Budget Preparation 2017-04-03T09:09:36+00:00

Budget Preparation

Salaries and Wages

Include all salaries and wages of personnel who will be spending full or part time on the project. For key personnel, provide the name, title, amount of time on the project, rate of pay, and the total amount to be paid to each individual under the gift annually. Salaries of employees should be expressed in terms of a percentage of total effort, rather than as hourly or daily rates. If clerical or administrative salaries are requested, they should be carefully justified in the budget narrative.

Fringe Benefits

Include Fringe Benefits for all salaries and wages. A copy of the rate agreement can be obtained through the Department of Contracts and Grants.

Materials and Supplies

These include consumable supplies such as office supplies, glassware, chemicals, computer supplies, etc. These may be listed under one general heading with an explanation of the types of items to be purchased. If the cost is substantial, the breakdown should be more detailed. Include general office supplies in this category.

Equipment

Equipment is defined as an item of property that has an acquisition cost of $5000 or more and has an expected service life of two or more years. Items of equipment should be listed individually by description and estimated cost, including tax, and should be adequately justified. If funds for “general purpose” equipment, such as fax machines or photocopiers, are requested, the justification should be particularly thorough. Because equipment is an expense that some sponsors are reluctant to fund, any pertinent foundation guidelines should be reviewed and observed.

Travel

This section usually details each trip, and should include your destination and purpose for travel.

Communications

This category usually includes telephone, courier, fax, postage, etc. costs associated with the project if expenses for these items will be unusually great. If, for instance, the project includes mass mailings or telephone survey work, the costs are appropriate.

Printing

A line item should be included if printing expenses exceed $250. If not, include expenses in materials and supplies category. If printing costs are in excess of $250, explain purpose and include detail in budget justification. An example might be the preparation and printing of a brochure.

Contractual Costs

This category should contain any contractual agreements to be entered into by the Keck School of Medicine, under which non-University employees or entities will be paid for contributions to the project as either consultants or subcontractors. The daily rate should not exceed the rate that the consultant customarily receives for similar work.

When funding for subcontracts is requested, a subcontract proposal, including an appropriate budget signed by the authorized subcontractor official, should be included in the proposal.

Other Direct Costs

Miscellaneous items that do not fit into any other category are entered as other direct costs. Examples might be payments to subjects, animal maintenance costs, and repair and maintenance contracts. Itemize these costs by unit and category.

Indirect Costs

Indirect costs are those costs incurred in the general support and management of the proposed activities which cannot be readily determined by direct measurement. They may include:

general administration, including such functions as accounting, personnel, payroll and other administrative functions
research administration
department administration
plant operation and maintenance, including utilities, janitorial services, routine maintenance and repairs
depreciation and use allowance
libraries

Indirect costs are usually expressed as a percentage of Modified Total Direct Costs (MTDC). MTDC are total direct costs excluding the costs of equipment, patient care, tuition and fees, and that portion of each subcontract exceeding $25,000. A copy of the agreement can be obtained at the Department of Contracts and Grants.
A few foundations pay indirect costs and have established maximum rates. Most foundations prohibit indirect costs. Check guidelines carefully.

If the foundation allows indirect costs, include this line item in your budget at the rate published by the foundation.
If the foundation has no written policy, contact the Office of Foundation Relations for assistance (323) 442-2356.

If the foundation refuses to pay indirect costs, you must contact the Office of Foundation Relations for assistance (323) 442-2356.

Cost Sharing

Cost sharing is the process by which the total costs of a project are shared by the foundation and the performing institution. Formal cost sharing obligates the University to provide the resources in the agreed fashion and to account for their use in the performance of the project. Cost sharing must be authorized and approved by the Department Chair and Dean/Director. When formal cost sharing is not required, it is best to avoid.

Budget Justification

In budget justification each line item category is explained separately. Show a specific breakdown of cost if you have not already done so in your actual budget. For example, list equipment manufacturer and model number. Include state sales tax where applicable (8.25%).

Please Note: All proposals to foundations (with or without budgets) must be reviewed by the Office of Foundation Relations.