Guide to Services
- Research Administration
- OMB Circulars
- Institutional Data
- Financial Conflicts of Interest for PHS-Sponsored Projects
- Prepare a Budget
- Modify a Budget (Rebudget)
- Indirect Costs
- Assurances and Regulations
- Award Notification and Setup
- Progress Reports
- Close, Extend or Transfer an Award
- PI-Eligibility/Guest Scientist
- Frequently Asked Questions
- Commonly Used Acronyms in Research Administration
- Clinical Trials
- Subcontract and Vendor Contract Services
- Subaward Services
- Consulting Agreements
- Lease & Renovation Services
- Regulatory Affairs
- Human Resources
- Occupational Safety and Health
- Purchasing & Reimbursements
- Financial Reports
- Graphics & Communications
- Information Technology
- Technology Transfer & Commercialization
Prepare a Budget
HJF can help prepare budgets required for applications or proposals for extramural funding. HJF provides templates for federally required proposal forms and assists with determining appropriate salary levels for new personnel. Additionally, our preaward team, or a grants specialist or contract manager can provide approved rates for fringe benefits and HJF’s company-wide General & Administrative costs and instructions on how to apply them. Information about federal restrictions on costs (e.g., salary caps, consultant per diems, etc.) is also available.
The budget should include all direct costs including personnel, equipment, supplies, travel and other costs for activities required for the project, as well as G&A costs.
Most costs may be adjusted for inflation in future project years. The NIH inflation factor is limited to 3% per year. In most instances, equipment purchases are made toward the beginning of the project. Your preaward team, contract manager or grants specialist can answer any budget questions.
Below is a list of possible costs chargeable to a sponsored project. In order to avoid costly omissions when preparing application/proposal budgets, be sure to consider the following:
- Fringe benefits
- Equipment (non-expendable equipment, accessories, freight, installation) Consultants (fees, travel)
- Supplies and expendable equipment (research reagents, lab equipment under $5,000, computing devices under $5,000, office supplies, questionnaires, animals and animal maintenance supplies, chemicals, glassware, electronic components, brochures and announcements, audio and video tapes,
- Travel (domestic and foreign, field work, conferences, subsistence costs, transportation) Publications
- Other direct costs (space or equipment rental, alterations or renovations, human subjects or informant fees, service contracts, communications, animal care, stipends for participants, vehicle lease or purchase, shipping costsCompany-wide General & Administrative (G&A/indirect) costs (and performance site specific overhead costs).
- Federal government employees may not simultaneously be employees of HJF
- Salaries for temporary or intermittent (non-tenured) federal government employees may be included on federal projects (using federal fringe rates)
- Personnel budgets should reflect usual and customary wages; however, increased wage levels will be considered under extenuating circumstances
- Employees may be funded between two or more HJF sponsored programs or projects There are some federal restrictions on costs (e.g., salary caps, consultant per diem, etc.)
- It is strongly encouraged to include an inflation factor of 3% for personnel costs in each succeeding budget year of a project to provide for merit pay adjustments
- Do NOT include consultants in the personnel section.
To develop an effective, comprehensive budget, begin with these basic categories.
Personnel is usually the largest component of a research budget. Determine what types and levels of personnel are needed to accomplish the research goals. For help determining appropriate salary ranges for a budget, contact Business Development, Office of Sponsored Programs (OSP) or the Contracting Department for assistance.
If an HJF employee will be supporting a project in any capacity, for any level of effort, salary for the employee must be included in the proposed budget.
Before the proposal is submitted or revised, salaries must be verified by the HJF Human Resources Department to ensure that the proposed salary is either equal to the employee's current salary, or if a different salary is proposed, a justification must be provided stating the reasons why the proposed salary differs from the current salary (e.g., anticipated promotion or merit increase between submission and award, anticipated change in hours, anticipated change in duties).
The compensation for to-be-determined (TBD) positions must also be verified by the HJF Human Resources Department, to ascertain realistic salaries in accordance with market pricing and HJF's compensation structure.
Fringe Benefit Rates
Fringe benefits are employee associated costs expressed as a rate by employee class. Fringe benefit rates must be applied to all proposed personnel expenses. when preparing application/proposal budgets. Each fiscal year, HJF negotiates fringe benefit rates with the U.S. Department of the Army. Contact our preaward team, a grants specialist or contract manager with any questions about the current fringe benefit rates to use in a proposal.
HJF utilizes two different fringe benefit groups, each with a different rate. Tier one supports the benefits for employees who work 21 or more hours per week. Tier two supports the reduced benefits provided to intermittent workers and temporary employees (less than 21 hours per week or four months per year). In both cases, the rate is applied to all salaries and wages except paid vacation time. Paid vacation time is not charged to projects, and fringe benefit rates are not charged against stipends.
Fringe benefit rates include:
- Employer's portion of FICA taxes
- Unemployment taxes
- Workers' compensation insurance
- Employer's contribution to retirement plan*
- Health, disability and life insurance*
- Vacation accrual*
* These benefits do not apply to employees working less than 21 hours per week
Stipends on Sponsored Awards
Stipends are payments made to individuals for subsistence support or to defray expenses during a period of academic appointment or sponsored training activity. Stipend payments are not compensation for services rendered and, therefore, are not allowable on federal awards unless the purpose of the agreement is to provide training to selected participants and the charge is approved by the sponsoring agency (OMB Circular Uniform Guidance, Subpart E).
Sponsored funds intended to support training or research training will state that intention clearly in the agency program announcement. The scope of work in the proposal and award agreements should also state explicitly that training or research training of specific individuals is a purpose of the award. In such cases, stipend expenses are expected and allowable. Typical training awards include NIH "T" and "F" awards, NASA's various fellowship programs, and NSF Doctoral Dissertation grants. Other awards where the training intention in HJF's proposal and award agreement is described clearly and accepted by the federal sponsor can also include stipend expenses. Starting October 1, these costs would go under the new cost category “Trainee Participant – Stipend.”
Sponsored research funds generally reimburse HJF for the allowable cost of services rendered. Stipends do not reflect payments in exchange for services and they are ordinarily not allowed on sponsored research awards. If an individual is providing benefit to a project under the direction of a Principal Investigator, they should be paid as an employee (e.g. a Graduate Student, Research Assistant or Scientist if a postdoctoral fellow).
OMB Uniform Guidance, Cost Principles (Subpart E)
No explicit guidance exists in the Uniform Guidance for the allowability of stipends, but the Cost Principles section does address student support. The only allowance for payments to individuals that do not represent compensation for services rendered appears in §200.466, Scholarships and student aid costs, which says such payments are allowable “…only when the purpose of the Federal award is to provide training to selected participants and the charge is approved by the Federal awarding agency.”
Two sections of the Uniform Guidance Cost Principles (Subpart E), suggest that stipends should not be charged to research awards. First, §200.430 (Compensation - personal services) requires that amounts paid to individuals for their services on federal programs be documented, implying that payments to individuals which are not for services rendered should not be funded by research awards. HJF’s effort reporting system does not include stipends, since these amounts do not represent compensation for work effort.
National Institutes of Health
The National Institutes of Health Grants Policy Statement (Revised October 2018) states explicitly that stipends are not allowable on research grants. This definitive statement appears twice in Part II: Terms and Conditions of NIH Grant Awards Subpart A: General; Selected Items of Costs. Under Salaries and Wages, it states: "Payments made for educational assistance (e.g., scholarships, fellowships, and student aid costs) may not be paid from NIH research grant funds even when they would appear to benefit the research project." Further, under the entry for Stipends, it states: "Stipends are not allowable under research grants even when they appear to benefit the research project."
National Science Foundation
The National Science Foundation Grant Proposal Guide allows for stipends only in support of participant costs at conferences, symposia, workshops, or other specific training activities. In these cases, the scope of work should include a description of the training activity and NSF would have acknowledged that participant costs would be funded by stipends. NSF guidelines do not provide an allowance for payments to non-employees or non-consultants for activities that benefit a research award.
Stipends are only allowed if there are specific training activities included in the scope of work as proposed and awarded by the federal sponsor.
Outgoing federal proposals that include stipends in the budget should include a description of a training purpose in the award. Graduate student support that is not identified explicitly as "stipend" will be considered "compensation." Preaward staff will review proposals to prevent submission of inappropriate stipends on research awards.
At the award stage, the HQ Admin should be sure that stipends are allowable if a federal award is involved. Because awards that might allow stipends are not readily identified by fund number or other unique attributes, the HQ Admin should coordinate with the Program Officer to communicate whether a specific federal award can be used to fund stipends.
During financial reviews, the HQ Admin and Program Managers of sponsored funds are responsible for reviewing awards for allowable costs and other compliance concerns. Stipend expenses on a federal award should trigger verification that stipends are allowable on that award. Similarly, finance officers will confirm the allowability of stipend charges on federal awards during their periodic reviews of financial activity.
For cases in which it is not clear whether stipends are allowable, the HQ Admin will review the program announcement, the award document, the budget, and the budget justification to determine allowability. If it is determined that stipends are not allowable on the grant, the program manager must remove expenses on stipend object codes from the grant. See below FAQ#4.
Stipends are allowable on non-federal sponsored research awards, but they should be anticipated in proposal budgets and approved by the sponsor. Many non-federal sponsors are willing to fund stipends. It is important to distinguish individuals who are providing services to HJF from individuals who are being paid without any expectation of work effort. HJF Human Resources policies prevail over non-federal sponsor expectations. An individual who is being paid for the services they provide to HJF should be considered either an employee or an independent contractor rather than the recipient of a stipend.
1. Which types of NIH awards allow stipends?
In some instances, NIH specifically identifies the "R" series of awards as research awards, but their guidance on stipend allowability seems to make a more general reference. We interpret the guidance to mean that "T" and "F" grants allow stipends, while "R" and "P" awards do not. Other programs should be evaluated on a case-by-case basis.
2. Will appointing researchers as employees, rather than stipendees, increase my indirect costs?
No, HJF’s indirect accounting system is based on the total value (CAS) approach rather than the modified total direct costs (MTDC) methodology, overhead is applied to both personnel compensation and stipend expenses. This is in contrast to many other institutions, where stipends are excluded from overhead and are removed from total direct costs to determine (MTDC).
3. Can a visitor who is an employee or faculty member from another university be paid a stipend?
The employment status of an individual at their home institution should not determine their appointment status with HJF. If they are providing services to HJF, they should be either hired as an employee or paid as an independent contractor. If they are visiting HJF for their own research or educational purposes and will not be working on federal research, they can receive a stipend as long as it is allowed by the funding source.
4. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to a compensation object code?
No, payments in these object codes reflect the employment category assigned by HJF. The payments carry taxation and employment liabilities for the individual and for HJF that are specific to the terms of the respective categories. Please coordinate the change with your HQ Admin and Human Resources.
5. If I find unallowable stipends on a federal research award, can I simply journal the stipend charges to another fund using the same object code.
Yes, stipends can be moved off federal research awards to funds where they are allowable as long as the transaction follows the cost transfer rules and the costs meet the conditions of allocability and allowability for the sponsored fund where the costs end up.
6. What do you do when stipend expenses appear on an invoice from a subcontractor on a federal research award?
Universities and other institutions use the term "stipend" to cover a variety of affiliations for individuals, and the use of the term itself should not specifically disallow the cost. When an invoice for stipends is submitted by a subcontractor, the costs should be verified and documented as compensation before they are charged to the federal research award. If possible, the subcontractor should resubmit the invoice using a more accurate description of the costs, such as compensation or salaries and wages for students or postdocs.
Equipment is defined as tangible assets with a unit or aggregate cost (if used as an operational unit) of $5,000 or more and a useful life of more than one year. Shipping and transportation costs associated with the equipment are treated as part of the total equipment cost. (Items costing less than $5,000 fall under the "tangible assets" category.)
If an item costs under $5,000, but functions as part of an operational unit or system costing over $5,000, it falls into this category and should be included in the equipment budget line.
Examples: computer hardware and software; office furnishings; scientific or medical equipment; alarm/monitoring system hardware.
Many funding agencies require prior written approval for the purchase of equipment items that were not specified in the original project budget. By including a detailed itemized budget of all anticipated equipment purchases when preparing an application, you will avoid having to obtain prior approval from the sponsor each time equipment is purchased.
Materials and Supplies
Supplies should be subdivided into major categories such as radioisotopes, reagents, animals, etc. For animals state:
- number to be used
- unit purchase cost
- unit care cost
- number of care days anticipated (include per diem rate).
Please see the Travel section of this guide.
Consultants may be used on contracts and grants as long as the individuals or organizations meet the Internal Revenue Service requirements for independent contractors.
It is required to provide the names and organizational affiliations of all consultants (other than those involved in consortium/contractual arrangements). Describe the services to be performed and include the number of days of anticipated consultation and the expected rate of compensation, as well as travel, per diem and other related costs.
Contracted Services Agreements (Contracts for Service)
Contingent upon the approval of the sponsor, contracts and agreements with vendors may be established for the provision of goods and services. Identify in the application the institution or individual to be contracted. For procurements between $10,000 and $250,000, federal regulations require the submission of two or more competitive quotes. Procurements over $250,000 will require competitive bidding. A single source justification (if there is only one available source) or a sole source justification may be developed with assistance from the HJF Purchasing Department to address inadequate competition..
HJF Purchasing or Subcontracting staff can assist with identifying a qualified third party to perform the work by submitting and evaluating responses from a Request for Proposals (RFP).
If collaborating with another organization, HJF needs to establish a subrecipient agreement with that organization that has the responsibility for programmatic decision making; has its performance measured against the objectives of the program; and has responsibility for adherence to federal compliance. Typically included in the application is a written statement supplied by the collaborating organization indicating their intent to cooperate in the research. In addition, the funding agency may require a detailed proposed budget for the subaward or consortium participant. Consortium arrangements may involve personnel costs, supplies and other allowable costs, including G&A costs.
If assistance is needed in determining the appropriateness of using a vendor versus initiating a subaward, contact a grant or contract specialist.
Proposal Requirements for Subawards
The proposal format for the identified subrecipient should mirror the format HJF is required to submit to the sponsor. At a minimum, the proposal should include:
- The subrecipient's statement of work
- The subrecipient's budget, to include an itemization salaries and wages, fringe benefits, supplies and materials, equipment, travel, other direct costs, G&A costs (indirect costs) and accompanying budget justification, checklist, and supporting documents
- A copy of the current negotiated rate agreement for the subrecipient's institution
- Signed proposal cover page from an authorized institutional representative of the subrecipient institution a signed letter of intent indicating the proposal period, total cost, usage of human subjects, animals, biohazard and radioactive material
- Resources available for research at the subrecipient institution
- Biographical sketches of key personnel involved in the subrecipient's statement of work
- If required by the sponsor, current and pending support for subrecipient's key personnel, human subjects or animal subjects documentation, intellectual property agreements, signed certifications and representations, environmental compliance, PI assurance forms and Facility Safety Plan
Subrecipient costs (both direct and the subrecipient institution's G&A) are included in the HJF proposal budget as a direct cost to HJF. Unless otherwise specified differently in the sponsor guidelines, HJF calculates G&A costs using the subaward rate for all subrecipient costs, regardless of the number of budget periods or the duration of the project.
Facilities & Administrative Costs (F&A/Indirect Costs)
Each fiscal year, HJF submits proposed G&A cost rates to the U.S. Department of the Army for approval. These rates should be used when constructing the proposal budget. The preaward team, contract manager or grants specialist will verify that the appropriate F&A rates are used in the proposal.