The budget documents required for an SBIR/STTR are complicated, particularly if the applicant does not have any experience with federal grants. Reviewing the documents at an early stage will provide more time for the applicant to become familiar with the budgeting process and to gather the required materials and details to prepare the forms properly. Collaborations with research institutions, federal laboratories, subcontractors, and consultants can help bolster the research and development aspects of the project, but these collaborations also result in additional forms and justifications. Therefore, it is best to become familiar with the forms and begin gathering information as soon as possible.
Carefully review the FOA for information regarding the maximum funding amount and the award period of performance (Section II), and any funding restrictions or other funding information (Section IV). In addition to taking into consideration any funding restrictions listed in the FOA, it is also important to note that pursuant to CFR §§ 200.403, 200.404, and 200.405, costs included in the budget must be reasonable, allowable, allocable, and consistently applied.
Reasonable | A cost is considered reasonable if the nature of the goods or services, and the price paid for the goods or services, reflects the action that a prudent person would have taken given the prevailing circumstances at the time the decision to incur the cost was made. |
Allocable | A cost is allocable to a particular Award if the goods or services involved can be directly charged to the Award based on the benefit provided. |
Consistently Applied | All costs incurred for the same purpose and in like circumstances must be treated uniformly either as direct costs or as indirect (facilities and administrative or F&A) costs. Since certain costs, such as administrative salaries and office supplies, are normally treated as F&A costs, these costs cannot be charged directly to federal Awards unless the circumstances of an Award are clearly different from the normal operations of the unit. |
Allowable | A cost is allowable if it is permitted as a cost within general federal regulations, the terms of a specific Award, and/or the institution's F&A rates. |
As you are documenting and identifying the costs associated with carrying out the proposed research and development and determining the appropriate budget categories for each item or expense, be sure that the costs you include on the budget adhere to the four Federal cost principles listed above.
The Research and Related Budget includes the following budget categories for the allocation of project costs. Applicants should keep these categories in mind during the budget development phase as it will make it easier to allocate project costs appropriately.
A. Senior/Key Person - Salary, Wages, and Fringe Benefits
B. Other Personnel - Salary, Wages, and Fringe Benefits
C. Equipment - in excess of $5,000 for each item
D. Travel - Domestic and Foreign
E. Participant/Trainee Support Costs
F. Other Direct Costs - Materials and Supplies, Publication Costs, Consultant Services, ADP/Computer Services, Subawards/Consortium/Contractual Costs, Equipment or Facility Rental/User Fees, Alterations and Renovations
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