Budget Building
Budget Development Tools
UW’s Research and Sponsored Programs (RSP) office has developed several spreadsheets to assist in budget calculations. These spreadsheets are not required, but may be helpful. These spreadsheets are also available on RSP’s Budget Tools page.
- UW Standard Budget Spreadsheet | Standard Budget Spreadsheet Preparation Instructions
Useful in cases where the sponsor does not have a prescribed form; spreadsheet calculations include fringe rates and escalation factors. - NIH Modular Budget Spreadsheet | NIH Modular Budget Spreadsheet Preparation Instructions | NIH Modular Budget Examples (PDF)
Useful in preparing NIH Modular budgets; it correctly calculates the number of modules you should request for your project, including associated F&A costs. - SF 424 R&R Budget Spreadsheet | Useful for grants.gov applications; template calculates and follows the format of the 424 R&R budget form.
NIH Salary Cap Guidance
The NIH has issued Salary Cap Guidance. Please read the notice carefully. A high-level summary:
- Competing grant applications and contract proposals that include a categorical breakdown in the budget figures/business proposal should continue to reflect the actual institutional base salary of all individuals for whom reimbursement is requested. In lieu of actual base salary, however, applicants/offerors may elect to provide an explanation indicating that actual institutional base salary exceeds the current salary limitation. When this information is provided, NIH staff will make necessary adjustments to requested salaries prior to award.
- The salary limitation does NOT apply to payments made to consultants under an NIH grant or contract although, as with all costs, those payments must meet the test of reasonableness and be consistent with institutional policy.
- The salary limitation provision DOES apply to subawards/subcontracts for substantive work under an NIH grant or contract.
SMPH/VA Appointments
Some of our UW investigators* have a joint appointment with the VA Hospital. A UW/VA MOU must be attached to the WISPER record so that by approving the record we can assure the Feds that we are paying from effort on the UW side. When applying for grants it is important to indicate the salary paid by the UW, exclusive of the VA. HRS will list the appointment as:
Standard Hours: 20.00
FTE: 0.5
Compensation Rate: 80,000.00 (this represents a comp rate for 40.00 full-time hours)
You must list the amount that is paid by UW. Since this is based on 0.5 FTE the part that is paid by UW is 40,000.00 because NIH instructions state:
Special Instructions: Joint University and Department of Veterans Affairs (VA) Appointments
Individuals with joint university and V.A. appointments may request the university’s share of their salary in proportion to the effort devoted to the research project. The individual’s salary with the university determines the base for computing that request. Signature by the institutional official on the application certifies that: (1) the individual is applying as part of a joint appointment specified by a formal Memorandum of Understanding between the university and the V.A.; and (2) there is no possibility of dual compensation for the same work, or of an actual or apparent conflict of interest regarding such work. Additional information may be requested by the awarding components.
When developing a budget, you can base it on this example:
A simple:
0.6 cal months for a 0.5 FTE will pay 10% salary
Or just a little more by adding:
0.6 cal months for a 0.5 FTE will pay 10% salary as per the MOU.
Dr. ______ has an appointment with the University of Wisconsin–Madison (UW–Madison) and with the Veterans Administration (VA). This arrangement is defined in a formal UW-VA Joint Appointment Memorandum of Understanding. The institutional base salary used in this application represents the base salary at UW; it does not include salary from the VA appointment. The number of person months in this application represents UW effort on the proposed project in relation to professional effort for the UW appointment only.
*There are a small group of investigators who have UW/VA appointments that allow the individual to work on UW research while on VA time. This is referred to as “protected research time” and is something the VA provides to some faculty who have dedicated research time outlined in their VA appointments. Christy Schulz, 608-265-3386, with these specific instances.
Calculating Effort for Less Than 1 FTE on a Grant Application
The NIH definition of Institutional Base Salary is found in the Glossary & Acronym List
The annual compensation paid by an organization for an employee’s appointment, whether that individual’s time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual is permitted to earn outside of duties for the applicant/grantee organization. Base salary may not be increased as a result of replacing organizational salary funds with NIH grant funds.
Please use the Percent of Time & Effort to Person Months (PM) at this link: Person Months Conversion Chart (Excel)
How do you convert percent effort into person-months?
To convert percent effort to person months, multiply the percentage of your effort associated with the project times the number of months of your appointment. For example:
25% of a 9 month academic year appointment equals 2.25 (AY) person months (9 x 0.25= 2.25)
10% of a 12 month calendar appointment equals 1.2 (CY) person months (12 x 0.10 = 1.2)
35% of a 3 month summer term appointment equals 1.05 (SM) person months (3 x 0.35= 1.05)
10% of a 0.5 FTE 12 month appointment equals 0.6 (CY) person months (12 x .5 X .1 = 0.6); therefore,
40% of a 0.5 FTE 12 mon appointment equals 2.4 (CY) person months (12 x .5 x .4 = 2.4)
Example:
Base Rate: $90,852; FTE = 0.5 (6CM/year); IBS = $90,852 x .5 FTE = $45,426
Q1: What percent effort do you want the person to dedicate to this project?
A: 20%
Q2: What FTE appointment does this person have?
A: 0.5FTE
If you want this person to be paid a certain amount, then use:
20% of a 1 FTE 12-month calendar appointment equals 2.4 (CM) person months (12 x 0.20 = 2.4)
.2 x 90,852 = $18,170
*40% of a 0.5 FTE 12-month appointment equals 2.4 (CM) person months (12 x .5 X .4 = 2.4)
.4 (4.8CM) x $45,426 = $18,170
*This adjustment would be made based on paying a certain amount.
Effort = 40%
RPPR = 2.4CM
In Cayuse the budget would be: 4.8 CM for an IBS $45,426 = $18,170
The budget justification would explain:
______ has a 0.5FTE appointment with the University of Wisconsin–Madison (UW–Madison). The institutional base salary used in this application represents the base salary at 0.5FTE. The 20% effort for a 1FTE (2.4CM) is adjusted to 40% effort (2.4CM) for a 0.5FTE.
If you want this person to simply contribute 20% of their 0.5FTE, then use:
*20% of a 0.5 FTE 12-month appointment equals 1.2 (CM) person months (12 x .5 X .2 = 1.2)
.2 (2.4CM) x $45,426 = $9,085
*This adjustment would be made based on effort.
Effort = 20%
RPPR = 1.2CM
In Cayuse the budget would be: 2.4CM for an IBS $45,426 = $9,085
The budget justification would explain:
______ has a 0.5FTE appointment with the University of Wisconsin–Madison (UW–Madison). The institutional base salary used in this application represents the base salary at 0.5FTE. The 10% effort for a 1FTE (1.2CM) is adjusted to 20% effort (1.2CM) for a 0.5FTE.
Guidance for Budgeting 9-Month [C-Basis] Salary and Effort
Academic Effort
Effort expended over the academic year uses the same calculations as with 12-month [A-basis] appointments but instead is reported as academic (not annual) effort.
Academic base salary x % effort = funded effort
$120,000 x 5% effort = $6,000 – Verify: 5% effort x 9 months = 0.45 academic months
Summer Effort
If you know the amount of effort the faculty member will have on the project, calculate the requested salary by:
- Calculate monthly salary by dividing the academic base salary by 9 months
Academic base salary ÷ 9 = monthly salary – $120,000 ÷ 9 = $13,333 monthly salary
- Determine salary in the budget by multiplying the # of months by the monthly salary
0.45 months x $13,333 = $6,000
If you know the available funding in the budget to support summer salary, calculate the effort by:
- Calculate monthly salary by dividing the academic base salary by 9 months
Academic base salary ÷ 9 = monthly salary – $120,000 ÷ 9 = $13,333 monthly salary
- Determine effort in months by dividing the available funding by monthly salary rate
$6,000 available funding ÷ $13,333 = 0.45 months effort
- Calculate the percent (%) effort by dividing the number of person-month by 9 months
0.45 person-month ÷ 9 months = 5% effort – verify: 5% X $120,000 = $6,000
Graduate Students
Graduate students primarily have Teaching Assistant, Project Assistant and Research Assistant appointments. These individuals have a salary rate that is at or above $72,000 base. Due to the nature of their appointment, graduate students are split between school study and research, making research time 50% of their appointment. Graduate students can only make 50% of the ~$72,000 salary base. For graduate students, 12 calendar months of effort is 100% of their 50%. If not budgeted this way, there is a significant risk to tuition remission being cut, which has occurred in the past.
For example:
Graduate student base rate $74,834
Appointment: 50% FTE
If requesting the full appointment of the graduate student on the award, the budget would show 12 calendar months effort, $37,417 salary ($74, 834 x 0.5) and full tuition remission.
If requesting a specific appointment percentage of the graduate student on the award, the budget would show x calendar months effort, $37,417 * x and tuition remission * x.
Example 9.6 calendar months (80%):
9.6 calendar months effort, $29,934 (437,417 x 0.8) and 80% tuition remission.
UW Health Employees
UW Health employees that are budgeted on UW research grants are done so by adding a line item in the other direct costs section of the budget. They are then paid through an internal work order. Further information on how to create a work order (PDF) is located in Box.
Fellows who are UWH employees, with no paid appointment at UW cannot be on a UW grant as a paid employee.
Fellows who fall in this category and want to be PI on a grant:
- To be listed in the grant as personnel, the department needs to include note in RAMP that they plan to provide fellow with a paid UW appointment.
- We need to know what position the individual will be anticipated to have to confirm salary and fringe
- Follow the same rules of needing faculty member with PI status to be PI of the RAMP.
This guidance for fellows is also applicable for residents.
Direct Costs
Direct costs are costs that are associated specifically with a particular sponsored project, instructional activity, or other institutional activity. Uniform guidance
Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or F&A costs.
Examples of direct costs include salary, fringe benefits, supplies/materials, publications, equipment, travel, and tuition remission.
Note: Costs above are examples only – allowability of these or other costs depends upon federal, state and sponsor regulations related to a specific project.
Facilities and Administration (F&A) Costs
Facilities and Administration (F&A) costs (or indirect costs) are costs incurred by the university for common or shared objectives. F&A costs cannot be identified specifically with a particular sponsored project, instructional activity, or other institutional activity.
Examples of F&A costs include library services, utilities, department and sponsored project administrative expenses, office supplies, postage, local telephone service, memberships and depreciation of buildings/equipment.
Calculating F&A Costs
F&A costs for a project are calculated by multiplying the appropriate cost base and rate:
F&A cost = F&A cost base x F&A cost rate
F&A Cost Base
F&A cost base indicates the type of calculation used to determine F&A costs. There are three main types:
- Modified total direct cost (MTDC)
Total of direct costs, excluding equipment totaling over $5,000, subcontracts over $25,000, capital expenditures, rent/lease, patient care, tuition remission and scholarships/fellowships. - Total direct cost (TDC)
Total of all direct costs (no exclusions) - Salary, wage and fringe
Sum of salary, wage and fringe benefits costs to be charged to the project
Other types of F&A cost base may be specified by individual sponsors.
F&A Cost Rate
The university’s F&A rate is negotiated between UW–Madison and the U.S. Department of Health and Human Services (DHHS), and is updated periodically.
- In general, use the highest allowable rate
- Some sponsors specify F&A rates lower than the federally negotiated rate
For more information on F&A rate application and exceptions, review RSP’s F&A policy guidance page.
Budget Narrative
In addition to the budget itself, you will also need to create a budget narrative, sometimes referred to as a budget justification. Within the budget narrative, you must:
- Explain how costs were estimated
- Justify the need for each cost