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Budget Preparation

When preparing a proposal budget, start the process by reading the sponsor guidelines and reviewing any required sponsor forms.

Contracts, grants, and other types of awards accepted by the campus are to be prepared in accordance with the Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions and the UC Santa Barbara Departmental Costing Guidelines.

Table of Contents

Direct Costs

Direct Costs include salaries, fringe benefits, consultant costs, equipment, supplies, travel, sub-awards, alterations or renovations, and other costs, such as tuition, fees, and GSR health insurance.

Salaries and Wages

In the salaries and Wages category, you should include the name, university payroll title, appointment type, annual or monthly salary, number of months or percentage of time on project, and the total salary requested for each person listed. If the individual is not yet identified, list as "TBN" (to be named) with the appropriate salary from the approved salary scales. Actual salary costs for named employees may be used if the salary scales are inadequate. Actual costs must be indicated as such in the proposal budget. The bargaining unit contract should be consulted for covered academic and staff titles.

If an individual's salary is above-scale or off-scale, indicate such on the budget. The two terms are not synonymous. Off-scale means appointed at a specific on-scale level, but the salary is above that level. Above-scale means appointed at a salary that is above the highest possible level for that title.

Always note that the summer salary is "1/9 annual salary," as many sponsors question how summer salary is calculated.

Projected merits/promotions should be factored in for all titles. For faculty with appointments outside your department, contact their home department staff person in charge of academic merits/promotions to get the current pay rate, rank, and next scheduled merit.

Departmental approval is required for any release time proposed by the Principal Investigator.

Clerical or administrative salaries are generally not allowable as a direct cost. To be included, such costs must be specifically justified in the proposal and in accordance with OMB Circular A-21.

Salary Scales

Refer to the salary scales on the following web pages when preparing your budget:

Fringe Benefits

Fringe Benefit rates are established by the Office of the President and must be budgeted to the same funding source as the corresponding salary.

Actual benefit costs may be used for an existing academic or staff employee. If you use actual costs, note the employee's name on your budget, with the word "actual" next to the name. Fringe benefit percentages for some academic titles change in the summer months.

To determine whether faculty compensation is above or below the FICA ceiling, take the annual, 9 month salary, divide by 12, then multiply by 7 (January 1 - July 1 paychecks).

At their September 2010 meeting, the University of California Board of Regents voted unanimously to increase the amount UC and its employees contribute to the pension plan. Beginning in July 2011, employee members of the UC Retirement Plan (UCRP) began contributing a percentage of salary into the plan; UC also contributed a percentage to the plan. The amount of contribution has increased over a period of time and will continue to increase every July, as follows:

The rates below should be added to the Academic and Staff benefits rates for budgetary purposes. The rates listed below do not apply to academic summer salary.

FY 12-13 10.63%
FY 13-14 12.65%
FY 14-15 14.5%
FY 15-16 16.8%
FY 16-17 19.1%
FY 17-18 19.1%
FY 18-19 19.1%

The new contribution levels are subject to collective bargaining for represented employees. The Regents' actions do not change employees' pension benefits, only the amount they and the university pay toward the cost.

To maintain consistency with University accounting practices the cost should be added to the existing benefit rate for eligible staff and academic personnel. If a budget proposal covers two fiscal years, a combination of the two benefit rates should be used in the proposal. A statement similar to the one below should be included in the budget justification to address the estimated UCRP contributions.

Sample justification: The fringe benefit rate includes an increase of ___% for restarting the employer contribution to the University of California Retirement Program (UCRP), effective July 1, 2009 for eligible employees and is applicable to all university fund sources.

Please refer to the UCSB Projected Fringe Benefits Rates chart for the correct benefit rates.

Graduate Student Tuition, Fees, and Graduate Student Health Insurance Program (GSHIP)

Graduate students employed by the University in eligible classifications receive partial or full tuition and fee remission, depending on the percentage of time appointment, from the fund that pays their salaries. In cases when an eligible graduate student is paid from more than one fund source, the cost of remission should be prorated. Graduate students employed in the title classification Graduate Student Researcher (GSR) are among those eligible for remission. Questions regarding eligibility of particular students should be directed to the Graduate Division.

Currently, GSRs employed between 25% and 34% time qualify for partial fee remission which includes payment of 100% of the University's Educational and Registration Fees. Campus fees are currently not paid by the partial fee remission.

GSRs qualify for full fee and tuition remission if they are appointed for at least 35% time (all GSR appointments combined) over three months of the quarter, or they work at least 140 hours during the quarter. Full fee remission includes the payment of educational tuition for eligible students, supplemental tuition for international students, and supplemental tuition for domestic students during their first year only. Non-resident GSRs who have advanced to candidacy are eligible for a 100% reduction in supplemental tuition for a maximum of three years after the advance to candidacy. Indicate on the budget if tuition, fees and insurance are for an in-state or out-of-state Graduate Student Researcher (GSR).

All GSRs employed 25% time or greater are eligible for payment of graduate student health insurance (GSHIP).

Please refer to the Summary of Quarterly Fees and Expenses for the current rates.


The University defines equipment as articles of non-expendable tangible personal property having a useful life of more than one year, and an acquisition cost of $5,000 or more per unit. Sometimes an agency will have a higher or lower dollar value than UCSB. In this case, UCSB's dollar value takes precedent.

Tax, shipping, and any transit costs should be factored into the cost of the equipment. One exception: Sales tax is not paid on government owned equipment. If the guidelines of a proposal state that any equipment purchased will vest in the government, do not add in sales tax.

Fabrications are generally treated like equipment and excluded from indirect costs under MTDC calculation. However, if an item is fabricated and shipped off campus, then indirect costs are assessed. Fabrication costs may include associated labor.


Travel should be broken down into domestic and foreign. Provide as much detail as possible. Include airfare costs, lodging, number of travel days, destinations, meal amounts and number of people traveling when possible (Example: Airfare: $300; Lodging: $200; etc.).

All travel funded directly or indirectly by the Federal Government must comply with the Fly America Act.

The Accounting & Financial Services Travel website provides a good summary of travel policies, including per diems rates and mileage expenses. It can be found at University of California Travel Policy Summary.

Participant Support

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 employees) in connection with meetings, conferences, symposia, or training projects. Participants cannot be UCSB employees whose employment is related to the research or project. Costs of facilities rental, administrative support, supplies, and conference meals are generally not considered participant support.

A stipend is defined as a fixed sum of money paid to a participant for a service.

Other Direct Costs

Other Direct Costs include Materials and Supplies, Publication Costs, Consultant Costs, Computer Services, Subawards, and Other. Items that fall under the category of "other" include rental charges, facility charges, etc.

Material and supply costs must be reasonable and directly allocable to the supported activity. Office supplies, postage, copy charges and local phone calls are examples of costs not normally allowed as direct costs. To be included, such costs must be significantly above what is normally covered by Facilities and Administration costs, specifically justified in the proposal and appropriate to the project.

Hazardous waste disposal costs are not allowable as a direct cost.

Supplies are defined as items that cost less than $5,000. Include a list with quantity, unit price, and description of each item.

Subawards and Multiple-Campus Awards (MCAs)

Subaward totals should be in the budget. The total amount of each subaward or Multiple-Campus Award (MCA) should be listed as a line item on the UCSB budget and separate detailed budget included in the proposal review copy. Indirect costs are assessed on the first $25,000 of each individual subaward for all New and Renewal proposals (effective July 1, 2009). If UCSB is submitting a proposal that includes an MCA, no indirect costs are assessed on any part of the MCA amount.

An authorized scope of work, budget, and budget justification must be submitted for each subaward or MCA. A Subaward or MCA commitment form, signed by an authorized official of the recipient entity, must be provided to SPO prior to submission of the proposal. See Subawards page for details.

Consultant Costs

Consultant Costs generally may only be paid to individuals not employed by UC campuses or labs. The consultant should provide special knowledge that is needed for the project. Include the same information provided for personnel and be specific about daily rate and amount of days they will be paid.

Contracts for Services

Contracts for Services should be included in the budget as a line item. The total amount of the contract is accessed the appropriate IDC rate.

Alterations and Renovations

Alterations and Renovations are changes that need to be made to convert an existing space. This can include the installation of equipment.

Indirect Costs (IDC) or Facilities and Administration (F&A) Costs

Indirect Costs (IDC) a.k.a. Facilities and Administrative (F&A) Costs represent those expenses that cannot be easily identified to any specific project but are incurred for common or joint objectives. They include operation and maintenance of facilities, including building depreciation, library expenses, space, utilities, payroll, accounting, and other services. The indirect cost rate is determined by the type of project i.e. research, instruction, or other. The rate is also determined by whether the project is performed on-campus or off-campus. See the negotiated rate agreement for UCSB.

Proposals must include the negotiated rate unless the UC Office of the President has approved a waiver of some or the entire indirect cost rate. If the sponsor has written guidelines that indicate they do not reimburse indirect costs at the full rate, Sponsored Projects will verify if an existing waiver exists. If not, Sponsored Projects will request a waiver from UCOP.

UCSB's indirect cost is assessed on Modified Total Direct Costs (MTDC). The MTDC base consists of salaries and wages, fringe benefits, materials, supplies, services, travel, and subcontracts (up to the first $25K of each). The costs of equipment, capital expenditures, tuition remission, Grad Student Health Insurance Program (GSHIP), rental costs of off-site facilities, scholarships, fellowships, the portion of each subcontract in excess of $25K, and the total of each MCA is excluded from the MTDC base.

A DHHS agreement statement should always be included at the end of the detailed budget to let agencies know which authority has negotiated our IDC rate agreement. Ex: "This is the DHHS negotiated, predetermined, on-campus rate for Research Projects covering the period July 1, 2006 through June 30, 2010. The rate thereafter is provisional."

If you are preparing a budget for a transfer of an award from another institution, call your Sponsored Project Officer first to confirm the indirect cost rate.

In the event of a full or partial waiver of indirect costs, the base on which indirect costs are assessed is defined in the waiver, rather than assessed on MTDC. Contact your Sponsored Project Analyst to get the appropriate rate.

Project Contributions

Project Contributions should only be included in a proposal when required by a sponsor as a condition of applying for a grant. If project contributions are included you will need to have commitment memos for each source of funding. These commitment memos must be signed by the individual responsible for each funding source identified in your proposal as project contributions. Refer to the Project Contributions page for more information about requesting cost sharing.

Budget Justification

The Budget Justification provides the rationale for proposed expenditures. Follow sponsor guidelines to prepare the budget justification for submission to the sponsor. If sufficient detail is not provided on the UCSB detailed budget, UCSB may require additional justification.


Helpful Budget Links

Budget Allocation

Detailed Budget (4-year) Updated


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