Office of Sponsored Programs - 300.05 - Proposal Budget Requirements

Title

Office of Sponsored Programs - 300.05 - Proposal Budget Requirements

Purpose

This operating standard mandates the University’s compliance with the Federal requirements defined in 2 CFR §200 Subpart E - Cost Principles. It emphasizes the University’s use of consistent financial accounting and compliance measures from the beginning to the closing of each research project.

These preventative measures minimize non-compliance issues and audit disallowances that may impede or detrimentally affect the University research community.

Policy Statement

The University is mandated to comply with Federal regulations presented in 2 CFR §200 Subpart E when determining what costs are allowed for inclusion in sponsored research funding. This includes proposal preparation and submission as well as post-award management. It is essential that initial proposals represent realistic budgetary data and justifications for immediate and future years of a project. Also, project costs must comply with the terms and conditions of the proposal/award, the sponsoring agency policies, and University policies to be considered allowable. When planning budgets, the projected costs for any proposal (whether it involves Federal or non-Federal funds) must comply with standards of allowability.

Allowable costs identified directly and solely with a particular sponsored project are classified as Direct Costs. Allowable costs used for common or joint objectives (i.e., shared with other operations) or those that cannot be readily identified as a particular sponsored project cost are classified as Indirect costs or Facilities and Administrative costs (F&A).

A cost is considered unallowable if any one of these conditions apply:

• It is not applied consistently, allocable, or reasonable under the prescribed conditions in 2 CFR 200 Subpart E.
• It is specifically designated as an unallowable cost as defined in the proposal guidelines and award terms and conditions.

F&A and Direct costs are allowable if they are determined to be allocable - meaning they can be assigned to a particular cost objective as a direct cost or an F&A cost, according to applicable guidelines. The Principal Investigator (PI) is responsible for preparing proposed budgets that meet University and sponsor cost principles and ensuring projected costs meet these criteria throughout an awarded project. To assist with budget preparation, the PI may refer to the Office of Sponsored Programs (OSP) operating standards contained in Section 300. Proposal budgets should include all direct costs, F&A costs, and cost-sharing contributions. Written justification is also required to explain each line item and its correlation to the project. If the budget includes cost-sharing or cash matching, the administrative office responsible for funding the contribution must include this information as well.

Exclusions

In conjunction with an initiative by the National Institutes of Health (NIH) regarding modular applications, OSP and the School of Medicine Sponsored Programs Office (SOMSPO) provide standardized modular budget templates to streamline review of NIH modular application and proposal budgets.

Any foreseeable program income (such as fees for laboratory services, the sale of tissue cultures, third-party patient reimbursement, etc.) should be included in budget estimations during the proposal stage. For Public Health Service (PHS) applications, estimation of program income is required at the proposal stage.

Related Requirements

• Research Administration Glossary at Carolina
• 2 CFR 200 Subpart E - Cost Principles

Unit Policies, Standards, & Procedures

• OSP Operating Standard 200.04 - Principal Investigator Responsibilities

Contact Information

For questions regarding this operating standard and its related procedure, please contact SponsoredPrograms@unc.edu.

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant.
OSP Staff assignments may be found in RAMSeS or on the OSP website.

History

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.