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Module 5Module 5

Preparing a Preparing a Proposal BudgetProposal Budget

Proposal Proposal Preparation and Preparation and

SubmissionSubmission

© Copyright UC Regents 2008 - 2009 All Rights Reserved

In this module, we actually prepare a proposal budget with the goal to avoid the scenario depicted in the next slide….

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We don’t want to prepare a budget that undercuts the costs we actually need to perform a project. That’s the purpose of this module – to make sure we are budgeting for the FUTURE, not the present.

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IMPORTANT NOTEIMPORTANT NOTE

• A key purpose of this budget exercise is to explain the concepts and formulas for calculating personnel costs.

• This budget exercise is NOT intended to dictate the manner in which personnel should be appointed, especially the GSRs.

• It is imperative to adhere to the practices of your academic department.

Take a moment to look at the important notes regarding this exercise. Aside from sponsor and university policies and procedures, departmental practices are key to the preparation of the budget.

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IMPORTANT NOTEIMPORTANT NOTE

• The rates shown in this budget are for this budget exercise only. Some rates are current as of August, 2008. Others are not.

• When preparing your budget, ALWAYS check the appropriate sources for the most current rates pertaining to items such as:– Salaries– Mileage reimbursement – Technology Infrastructure Fee (TIF)– GSR fees

You always want to check and double check to make sure you are using the most current sponsor guidelines, salary scales, and rates when preparing your budget.

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IMPORTANT NOTEIMPORTANT NOTE

• Whether you are answering questions in this module or preparing budgets using a spreadsheet, you should round to the nearest whole dollar.

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• Get your calculator!

The following scenario is based on a budget period that begins July 1, 2009

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Academic Salaries (Faculty Summer Ninth)Academic Salaries (Faculty Summer Ninth)

Steven J. LeConte, Principal InvestigatorProfessor V (School of Engineering)Anticipated Advancement to Professor VI,

7/1/09One Summer ninth @ 100% (9 month

appointment)Current Base: $109,000Anticipated Base:$117,600 (07/01/09)

Let’s look at our personnel costs, beginning with the PI, Dr. Steven J. LeConte. He is a professor Step V in the School of Engineering and anticipates advancement to a Professor VI on July 1, 2009. He is a 9-month, Academic Year appointee. He’ll be requesting one Summer month at 100%. His current base salary is $109,000. What is his anticipated based on July 1, 2009? We look at the table to obtain this information.

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Calculating salary for a faculty Summer Calculating salary for a faculty Summer ninth appointmentninth appointment

= ?X 1.00X 1÷ 9 117,600

= totalx % effort× months effort÷ months appointment

7/01/09 base

Current Base: provided by department Anticipated Base: 07/01/09= APO standard salary table

= 07/01/09 base ÷ mo. appt × mo. effort × % effort= $117,600 ÷ 9 × 1 × 1.00 = $13,067

Now we are going to calculate Dr. LeConte’s salary. Remember, his current base has been provided by the department, and you looked at the Academic Personnel Office salary scales to determine his salary effective July 1, 2009. We have what we need to perform our calculation.

Start with the base salary on July 1, 2009 and divide by the number of months in the appointment, then multiply that answer by the months of effort, and finally the level of effort during those months. This will give you the total salary for Dr. LeConte for the budget year.

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Academic Salaries (AcademicAcademic Salaries (Academic--12 month appt.)12 month appt.)Avery Hilgard, (Other Academic)Associate Researcher III (College L&S)Anticipated Advancement to Assoc Rsrch IV, 7/1/0912 months @ 15%Current Base: $76,800 (12 month appt.)Anticipated Base: $81,600 (07/01/09)

$83,600 (10/01/09)

This project has a Co-PI, Dr. Avery Hilgard. He is an Associate Researcher III in the College of Letters and Science. He is anticipated to advance to Associate Researcher 4 on July 1, 2009. Unlike Dr. LeConte, Dr. Hilgard is on a 12-month appointment, with 15% of his salary requested for the proposed project. His current base is $76,800. In the following exercise you will determine what his base will be on July 1, 2009 when he advances to Associate Researcher 4 and on October 1, 2009 when he’s eligible for a range adjustment. We find this information on the table.

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Calculating salaries for 12Calculating salaries for 12--month academic appt.month academic appt.Dr. Hilgard’s current base: provided by departmentAnticipated base:

07/01/09 = APO standard salary tables = 81,60010/01/09 = APO standard salary tables= 83,600

X 3 months(July – Sept.)

81,600

× no. months7/1/09 base

X 9 months (Oct – June)

83,600

× no. months10/01/09

base

+= ?X 0.15

(15% effort during Academic Year)

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= total× % effortmonth

appt.

÷

(((7/1/09 base × mo. effort) + (10/1/09 base × mo. effort)) ÷ mo. appt. × % effort)

= (((81,600 × 3)+ (83,600 × 9)) ÷ 12 × 0.15) = $12,465

Now that you’ve figured out the base salary, lets go ahead and calculate the total salary for the budget period. To do this, begin with the July 1, 2009 base and multiply it by the number of months Dr. Hilgard will be appointed at that base. We do the same for the October 1, 2009 based and add the two numbers together. Next, we divide the sum of those two calculations by the number of months of his appointment, and then again, multiply that by his level of effort. In the next exercise, you’ll be calculating Dr. Hilgard’s total salary for the budget period.

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SalariesSalaries(Staff – 12 Month Appointment)

Anticipated Base (10/01/09):

Current Base: $45,336 (from CHR – mid-range)

Staff Research Associate II (to be named) 12 months per year at 50% effort

Anticipated base

Merit increase

Current base

= 47,149× 1.0445,336

This project includes a Staff Research Associate. This person has not been named, however the PI has indicated that this individual will be appointed for 12 months at 50% effort. The current base is $45,336, which is the midrange salary from CHR salary scales shown here. Keep in mind the starting salary for a to-be-named researcher is largely dependent on the practices and policies of your department. According to guidance provided by OCGA, the merit increase is anticipated at 4% effective October 1, 2009. To obtain the SRA salary base for 10/1/09 we’re going to multiply the current base by 1.04 which shows us that the base will be $47,149 beginning October 1, 2009.

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Calculating salaries for staff Calculating salaries for staff -- 12 month 12 month appointment (Staff Research Associate)appointment (Staff Research Associate)

X 3 months(July –Sept.)

45,336

×months effort

current base

X 9 months(Oct –June)

47,149

× no. months10/01/09

base

= ?X 0.5 (50% effort

12 months appt.

= total

× % effortmonth appt.

= (((current base × mo. effort) +(10/1/07 base × mo. effort)) ÷ mo. appt. × % effort)

= (((45,336 × 3)+ (47,149× 9)) ÷ 12 × 0.5) =$23,348

+ ÷

Now that we know the base salary for our Staff Research Associate on July 2, 2009 and October 1, 2009, let’s calculate the total salary cost for this SRA for the budget period. The formula is similar to one we used for Dr. Hilgard. Take the current base, multiply it by the number of months at that level, added to the October 1, 2009 base times the number of months at THAT level; divide that answer by the months of the appointment and then multiply it by the percent of effort. In the next exercise, you’ll be calculating the SRA’s total salary for the budget period

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Student SalariesStudent Salaries(Graduate Student Researcher)

2 Graduate Student Researcher IVs (one resident, one non-resident)

Academic:8 months @ 49%

October – mid December (2.5 months);January – mid June (5.5 months)

Summer/Inter-quarter:4 months @ 100%

mid June – September (3.5 months);mid December – end December (0.5 months)

This budget has two Graduate Student Researchers – one resident, and one non-resident. Keep in mind, as we’ve been mentioning throughout the course, that when considering Graduate Student Researcher appointments, it is imperative that you follow the practices, policies, procedures of your department. The two GSRs will be appointed during the Academic Year at 49%. In this scenario the Academic Year represents October to mid-December, which is the fall quarter; January to mid-June for the winter and spring quarters. In addition, the students will be appointed 4 months during the Summer/Inter-quarter periods at 100%. The Summer represents mid-June to the end of September and the interquarter represents mid-December to the end of December.

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Student SalariesStudent Salaries(Graduate Student Researcher)

Current Base (monthly): $3,488 (from Grad Div)

Anticipated Base(10/01/09): = current base × 1.05 = $3,662

Lets figure the anticipated base on October 1, 2009 for the students. We start with the current base of $3,488 which is from the Graduate Divisions’standard salary tables pictured here. According to OCGA guidance, Graduate Student Researchers can anticipate a range adjustment on October 1st of each year at 5%. So we are going to multiply the current base of 3,488 by 1.05 to determine the October 1, 2009 base, which is $3,662.

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Calculating Summer/InterCalculating Summer/Inter--quarter quarter salaries for Graduate Student salaries for Graduate Student ResearchersResearchers

X 3 months(summer months)

3,488

× no. months

current base

X 1 mos3,662

× no. months

10/01/09 base

=?X 2GSRs

1.0 (100% effort)

= total× no. students

% effort

+

(((current base × no. months)+(10/01/09 base × no. months))× % effort × no. students)= (((3,488× 3) + (3,662 × 1)) × 1.0 × 2) = $28,252

+

Now that we have determined the two base salaries we can begin calculating our Graduate Student’s salaries. Because this project begins on July 1st, we’ll begin with the Summer/Inter-quarter. To determine the Summer/Inter-quarter salary, start with the current base and multiply that bythe number of months at the base; add that to the number of months at the 10/1/09 base; and finally, multiply all of that by the percent effort and number of students.

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Calculating Academic Year salaries for Calculating Academic Year salaries for Graduate Student ResearchersGraduate Student Researchers

= ?× 2 students× 0.49 (49% effort)

× 8 months3,662

= total× no. students× % effort× no. months10/01/09 base

= 10/01/09 base × no. months × % effort × no. students= 3,662× 8 × 0.49 × 2 =$28,710

We’ve determined the Summer/Inter-quarter salary, lets calculate the Academic Year salary. Because the project starts on July 1st, and the Academic Year appointment starts on October 1st, the entire Academic Year salary will be at a single base, $3,662 as previously determined. We take that base and multiply it by the number of months in the appointment, then by the percent of effort and, finally, by the number of students to determine our salary for the budget period.

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Total Salary and WagesTotal Salary and Wages

105,842Total Salaries & Wages

Academic Year ($28,710)Summer/Inter-quarter ($28,252)

56,962Graduate Students23,348Staff Research Associate

12,465Dr. Hilgard (Co-PI)

13,067Dr. LeConte (PI)

We have now calculated the salaries for all our personnel. Next we need to determine our total salaries and wages by adding all those salaries up, which amounts to $105,842. We are now going to take these salaries and apply them to the calculation of fringe benefits for each of our personnel.

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Calculating Fringe BenefitsCalculating Fringe Benefits

32,256

_____

43,109

23,622

8,634

Graduate Student - non-resident tuition fee remission

Graduate Student - residenttuition remission

Total Fringe Benefits

848x0.03 (3.0%)28,252Graduate Students –Summer/Inter-quarter

373x0.013 (1.3%)28,710Graduate Students – Academic Yr

5,604x0.24 (24%)23,348Staff Research Assoc

2,368x0.19 (19%)12,465Dr. Hilgard (Co-PI)

1,660x0.127 (12.7%)13,067Dr. LeConte (PI)

FB AmountX BenefitRate

SalaryRequest

Employee

Now that we have the fringe benefit amounts, lets add them up to get the total fringe benefits of $43,109

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Total Salary, Wages and BenefitsTotal Salary, Wages and Benefits

Total Salaries, Wages and Benefits

43,109Total Benefits

105,842Total Salaries & Wages

148,951

Finally, we are going to take our total salaries and wages, add them to total benefits, and we’ve determined our first cost category which is total salaries, wages and benefits. We’ve finished one of the most time consuming categories of the budget. Let’s move quickly through some of the other cost categories.

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EquipmentEquipment

• Computer workstation with high level graphics card for modeling of data

• Cost: $5,200

The next cost category we are going to look at is equipment. For this budget we are proposing one computer workstation with a high level graphics card for modeling of data, at a cost is $5,200. Keep in mind that when we are preparing our budget justification we need to thoroughly justify the purchase of the computer as a direct cost item, since with many sponsors, computers are considered general use items which should be covered by F&A costs.

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TravelTravel

Total Travel

1,500

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Conference and/or Sponsor MeetingsPI or designate will attend one conference or sponsor meeting per year to present research results. Costs to include: RT airfare, lodging, local transportation, meals, registration, incidentals

Field Data RetrievalStaff Research Associate will travel throughout the year to field sites to collect data. Cost is for mileage only (approximately 400 miles per year at 58.5 cents per mile)

1,734

Travel for this budget includes both a meeting or conference to present research results and mileage reimbursements for local travel for field data retrieval. Lets first look at the conference. The PI is asking for $1,500.00 for the cost of one conference with one attendee per year to present research results. The anticipated cost includes round trip airfare, lodging, local transportation, meals, registration and other incidental costs. What information is missing here? Whether the travel is foreign or domestic. Next, our Staff Research Associate will travel to field sites in California throughout the year to collect data. It is anticipated that about 400 miles per year is required to perform this retrieval at the cost of 58.5 cents per mile for a total cost of $234.00. When we add this to our conference cost our total travel is $1,734.

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= total×40.75(TIF rate)

×% effort(to get # of months)

Months of appt.

Calculating the Technology Calculating the Technology Infrastructure Fee (TIF)Infrastructure Fee (TIF)

$40.75 per person per month of *sponsor-funded* effort

Lets move on to our TIF calculations To calculate TIF we take the total months of effort, multiplied by the level of effort to get the total number of [sponsor-funded] months, and multiply that by the TIF rate of 40.75 per FTE to determine our total TIF cost. It sounds simple, but in reality we know it can be very confusing..

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Calculating TIFCalculating TIF

1,004.08Total TIF

326.00“8.0 mosGraduate Students –Summer/Inter-quarter

319.48 “7.84 mosGraduate Students –Academic Yr

244.50“6.0 mosStaff Research Assoc.73.35“1.8 mosDr. Hilgard (Co-PI)

40.75“1.0 mosDr. LeConte (PI)

TIF AmountX 40.75# MosEmployee

To make calculating the TIF a little less confusing, we have provided the number of sponsor-funded months for each person’s appointment on the project .We take that and multiply it by the TIF amount of $40.75 to determine our TIF amount.

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SubawardsSubawards

Subawards:• University of Southern California 55,000• UC Santa Barbara 35,000• University of Wisconsin 15,000

Now it’s time to look at subawards. Next to personnel costs, this can be one of the most confusing cost categories that we deal with because of the application of F&A on subawards. We have subawards to USC for $55,000, one to UC Santa Barbara, one of our sister campuses, for $35,000 and one to the University of Wisconsin for $15,000. The next slide shows you how much of these costs are applied to F&A.

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$00 will be exempt from F&A because the $25K threshold has not been met

University of Wisconsin ($15,000 total)

$35,000 will be exempt from F&A  because UCLA assesses no F&A on subs to sister UC campuses

UCSB ($35,000 total)

$30,000 will be exempt from F&A because it is the amount over and above the $25K threshold.

USC ($55,000 total)

Amount ExemptSubaward

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OTHER DIRECT COSTSOTHER DIRECT COSTS

111,904Total Other Direct Costs

3,500Other:SEM usage fees ($35/hour for approx. 100 hrs/yr)

105,000Subawards:•USC (55,000)•UC Santa Barbara (35,000)•U Wisconsin (15,000)

500Publication/Documentation/Dissemination:(Journal page charges, document preparation)

•Expendable research supplies to include: computer supplies and media, glassware, safety items $ 1,000•zip disk for back-up of field data $ 900

1,900Materials and Supplies1,004Technology Infrastructure Fee

Now that we’ve calculated our TIF and talked a little bit about subawards, lets talk about some of our additional other direct costs. For this budget we are anticipating materials and supplies to include expendable research supplies costing $1,000 and a zip disk for back-up of field data at $900.00. We have publication/documentation/dissemination costs at $500.00. This covers journal page charges and documentation preparation costs such as high resolution color photos. We’ve already determined our subawards at $105,000. Our final other direct cost is the scanning electron microscope usage fees . This is an established recharge unit on the campus that charges $35.00 an hour and we anticipate approximately 100 hours of usage for a total of $3,500.

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TOTAL DIRECT COSTSTOTAL DIRECT COSTS

267,789 TOTAL DIRECT COST (TDC)

111,904Other Direct Costs1,734Travel5,200Equipment

148,951Salaries, Wages and Benefits

We have now established all of our direct costs for this budget.

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F&A (INDIRECT) COSTSF&A (INDIRECT) COSTS• UCLA’s federally negotiated F&A rate for

the purpose of this exercise is 54.0% of Modified Total Direct Costs (MTDC)

The next exercise demonstrates how we take those total direct costs we’ve just come up, determine the exclusions, and calculate the modified total direct cost which is the basis of our F&A rate.

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Calculating the MTDCCalculating the MTDC

165,333= Modified Total Direct Cost (MTDC)

0-minus balance after first $25K of University of Wisconsin subaward

35,000-minus UCSB subaward

30,000-minus balance after first $25K of USC subaward

5,200-minus equipment

32,256-minus student fees, tuition and insurance waiver

267,789Total Direct Cost

Our modified total direct calculation is our total direct cost minus our student fees, tuition and insurance waivers, the equipment; the balance after the first 25K of the USC subaward; the total value of the UCSB subaward because UCSB is one of our sister campuses and we don’t charge F&A, minus zero dollars on the University of Wisconsin subaward because Wisconsin has not yet reached the $25,000 threshold on which we charge F&A.

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Total Cost RequestedTotal Cost Requested

Modified Total Direct Cost (MTDC) $165,333

Total Cost Requested = TDC + F&A

89,280F&A = $165,333 × 0.54 (54.0%)

267,789Total Direct Cost (TDC)

357,069

So now we’ve determined our total direct costs, our modified total direct cost, and our F&A by multiplying the modified total direct cost amount by our F&A rate of 54% which is 89,164. We add all that up, and we come up with our total cost requested for this budget period of $356.738

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Congratulations! You did it!Congratulations! You did it!

Congratulations, you just completed a budget!