Developing a Budget

Key guidelines 

A sponsored project budget is an estimated financial representation of the scope of work for a project. A proposal budget should demonstrate how the University will carry out the project objectives with the requested amount of resources. The budget should be prepared with great care and should provide a detailed breakdown of each proposed cost category. Budgets should be prepared for the entire project period (i.e., for all years of the sponsored project) and should provide a breakdown of costs for each budget period year.

Direct costs, indirect costs, and cost sharing

Proposal budgets are generally grouped into three primary categories:

  • Direct costs are those that can be specifically identified with a particular project. These costs include salaries and wages, fringe benefits, travel, equipment, supplies, consultant services, subcontracts, and other direct costs. Click below for more on various type of direct costs.
  • Indirect costs (now called Facilities & Administration or F&A) are institution-wide costs that cannot be tied specifically to a project, such as utilities, maintenance and depreciation of facilities, and general administrative costs.
    • When preparing your budget, all direct cost items are listed first; then the appropriate indirect cost percentage rate is assessed against the total of allowable direct costs.
    • Click here for more on indirect costs.
  • Cost Sharing is defined in federal regulations as project costs not borne by the sponsor. The University shares in the cost of a sponsored program whenever there is a difference between the total cost of performing a project and the funding provided by the sponsor. Either direct costs or indirect/F&A costs may be cost shared.

Budget Template