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Principal Investigators Guide


Budget Preparation

The budget is one of the most important parts of an application. The typical budget has two forms of costs — Direct and Indirect.

Direct Costs

These are costs that can be directly associated and charged to one specific project. The following costs are typically considered direct costs:

  • Salary - Any DU employee working on a project that will be charged to the grant must be included in the salary line component. Most sponsors require that a percentage of effort or FTE is identified.
  • Leave Reserve - The Principal Investigator must calculate leave reserve on any non-faculty DU employee who receives vacation, sick or holiday benefits and that will be charged to a grant. Leave reserve is not listed as a separate line item, but is included in the salary amount. This is done by taking the salary amount and increasing it by 15%.
  • Fringe Benefits - The University of Denver has three negotiated fringe benefit rates for individuals being charged to a grant depending on type of employee. The rates for FY09 are:
    • Faculty = 24.3%
    • Non-benefited = 7.8%
    • Students = 1.8%

Fringe benefits are figured on the salary amount plus any leave reserve for each individual working on a grant.

  • Supplies - These are costs that are attributed to the project for items such as program materials, lab supplies, etc. Routine office supplies such as postage, paper, pens, etc. cannot be charged to a grant unless they can be directly associated with one project and kept separate.
  • Travel - Costs associated with traveling either domestic or international.

Per Diem rates can be figured by using the GSA website: http://www.gsa.gov/Portal/gsa/ep/home.do?tabId=0

Effective 7/08 mileage rate is 58.5 cents/mile

  • Consultants are individuals who are not DU employees and who will contribute a specialized skill set to a project. Consultant costs are typically for salary only and may be based on a daily or monthly rate determined by the consultant. Travel costs may be included in consultant agreements if travel is necessary to perform the activities outlined in the statement of work
  • Subcontracts are formal agreements with organizations to conduct a substantive portion of the work for the project. If the PI is planning to subcontract out a portion of the work, it must be listed in the proposal. Most organizations will provide a letter of intent to form a collaboration and a detailed budget for their portion of the costs that will be submitted with the proposal. These organizations may charge the University of Denver indirect costs as well.
  • Equipment - Defined by OMB as one item with a cost over $5,000 and a lifetime greater than 2 years. Equipment costs can be determined by receiving written estimates from vendors.
  • Tuition - The University of Denver policy is for the academic division to support ½ of the tuition for any GRA working on the project and then charging the other 1/2 of tuition to the sponsor. Tuition is determined by taking the tuition rate times 3 quarters and then by the standard academic load for that division.

Fiscal year rate: www.du.edu/registrar/regbill/reg_tuitionrates.html

Indirect Costs (IDC)

IDC (Facilities & Administration costs) cannot be directly charged to a specific project so they must be pooled together and categorized as overhead for the University of Denver. The current fiscal year Indirect Cost Rates are located at: www.du.edu/orsp/rates.html

To determine IDC rates on a proposal, you must first know the type of basis the sponsor utilizes. The two most common indirect cost bases are:

  • Total Direct Costs (TDC) - All direct costs are added together and then multiplied by the appropriate IDC rate.
  • Modified Total Direct Costs (MTDC) - This basis is modified by excluding some direct costs from being charged IDC. To determine this basis, add together all direct costs (EXCEPT equipment, tuition, and subcontract costs over $25,000) and then multiply by the appropriate IDC rate.