Modular Budgeting: A Case Study in Preparing a Budget for Research Projects

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Preparing a Budget
 
Live Case Study
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 1. R01 Modular Budget
 
1.
Start with an itemized budget (R&R budget component)
2.
Create out-year budgets
3.
Divide 
total budget for all years
 by 
number of years
4.
Request same number of modules each year
*
5.
Consortia total costs are calculated separately and may
be rounded to nearest $1,000
 
 
*
 
exception for equipment
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Direct Costs – Year 
1
 
    
Cal 
 
Req.
  
Fringe
  
Funds
    
Mos
 
Salary
  
Benefits
 
Req.
A. Senior/Key Person
 
PI
   
 2
 
15,333
  
4,293
  
19,626
 
co-investigator
 
 
 
 1
 
      0
  
     0
  
      0
B. Other Personnel
 
Postdoc Assoc
  
12
 
52,704*
 
            
 
14,000
  
66,704
 
Grad Student
  
12
 
24,816*
  
  6,900
  
31,716
 
Grad Student
  
12
 
24,816*
  
  6,900
  
31,716
C. Equipment – Microscope
      
19,000
D. Travel - (2 meetings)
      
  4,000
E. Participant/Trainee
     
usually left blank
F. Other Direct Costs
 
Materials/Supplies
      
25,533
 
Publication Costs
      
  1,500
 
Subaward/Consortium/Contractual costs
    
  none
 
Tuition Remission
      
   7,000
G. Total Direct Costs
     
                
206,795
 
* Based on FY 2020 NRSA stipend levels, 
NOT-OD-20-070
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Calculate the direct costs for the first year.
(in the example, Year 1 budget = $206,795)
Calculate the direct costs for subsequent years taking into
account salary and research cost increases (e.g., 3% per
year) and changes in funds requested for equipment.
Year 1 = $187,795 + $19,000 [equipment]
Year 2 = $193,428
Year 3 = $199,231
Year 4 = $205,208
Year 5 = $211,364
 
Direct Costs - Add it all up
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Calculate the total direct costs for all years
Total direct costs for 5 years = $1,016,026
Divide total by the number of years requested
Average direct costs = $203,205/year
Investigator-initiated R01s up to $250,000/yr must use modular
format*
Except applications from foreign (non-U.S.) institutions
 
Determining  the Need for a Modular
Budget?
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Converting Average Direct Costs to the Modular
Format
 
Round up to the next module (number divisible by
$25,000)
In the example, $203,205/year rounds up to $225,000/year
No yearly increases for inflation
First year may include additional modules for one-time
expenses like equipment
In this example, PI adds one additional module to year 1 =
$250,000
 
 
 
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A. Direct Costs
    
Funds Requested ($)
 
*Direct Cost less Consortium F&A      
 
$250,000
 
  
                           Consortium F&A      
 
$  0
                                    *Total Direct Costs   
 
$250,000
 
B. Indirect Costs      
   
Funds Requested ($)
  
MTDC [less equipment $19K, tuition $7K]
 
$224,000   [DC base]
   
Indirect cost rate [63%]
 
$141,120
 
C. Total Direct and Indirect Costs
 
Funds Requested ($)
    
(A + B)
  
 
 
$365,120
 
Record Modular Budget:
PHS 398 Modular Budget, Period
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A. Direct Costs
    
Funds Requested ($)
 
*Direct Cost less Consortium F&A      
 
$225,000
 
  
                           Consortium F&A      
 
$  0
                                    *Total Direct Costs   
 
$225,000
 
B. Indirect Costs      
  
 
Funds Requested ($)
 
  
MTDC [less tuition]
  
$218,000   [DC base]
   
Indirect cost rate [63%]
 
$137,340
 
C. Total Direct and Indirect Costs
 
Funds Requested ($)
    
(A + B)
   
$355,340
This is the bottom line total of your budget request
 
Record Modular Budget:
PHS 398 Modular Budget, Periods 2-5
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9
 
This requires a consortium agreement
NIH will only make one grant award (parent)
Your Budget will list costs for Consortium/Subaward
Costs (consortium budget)
Your Co-I/Co-PI/MPI will need to prepare a budget for
the consortium to be included in the application
If the grant is awarded the consortium will have a
contractual arrangement with your institution
An application with a Consortium does not automatically
require a Detailed Budget
 
 
What if I have a collaboration with an investigator at
another institution that requires funds?
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2. R01 Budget 
with Consortium Costs
 
Prepare an itemized budget for the parent award
Prepare an itemized budget for consortium/subcontract
costs, including:
Personnel
salary and benefits
    
$33,000
Travel
professional or investigator meeting
  
$  2,000
Other Direct Costs
Materials and Supplies
    
$10,000
    
Total Direct Costs = 
 
$45,000
 
Don’t forget the budget justification
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Consortium Direct Costs = 
   
$42,250
Consortium F&A
 
consortium institution (at 60%) = 
  
$25,350
 
Consortium Total Costs = 
   
$67,600
*
Remember you may round to the nearest $1,000
 
Total Consortium Costs
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Direct Costs – Year 1 
with Consortium
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R01 Grant with Consortium Budget
 
Submit as a modular budget
when requesting Direct Costs at or below
$250,000 per year…
 
… excluding Consortium F&A costs
.
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Modular Grant with Consortium Budget
 
In the example,
Year 1 – Itemized Total DC
    
= $274,295
   
minus Consortium F&A
  
= $  25,350
Year 1 – Itemized DC excluding Consortium F&A
 
= $248,945
 
Year 1 – Itemized DC  = $229,945 + $19,000 [equip]
Year 2 – Itemized DC  = $236,843
Year 3 – Itemized DC  = $243,948
Year 4 – Itemized DC  = $251,266
Year 5 – Itemized DC  = $258,803
 
Average Direct Cost per yr (less consortia F&A) = $247,961
 
Round up to the next module = $250,000
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A. Direct Costs
   
Funds Requested ($)
 
*Direct Cost less Consortium F&A      $250,000
 
  
                           Consortium F&A     $  25,530
                                    *Total Direct Costs     
$275,530
 
The total direct costs requested are allowed to exceed the
modular maximum ($250,000) by the amount of F&A
associated with the subcontract ($25,530).
 
 
Record Modular Budget with Consortium:
PHS 398 Modular Budget, Period 1
undefined
 
A. Direct Costs
 
Funds Requested ($)
 
*Direct Cost less Consortium F&A      
  
$250,000
 
  
                         Consortium F&A     
  
$  25,530
                                    *Total Direct Costs   
  
$275,530
 
B. Indirect Costs
 
Funds Requested ($)
 
Direct costs [less consortium TC: $68,000]
 
$207,530
MTDC [- equip, tuition: + consortium costs
*
]
 
$206,530 [base]
   
Indirect cost rate [63%]
  
$130,114
 
C. Total Direct and Indirect Costs
 
Funds Requested ($)
   
 
(A + B)
   
$405,644
 
* Up to $25,000/
each
 consortium total costs
 
Record Modular Budget:
PHS 398 Modular Budget, Period 1
undefined
 
A. Direct Costs
 
Funds Requested ($)
 
*Direct Cost less Consortium F&A      
  
$250,000
 
  
                           Consortium F&A      
  
$  25,530
                                     *Total Direct Costs   
  
$275,530
 
B. Indirect Costs
 
Funds Requested ($)
 
Direct costs [less consortium TC: $68,000]
 
$207,530
MTDC [- equip, tuition: + consortium costs
*
]
  
$200,530 [base]
   
Indirect cost rate [63%]
  
$126,334
 
C. Total Direct and Indirect Costs
 
Funds Requested ($)
   
 
(A + B)
   
$401,864
 
* Up to $25,000/each consortium total costs
 
Record Modular Budget:
PHS 398 Modular Budget, Period 2
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R01 Budget Reminders
 
All budget requests to NIH for R01 applications use:
the 
modular format
 when requesting direct costs of
$250,000 or less each year
the 
non-modular format
 when requesting direct costs
greater than $250,000 in any year, or if the application is
submitted from a foreign institution
 
When including collaborator(s) at another institution(s)
A modular format budget may be appropriate even with
consortium
Consortium F&A costs are not factored into the modular
direct cost limit
 
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This live case study guides researchers on preparing a budget for their projects using modular budgeting. It includes steps such as creating out-year budgets, calculating direct costs, determining the need for a modular budget, converting average direct costs, and recording the modular budget. The example provided helps in understanding how to efficiently allocate funds for research activities.


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  1. Preparing a Budget Live Case Study

  2. 1. R01 Modular Budget Start with an itemized budget (R&R budget component) Create out-year budgets Divide total budget for all years by number of years Request same number of modules each year* Consortia total costs are calculated separately and may be rounded to nearest $1,000 1. 2. 3. 4. 5. * exception for equipment

  3. Direct Costs Year 1 Cal Mos Req. Salary Fringe Benefits Req. Funds A. Senior/Key Person PI co-investigator B. Other Personnel Postdoc Assoc Grad Student Grad Student C. Equipment Microscope D. Travel - (2 meetings) E. Participant/Trainee F. Other Direct Costs Materials/Supplies Publication Costs Subaward/Consortium/Contractual costs Tuition Remission G. Total Direct Costs 2 1 15,333 0 4,293 0 19,626 0 12 12 12 52,704* 24,816* 24,816* 14,000 6,900 6,900 usually left blank 66,704 31,716 31,716 19,000 4,000 206,795 25,533 1,500 none 7,000 * Based on FY 2020 NRSA stipend levels, NOT-OD-20-070

  4. Direct Costs - Add it all up Calculate the direct costs for the first year. (in the example, Year 1 budget = $206,795) Calculate the direct costs for subsequent years taking into account salary and research cost increases (e.g., 3% per year) and changes in funds requested for equipment. Year 1 = $187,795 + $19,000 [equipment] Year 2 = $193,428 Year 3 = $199,231 Year 4 = $205,208 Year 5 = $211,364

  5. Determining the Need for a Modular Budget? Calculate the total direct costs for all years Total direct costs for 5 years = $1,016,026 Divide total by the number of years requested Average direct costs = $203,205/year Investigator-initiated R01s up to $250,000/yr must use modular format* Except applications from foreign (non-U.S.) institutions

  6. Converting Average Direct Costs to the Modular Format Round up to the next module (number divisible by $25,000) In the example, $203,205/year rounds up to $225,000/year No yearly increases for inflation First year may include additional modules for one-time expenses like equipment In this example, PI adds one additional module to year 1 = $250,000

  7. Record Modular Budget: PHS 398 Modular Budget, Period A. Direct Costs *Direct Cost less Consortium F&A $250,000 Consortium F&A $ 0 *Total Direct Costs Funds Requested ($) $250,000 B. Indirect Costs MTDC [less equipment $19K, tuition $7K] Indirect cost rate [63%] Funds Requested ($) $224,000 [DC base] $141,120 C. Total Direct and Indirect Costs Funds Requested ($) $365,120 (A + B)

  8. Record Modular Budget: PHS 398 Modular Budget, Periods 2-5 A. Direct Costs *Direct Cost less Consortium F&A $225,000 Consortium F&A $ 0 *Total Direct Costs Funds Requested ($) $225,000 B. Indirect Costs Funds Requested ($) $218,000 [DC base] $137,340 MTDC [less tuition] Indirect cost rate [63%] C. Total Direct and Indirect Costs This is the bottom line total of your budget request Funds Requested ($) $355,340 (A + B)

  9. What if I have a collaboration with an investigator at another institution that requires funds? This requires a consortium agreement NIH will only make one grant award (parent) Your Budget will list costs for Consortium/Subaward Costs (consortium budget) Your Co-I/Co-PI/MPI will need to prepare a budget for the consortium to be included in the application If the grant is awarded the consortium will have a contractual arrangement with your institution An application with a Consortium does not automatically require a Detailed Budget 9

  10. 2. R01 Budget with Consortium Costs Prepare an itemized budget for the parent award Prepare an itemized budget for consortium/subcontract costs, including: Personnel salary and benefits Travel professional or investigator meeting Other Direct Costs Materials and Supplies Total Direct Costs = $33,000 $ 2,000 $10,000 $45,000 Don t forget the budget justification

  11. Total Consortium Costs Consortium Direct Costs = Consortium F&A consortium institution (at 60%) = $42,250 $25,350 Consortium Total Costs = *Remember you may round to the nearest $1,000 $67,600

  12. Direct Costs Year 1 with Consortium Should you request a modular budget? 12

  13. R01 Grant with Consortium Budget Submit as a modular budget when requesting Direct Costs at or below $250,000 per year excluding Consortium F&A costs.

  14. Modular Grant with Consortium Budget In the example, Year 1 Itemized Total DC Year 1 Itemized DC excluding Consortium F&A = $274,295 = $ 25,350 = $248,945 minus Consortium F&A Year 1 Itemized DC = $229,945 + $19,000 [equip] Year 2 Itemized DC = $236,843 Year 3 Itemized DC = $243,948 Year 4 Itemized DC = $251,266 Year 5 Itemized DC = $258,803 Average Direct Cost per yr (less consortia F&A) = $247,961 Round up to the next module = $250,000

  15. Record Modular Budget with Consortium: PHS 398 Modular Budget, Period 1 A. Direct Costs *Direct Cost less Consortium F&A $250,000 Consortium F&A $ 25,530 *Total Direct Costs $275,530 Funds Requested ($) The total direct costs requested are allowed to exceed the modular maximum ($250,000) by the amount of F&A associated with the subcontract ($25,530).

  16. Record Modular Budget: PHS 398 Modular Budget, Period 1 A. Direct Costs *Direct Cost less Consortium F&A Consortium F&A *Total Direct Costs Funds Requested ($) $250,000 $ 25,530 $275,530 B. Indirect Costs Direct costs [less consortium TC: $68,000] MTDC [- equip, tuition: + consortium costs*] Indirect cost rate [63%] Funds Requested ($) $207,530 $206,530 [base] $130,114 C. Total Direct and Indirect Costs Funds Requested ($) $405,644 (A + B) * Up to $25,000/each consortium total costs

  17. Record Modular Budget: PHS 398 Modular Budget, Period 2 A. Direct Costs *Direct Cost less Consortium F&A Consortium F&A *Total Direct Costs Funds Requested ($) $250,000 $ 25,530 $275,530 B. Indirect Costs Direct costs [less consortium TC: $68,000] MTDC [- equip, tuition: + consortium costs*] Indirect cost rate [63%] Funds Requested ($) $207,530 $200,530 [base] $126,334 C. Total Direct and Indirect Costs Funds Requested ($) (A + B) $401,864 * Up to $25,000/each consortium total costs

  18. R01 Budget Reminders All budget requests to NIH for R01 applications use: the modular format when requesting direct costs of $250,000 or less each year the non-modular format when requesting direct costs greater than $250,000 in any year, or if the application is submitted from a foreign institution When including collaborator(s) at another institution(s) A modular format budget may be appropriate even with consortium Consortium F&A costs are not factored into the modular direct cost limit

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