Budget Development

As you begin to develop a budget for your research grant application, you’ll likely encounter questions about how to accurately allocate costs, comply with institutional and sponsor guidelines, and ensure all expenditures are justified. This guide will walk you through the key components of budget development, including personnel, direct and indirect costs, as well as UF-specific policies such as cost-sharing, F&A rates, and CAS exemptions, helping to ensure that your budget is compliant, realistic, and aligned with your project goals.

1. Understand Sponsor Guidelines and UF Policies

Cost Principles
The Uniform Guidance (2 CFR 200) outlines cost principles applicable to federal awards. Per Subpart E, allowable costs must be allowable, allocable, reasonable, necessary, and consistently applied to the performance of the project, with UF’s Cost Principles Policy providing additional guidance.

The University of Florida requires Mandatory Training in Cost Principles (RSH260) for compliance with these standards.

Cost Accounting Standards (CAS)
UF adheres to CAS 48 CFR 9905.501, 9905.502, 9905.505, and 9905.506, ensuring costs are consistently treated as direct or indirect (F&A). If necessary, CAS Exemptions for federal projects can be requested through UFIRST. For non-federal awards, all costs deemed reasonable, allocable, and necessary may be direct-charged.

Refer to UF’s Cost Principles page for more information​​.

2. Key Budget Components

• Personnel: Include salary caps and person-months. NIH assesses personnel effort in “person months,” a key metric for cost justifications​.
  •  Graduate Student Salary & Tuition Cost
• Fringe Benefits: Use institutional rates.
• Equipment: Equipment capitalization threshold is currently $5,000. Justify all equipment in the budget​.
• Travel: Include justification for domestic/international travel. NIH requires specific details about each trip in the justification​.
  If traveling internationally, be mindful of the countries listed in UFIRST 3.0.F. If one of those countries are selected your proposal will automatically be routed for review to export control who may have additional questions. To learn more about OFAC sountry-specific regulations and sanctions, visit Country-Specific Regulations.
• Consultants and Subawards: Use the R&R Subaward Budget form if subawards are included​.
• Other Direct Costs: Detail other relevant project expenses like publication costs, lab services, analysis, etc.,

For more UF specific budget information, visit UF’s Budget Guidance

3. Indirect Costs (IDC)

When budgeting for sponsored projects, it’s essential to account for both direct costs (e.g., salaries, travel, supplies) and F&A costs (also known as Indirect Costs, IDC, overhead, etc.), which cover institutional overhead like administrative support, utilities, and general services. F&A costs are calculated as a percentage of a project’s modified total direct costs (MTDC) and follow UF’s federally negotiated F&A rates.

NIH Reduced IDC Rates:

For specific NIH mechanisms, a reduced 8% IDC rate applies, excluding costs such as tuition and fees, equipment, and subawards in excess of $25,000.

• T-Series (Training Grants): T32, T34, T35, and T90/R90.
• K-Series (Career Development Awards): K12 and KL2.
• F-Series (Fellowships): F30, F31, F31 Diversity, and F32. F33: This senior fellowship generally also uses the 8% rate, though indirect costs are less commonly applicable for more senior, self-sufficient researchers.
• Research Education Programs: R25

In contrast, standard research grants (e.g., R01) use higher IDC rates, such as UF’s 52.5% for on-campus research.

See UF’s rate agreement

IDC Waiver Process:

If a project requires a deviation from UF’s standard negotiated F&A rates, an IDC waiver may be requested. The waiver process involves submitting a request through UFIRST, which must include:

1. Approval from the College Dean or Unit Director.
   To capture this approval, initiate an ad-hoc request and send to 29000000. Include a justification for the waiver based on the nature of the project, its importance, and its benefit to the institution. This justification can be in the form of an attachment, or included in the 3.0 ‘Additional Review Information’ within the ad-hoc request.
2. Once the first ad-hoc is approved, an ad hoc review request must be submitted to the Director of the Division of Sponsored Programs (DSP).

The DSP Director will evaluate the waiver request, considering factors such as the project’s significance and the potential financial impact on the department.
Please note – The approval of the ad-hoc from the College does not guarantee the ad-hoc will be approved by the Division of Sponsored Programs.

For more detailed guidance, refer to UF’s Facilities & Administrative and the F&A waiver procedures.

4. Budget Justification

Justifications must clearly explain personnel, travel, and equipment costs. Ensure all justifications align with sponsor guidelines, including NIH requirements for senior/key personnel effort, salary limitations, and fringe benefits​.

Template budget justifications are available in the COM RA Resources Teams group.

5. NIH Budgeting Resources

• R&R vs. Modular Budgets: The primary difference between modular and detailed (or R&R) budgets lies in the level of detail. Modular budgets are simplified, requiring fewer details, as NIH does not need a categorical breakdown of expenses. These budgets are used for requests under $250,000 per year and are structured in $25,000 increments. In contrast, detailed budgets (R&R Budget Form) are required for requests exceeding $250,000 annually and must include a full breakdown of costs, such as personnel, equipment, travel, and indirect costs. Both types serve different funding levels but aim to ensure compliance with NIH guidelines.
• Person Months: Accurately report personnel effort in person months, and ensure it aligns with project goals​.
• Data Management and Sharing (DMS) costs Requirement: You must provide detailed DMS cost justifications within the “Budget Justification” section of the R&R Budget Form or the “Additional Narrative Justification” in the PHS 398 Modular Budget Form​. Details to Include: In the budget justification, specify estimated costs related to data curation, storage, and sharing activities, and link these costs directly to the research objectives. This justification must be labeled as “Data Management and Sharing Justification” within the budget justification attachment, followed by the estimated dollar amount. Investigators must also include a justification of the activities proposed in the DMS Plan that will incur costs.
• NIH Grants & Funding – Develop Your Budget: This page provides a comprehensive guide to NIH budget requirements, including budget justifications, types of costs (e.g., direct, indirect), and guidance for specific funding mechanisms.
• NIH SF424 (R&R) Application Guide: Detailed instructions on preparing your budget using the R&R Budget Form and PHS 398 Modular Budget Form, as well as specific requirements for various NIH mechanisms.
• NIH Grants Policy Statement: This document outlines NIH policies and requirements for budgeting and financial management for grants. It includes detailed explanations of allowable costs, budget categories, and cost principles.
• Salary Caps, Stipends, and Training Grant Guidelines: The page provides details on current salary caps, stipend levels, and allowable uses of training funds for fellowship and training grants.
• Salary Cap Summary (FY 1990 – Present): The website provides a summary of salary caps for NIH grants, listing the salary limitations from FY 1990 to the present.

6. UF-Specific Guidelines and Policies

Utilize UF’s Division of Sponsored Programs for developing compliant budgets and aligning templates with institutional policies​.

Institutional Cost Sharing Policy – The University of Florida’s Cost Sharing Policy mandates that only required cost sharing is offered to sponsors, with voluntary committed cost sharing permitted under certain circumstances, and all contributions must comply with federal regulations and be properly documented.

F&A Rate Exceptions and Waiver Process – The exceptions section outlines specific F&A rates accepted by the University of Florida for certain sponsors without requiring additional documentation, along with guidance on when and how to request waivers for non-standard rates.

Revised Budgets in UFIRST

Budget revisions in UFIRST must be routed through DSP for approval under the following conditions:

• Changes to the budget exceed 5% or $10,000 (whichever is less) from the unit-approved total proposal budget, or variances between the UFIRST SmartForms and submission documents exceed 5% or $10,000 (whichever is less)
• Addition of cost-sharing
• Changes to the level of effort (paid or unpaid) for any UF key person
• Re-categorization of a third party’s involvement from subrecipient to vendor or vice versa
• Shifts between categories that affect the Facilities and Administrative (F&A) budget (e.g., moving from a category that does not incur F&A to one that does, or vice versa)

Note: If the budget changes by 15% or more or if cost-sharing is added, College approval must be re-captured through an ad hoc request.

Changes to the F&A rate or F&A base also require routing unless the change does not affect the calculated F&A costs.

Changes that Do Not Require Routing Through DSP:

• Budget changes that result in a total proposal budget change of less than 5% or $10,000 (whichever is less)
• Variances between UFIRST and submission documents, as long as there are no major changes as described above

*Note* Even if the changes do not require re-routing, they must still be reviewed by your research administrator before submission to the sponsor.