Creating a budget for your research project should, ideally, be one of the first steps as you prepare the grant application. Understanding how much money you need to accomplish the study will help to frame the entire proposal. In addition, if you realize that your needs exceed the amount available from a particular funding agency, you will be able to adjust your application to make it clear that the award will fund only a portion of the entire study, or you’ll have to scale it back.
The information presented here is intended as an outline to get you started as you create a research budget. Details of each project will vary based on the research itself as well as the funding agency’s requirements. Use those factors to guide you toward the final budget for your individual project.
In creating a budget for my project, what are the general cost categories?
- Direct costs are those that can be specifically identified with a particular project or activity. These costs include, but are not limited to, investigator salaries, consultant fees, equipment, supplies, study procedures, study participant recruitment and payments, and travel.
- Indirect costs, which are also known as facilities and administrative (F&A) costs or overhead, cannot be identified with a particular project. Indirect costs include rent, utilities, infrastructure, and, in many cases, administrative personnel. These costs are normally expressed as rates; Pitt’s Office of Research maintains a current list of F&A rates.
What do I need to include in my budget?
The following list represents common research expenditures but should not be considered exhaustive. Refer to the individual funding agency’s budget guidelines to determine exactly what costs may be included. For a guide on estimating the costs for each element, see the following section: How do I estimate my costs?
- Personnel costs include salaries for individuals working directly on the research project. Classifications include senior project individuals, technical staff, administrative and clerical staff, clinical research coordinators, and various types of trainees (postdoctoral fellows, graduate students, research associates). Personnel costs also include fringe benefits for those individuals. Note that administrative and clerical staff costs may need to be reported as F&A; refer to the grant application for details.
- Consultants are defined as noninstitutional employees who are retained over a short duration for their expertise. They are typically paid a fee for a limited term of service and would not receive institutional fringe benefits.
- Equipment is generally defined as an article of nonexpendable, tangible, personal property that has a useful life of more than one year and an acquisition cost of $5,000 or more per unit. Consult the grant application for details on how to report equipment costing less than $5,000. In some cases, it will still fall under “equipment” but can also be classified as “supplies” or “other.”
- Supplies are generally defined as expendable materials required to conduct the research project. Supply costs, which must be project-specific, may include laboratory supplies, laboratory animals, chemicals, and other disposable items. Note that general office supplies are F&A costs and should not be itemized in the application.
- Travel costs are normally itemized on a per-trip basis and include air or ground transportation, meeting registration (if applicable), and per-diem travel expenses like hotel and food. Details of the trip, including destination, purpose, and number of travelers, should be identified. Travel costs are generally limited to those required to conduct the research (e.g., meeting with collaborators) or to present research findings (e.g., attending a scientific meeting).
- Participant costs are those associated with human subjects in a clinical study. These costs are normally divided by type and are assigned on a per-participant basis. Such costs may include advertising for study recruitment; study procedures and evaluations; storage, processing, and shipping of biological samples obtained from participants; and transportation costs, meals, and compensation for participants.
- Indirect (F&A) costs include institutional or infrastructure costs that are typically expressed as a rate based on a pool of direct cost items. The University of Pittsburgh Controller’s Office issues an annual statement confirming the negotiated F&A costs schedule that can be used for budget preparation.
- Cost sharing, which some federal programs require, is typically a contribution by the institution toward total project costs. Remember that cost sharing is a real cost and should not be included in a budget unless mandated by the funding organization.
- Other costs include items that do not fit into another category. Examples include publication costs, page charges, computing charges, rental or lease charges, equipment maintenance contracts, long-distance phone charges, and modest fee-for-service contracts. Indicate that these charges are project-specific.
How do I estimate my costs?
Once you’ve identified the various cost categories for your project, the next step is to calculate what each of those costs will be.
- Personnel costs are normally expressed as salary multiplied by percent effort plus the fringe benefit rate, which will vary by personnel type.
- Consultants are normally paid a per diem maximum rate, according to federal guidelines, or an appropriate fee for a limited service term commensurate with the market or their specialty. Extended-term consultancies may be subject to institutional or sponsor restrictions or could require a classification change to employee status.
- Equipment costs should be provided based on the actual expenses.
- Supplies do not necessarily need to be itemized, but it is best to provide as accurate an estimate as possible. One method to calculate this number is to consult previous grant applications in your field; another more tedious but more accurate method is to identify each of the supplies required for one round of testing in your study. Multiply that figure by the number of testing rounds, and then assign costs to each supply quantity. Note that numbers often will need to be rounded up because, for instance, you cannot purchase a partial box of latex gloves.
- Travel costs and the required details should be made clear in the grant application information. In most cases, the destination, purpose, and number of travelers for each trip should be identified. The economy or lowest available class of air fare must be used; per diem and meal allowance rates follow the federal guidelines for geographic sites. International per diem rates are established by the U.S. Department of State. (Note that not every grant will cover international travel; refer to the individual grant application for details.) If you will use a personal automobile for business travel, costs may be estimated using the University mileage chart. If you will be renting a car, consider using Pitt Motor Pool vehicles; see the table of rates, which include gas and road service.
- Participant costs may include advertising for study recruitment; storage, processing, and shipping of biological samples obtained from participants; and transportation costs, meals, and compensation for participants. Advertising costs will include the design, printing, and mailing of flyers; factors to consider in estimating these costs include such variables as format, quantity, and bulk rate versus first-class postage. If recruitment is aimed at the general population, you may also need to add costs for classified ads or posters as well. Estimated costs for processing biological samples should be available from the facility conducting the analysis. Transportation costs can include parking stickers, bus fare, or cab fare. Decide in advance the methods that will be used to get participants to your location; alternatively, if your staff will travel to the participants, perhaps in home visits, this expense should also be counted in travel costs. Depending on how long participants will be on site, you may need to consider whether snacks or a meal are needed. If your study has a nutritional component, you should discuss this option with a nutrition specialist. Otherwise, determine the cost per person and multiply the cost by the number of participants. Participant compensation is based on several factors, including the duration of the trial (e.g., a simple questionnaire or a 10-year longitudinal study), risk to the participant (e.g., blood draw, tissue collection, drug administration), and payment schedule (e.g., once or several times throughout the study). Once you have determined the compensation per participant during the proposed funding period, multiply the cost by the number of participants to be accrued during that same period. Participant costs can also include basic medical care required for the course of the study. If a participant is insured, these costs are typically billed to an insurance company. For example, if a study will collect information from participants during a routine checkup, the costs associated with the checkup are billed to the insurance company, not the clinical study. Also, be aware that a funding agency may not provide any funds for participant care costs. Consult the application information for details on allowed participant costs.
- Indirect (F&A) costs can be estimated in your budget based on the annual statement from the University controller’s office confirming the negotiated F&A costs schedule.
- Cost sharing, if required, should follow the rate as specified in the grant application.
- Other costs that can be verified as research expenses typically have specific rates associated with them. Some costs like page charges and publication costs should be estimated based on average expenses; other costs like equipment maintenance contracts may be attributed to more than one study. Check the application for details on how the charges should be shared among projects.
If budget negotiations are necessary, who should handle them?
There are times when budget rates must be negotiated between the University and the funding organization. For instance, if the University’s F&A rate is not acceptable to the sponsor, an F&A rate waiver is required. The waiver must be obtained in advance of the grant, and negotiations must take place between the University and the sponsor. The PI and the research staff may not conduct budget negotiations. For information about industry-initiated and -sponsored clinical trials contact the UPMC Clinical Trials Office.
Who oversees research contracts on behalf of the University?
The University of Pittsburgh Office of Research will negotiate terms and conditions of the grant contract, including factors like publication allowances, patent and copyright clauses, confidentiality of shared data, and liability/indemnification. The grant contract is a legal contract between the sponsor and the University; therefore, the Office of Research will take great care in reviewing the terms. Allow time for this process as you plan your start date. Also, remember that if an expense is not included in the contracted budget, the sponsor is not obligated to pay for it. For information about industry-initiated and -sponsored clinical trials contact the UPMC Clinical Trials Office.
What other budget issues should concern me at this point?
More details about how to handle grant funds once they have been awarded can be found in the sections on Preparing for a Study and Conducting a Study. For now, be certain that you have a good relationship with your grants and contracts person as well as your department or project budget manager. These individuals will be critical for distribution and tracking of funds. Accounting for how every dollar is spent is crucial for annual reporting, final reporting, and auditing associated with grant awards. Failure to keep good records can affect future funding.
