Proposal Budget Basics

• Salaries: Salaries and wages for individuals who are working on the project scope, to be paid in proportion to the expected effort on the project. These are based on current UC Santa Cruz salary scales and include annual escalation of 4.5%, unless prohibited by sponsor policy. Per Uniform Guidance (2 CFR 200.413(c)), the salaries of administrative and clerical staff are normally treated as indirect costs and therefore not typically allowable as direct costs.
• Fringe: Fringe (or benefit) rates are composite rates based on the budgeted personnel’s position classification, and are subject to change. During budgeting, the current rate for the position’s classification is used and is calculated as a percentage of the individual personnel’s salary.
• Domestic travel: Costs for transportation, lodging, and subsistence/per diem for travel directly related to the proposed project within the United States. (2 CFR 200.475) For more information see UC Santa Cruz’s Travel Guide.
• Foreign travel: Costs for transportation, lodging, and subsistence/per diem for travel directly related to the proposed project outside of the United States. 
• Permanent equipment: Costs for project-specific equipment and other capital assets in excess of $5,000 with a life expectancy of more than one year. Read more about UC Santa Cruz’s equipment purchasing guidelines.
• Participant support:
• This budget category is only used as part of specific federal award programs (such as NSF’s Research Experiences for Undergraduates, or REU, program), and the intent is solely to provide financial assistance for participants to attend conferences and training that are developed and implemented as part of the project scope. Participant support  is defined as “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 employees) in connection with conferences, or training projects.” (2 CFR 200.1 “Participant support costs”) This budget category should not be used to budget for general travel to conferences, and cannot be used to support employee costs. Unallowable costs in this budget category include honoraria or travel for guest speakers or trainers; expenses for the PI, project staff, or collaborators to attend; workshop facilities or support costs; and payments made to research subjects as an incentive for recruitment or participation in a research project. These expenses, if allowable by the sponsor, should be budgeted under Other Direct Costs or Travel as appropriate.
• Subrecipients/subawards: An award provided by a pass-through entity (in our case, UC Santa Cruz) to another institution to carry out an intellectually significant part of the project. This does not include costs associated with contractor or vendor services. See more about subawards vs. vendors. 
• Multiple Campus Awards (MCAs): Funds for other UC campuses that will perform a portion of the programmatic work of a sponsored project are budgeted here. The UC campus that receives the original award is the “prime campus” while a UC campus that performs the portion of the work is considered a “participating UC campus.” More information about MCAs can be found in Chapter 8 of the UC Contract & Grant Manual.
• Other Direct Costs: Other project costs that are necessary to advance the work of the project. For example, other direct costs may include publication costs, laboratory supplies, service agreements, laptops, and/or software. Some sponsors may restrict what can be budgeted in this category. General office supplies, like pens and paper, are considered an indirect cost and should not be included.
• Tuition/Fees/GSHIP: Graduate student researcher appointments budgeted at 25% time or greater are subject to full costs for tuition (if applicable), fees, and GSHIP (health insurance) for each requested academic month. Annual escalation of 5% is included.

Facilities and Administration (F&A)/indirect costs (IDC) (or overhead) represent project expenses that cannot be easily identified with any specific sponsored project but are incurred for common or joint objectives related to all sponsored projects at UC Santa Cruz.

Read more about indirect costs.

A sponsor may require cost sharing or matching as part of the institution’s commitment, and may require such cost sharing to be included on a proposal budget. Cost sharing should only be offered and committed if required by the sponsor. If this is a sponsor requirement, be sure to start your proposal early and work with the Proposal Administration team to secure cost share.

Read more about cost sharing.

Some sponsors do not require a detailed budget as part of their proposal. The Proposal Administration team can still work with PIs to sketch out a rough budget to ensure that an award would be able to properly fund the proposed scope of work. In addition, a draft budget may be needed for internal approvals in some circumstances.

Projects which will be proposed and/or awarded in a foreign currency require an internal budget using US Dollars based on the exchange rate at the time of proposal. For more information on proposals and awards involving foreign currency, see the Foreign Currency section.

If a proposal includes work with another entity, a PI should discuss with their Proposal Administrator to determine whether the appropriate relationship is a subaward or a vendor/contractor. UC relies upon Uniform Guidance policy to define the types of relationships.

A subaward is for the purpose of carrying out an intellectually significant portion of the scope of work, and comprises a substantive contribution to the overall performance of the work. If the collaborating institution is a subaward, UC Santa Cruz acts on behalf of the sponsor as the pass-through entity, and is responsible for ensuring that the subrecipient performs according to the terms of the prime award. . (2 CFR 200.331) At UC Santa Cruz, subawards are prepared and issued by OSP.

An agreement is likely to be a subaward if the following are true:

• An entity has agreed to work in collaboration with the UC Santa Cruz PI to perform a substantive portion of the programmatic effort on an award, and the entity’s statement of work may represent an intellectually significant portion of the programmatic decision making.
• The entity has authority to make administrative and programmatic decisions and to control the method and results of work performed by their personnel..
• The entity has responsibility to meet all applicable sponsor requirements, and performance must meet program objectives.
• The entity has designated senior/key personnel in the proposal.
• The entity uses sponsor funds to carry out a program rather than provide a good or a service.
• Work performed is complex and requires a scope of work and budget, billing requirements, and performance outcomes or deliverables.
• The entity’s work results may involve intellectual property and/or may lead to publications.
• The entity needs animal and/or human subjects approvals for its independent portion of the work.

A vendor contract is for the purpose of obtaining goods or services for UC Santa Cruz’s own use, and creates a procurement relationship with the contractor. (2 CFR 200.331) At UC Santa Cruz, a service contract or vendor contract is negotiated by the Procurement Office.

An agreement is likely to be contractor/vendor relationship if the following are true:

• The contract is to an individual or sole proprietor. An individual cannot be a subrecipient because -individuals are not legal entities, and the federal government awards funding to organizations (not individuals).
• The vendor provides similar kinds of goods or services within its normal business operations or to many purchasers, and such goods, services, or specialized services are customarily provided by this vendor on a commercial basis, usually at a fixed price or rate..
• The vendor is providing service center services, utilizing recharge rates to determine usage. These may be conducted by other universities, but typically use procurement or service agreements as the agreement mechanism.
• The vendor’s scope of work does not reflect a specific, clearly defined, intellectually significant part of the research.
• The vendor is a professional consultant advising UC Santa Cruz personnel.
• The vendor is working at UC Santa Cruz’s direction, does not have programmatic decision-making responsibility, and is unlikely to be an “inventor” due to lack of substantive design contribution. .
• The vendor is providing equipment, fabrication of equipment, or components of fabricated equipment. However, a subaward SOW may include fabrication of specialized equipment to be used for the UC Santa Cruz SOW as a project- related asset or as a deliverable to the sponsor. It depends on the purpose of the sponsor’s award, UC Santa Cruz’s SOW, and whether the subrecipient is providing intellectually significant contributions to the development of the equipment.
• The vendor is providing services that are routine in nature, using de-identified data, and/or performing tests on data provided to them by UC Santa Cruz. This may include services such as conducting a survey or, routine professional services to analyze data/results (e.g, a radiologist reading an X-ray).