Budget Tips for Researchers

Introduction

To focus the advice, we have broken the tips up into five sections:

Before you Start

Read the sponsor's/funding agency's guidelines. Ask the sponsor representative or email the Office of Research [1] for clarification before you begin - we may have some tips!
Use the sponsor provided forms or University budget templates to help you create your budget. Some funding agencies provide their own forms while others do not.
Review the funding sponsor/program guidelines to ensure expenses are eligible. For example, a given program may fund salaries and consumables but not equipment above a stated value.
Many funding agencies ask for a separate document, often called a 'Budget Justification', in which the details of all items listed in the budget are explained. Ensure you know what you need for each application. Make sure the budget justification matches the budget template. If necessary, provide enough information for reviewers to see how you arrived at the numbers.
Some funding programs (e.g. NSERC Discovery Grants) allow researchers flexibility in how funding is spent following receipt of the award. Other funding sponsors expect expenditures to strictly adhere to the proposal budget following the awarding of funds. It's important you understand the different sponsor terms and develop a budget that will meet your funding needs.
A budget must follow the University of Guelph policies and guidelines.
- If your budget includes salaries for personnel, ascertain what an appropriate salary would be for the positions requested and learn of other key HR considerations by contacting your Human Resources Consultant. To find the name and contact information of your consultant, visit the Human Resources staff directory [2]. Please also see section 2 under 'Final Budget Preparation Tips'.
- Be sure to know any mandatory minimum graduate student stipend rates (set by the sponsor or University). You are advised to consult with the Graduate Coordinator or Graduate Secretary in your department to obtain the correct stipend rates.
- Do you plan to request money for travel? Be familiar with the University of Guelph's Travel and Business Reimbursement Policy [3].
- Does your proposal involve construction or renovations? If so, it is advised that you engage the University's Physical Resources staff [4] by seeking a cost estimate for the planned work.
- If your intended request to the funding sponsor includes equipment or subcontracted services, obtaining three quotes is recommended as they will provide a reasonable estimate of the cost of such items. Your administrative assistant or the Purchasing Department can assist you with this.
If you are in receipt of funds that you are aiming to match through this current proposal, be sure that the funds are an eligible source of matching funds, and be careful not to spend any funds you currently hold and plan to match until you are sure of the 'start date' of spending (i.e., the new sponsor may deem that only expenditures after a specific date can be matched.)
If you are preparing a budget for a service agreement, make sure to include all costs [e.g. material costs, labour costs (including departmental charge back for faculty time), overhead costs (e.g., depreciation of equipment, etc.)].

Preparing the Budget

Be realistic and don't over-inflate the budget. Do not try to 'underfund' a project in the hope it will be funded. Budgets should be reasonable and appropriate for the proposed research plan. It may be perceived that a poorly put-together budget indicates a poorly designed project.
When working out your budget, be detailed and specific. List all budget items on a worksheet that clearly shows the calculations you used to arrive at the dollar figure for each item. Keep this detailed list to remind yourself how the numbers were derived. The detailed worksheet(s) often has value as you continue to develop the proposal, draft the budget justification, and discuss it with funders; as well as for use in monitoring and reporting on the project after funds are awarded.
If preparing a budget with multiple sponsors (e.g., NSERC/industry), clearly separate the budget on your detailed worksheet to show expenditures 'by sponsor'. For many programs it is important to track and manage the expenditures for each sponsor separately as expense eligibility often varies by funding source. Ensure that amounts in the budget match those committed to in funding support letters or other documentation in the proposal.
Next, think about all in-kind contributions toward the projects. These are the non-monetary resources that partners and/or the University of Guelph will provide to support the project (e.g. value of donated or loaned new or used equipment, value of donated land for field trials, or office space, etc.). Include in-kind contributions under a separate category to ensure they are recognized as part of total project costs/contributions. Make sure that in-kind contributions are valued based on 'Fair Market Value' as this may be audited. Consult with your Department Chair and Deans' offices and Physical Resources to determine appropriate in-kind expenses as required.
The CFI Policy and Program Guide [5] may be of assistance.
With your detailed worksheet(s) completed, you are ready to prepare the expense budget. While some sponsors expect a specific and detailed listing of expenses, others allow costs to be grouped into categories and subcategories at a higher level. Costs might be able to be grouped in categories and subcategories based on the critical areas of expenses, or grouped according to line item categories provided on the agency's budget template form(s). If permitted, combine small costs under subcategories. For example, you might divide your expense budget first into personnel and non-personnel costs; your personnel subcategories might include salaries, benefits, and consultants. Subcategories under non-personnel costs might include travel, equipment, supplies, knowledge translation and indirect costs (i.e., indirect costs must be included in accordance with the University's indirect costs policy [6].) A dollar figure would be attached to each line.
By combining smaller costs into subcategories, you will have greater flexibility in the spending of funds awarded and subsequent reporting on expenditures will be made easier.

For example, if you request $3,000 for travel, describing the purpose of the travel in the budget justification, your actual costs for transportation, accommodation and meals are more flexible among these subcategories (depending on the source of funding), than if you request $1,500 for airfare, $750 for accommodation, and $750 for meals.
If the funding sponsor states that a budget justification or a description of the budget is to be provided, give an explanation of every item listed in the budget (speak to its purpose). Link costs to your research objectives wherever possible. Be specific in justifying your budget, for example:
- State the name(s) of the journals in which you plan to publish or how you will disseminate your research results if you have included costs for publication/knowledge translation.
- Describe what your travel budget entails (e.g., state the name of a particular conference at which you will present your results, where it will be held, etc.).
The indirect cost rate included in your budget should be based on the agreement the sponsor will ask the University to sign if funded. Some sponsors call their awards grants (e.g., US government sponsors) when the terms of the agreement governing the funding are really a contract. This can be problematic if you include the indirect cost rate for a grant at the time of proposal development, and after receiving notice of funding the agreement presented to the University is deemed to be a contract. The table listing the differences between contracts and grants [7] may assist you in determining which indirect cost rate (grant or contract) should be applied.
If you are still unsure, please contact the Office of Research and we can assist in making the determination.
Through the Ontario Agri-Food Innovation Alliance [8] researchers can apply to have access to animal and crop research stations at a subsidized rate. Researchers proposing to utilize these research stations must include the appropriate fees and costs in their proposal budgets. Please view Research Station Access (RSSA) Fees [9] for information about the cost associated with research station use. Note that RSSA fees are exempt from indirect costs.

Final Budget Preparation Tips

For multi-year projects, consider time constraints and get advice on whether it is likely that you will be able to spend your budget within the years in which you have allotted it. For example, have you considered the time required to go through all necessary procurement processes and recruitment and hiring processes? If construction is involved have you considered that construction projects frequently fall behind schedule? If your project involves field trials and notices of award are to be received in November, must your research wait until the following year to begin?
Budgets must be complete. All expected costs should be included. Have you included:
1. Foreign exchange rates: For proposals to the Canada Foundation for Innovation (CFI), please use the exchange rates listed on the Office of Research website [10]. For all other research proposals, please use the OANDA Currency converter [11] to determine the appropriate exchange rate
2. Employee benefits on top of base salaries. To be sure you have sufficient funding for employee benefits, consult the benefit allocation rates posted by the Budget Office [12] annually (requires Central Login Account.)
3. Salary increments for personnel (e.g., 2 or 3% increase annually) over multi-year projects.
4. Out of province health care costs, if applicable to the project.
5. The costs of administrative or office supplies if required.
6. The costs of telecommunication services if required.
7. The cost of a project manager or administrative assistance if needed and deemed by the sponsor to be an eligible expense. To ascertain what an appropriate salary would be for such a position, contact your Human Resources Consultant listed in the HR staff directory [2].
8. Indirect Costs (refer to the University's indirect costs policy [6].)
9. Costs such as tuition/fees. If you are including tuition and/or university fees in your budget, verify that your funding agency considers this a permissible use of award funds. Many awards have restrictions on the use of funds towards payment of school tuition and fees.
10. Per page publication costs or other means of disseminating research results through knowledge translation and transfer activities.
11. Participant incentives or patient care costs.
12. Animal purchases and animal care costs. Researchers intending to use the University's Central Animal Facility should refer to the CAF's listing of costs for animals, animal accommodation and services [13].
13. Hidden fees such as equipment or consumables shipping costs.
14. Other expenditures particular to the research you conduct.
15. Taxes, such as HST (13%) in Ontario. The University of Guelph is eligible for certain tax rebates on the HST charged on the Goods or Services you purchase. Your research project trust account will only be charged the net difference (taxes paid less tax rebate).
  Example: You plan on purchasing equipment for $1,000. Your budget for equipment should be $1,034.10.
  
  Purchase Price HST Rebate on GST Rebate on OVAT Net tax to university
  
  percentage 13% 67% of 5% 78% of 8% 3.41%
  
  amount $1,000 $130 ($33.50) ($62.40) $34.10
If you request Internet and/or a cell phone, explain why they are essential for your research. For example, in field research, a cell phone may be necessary for scheduling appointments with participants.
Make sure any additional budget pages (e.g., budget justification) match the budget forms/template pages.
Check your math! Make sure it all adds up and that you are not over budget.
Anticipate reviewers' questions and work to address them or, better yet, ask a colleague to review and provide feedback on your proposal, including the budget.
Some Colleges have internal peer review/mentoring programs. Check with your Associate Dean Research (ADR) to see if this service is available in your College.
Allow yourself time to prepare your budget properly. Don't leave it to the last minute.

	Purchase Price	HST	Rebate on GST	Rebate on OVAT	Net tax to university
percentage		13%	67% of 5%	78% of 8%	3.41%
amount	$1,000	$130	($33.50)	($62.40)	$34.10

If your Proposal is Successful

Read the agreement and follow it! Be aware of any special terms of your funding.
When the Research Services Office (Contracts or Grants) receives the signed agreement or award for your project an account set up will be initiated by staff within the Research Services Office. Your full research file for this new award will then be sent to Research Financial Services. The actual account will be activated and administered by Research Financial Services. Typically, the account will be activated by Research Financial Services within a few days of receiving your file. However, if the start date of your new award is a date that is sometime in the future, your account will not be activated until the 'start date' of the project. Note: A procedure to request approval for an account to be opened prior to all documentation being in place for contracts exists (i.e., this procedure does not apply to accounts for grants). Find out more about the circumstances under which 'Early Account Set-Up' can be approved [14]
The University has a financial management system designed to allow you to monitor and manage your research project budgets. It is called 'My Grants Tracker'. To learn more about it, participate in the on-line tutorial for 'My Grants Tracker' [15]
Some sponsors require that timesheets and copies of receipts for personnel be kept and submitted. If this is a requirement of the sponsor, it is the responsibility of the principal investigator to track, maintain and retain timesheets for personnel.
Be sure to know if the sponsor permits funding remaining from one fiscal year or project year to be transferred to the next, or whether you will lose the funding if it is unspent. If the sponsor does not allow the carry-forward of unspent funds to the next fiscal year, contact them well in advance of the fiscal year end and ask if they will consider a request for permission to carry forward funding. If they will not permit the carry forward of funding, discuss with Research Financial Services any alternate options that might exist to maximize the utilization of the funding.
Be sure to know what flexibility, if any, the sponsor allows in the spending across budget line items. For example, if your budget requests $20,000 for supplies and $3,000 for travel, will the sponsor permit you to spend $18,000 on supplies and $5,000 on travel? Find out if you need permission to overspend in one category while under spending in another. If you do need permission, get it in writing through an amendment to the agreement.
Some funding sponsors will require proof of the in-kind contributions toward your project. Find out what, if any, documentation is required, and prepare in advance how you will meet the expected documentation requirements.
If you have finance related questions after the agreements have been signed and the accounts have been set up, please contact the appropriate person in Research Financial Services.

What More can you do to Develop Budget Expertise?

Watch for and attend training sessions on budgeting and financial management.
Ask an experienced colleague for an example of a budget from a successful application to the target sponsor to use as a guide and/or ask an experienced colleague to review your proposed budget prior to submission. If you need assistance finding a colleague to act as a mentor or reviewer, don't hesitate to ask your department chair or ADR.
If your College has a research manager or ADR, utilize her/his skills.
Seek purchasing assistance from your departmental support staff and the University's Purchasing Department [16].
Develop a relationship with, and know who to contact in Research Financial Services regarding your queries.
Complete the on-line 'My Grants Tracker' tutorial.
Call and speak with the Office of Research program officer responsible for liaising with the Sponsor. It is their job to help you by answering specific questions about the program.
Learn from past examples of proposal budgets that were funded. Be organized about your previous submissions (e.g. budgets you have already developed). It may be easier to start from a past template than start from scratch, or, ask your colleagues to share sample budgets with you.