Budget Preparation

Salary amounts are determined by the following factors:

• Approved University rate for the individual or an estimated amount for a comparable position if the position will be filled at a later time.
• Amount available on the project based on allowable salary divided by the number of months. The total salary budgeted on the grant/contract may not be paid over a period of time less than that stated in the budget, i.e., at an accelerated rate.
• The beginning and ending dates of the project funding will determine the amounts.
• The regulations from the sponsor may be more restrictive than those of the institution, in which case the more restrictive rules will prevail. Overtime is not allowable on some grants/contracts even though it is allowable under institutional policy.
• Salary caps are mandatory for some agencies.
  • National Institutes of Health follows the federal Executive Level II salary and will only support the following regardless of institutional salary. Learn more.
  • The Executive Level II salary is based on a 1.0 FTE and a 12 month salary.  If you are working with a salary that is less than 1.0 FTE or less than 12 months the cap will need to be adjusted to represent the individual.
  • Salary in excess of the any salary cap must be paid from non-federal and non-sponsored funds.
• Please note: National Institutes of Health defines an Other Significant Contributor as having no salary or effort.

Fringe benefit information can be gathered from departmental administrative staff or the Fringe Benefit Calculator located on the Human Resources webpage.

University regulations apply to all grant or contract travel unless there is a restriction from the sponsor which would provide a lesser amount of reimbursement.  When multiple sources of funding are used by the individual, the normal process requires travel to be funded from the same source as the salary funding the individual.

University regulations apply to all grant or contract food purchases unless there is a restriction from the sponsor which provides a lesser amount. Generally, food purchases are not an allowable expense on grant funds. Exceptions exist, for example, in situations where the purpose of the funding is to provide a training session and lunch is to be provided to the participants. In all cases, the need for such costs must be specifically identified in the proposal and explicitly provided for in the budget. Entertainment expenses are not allowable on grant/contract funding. 

Consultant fees are usually an allowable cost on grant/contract funding. The amount that may be paid to a consultant will be based on University policy and/or sponsor restrictions. The normal situation that occurs involves an outside consultant providing services of a highly specialized nature. The Procurement & Payment Services office has information available to assist in evaluating whether an employer-employee relationship or whether it is an independent consultant.

In situations where a portion of the work required under a grant or contract agreement is to be performed by an entity other than the University, a subaward will be executed. Generally, the use of a subaward will be provided for in the approved proposal and accompanying proposal budget. If a specific entity is identified in the proposal there must be a statement of work, budget and budget justification with an authorized signature, provided to UND prior to proposal submittal. Additional forms and certifications may be required depending on the agency. If the subaward in not named in the proposal, the process of identifying the appropriate subaward may require a competitive selection process when a project is funded. 

The subaward entity should fill out the Collaborating/Consortium Institution Agreement form.

Capital expenditures are usually allowable on grants and contracts; however, special approvals or restrictions are often required by the sponsor. If capital expenditures will be needed, they should be specifically provided for in the approved proposal and the accompanying budget and budget justification. This will minimize the need for additional approvals prior to the purchases. Capital equipment is defined as having a purchase price of $5,000 or greater.

F&A is also often referred to as Indirect Costs and covers those items that can't be specifically identified to an individual project.  It is the policy of the University of North Dakota to recover full indirect costs as defined by the applicable federal negotiated rate agreement.  It is recognized that some sponsors have existing policies that preclude payment of indirect costs or provide only for partial reimbursement. To the extent that the policy of the sponsor has been verified, the University accepts the limitation on indirect cost recovery. In the interest of having current information available regarding these exceptions, Research & Sponsored Program Development requests these sponsors provide a copy of their policy statement regarding payment of indirect cost, the applicable budget guidelines for funding recipients, or other evidence of their existing position on payment of indirect cost.

In dealing with federal funding (direct or flow through), it is possible that the enabling legislation for the program has some restrictions on the payment of indirect cost.

During the conversations with sponsors concerning Indirect Cost, it is important to emphasize our desire to clearly understand their rules and to obtain definitive information for future use in the proposal process and subsequent award administration. In addition, since indirect cost is the reimbursement of real expenses, the verification of sponsor policy is an important step in our process of insuring that indirect costs are recovered to the greatest extent possible.

For those situations where less than the full Indirect Cost is being requested, a waiver must be obtained prior to submittal of the proposal. Waivers are determined on a case by case basis. 

INDIRECT COST RATES

Some examples of expenses the F&A cost covers:

• Human resource administration salaries to help get the project positions hired and paid
• Department or central accounting salaries to pay the bills for the project, network support
• Department and sponsored project administration
• Building and facilities operation and maintenance
• Lights and heat/air conditioning

Items that are normally considered F&A costs:

• Administrative and clerical staff salaries
• Office supplies
• Postage
• Local telephone
• Memberships

The following criteria should be met in order for these costs to be allowed as a direct charge to grants and contracts:

• The costs are specifically identified and requested as part of the original/modified budget or accompanying narrative (for example, salaries or individuals involved can be specifically identified with the project or activity).
• Sufficient justification is included to demonstrate major project or extraordinary service.
• The charges are not specifically disallowed in the resulting award or modification.
• If not included in the current award, subsequent explicit approval from the awarding agency has been received unless the federal agency has issued the award under expanded authority.

Expanded Authority

If a grant or cooperative agreement falls under Expanded Authority, costs normally charged as F&A cost will be allowed if sufficient written justification is included to demonstrate the cost would not be incurred except for the project.