A budget ensures the costs of a research or sponsored activity are reached according to a fair and equitable basis. Budgets and budget narratives demonstrate that estimated costs and effort are related to the proposal's goals and objectives, and show an ability to manage a project award if received. As the budget and its narrative are usually not subject to page limitations, this is an excellent method to relate needs identified to the outcomes expected. The budgeted line items should meet the OMB Circular A-21 standards of "reasonable, allowable, allocable, and consistently applied" cost estimation.

Budgets should be prepared with great care to provide an accurate approximation of the cost elements to ensure the amount requested from the agency is sufficient to cover the cost of carrying out the proposed research. Investigators should group costs according to the sponsor's requirements. Care must be given to ensure the funding request does not exceed the agency's funding limitation or include items unacceptable to the funding agency. Certain items such as food, clothing, and entertainment are generally unallowable unless specifically stated in the agency guidelines. The purchase of such items without prior agency approval could result in an audit disallowance. Sponsor guidelines are always the final authority in preparing a project budget and should be followed explicitly.

Budgets should be prepared for the entire project period and should include both direct costs and Facilities and Administrative (F&A) or previously indirect costs. Direct costs are typically broken into categories while F&A costs are a percentage of the appropriate base expressed as a lump sum.

The standard for developing a budget is the federal Budget Information - Non-Construction Programs (SF 424A) form (PDF). The RSP Research Project Budget Model (Excel) and the Grant-Inception-to-Date report have been developed to follow this model and is the basis for subsequent set up of a grant/fund to allow for capture of expenditures in the report form for federally funded projects.

Budgets requiring approval of department, college, RSP matching fund requests or reduced F&A requests should be submitted to RSP at least 10 working days prior to the proposal due date in order to allow sufficient time for review and processing. RSP Grants Specialists are available to review the budget, assist in its preparation and completion of appropriate forms, and advise about normal university policy.