Budget Tools and Requirements

Successful proposals included a well thought out budget and a clearly articulated budget narrative (justification) defining the costs associated with the project.  The Budget Development Checklist is a listing of major cost categories to be considered with a series of questions and notes that may be helpful in guiding the process.

  • The budget is the financial presentation of major cost categories specified by the sponsor. These are typically personnel and other than personnel costs for each project year, as well as the cumulative total for the entire project.
    • The budget should be an accurate reflection of the project (statement of work). If there are insufficient funds to support the proposed work, either increase the budget, if allowed, or modify (reduce) the work plan accordingly.
    • Ordinarily all financial requests should be substantiated by use of the OSP budget template to ensure the allowability and completeness of funds requested.  The budget template should be used even if the sponsor does not require a detailed or line-item budget or when establishing an activity-based (milestones) or functional budget organized by tasks.
    •  There are two general strategies used to develop your application’s budget:
      • If the award amount is capped at some level, based on your understanding of your project’s needs, work backwards from the sponsor cap and allocated funds to direct and indirect costs, or
      • Work forward from major types of expense to arrive at total project costs.
    • We recommend you review Preparing Your Budget to establish a solid foundation.
  • Complementing the budget is the budget justification or budget narrative, which describes the need for and reasonableness of costs in supporting project objectives and may present specific information describing how costs were derived (calculations, rates, etc.).
    • The budget justification is the first step in documenting the allowability, allocobility, necessity, reasonableness and consistent treatment of possible award expenditures and serves a number of critical functions.
      • Describes the need for or necessity of major categories of expense.
      • Documents the reasonableness of the budget request, conveys the PI/PD’s judgment as well as the feasibility of project approach in context of resources available and proposed.
      • Serves as documentation for a sponsor’s prior approval of a cost that are ordinarily not allowable as a direct cost.
      • Facilitates OSA ‘pre-audit’ of high-risk expenditure categories following award.
        • The budget justification is the first place reviewed to confirm the allowability, allocobility, necessity, reasonableness and consistent treatment of an item charged to a sponsor, particularly if the justification in the purchase requisition is unclear.