A budget justification (narrative) should be prepared to explain how the budgeted costs relate to the project. The narrative should provide sufficient detail to allow the sponsor to determine whether the proposed costs are reasonable and appropriate.
Key elements to include:
- A detailed justification of the expense or service
- How the expense relates to and benefits the project
- The anticipated cost
- The time period in which it will be utilized
- Other information that will aid the sponsor in evaluating the proposed item
Salaries and Wages
List all persons/positions to be paid with project funds and briefly describe their role in the project. If a university employee will contribute time/effort to the project, disclose the person months of the contributed effort. Indicate that salaries are based on current University of Illinois academic and staff salary scales (i.e., Institutional Base Salary [IBS]) and explain the types of anticipated salary increases (merit or range adjustment), the rate of increase, and the period of time to which the increases apply. 2 CFR §200.430
For those costs normally treated as Facilities and Administrative (F&A) costs (i.e., costs for administrative/clerical duties), clearly justify the special purpose necessitating the inclusion as a direct cost and include the following statement: “We are requesting agency approval for a xx% time appointment for an administrative professional to be directly charged as an administrative cost in accordance with 2 CFR §200.413.” For internal approval, please submit Form A at least seven (7) days in advance of the proposal deadline.
List the benefit rate used for each University of Illinois employee. A statement about the applicable Negotiated Fringe Rate Agreement should also be included (see current Rate Schedule). 2 CFR §200.431
Sample Verbiage - provisional: FY22 Fringe Benefit Rates assessed at 40.30% for SURS employees (non-self-managed), 35.58% for SURS employees (self-managed), 7.66% for non-SURS employees, 9.47% for Graduate Assistants enrolled 6 hours or more, 17.06% for Graduate Assistants enrolled less than 6 hours, 0.10% for students enrolled at or more than half time, and 7.66% for students enrolled at less than half time of salaries and wages, per the current rates published by the university. These rates are subject to change as determined by the designated cognizant agency, the Office of Naval Research (ONR).
Sample Verbiage - predetermined: FY22 Fringe Benefit Rates assessed at 40.30% for SURS employees (non-self-managed), 35.58% for SURS employees (self-managed), 7.66% for non-SURS employees, 9.47% for Graduate Assistants enrolled 6 hours or more, 17.06% for Graduate Assistants enrolled less than 6 hours, 0.10% for students enrolled at or more than half time, and 7.66% for students enrolled at less than half time of salaries and wages, per the Negotiated Fringe Cost Rate Agreement with the Office of Naval Research (ONR).
Capital Equipment (or Permanent Equipment) is defined as a piece of equipment (or the fabrication of a piece of equipment) with (a) a useful life of one year or more and (b) an acquisition cost of $5,000 or more. Describe the benefit to the project or the specific need for equipment proposed. When proposing fabricated equipment costs, provide a cost analysis of the estimated labor, materials, and other costs associated with the equipment fabrication and retain supporting documentation used to develop the cost analysis. Describe the method used to estimate equipment expenses (e.g., catalog prices, vendor quotes, etc.) including how inflationary factors were determined and applied in multi-year budgets. 2 CFR §200.33 and 2 CFR §200.2
For more guidance visit our Equipment research topic.
Distinguish and separate costs for domestic versus international travel (be sure to review sponsor policy for this categorization). Explain the purpose of the trip and how the trip will benefit the project. State the destination and the names or the number of individuals who will be taking the trip. If the exact destination is not known, state the geographic location. Describe the mode and cost of transportation (air and/or ground), the number of days of per diem, the per diem rate. Include a statement indicating that the appropriate and current per diem rates are used (see current University of Illinois Per Diem Rates). 2 CFR §200.474
Describe in detail the stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conference or training projects. 2 CFR §200.75
Participants may be a student/scholar from any campus of the University of Illinois or another institution, a private sector company representative, a K-12 teacher, or personnel from state or local government agency. Participants may not be employees of the University of Illinois, a student/scholar paid directly or indirectly from project, a research subject on the project, or any other person that received compensation from any other federal project during the participation in this project (federal projects only).
Participant Support Costs are for the participants or trainees only. Specifically, these costs cannot include conference speaker fees, room rental fees, catering, or other supplies for the conference or training room.
Materials and Supplies
Describe in detail the supplies/materials that make up the costs proposed. Describe how the project will benefit from the purchase of the supplies and materials proposed. Describe the method used to estimate supply and material expenses (e.g., catalog prices, vendor quotes, historical costs for like projects appropriately escalated, etc.) including how inflationary factors were determined and applied in multi-year budgets. For those costs normally treated as Facilities and Administrative (F&A) costs, clearly justify the special purpose necessitating the inclusion as a direct cost; that is, explain how the costs are used in furtherance of the statement of work. 2 CFR §200.453
Retain page rates for those journals in which project results will be published and any other documentation used to estimate publication (or printing) costs. 2 CFR §200.461
List the name of the consultant(s), the area of expertise, organizational affiliation (if any), the daily/hourly rate of pay, number of days/hours of service and the cost of travel and per diem as appropriate. Describe the need for the consultant(s), the services to be provided, and justify the selection of the consultant and their rate of pay. 2 CFR §200.459
Computer Services or Service Center
List the name of the provider, the type of service, the daily/hourly service rate, number of days/hours of service, and the cost of travel, per diem, and or shipping costs as appropriate. Describe the need for the service, the services to be provided, and justify the selection of the service and the stated rate of pay. 2 CFR §200.468
Indicate the reasons why a portion of the technical or programmatic effort must be subcontracted and provide an explanation of the method used to select the subcontract (e.g., sole source, competitive bid, etc.) as well as the reasons why the subcontractor was selected. 2 CFR §200.92
Explain the need for cost items included in the direct costs category and describe the method used to estimate those expenses (e.g., service brochures, established rate lists, vendor quotes, historical costs for like projects appropriately escalated, etc.) including how inflationary factors were determined and applied in multi-year budgets.
Sample Verbiage: Tuition Remission Rate: 64.0% of salaries and wages of graduate assistant(s) for the predetermined period of 07/01/2021– 06/30/2022, per the Tuition Remission letter of approval from the Office of Naval Research (ONR) dated 03/01/2021.
Human Research Incentive Payments
List the amount that will be paid to each human subject (payment) and the number of human subjects.
Facilities and Administration (F&A)
List the F&A rate used for the project, including the Activity Type (Research, Instruction, or Other Sponsored Activity) and Location (On-Campus or Off-Campus). A statement about the applicable F&A Negotiated Agreement should also be included (see current Rate Schedule). If a rate, other than the applicable rate from the Negotiated Indirect Cost Rate Agreement (NICRA) will be used, then please state the basis (MTDC, TDC, Other) for the rate in sufficient detail to be able to replicate the base that was applied. 2 CFR §200.56, 2 CFR §200.68, 2 CFR §200.414, and 2 CFR §200 Appendix III.
Sample verbiage: Research, On-Campus: 58.6% Modified Total Direct Costs (MTDC) for the predetermined period of 07/01/2021 – 06/30/2024, per the Negotiated Indirect Rate Agreement (NICRA) with the Office of Naval Research (ONR) dated 01/25/2021.
Institutional Policies and Procedures
Related Documents and Resources
- SPA Proposal Field Guide
- SPA Budget Tools - FY22
- SPA Budget Template - FY22
- F&A Rate Agreement (FY21-24)
- Tuition Remission Letter (FY21)