LTU Facilities & Administrative Cost Agreement (9/15/21)
A budget is the estimated cost of the program described in the proposed narrative, description or statement of work. It includes the estimated cost of personnel and fringe benefits, equipment, travel, supplies services and indirect cost of administration for a sponsored project. For federal grants, the allocation and allowance of costs is governed by the Uniform Guidance (2 CFR 200). In contracting, cost allocation and allowability is governed by Federal Acquisition Regulations (48 CFR 31). For all agreements, LTU institutional policy and procedure apply to the process of review, approval and disbursement of funds. Costs must be reasonable, allocable and allowable to be apportioned to a sponsored project.
Cost may be considered reasonable if the nature and amount reflect the decision that a prudent person would make. A reasonable cost is generally recognized as necessary for performance and consistent with LTU policies and practices.
Cost is allocable to a sponsored project if it is necessary to directly support the work under the sponsored project; or benefits both the sponsored project and other work in a proportion using a reasonable allocation method consistently applied to sponsored and non-sponsored funding.
Before planning your budget, carefully read the sponsor’s guidelines for any limitations, requirements for justification or special approval requirements.
Unallowable are costs not related to the project, losses or bad debt transferred from another agreement, alcohol, fines & penalties, entertainment, lobbying, donations, prizes, awards and gifts or any cost deemed unallowable by sponsor restriction.
General budget considerations for sponsored projects are provided here for your reference when developing a budget. For questions specific to a sponsor about budgets or spending, email Research@ltu.edu.
Principal Investigator, co-investigator, multi-investigator and senior/key personnel - Personnel essential to the core work of a project, typically persons responsible for the design, conduct and reporting of the research. Sponsors generally leave to institutions the rules governing who may serve as lead researcher or project director. LTU is responsible for program delivery and compliance oversight upon award. For these reasons, dean and chair approval is necessary to approve project leadership for academic personnel. For non-academic personnel, additional organizational approval may be necessary. Budgets for salary must be commensurate with project effort, sponsor guidelines and LTU policy. It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting.
Academic (fall+spring) effort commitment – Base appointment terms are governed by the letter of appointment for a position. The allocation of salary is based upon the portion of time committed during an appointment term. For federal agreements, salary allocation to the sponsor may not exceed the proportionate share of institutional base salary for the period (2 CFR 200.430(h)(1)(ii)).
Requests for academic-year overload are reviewed by the chair and dean at proposal and award to determine whether appropriate given the scope of proposed work and impact to workload under institutional policy. Requests for course releases are reviewed by the chair and dean at proposal and award to determine impact to course delivery. The expected effort commitment supporting a request for course release is an equivalent percentage of effort for course-delivery.
Summer effort commitment - The allocation of salary is based upon the portion of time committed during a summer term. For federal agreements, salary allocation to the sponsor may not exceed the proportionate share of institutional base salary for the period (2 CFR 200.430(h)(1)(ii)). For National Science Foundation (NSF) proposals, a maximum of two-month’s salary is permitted for all NSF awards paid from during the calendar year
Incidental pay – Incidental projects may occur once or infrequently for a negligible portion of effort. Pay for negligible portions of effort is permitted at less than or equal to the proportionate share of institutional base salary and is not required to be supported by effort confirmation.
Fringe benefits – Benefits covering medical, dental, vision, retirement, and disability are allocated to sponsored agreements based on the pro-rata apportionment of salary. The current rate used for faculty and graduate students is 25.0%. The rate for undergraduate students is 10.0%. Other university personnel is 25%.
Graduate students – Stipend support for graduate students may be budgeted as the prior experienced amount or amount expected to recruit and retain a student with the necessary preparation to support the proposed portion of work in the sponsored project. Graduate fellowships paid by sponsors generally establish amounts payable to the student for a specified period of support at minimum levels. NIH provides a schedule each year that’s a reasonable gauge for stipend levels (linked here for reference). Graduate students may also receive an hourly wage. In this case, reasonably budget the hours. Department of Labor regulations require records supporting hours worked each day for non-exempt workers.
Undergraduate students - Wage support for graduate students may be budgeted as the prior experienced amount or amount expected to recruit and retain a student with the necessary preparation to support the proposed portion of work in the sponsored project. Reasonably budget the hours for students as Department of Labor regulations require records supporting hours worked each day for non-exempt workers. LTU limits apply on the number of hours a student may work during the academic year.
Administrative personnel – Administrative personnel support is considered an operational cost apportioned to Facilities & Administration (indirect cost) for federally funded projects. Costs of administrative personnel as a direct charge may be justified for projects requiring extensive support, e.g., students resident on campus, conference planning/ coordination, production support, extensive record-keeping and reporting. Administrative personnel may only be charged if budgeted and justified in the proposal for a federal project. For non-federal projects, administrative personnel support may be budgeted and charged directly to the sponsored project where full indirect cost is not reimbursed by the sponsor.
Consultants – A general description of the consultant’s work, daily rate and planned number of days supporting the total estimated cost for the consultant is required by most sponsors.
Equipment – Equipment is an item costing $5,000 or more with a service life of more than one year. Use quoted or recent experience pricing including installation, training and inseparable-from-device-costs required to bring to service as the basis for amounts listed in a proposal. Warranties over the period of award may be allocated to the agreement. For special purpose equipment, cost of regular maintenance, repair or calibration may be allocated to a sponsor if it directly benefits and is necessary for the project (allocable and reasonable).
When obtaining a quote, be prepared to:
- inform vendor that LTU is tax-exempt and equipment is for research or educational purpose
- confirm the general requirements
- provide specific requirements for the planned use
- obtain vendor’s delivery terms (cost and time) for the equipment as specified
- obtain the estimated time for production if the item is built or modified
- determine whether other components are required to operate
- determine needs for space, power/hook-up, calibration and training
- ask about on-going maintenance cost
- ask about the warranty and whether it also applies to any modifications
- confirm vendor’s payment terms
This information should be within the written quote provided by the vendor.
Materials and Supplies – Reasonably estimate research material and supply usage or replenishment cost of items if already existing in lab. Costs related to a sponsored project should be allocated. Items required to support the research plan described in the narrative should be generally described to support cost estimates. For contract work and some sponsors, substantial detail may be required. Consult the budget requirements of a solicitation for guidance regarding level of detail the sponsor expects.
Tuition – Support for graduate student tuition is generally allowable for grant-funded research. Where the budget and sponsor guidelines allow, a graduate student should be budgeted for stipend + tuition, apportioned at the effort assigned to the research. Current rates for tuition and fees are provided on the Registrar’s tuition website.
Participant Support – A participant is the recipient of service or training opportunity as part of a workshop, conference, seminar or other activity beneficial to the participant. Participants are not employees, but may be students, scholars, scientists from other institutions, or teachers. Costs may be stipends or living allowances, travel, registration fees, or other support provided directly to or directly assignable to the participant. Costs supporting group activities (facilities rental or group transportation) are not considered participant support.
Subawards – Subrecipients have responsibility for a substantive portion of the planned research effort, with a principal lead partner at another institution. The subrecipient will complete a budget following all requirements of the sponsor and within its own institution, using an appropriate indirect cost rate for the proposed activity and sponsor. Be sure to leave adequate planning time for the review and institutional approval process to conclude at the subrecipient institution. Subrecipients are responsible to adhere to all regulatory and program requirements of the sponsor.
Publication – Provide estimated cost to support publication.
Research Incentives – Amounts paid to research subjects for surveys or other research activity.
Refer to Guidance on Indirect Costs and application of the Facilities and Administrative (F&A) Rate for information on this topic.
Indirect costs are applied using the F&A rate to direct cost under terms of agreement between LTU and the sponsor. For federally funded proposals and federal flow-down from other institutions, the federal negotiated rate must be used applied to a base of Modified Total Direct Cost (defined below). For non-federal funded proposals, the F&A rate and its application to direct costs should be appropriate to support the project’s full cost.
Modified Total Direct Cost
- Total Direct Cost (sum all costs)
- Less (then subtract):
- Participant Support
- Subaward costs above $25,000 for each subrecipient
Kathryn Wrench, MBA, CRA
Sponsored Research and Institutional Grants