In general, the largest portion of the proposed budget will be allocated to salaries and fringe benefits, so it is important to understand how to present this information and to ensure that the numbers are correct. 

The first step is to determine how much effort of various types of employees will be required to complete the project. The budget justification should describe what each employee will be doing on the project. These decisions have implications downstream because proposed effort becomes committed effort which becomes certified effort.

Next, determine how the sponsors require effort to be presented in the budget. Typically this is either in months or percentages. Some funding mechanisms require effort to be presented in hours or daily rates. Because Duke employees are paid either monthly or on a by weekly basis these two approaches are difficult to impossible to address.

After determining the amount of effort needed, the next step is to collect the Institutional Base Salary (IBS) of all project employees.(Employee Salary Request Form)The IBS is the of salary paid to an employee for 100% of the employee’s University Effort: research, instruction, administration, etc.

                                    IBS X % = Requested Salary

PI/PDs, Co-PIs and Key Senior Personnel (faculty members) are almost always identified by name in the budget. Postdocs, Professional/technical staff, students and staff generally are not and can be identified as To Be Determined (TBD). In these cases the budget should include appropriate estimates based on Duke’s established salary ranges as published Human Resources .

Only Duke employees and TBDs may appear in the Salary and Wages section of the proposed budget with the proposed compensation and fringe benefits. Non-Duke personnel may appear in the budgets as consultants, recipients of honoraria, participant support or as a subcontracting entity with a separate budget.

Duke personnel can be included in budgets with effort and zero dollars. This is referred to as Voluntary Committed Cost-Sharing and requires further reviews and approvals. Some sponsors like the NSF prohibit the inclusion of VCCS.

Fringe benefit (FB) rates are expressed as a percentage of salary. Separate FB rates are used for federal and non-federal grants and contracts, and those rates are divided by faculty/monthly employees, bi-weekly employees, Ph.D. students and other students. (The rate for students is only to be used when a student is not currently enrolled.) Federal rates are lower as a result of the government's decision to end participation in the tuition reimbursement portion of Duke's FB program.

Duke's FB rates are negotiated with DHHS; however, the negotiated rates usually cover only one fiscal year at a time. The University's Corporate Controller projects FB rates several fiscal years in advance for budget planning purposes. These projected rates have not been negotiated with the Federal Government. Unless the Sponsor stipulates otherwise, faculty are expected to use the projected rates when preparing proposals. The Controller's office notifies the faculty and ORS of changes in the projected rates. Current and recent past rates are available on the Financial Services website.

The budget periods in a proposal do not always correspond to fiscal years. A given budget period may include more than one fiscal year and, therefore, more than one fringe benefit rate would be applicable to that period. The method for resolving this issue depends upon the sponsor and the anticipated award mechanism. For grant proposals, the fringe benefit rate should be prorated across fiscal years. Please note that if you are submitting a DOD contract proposal, you may be required to use the single negotiated rate for all years.

If another organization, a subrecipient, will be paid by Duke University to conduct part of the proposed project, subawards or subcontracts are the most appropriate mechanisms for the transfer of funds if the following criteria apply:

1. the funds are to be paid to another university or business rather than to an individual (consultant).
2. the subrecipient will contribute to the scholarly or scientific design, conduct, and reporting of the project as described in a statement of work.
3. the subrecipient's portion of the project requires judgment, unique expertise, and original thought.
4. the subrecipient does not provide identical services to others as their primary business. Examples of identical services include the fabrication or repair of equipment, data processing, and routine analytical and testing services.

How to pay outside entities.

Capital equipment is defined by the University as a permanent asset costing $5,000 or more per unit and having a useful life of at least two years. The cost of shipping and installation is included in the cost of the equipment.

The budget should specify the name and manufacturer of the equipment whenever possible. Sponsors may want to see the manufacturer's specifications and price list, particularly if the equipment is very expensive.

Software: Operational software is purchased in conjunction with hardware and is considered part of the purchase price. Software applications which are purchased separately are considered equipment if they meet the dollar threshold per licensed user as described above. Leased software is not identified as capital equipment, regardless of cost.

Warranties: Extended warranties are not capitalized under Duke policy and should go in the "other direct costs" category.

Fabrication: If a project will need equipment which is not commercially available and must be fabricated, all the costs associated with its fabrication will be considered part of the cost of the equipment.

The final cost of fabricated equipment should be estimated, included in the equipment category, and excluded from F&A cost recovery. The budget narrative should clearly identify all of the costs which will be associated with the production of the equipment, such as materials, salaries, and travel. Sponsored Programs has postaward accounting procedures to track expenses associated with fabrication. When the equipment is completed it will be tagged and inventoried.

Buy American: If a contract is used to fund the proposed research, the purchase of non-U.S. manufactured equipment may require special authorization under the Buy American Act. The contact for information about the Buy American Act is:

Equipment Screening Form: The Equipment Screening Form is required for purchases made on reportable projects. The form will require signatures from a Departmental Representative confirming that they have reviewed the completed form and related attachments. The completed form must appear in the Notes and Attachment section of the Buy@Duke Cart. Questions regarding allowability or procedure should be directed to your OSP liaison.

What does this mean for PIs?

The PIs should expect to have conversations with their Grant Manager (GM) regarding the scientific or programmatic needs of the project. They should note that convenience is not a sufficient reason.

What does this mean for GMs?

GMs should expect to have conversations with their PI and Departmental Representatives regarding the scientific or programmatic needs of the project and how they are furthered by the purchase of the capital equipment.

The Supplies & Materials budget category applies to consumable supplies, regardless of cost, and equipment with a unit value of under $5,000 or a useful life of under two years. Supplies should be listed by general type such as chemicals or glassware.

General office supplies, such as paper, staples, pencils and pens and non-capital equipment such as calculators and printers, are generally not allowable on federal grants unless they can be directly allocated to specific project and are fully explained in the budget justification. This budget category can be supported by general descriptions of the type of supplies included and a best estimate of their cost. 

If the awarded budget includes general office supplies, the department must complete a CAS form.

For each trip, the proposed destination, purpose and duration of the trip should be described. An estimated breakdown of expenses for each person traveling should include:

1. round trip coach air fare
2. per diem or living expenses
3. other related expenses such as ground transportation, conference registration fees, and short-term Visa fees, etc.

For use in federal projects, the General Services Administration publishes the maximum allowable Federal per diem rates for U.S. and foreign cities.

The Federal Government imposes strict regulations regarding the use of U.S. flag carriers and the class of ticket a grantee must purchase. See Fly America Act

Participant support costs are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not Duke employees) in connection with conferences, or training projects. Participant support costs are allowable expenses with the prior approval of the federal sponsor; funds budgeted for participant support costs can generally be rebudgeted to other costs only with the sponsor prior approval.

This category is used primarily for conference proposals or training proposals such as NSF Research Experiences for Undergraduates (REU) proposals where the students come to Duke from other universities and colleges.

NOTE: Participant support costs are managed on subcodes because they must be accounted for separately and excluded from the calculation of the F&A costs

It is critical that all required forms be signed by an authorized institutional officer. A signature from the participating PI, a department chair, or dean will not suffice to commit the institution.

When preparing the Duke budget, include the total cost of each subaward, including the recipient institution's Fringe Benefits costs and F&A costs, as a line item in the direct cost section of the budget proposal.

After receiving the award, ORS will write and issue the subawards.

Collaborative proposals, if allowed by a sponsor, are an alternate mechanism for joint projects with other institutions. The funds awarded for collaborative proposals go directly from the sponsor to each of the collaborating institutions simultaneously and eliminate the need for subawards from a lead institution to the other participating institutions.