Proposal Development

A strategic, accurate budget is a cornerstone of any sponsored research proposal. As you develop it with your PI, it should be created in full consideration of the sponsor’s requirements, as well as Princeton’s internal guidelines.

The budget is a financial representation of the detailed statement of work. It must be entered into our proposal management system (Princeton ERA) as part of the proposal development process. This budget module automatically calculates F & A (overhead) and fringe-benefit rates, assuring the budget captures the required additions.

The budget is reviewed by ORPA for compliance with University and Sponsor guidelines when the full proposal is routed for approval.

Direct costs must belong specifically to a project, and be identifiable with a high degree of accuracy. 

UNIFORM GUIDANCE

Uniform Guidance Cost Principles state that all direct costs must be

• Allowable: Adheres to sponsor terms and University policy.
• Allocable: Directly benefits the project.
• Reasonable: Is prudent for the project at hand.
• Consistent: Is treated in the same manner as like expenses.

TYPES OF DIRECT COSTS

The University’s Direct and Indirect Charging Policy outlines items that may be allocated as a direct cost.

Salaries, Stipends, and Tuition

• Salaries and associated fringe benefits for faculty and research staff
• Salaries and associated fringe benefits for postdocs
• Stipend for graduate and undergraduate students
• Graduate student tuition

Materials and Equipment

• Capital equipment (a unit cost of more than $5,000)
• Materials and supplies

Other Expenses

• Publication costs
• Foreign and/or domestic travel
• Consultants
• Subawards to other institutions
• Cost sharing, when required as part of the budget
• Participant support: Stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with meetings, conferences, symposia, or training projects. Guidelines vary by sponsor and program.

Facilities and Administrative costs—also known as F&A, indirect, or overhead costs—are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.

Examples of F&A costs include

• Depreciation and interest costs associated with the University’s physical plant.
• Operating and maintenance expenses, such as utility, security, and custodial costs.
• Common administrative functions, such as payroll and purchasing.

Because it is impractical to account separately for such costs, F&A costs are normally not charged directly to sponsored agreements.

CALCULATING INDIRECT COSTS

Princeton has a federally negotiated indirect-cost rate agreement for on- and off-campus activities. This rate, which can be found on the Institutional Information page, should be included in all budgets, as applicable. 

Based on sponsor specifications, the base for indirect costs may calculated using modified or total direct costs.

Modified total direct costs (MTDC)

This base is used when the sponsor accepts the University’s federally negotiated rate. This rate is applied to all budget line items, except equipment, tuition, and subawards beyond the first $25,000 (for each subaward). Princeton permits the use of 50% tuition when our federally negotiated rate is used in a budget.

Total direct costs (TDC)

This base is used when the sponsor does not accept the University’s federally negotiated rate. The indirect cost rate permitted by the Sponsor is applied to all budget line items with no exclusions. Full tuition rates should be used in this instance.

OFF-CAMPUS WORK

If significant portions of project work will occur off campus, please review the University’s Off Campus F&A Rate Policy for more details to confirm whether the off campus rate can be utilized.