Items to Consider When Developing a Budget
- Funding Opportunity Announcement (FOA) and sponsor guidelines and policies.
- Northwestern policies and Cost Accounting Standards, which provide important frameworks for budget development and management of sponsored projects.
- Office of Management and Budget (OMB), OMB Circular A-21 Cost Principles for Educational Institutions (applicable for federal grants, cooperative agreements, and contracts)
- Federal Acquisition Regulations (applicable for federal contracts)
- For more information on the above, please see Cost Studies' Links page.
When cost sharing is being requested, complete the pre-award cost sharing process.
Types of Costs
Budgets generally include two basic categories of costs:
- Direct Costs – Costs identified specifically with the sponsored project or that can be relatively easily assigned to it with a high degree of accuracy. Examples of direct costs may include salaries, fringe benefits, consultants, equipment, materials and supplies, travel and subcontracts.
- Facilities and administrative (F&A) Costs - Costs incurred for common or joint objectives and not readily or specifically identified with a particular sponsored project, or any other institutional activity. Examples of F&A costs may include building & equipment depreciation, operations and maintenance, costs of University’s libraries, materials, supplies and services of a more general nature, such as routine administrative support, office supplies and office equipment.
For additional information regarding direct costs and indirect costs (F&A) please refer to Charging Sponsored Projects. For information on what may be exempt from F&A in your budget, refer to the F&A page or the most recent DHHS rate agreement.
Sponsors may impose limitations on the total costs (such as a total funds-per-year ceiling), the direct costs (such as a salary cap or maximum travel costs) or the F&A costs. The FOA or agency guidelines as well as university policies should be reviewed for those limitations.
Examples of limitations include:
- Clinical Trials
- Resources & Training