Budget justifications are like recipes – if it’s your recipe, you know it by heart and don’t need instructions to make it – but if your friend would like to prepare it, they need to know all of the details.
Like your friend trying to make the recipe, reviewers need those details in order to understand why those costs are necessary.
Without the justification, the sponsor may interpret your costs as excessive or unnecessary. Budget justification is your chance to tell reviewers how you are going to use the money you are asking for. It shouldn’t be a single line for each budget category, for example $3,000 for the PI to work on the project. It needs to say why those funds are necessary and what will be accomplished. It’s your chance to show how responsible you are going to be with requested funds and how you have really thought about the supplies needed to complete the research. In other words, your budget justification ought to tell the financial story of your project in parallel with your project narrative. A justification validates the expenses and gives you another opportunity to sell your project.
In the simplest of terms, a budget justification is a narrative explanation of the budget – basically, you are selling your idea to a sponsor for a price.
Reviewers want to know as much detail about the technical project as possible, in addition to what they are paying for. Why does it cost this much for you to accomplish all your objectives? Do you really need that much in travel? There should be no surprises – everything that appears in your justification should be in your proposal and vice versa. For example, if you have a team of students working on your project, the budget justification needs to tell what you are paying the students or what conferences your team is participating in. Approach the budget justification from the perspective of the sponsor and include information the sponsor needs to know to evaluate budget in relation to your project.
Now, let’s review the “why” of the budget justification. A strong budget justification can make it easier for your reviewers to answer questions such as:
- Can the project be done for the requested dollar amount; and
- Is the spending reasonable and responsible?
Anything that helps reviewers answer questions in your favor is worth doing.
Also, a well-developed budget justification reinforces your careful planning which proves your project’s likely success. Let’s review the pieces of a budget justification, specifically what is required from each section. Please keep in mind that the below headings are as generic as possible. The solicitation for the program you are writing for will take precedent over everything below.
Salary for Key/Senior Personnel
Funds need to describe the role of each PI, Co-PI, or Project Director and what they will be responsible for on the project, as well as their time commitment – all personnel need to be individually justified, even graduate students – remember to list the name, title, amount of time to be spent on the project, and what s/he will accomplish.
This section includes research technicians, postdoctoral fellows, graduate and undergraduate research assistants, etc. When known, list the name, title, amount of time to be spent on the project, and what s/he will accomplish. When not known, describe the skill set you are looking for.
This is a hot button category that needs as much explanation as possible and, although not in the personnel section, should be written in the same vein as what you wrote for personnel section. In other words – should be handled as personnel. Provide a short summary of each individual’s most relevant qualifications and the relationship of those qualifications to the tasks the individual will be assigned in your project. For example: Who is the consultant? What are their qualifications? What is their organizational affiliation? What is their role? Number of days they will work on project? Normal daily rate? Travel costs included?
The rates for faculty, research associates, and graduate students are according to institutional guidelines. It varies from 5% (undergraduates) to 25% (for post-docs) and is available in a spreadsheet template.
There is an increased scrutiny for travel categories, so the more you can describe, the better. Explain the purpose of each trip and how it supports your project’s objectives. Explain how many individuals will go on each trip, where, how long, purpose (conference, dissemination, etc.), and why their participation is important.
Break down the travel budget as much as you can. If this information isn’t known ahead of time, give examples of past conferences and costs. This category should include airfare, hotel, ground transportation, per diem, and registration fees.
In order to qualify as an equipment purchase, the item must be over $5,000 and have a useful life of more than one year. You will need to explain why equipment is essential to your project’s success and if the equipment will be only used for your project.
Confirm prices with vendors. You need to provide quotes to back up cost.
Materials and Supplies
A nice round number is questionable to a sponsor. Put thought into what your needs really are and how you arrived at the actual needed dollar amount.
Also, sponsors like to see itemized lists or at least a basis for the amount you are requesting (based on historical costs of $1,000 per student, per month for cleanroom fees). Remember to list all types of supplies you will need to do the project (including glassware, chemicals, and incentives for research subjects).
It is better to explain strange costs rather than lump it in and hope for the best. For large projects, you can often lump categories for $1000 or less.
Other Direct Costs
This is a catch-all, but if you have something in this category then you need to show your work and explain why it is important to your project.
In most cases, it is enough to write “the indirect costs are 53% per university rule”.
If there is a limit to the indirect costs, then write something like, “Per the solicitation, we are asking XX% indirect cost to cover institutional costs regarding operation and maintenance of the facilities.” Carefully review the solicitation to ensure your language does not put yourself in conflict with what the sponsor will pay.
Now that we’ve discussed each section, here is a checklist for the document as a whole. Use this when you are editing your draft. No matter what the solicitation says, if your budget justification fulfills its goals, you should be able to go down the following list and answer in the affirmative:
- Does the justification follow the same order as the budget?
- Do the numbers match those in the budget?
- Does it give additional details to explain the costs included in the budget?
- Does it include only items that are allowable, reasonable, and allocable?
- Is it easy to read (short paragraphs, headings to separate different budget categories, etc.)?
- Is it concise (no more than 3 pages for National Science Foundation)?
You should absolutely take advantage of the help the Office of Sponsored Projects can and will provide with your budget.
They know correct numbers for salary and benefits for you and your students, they can calculate indirect costs, and alert you to any possible issues regarding your budget. Use their information to craft your project’s budget justification as if you are sitting in a room with your reviewers explaining your budget line-by-line. By showing reviewers you have spent quality time considering how much money you need to make your project successful and that you have not asked for any more or less than success requires, you will have a budget justification “recipe” to get you off to a great start.
Special thanks to Emily Lacy for her contributions to this post.
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