Personnel Budget |
New
regulations and interpretations have affected what constitutes
an "employee" at many organizations. A checklist
is now available that allows the Comptroller to determine
whether someone working on a project for the university is
a consultant or an employee. This ruling affects how and what
the university pays people. Please do not assume that because
someone is not going to spend 40 hours a week working on your
project that s/he is automatically a consultant or contract
worker. As personnel are added to your project, please be
sure to discuss all personnel requirements and their roles
with the Director of Academic Research and Sponsored Projects.
The Director will consult with the Comptroller to make sure
consulting fees or wages are estimated correctly. (See Consultant
section.)
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Calculating salaries and wages
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You should distinguish between salaried and wage employees because some personnel receive a yearly salary and some employees are paid by the hour (wages). Normally budgets indicate the difference by expressing the amount of time a salaried employee (exempt status) spends on a project in percent and the time an hourly employee (non-exempt) spends in hours per week or month. Exempt employees' dedicated time to a project should never be expressed in hours on a grant proposal. In most instances, federal agencies (through Circular A-21) require an annual statement from the PD/PI verifying work performed and the percent of time dedicated to the project.
When you know the personnel assigned to the project, use the current salary/wage in calculating budget.
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Example
Professor Excalibur, principal investigator, full-time employee, 50% time on project @ $50,000/9month contract = $25,000 + fringe benefits (21% x $25,000 = $5,250) = $30,250.
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| Summer salaries for full-time faculty: |
Summer
salaries are based upon the University's scheduled rates.
These rates are established every year. Check with the Academic
Research and Sponsored Projects Office for those pertinent
to your school.
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| Non-exempt Employees: |
| Non-exempt (hourly) employee wages are usually calculated on an hours per week or month basis unless the employee will be full-time on the project. For example, if a secretary will dedicate 10% of his/her time for one year to the grant project, the personnel column would reflect the following: |
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James Doe, secretary, 4 hours/week on project @ $7.50/hour = $30.00/week x 52 (or length of project) =$1,560 + fringe benefits @ 21% ($328) = $1,888. |
It is important, therefore, that you be clear about the amount of work that each participant will dedicate to the project.
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Nota bene.Federal dollars cannot be used to pay for more than 100% of a person's salary. This point is critical when current employees are written into grant activities. For example, a secretary may not be paid "extra" to do the work required of him/her on the grant project. Some of the secretary's workload must be reduced to accommodate the work of the grant. The University - not the secretary - then receives the money for the percentage of time the secretary works on the special project. S/he continues to receive regular salary and benefits. The secretary's workload must be shifted or someone else hired to carry out the responsibilities given up to work on the grant project.
If a full-time employee works
on a project and receives compensation through the grant but
does not give up any workload responsibilities, then that
employee must carry out the work of the grant before or after
regular work hours. The Project Director or the supervisor
must submit a separate time sheet of the hours the employee
works on the project in these cases before the employee can
be paid from restricted award budgets. This log becomes a
part of the official file and is subject to federal audit.
Other Office of Management and Budget regulations apply to
grants in a number of categories. The Academic Research and
Sponsored Projects Office Director will help you determine
which, if any, apply to your project.
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| Fringe Benefits |
Organizations like St. Mary's offer the same benefits to all employees, whether all employees use all benefits. Therefore, these costs are "pooled" and expressed as a percent of wages. At St. Mary's, fringe benefits are calculated at 21% of salaries/wages. FORMULA: the salary or wages of an employee for the period of time dedicated to the grant (ex: 12 months) x 21%. Example: Joe Doe makes $25,000/year x .21 = $5,250 in fringe benefits. Part time employees do not receive full benefits so their fringe benefit formula is: salary x 7.65% -- the amount the University uses to figure social security, medicare, and other federal and state tax requirements applicable to part-time employees. Faculty working for part time wages in the summer should also be given 7.65% for summer benefits, not the full time amount of 21%.
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| Raises and/or Cost-of-Living Increases |
If your project will be funded in a new fiscal year or if the project is a multi-year project, you should prepare salary and wage figures to reflect the University's annual percent of increase. Normally, employees receive a 3% cost-of-living or merit increase on June 1 of each year. For example, if your project will begin in August but you are preparing the budget in December, remember to increase the personnel salary lines by 3%. If an employee does not receive the raise/merit increase, then the dollars budgeted will simply go unspent. If a new employee is being hired for the project, you need not figure a merit increase for the first year. Simply budget the amount of starting salary.
The formula for figuring these amounts is:
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Yearly salary ($25,000) x 1.03 = $25,750
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This formula yields the yearly salary or yearly wage increases. Do not include fringe benefits in the yearly salary/wage formula. Fringe benefits are calculated on a separate budget line.
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| Consultants |
Consultants are not consistently treated in federal program budget categories. Sometimes a special line under personnel is provided for consultant fees, sometimes consultants are placed under the "Other" category in non-personnel, or under a separate line "Consultants." Check your budget guidelines in the program you are applying to. There are limits that may be paid to consultants on federal projects. Consultants do not receive benefits.
Except under very unusual circumstances, university employees
may not be listed under the consultant budget line. Only under
certain conditions may a university employee assume the role
of consultant to a university project. Check with the Director
of Academic Research and Sponsored Projects if you have questions
about this category for your project.
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| Non-personnel Budget |
Everything else goes under non-personnel. There may be several other sub-categories of items depending on the program. Usual items are travel, equipment, supplies, telephone, and the ubiquitous "other" category. You should carefully plan your budget to reflect exactly what activities your project will carry out. No items should appear in the budget category that are not accounted for in the narrative of the proposal. A minor exception is routine office supplies. These should be kept reasonable as should telephone expenses. Normally, unless your project calls for long distance communication there is no need to include telephone charges.
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| Travel |
Travel expenses should not be guessed at. The best way to estimate travel by air is to call the airline you expect to use and ask for current fares then add 5%. All federal grants must use U.S. airlines when possible and you must travel coach. Per diem expenses are regulated by the University. The amounts and conditions are on the back of University travel forms. You may not exceed the amounts or conditions established by the University for grant-related travel according to federal regulations.
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| Equipment |
If you include equipment purchases in your project budget, these must be directly related to specific activities and must be carefully rationalized in the budget narrative. The government and most foundations look very closely at computer equipment purchases. You need a convincing argument to include computer hardware or software purchases.
All computer equipment must conform to University minimum standards as established by the Computer Policies Committee. These standards are updated frequently, so you need to be sure that you are in current compliance. If you are requesting computer equipment that is not standard, then you must seek a waiver from the University Computer Committee. This process takes some time and is likely to delay submission of your proposal if you do not receive approval prior to your deadline. Plan ahead.
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Special equipment purchases
Some scientific equipment requires expensive maintenance agreements. Maintenance agreements should, when allowed, be charged to the grant project. You must also get agreement from the University (school, department, or other) to assume the maintenance agreement costs when the grant period expires. Maintenance agreement costs can easily exceed the cost of the piece of equipment over 3 or 4 years, so you must carefully choose equipment that you can afford to live with on a long-term basis.
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Selecting the appropriate piece of equipment for your project can be a time-consuming exercise. You need to allow plenty of time to get prices from vendors and information about reliability, life span, and repair costs from people who use the equipment if you have no direct experience with the specific instrument. The last place you want to discover the bad things about the Dingbat Super Widget is from comments written by a knowledgeable peer reviewer.
Procurements of equipment and supplies through grant awards must adhere to the standards set forth in the "University Purchase Standards" document (available in the Comptroller's office) and for federal awards must also conform to the standards set forth in OMB Circular A-110.
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| Renovation or building costs |
It
is very important to include in your budget any costs that
may be necessary to prepare space for your project. For instance,
if computers must be installed in a room, you must be certain
that the wiring is appropriate and if not plan to get estimates
- time and money -- from Physical Plant for the work that
will need to be done. If you need storage space for supplies
or a new entry or if the space must have special handicap
access, you must request renovation costs in your project
budget. If the foundation or program you are writing for does
not allow renovation or modification costs, you must work
with the Academic Research and Sponsored Projects Office Director
to get University
approval to provide these costs. Do not assume that
the University will be obligated to renovate space if your
project receives funding. The University may not accept
funds for the project when this unknown cost is discovered.
Or you may have to significantly modify your project to work
around the lack of renovation or space modification.
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| Anticipated Cost Increases |
| Cost increases usually apply only to multi-year projects. If you are working on a multi-year project, be sure to |
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Use 3-5% increase to provide an annual cost-of-living or annual raise to all employees on the project,
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Use a 5% increase to cover the cost of inflation for equipment, supplies, or services,
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Check to make sure the fringe benefit percentage will remain the same.
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