Proposal Budget Categories

Salaries

Institutional Base Salary (IBS) is the annual compensation paid by the university to an employee for all work which benefits the university. For proposal submissions, OSP verify personnel institutional base salary using IRIS PA 20. Only salary reflected on IRIS PA 20 should be included when calculating salary. Investigators with questions related to their Institutional Base Salary should work with their departmental business manager in the first instance. Refer to Fiscal Policy FI0207  for details regarding the components of IBS.

Working with Salary Caps

Awards from the National Institutes of Health (NIH) are subject to a salary rate cap. The salary rate cap is set by NIH and is adjusted periodically. For the current NIH salary rate cap please see the NIH site.

Salary charges above the rate cap may not be charged to NIH awards; however, it is important that the effort expended working on NIH awards should be accurately stated. Salary above the rate cap should be moved to a discretionary fund using the cost sharing cost element. Salary in excess of NIH salary cap should be recorded on the Cayuse SP budget page under the cost share section. Be sure to include Business & Finance to the Cayuse proposal so that it will route to their office for approval. Please work with your departmental grants administrator for assistance in calculating NIH salary cap cost share.

Fringe Benefits

The current estimated fringe benefit rates the Health Science Center are listed below:

TIAA/CREF & TCRS: 33.80%
JCRS-A: 40.85% Note: Research Administration (x5587) has a list of people on JCRS-A

Fringe benefit costs cover the University's cost for FICA, worker's compensation, unemployment benefits, and contributions to retirement and health insurance. Actual costs per person vary depending upon type of insurance coverage selected, type of retirement plan, and salary; figures are approximate, based on averages. These estimates are based on actual costs in recent years.

The breakdown is as follows:

Cost Element
FICA 07.65%
Worker's Compensation 0.25%
Est. Avg. Health Insurance 13.85%
Retirement
TIAA/CREF & TCRS 10.30%
JCRSA 17.35%
Unemployment 0.10%
Staff Tuition 0.15%
Longevity Pay 1.50%

These fringe benefit rates should be used in preparing grant and contract budgets. Fringes are calculated on salaries and longevity pay.

Note - If actual rates are needed (e.g., for federal contract proposals), please contact the Payroll Office or the Office of Finance and Operation.

Equipment

Equipment is defined by an article of nonexpendable, tangible property having a useful life of more than one year and an acquisition cost which equals $5,000 or more. When purchasing equipment on a sponsored project it is often beneficial to have vendor quotes for each item. Also, F&A is not charged on equipment costs. More information can be found in Fiscal Policy FI0605.

Consultants

Consultants are individuals outside of the university who are provided expertise to a given project or providing a service to the project that is consistent with their normal course of business activities. These individuals are not considered to be providing significant intellectual contributions to the project and do not guide the project’s technical direction. When including a Consultant on a sponsored project, a letter of commitment stating the Consultant’s hourly rate should be included with the proposal.

Sub-Awards

Sub-awards are typically institutions (such as another university) that are performing a substantial portion of the work and have partial control of the technical direction of the project. When sub-awards are included in the sponsored project budget, F&A is collected on the first $25,000 of each sub-award only. At the time of proposal, each sub-award must complete the Subrecipient Commitment Form and provide a Statement of Work, budget, budget justification, and a letter of commitment signed by an Authorized Official of the institution. More information can be found in Fiscal Policies FI0205 and FI0230. Please refer to the Sub-contract Guide to help determine if an entity is a sub-recipient, contractor/vendor, or consultant.

F&A Costs

Facilities and Administrative (F&A) costs are costs that cannot be specifically associated with a single project. These types of charges include: use allowances; operations and maintenance expenses; general and administrative expenses; departmental administration expenses; sponsored projects administration; library expenses; and student administration and services.

F&A is typically calculated by applying the university’s federally negotiated rate to the Modified Total Direct Cost (MTDC) of the project. MTDC refers to the total cost of the project student maintenance fees, cost sharing, equipment, and subcontracts after the first $25,000, real estate rental, and patient care costs. A sponsor or particular solicitation may provide guidance on a different method of calculating F&A, in which case Sponsored Programs can provide assistance. More information on F&A can be found in Fiscal Policy FI0205.

Determining On/Off Campus

The use of the on- or off-campus rate for F&A costs is determined as follows:

If 51% or more of proposed salaries for UT personnel represents compensation for on-campus effort, the on-campus rate will apply.
If 51% or more of proposed salaries for UT personnel represents compensation for off-campus effort, the off-campus rate will apply.
If 50% of proposed salaries for UT personnel represents compensation for on-campus effort—and if 50% represents off-campus effort—the on-campus F&A cost rate will apply.
Please note that the inclusion of a subcontract in a budget has no bearing on the applicable rate—the applicable on- or off-campus rate is related solely to the compensation to be paid to UT employees.

Locations with On-Campus F&A

UT owns or leases several facilities beyond the primary Memphis campuses. These facilities, while not on the main campuses, should be treated as on-campus locations. Accordingly, on-campus F&A rates should be charged when preparing budgets for sponsored programs using them.

Cost Sharing

Cost sharing is the portion of the total project costs of a sponsored project that is not paid by the sponsoring agency. There are primarily two types of cost sharing that may occur on sponsored projects: mandatory cost sharing and voluntary committed cost sharing. Matching is another common term used to describe cost sharing.

Mandatory Cost Sharing

This is cost sharing that is required by the sponsoring agency. The requirement for such cost participation is explicitly set forth in project announcements or request for proposal (RFP) and is a requirement for eligibility to participate in the project and will be specifically identified within the university’s proposal.

When mandatory cost sharing is required, a copy of the RFP, regulations, or guidelines must be submitted with the proposal along with a written commitment from the individual authorized to commit the resources to the campus research office. All cost sharing is to be reviewed and committed in writing prior to the proposal submission to the sponsor. The cost share must be detailed within the proposal narrative and within the Cayuse SP budget cost share section. All proposals including a cost share must be approved by the Office of Business and Finance by their inclusion as an affiliated unit in the Cayuse SP.

Voluntary Committed Cost Sharing

This is cost sharing that is not required by the sponsor, but which is included voluntarily in the university’s proposal to the sponsor. Once the sponsor has accepted the proposed cost share, the university is then obligated to meet the cost-sharing amount.

For example, voluntary committed cost sharing would be when a principal investigator commits to spend 15% effort on the project but does not expect the sponsor to provide funding to cover these costs. In this case, the 15% effort on the project was a requirement for proposal submission in the RFP, but was included at the discretion of the PI (or other project personnel) in an attempt to leverage the proposal.

All cost sharing is to be reviewed and committed in writing prior to the proposal submission to the sponsor. The cost share must be detailed within the proposal narrative and within the Cayuse SP budget cost share section. All proposals including a cost share must be approved by the Office of Business and Finance by their inclusion as an affiliated unit in the Cayuse SP.