While most proposals submitted by Syracuse University will contain a detailed budget representing the actual costs needed, some sponsors require budget formats that present cost differently.
The most common example of a sponsor that requires budgets presented in a non-traditional format is the National Institutes of Health (NIH), which uses a budgeting format referred to as a modular budget. Another common proposal mechanism that does not require a detailed budget is called a fixed price proposal. Fixed price funding mechanisms are most commonly used with industry sponsors, but might also be used occasionally by government sponsors.
While the budget format required by a sponsoring agency may lack budget detail, the basis for creating the submission budget should always start with a detail budget developed using the OSP budget template. This ensures that Syracuse University is neither proposing work for less than it costs to deliver the work, and along the same lines, is not proposing work for a cost at a higher price than it costs to deliver the work. Building a detail budget up front provides assurance that the University is responsibly representing its actual costs regardless of whether the details of a budget are shared with the sponsor or not.
NIH modular budgets are used for R01, R03, R15, R21, and R34 applications requesting $250,000 or less in annual direct costs and are budgeted in $25,000 increments. Modular grants, while not requiring detailed budgets, are still subject to federal regulations pertaining to the allowability of costs (i.e. Uniform Guidance), NIH Grants Policy Statement and any specific terms and conditions of the solicitation/award), allocability, necessity, reasonableness, and consistent treatment of costs.
Modular budgets present all personnel involved in the project including “to be determined” consultants, collaborators, and subcontractors; their effort in person- months; their roles and responsibilities to justify their level of effort, consortium costs (rounded to the next higher thousand) and any items typically unallowable as direct costs.
In the modular budget justification, faculty should clearly present both their proposed academic year and summer effort. Personnel with 12-month appointments should present effort as calendar year effort. Current federal application budget forms require that effort be presented as person-months. Please do not use the NIH person-month conversion tool as it is based on 9-month appointments as opposed to SU’s 8.5 month appointments. See OSP budget template for 8.5 month conversion.
Modular grant awards are typically constant for each year of the award; if there is a variation in the number of modules requested (see below), the reason must be explained in the budget justification, e.g. increase is the consequence of one-time equipment purchase.
To ensure that the appropriate number of modules is requested, OSP requires most applicants to develop an internal budget using the OSP budget template. The OSP template has output tabs designed specifically for NIH Modular budgets, one for even modules and another to accommodate uneven modules. This allows non-experts to easily build their budget modules and have their budgets reviewed for adequacy of: salary estimates, inclusion and accuracy of fringe benefit rates, and identification of costs which are excluded from F&A recovery such as tuition, equipment and subcontract costs in excess of $25,000.
NOTE: Any essential costs that are typically unallowable (e.g., office supplies, alcohol for research use, communication costs such as postage, etc.) should be explicitly identified in the modular budget narrative. In the event of an award, their inclusion will constitute sponsor prior approval of the cost.
Principal Investigators may engage corporations to explore sponsored research activities through a variety of points of contact, such as their own personal contacts or through the Office of Corporate Relations, the Office of Technology Transfer, or the CASE Center.
Regardless of the office facilitating the relationship, proposals should be reviewed and approved by OSP prior to submission to the corporate sponsor. The Sponsored Programs Internal Routing and Review form, signed by all key personnel and their respective chairs and/or deans, is also required prior to submission.
Budgets and Statements of Work for Industry Proposals
Corporate sponsors occasionally request that indirect costs be reduced or waived. Such requests ordinarily should not be granted because the full costs of research would then not be recovered. In addition, reducing or waiving indirect costs creates a situation of ‘inconsistency’ where the federal government is paying more in indirect costs than corporate sponsors.
Statements of work for corporate-sponsored research agreements ordinarily should be limited to no more than ten pages and include the elements presented in the Statement of Work form. Office of Sponsored Programs will work with PIs to ensure that all applicable information required to track private use activities for the University’s annual report to the IRS is included in the statement or work or other documentation.
In the event that a statement of work is shared informally between the PI and the potential corporate sponsor, it should only be done so if there is a valid non-disclosure agreement in place, and should contain the disclaimer below.
Disclaimer: This statement of work is for informational purposes only. The statement of work and associated price estimate do not represent a binding offer on the part of Syracuse University and remain subject to the review and approval of individuals authorized to bind Syracuse University. In the event the parties agree to pursue a sponsored research agreement, the statement of work and associated price or cost must be authorized by University officials.
In proposals for a fixed price agreement, the sponsor is provided with a lump-sum cost for the research, education or other services proposed. While no budget details are provided to the sponsor, the University does have an obligation to estimate the price from the costs associated with the work plan. In developing the fixed-price request, the items incorporated must comply with federal (if federal sponsor) and university policies. That is, costs must be reasonable, allowable, and allocable to the work; appropriate F&A rates must also be included in the cost.
Given the relative imprecision of the cost estimates, it is reasonable to expect that on some occasions the fixed-price may result in funds remaining at the end of the award, while on other occasions the fixed-price will not cover all costs. Fixed-price agreements that consistently result in significant positive balances will be scrutinized so that more accurate estimates can be developed for future applications.
Effort committed for key personnel engaged in fixed-price projects is included in the effort.
As a general rule, OSP requires preparation of a detailed budget to ensure that sufficient funds are requested, and to affirm that PI effort is explicitly devoted to the project, even though this information may not be included in the proposal.
When multiple activities or tasks are proposed, such as administrative costs or program costs, a separate OSP budget template corresponding to each function, activity or task is recommended. The total costs for each activity correspond to the amount to be proposed in a functional or activity-based budget. Many sponsors, e.g. Department of State, also require the line-item details comprising the functional budget.