollars does Albert propose under the subcontracts line in his proposal?

Solution:

$1,000,000 for Duke

Example 2:

Dr. Evan Tillman is submitting a proposal to NSF. Harvard is a part of the collaborative research team on the proposal for a total amount of $300,000. How much does Evan include in the proposal for subcontracts?

Solution:

Zero. According to NSF Proposal Guidelines (GPG), collaborative researchers on the same project submit their proposals directly to the NSF; they are not subcontractors.

Consultants

Example 1:

The Business School is hiring Travis Hollister to conduct a five-day training session. Travis will also need five days to prepare for the session. A review of Travis’ salary history shows that he is paid $350 per day for conducting training. How should the consultants costs be recorded in the proposal?

Solution:

10 days x $350 = $3,500 Consulting Expense

Example 2:

The School of Education plans to hire Clarence Sheaffer to perform a project evaluation at project sites located in Wilmington and Asheville. Over the course of six months Clarence will gather, review and analyze the data and write the report. The School of Education and Clarence agreed to a cost of $5,000 for receipt and acceptance of the report. In addition, Clarence will be reimbursed for travel in accordance with University travel policies. What is the budgeted amount for consulting Costs

Solution:

Clarence should be budget for $5,000.

Example 3:

Dr. Hongyu Duan requires Simone Herring to work on his HIV research project. Hongyu wants Simone to come to UNC-CH and work in her lab under her direction for one year. Simone rate is $4,000 per week and since she lives in the area, there are no travel costs. What are the proposed consultant costs for Simone?

Solution:

None because under this scenario, Simone should be paid as an employee of UNC-CH based on the Internal Revenue Service Guidelines.

Example 4:

Dr. Marion Markham requires the world renowned scientist Dr. Lee Samulski to consult on his mouse cloning project for Pharmacology Inc. Marion requires Lee’s services for one week starting bright and early Monday morning and ending at 5 p.m. on Friday. Lee will fly from Florida on Sunday night, rent a car for the week and stay in a hotel. Lee charges $1,600/day plus travel time and travel expenses. Airfare is $200 roundtrip, car rental $200 per week, per diem $40 per day. What should the consultant costs include?

Solution:

Labor

Item Amount
5 days x $1,600 $8,000
.50 days (4 hours travel time) x $1,600 $800
Total Labor $8,800

Travel

Item Amount
Airfare (roundtrip) $200
Lodging (5 nights x $100) $500
Car Rental $200
Per diem ($40 x 6 days) $240
Total Travel $1,140

Total

Total Proposal Consultant Cost $9,940

Example 5:

Dr. Maggie MacPherson works in the UNC-CH School of Public Health. She needs six weeks of consulting services from Dr. Wivi Ward from the UNC-CH School of Medicine on her Hepatitis study. Wivi makes $150,000 per year. What are the proposed consultant costs for Wivi?

Solution:

Since Wivi is a UNC-CH employee there are no consultant costs. Wivi should be proposed as a normal UNC-CH employee with all of the associated fringe benefit costs. UNC-CH employees can perform a consulting function on any UNC-CH project, however, they remain UNC-CH employees, not consultants.

Other Direct Costs

Example 1:

Dr. Felix Lowery is submitting an American Heart Association grant application that will require him to perform a number of tests on human hearts. Supplies need include: 10 human hearts at $100 per heart, 6,000 test tubes at $1 each, one heart refrigerator priced at $6,500, 10 boxes of petri dishes at $100 per box. What is the total proposed cost of Felix’s materials and supplies?

Solution:

The refrigerator is not included because it is over $5,000 and should be budgeted under Equipment costs.

Item Amount
100 mice x $10 $1,000
6000 test tubes x $1 $6,000
10 boxes of petri dishes x $100 $1,000
Total Material and Supplies $8,000

Example 2:

Jacob Simpson is a graduate student in the School of Medicine proposed for 25% effort on an NIH grant. What is the tuition remission cost for Jacob?

Solution:

25% effort x (Tuition Rate for School of Medicine) $3,164 = $791 Tuition Remission Cost

Facilities and Administrative Costs

Example 1:

Eric Haverly is establishing a lab in support of a NSF grant with 45% F&A. Eric has proposed the following items.

Item Amount
Mass Spectrometer $10,000
Cables for Mass Spectrometer $3,000
Miscellaneous cables $1,000
Wave Guide Analyzer $4,000

What is the proposed cost for equipment, materials and supplies, and F&A?

Solution:

Equipment Mass Spectrometer $10,000
  Cables for Mass Spectrometer $3,000
  Subtotal $13,000
Materials & Supplies (M&S) Miscellaneous Cables $1,000
  Wave Guide Analyzer $4,000
  Subtotal $5,000
  46% F&A x $5,000 M&S $2,300
  Total M&S and F&A $7,300
  Total Equipment, M&S and F&A $20,300

Example 2:

Dr. Samuel Coleman is a PI preparing a $500,000 proposal for a biology project to be preformed on UNC-CH campus and in Washington State at Thursday Harbor. There is a subcontract with the University of Washington in the amount of $200,000. The balance of the project ($300,000) is comprised of UNC-CH personnel costs. Sixty percent of the UNC-CH personnel will be completed on the UNC-CH campus and forty percent will be performed in the field. How should Samuel propose this project, on or off campus?

Solution:

The project should be proposed as an on campus because the majority >50% of the UNC-CH effort is being performed on UNC-CH campus.

Example 3:

Dr. Tanesha Frederic is a UNC-CH PI preparing a $100,000 proposal for the Durham Housing Authority that is being performed on UNC-CH campus and in east Durham. There is a subcontract with Duke in the amount of $80,000. The balance of the project ($20,000) is comprised of UNC-CH PI’s personnel cost. One hundred percent of the UNC-CH personnel ($20,000) will be completed on the UNC-CH campus. How should Tanesha propose this budget, on or off campus?

Solution:

Once again, this project should be proposed as an on campus because the majority >50% of the UNC-CH effort is being performed on UNC-CH campus. It doesn’t matter if 80% of the project is being performed off campus. The determining criteria is where the majority of the UNC-CH effort is being performed.

Example 4:

Ellen Parker is establishing a computer lab in support of a DOE grant with 46% F&A. Ellen has a $500,000 subcontract with Duke. Additional costs include $3,164 in tuition remission and the items listed below.

Item Amount
Hewlett Packard 3.0GHZ PC $6,000
HP 19″ Flat Screen Monitor $1,000
HP Laser Printer $3,500

What is the proposed cost for subcontracts, materials and supplies, equipment and F&A?

Solution:

Subcontracts Duke $500,000
Equipment Hewlett Packard 3.0GHZ PC $6,000
M & S HP 19″ Monitor $1,000  
  HP Laser Printer $3,500  
  M & S Subtotal $4,500
Tuition   $3,164
Total Direct Costs $513,664
Modified Total Direct Costs calculation $29,500  
F & A ($29,500 x 46%) $13,570
  Total Proposed Amount $524,070
Modified Total Direct Costs F & A Calculation
Total Direct Costs $513,664
Minus Exclusions:  
Equipment ($6,000)
Tuition ($3,164)
Subcontracts ($500,000)
Add back 1st $25K Subcontracts $25,000
Modified Total Direct Costs $29,500

Simple Budget

Example:

Dr. Richard Bartels is an employee with a 12 month appointment being proposed as a PI working 50% of the time on an NIH grant. Richard makes $120,000 per year. In addition, Paul Levy is an employee with a 9 month appointment being proposed as the co-PI at 33.4% effort during the academic year and one month during the summer. Paul makes $90,000 per year. A full time graduate student is proposed at 100% effort and will make $24,000 per year as well as receive $3,164 in tuition.

Richard has a subcontract with the university of San Francisco in the amount of $100,000. Richard will travel to San Francisco for two 3-day conferences. Roundtrip airfare is $800 each trip; lodging is $150/night; car rental is $50.75/day and per diem is $32.50/day. The following costs are to be included in the budget:

Consultant (4 weeks effort with annual salary of $130,000)
Test tubes $1,000
Gene Analyzer $40,000
Cables $500
Communication $600
Rabbit food $500
Printer $1,000
Mass Spectrometer $20,000
Printing $200
Computer $4,000
Monitor $1,000

What is the proposed budget for Richard’s project?

Solution:

Personnel Type of Appt % Effort Annual Salary Proposed Salary Fringe Health Ins Proposed Amount
PI 12mth 50% $120,000 $60,000 $11,400 $1,716 $73,116
Co PI 9mth 33.4% $90,000 $30,087 $5,717 $1,147 $36,951
Co PI 3mth 33.4% $30,000 $10,020 $1,904 n/a $11,924
Grad Student   100% $24,000 $24,000 n/a $1,302 $25,302
Total Salary & Fringe $147,293
Equipment $60,000
Travel $3,000
M & S $8,000
Consultant $10,000
Other:  
Communication $600
Tuition $3,164
Printing $200
Total Direct Cost $332,257
Calculation for Modified Total Direct Cost (MTDC)
Total Direct Costs $332,257
Minus Exclusions:
Equipment ($60,000)
Subcontracts ($100,000)
Tuition ($3,164)
Add back $25K of Subcontract $25,000
Modified Total Direct Costs $194,093
Total F&A $194,093 (MTDC) x 46% (F&A rate) $89,283
Total Proposed Amount $421,539