Costs and Cost Sharing

Identify the personnel who will be involved with the conduct of the project and determine the percentage of effort (the proportion of each person’s professional time) required. The salary amount you include should be calculated by multiplying the percentage of effort by the individual’s institutional base salary (e.g. 30% effort x $100,000 salary = $30,000). You must consider the length of the project. If the project is six months in duration, prorate the costs accordingly.

If you are on an academic-year appointment, you may receive summer appointments on external grants or contracts at a weekly rate of 2.5% of the previous academic-year salary. See the Summer Salary from Sponsored Program Accounts policy for more details.

You must include fringe benefits in proposal budgets for all Indiana University personnel. The rate varies depending upon the type of appointment. Fringe benefits include graduate student health insurance which is budgeted as a flat dollar amount. Rates change annually on July 1. The current rates can be found here.

If you plan to use one or more consultants for your project, their daily or hourly rate should be included, along with the number of days or hours they will be working. The consultants’ qualifications should be included in the proposal or budget narrative, along with a letter of support. Find a sample letter of support on the Proposal Tools & Resources page.

All necessary equipment you plan to use must be itemized and justified. Describe the purpose of the equipment in relation to the technical work you will be performing. It is a good idea to provide the source of your cost estimate. For example, you may include a vendor’s quote for an item or an estimate based on prior experience. Indiana University's current threshold for capitalized equipment is $5,000. An item that you would normally consider to be equipment that costs less than $5,000 should be labeled “Expendable Equipment” and be listed in the “Other” category.

Provide the detail for each expense item and describe the purpose of the travel in the budget narrative.

• Per diem is reimbursed at the rates used by the federal government unless limited by the sponsor.
• Mileage should be based on the established IU rate multiplied by the number of miles unless limited by the sponsor.
• Airfare should be budgeted at the coach rate for domestic travel.
• International travel has special restrictions. For example, federal and federal pass through projects must abide by the Fly America Act, and many sponsors require prior approval for foreign travel.

The costs of any laboratory or clinical procedures you will conduct in an outpatient clinic or in-patient facility belong in this category.

This budget category refers to direct costs for items such as stipends, subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, meetings, training activities, or workshops supported by this project.

It is helpful to group supplies into general categories to maintain flexibility when you receive the award (i.e. “Computer supplies: $150”, not "three flash drives, six cables and two microphones"). Include the category descriptions, an estimate for each one, and a subtotal. Some grouped categories you may consider using include: laboratory supplies, medical supplies, computer supplies, project supplies, and pharmaceutical supplies.

If you are working with a collaborator from another institution who will have a significant contribution to the design and conduct of the project, a subaward may be required. If IU is the lead organization, the subawardee must provide the following:

• Budget for each year with a cumulative total in the sponsor format
• Budget justification or budget narrative
• Work statement
• Letter of support signed by the authorizing official of the subaward institution
• Copy of the subaward’s Facilities and Administrative costs rate agreement (if applicable)

The subawardee budget total is included in IU budgets on one line labeled subaward, or consortium costs. If you have more than one subawardee, the documents are required for each, with the total for each subawardee listed as a direct cost on the IU budget.

Unlike vendors, who provide goods or services, subawardees serve as project co-investigators. For further clarification, visit the page on Subawards.

This budget category may include, but is not limited to, items such as long distance telephone tolls, photocopy costs, graduate student fee remissions, expendable equipment, contractual services, honoraria, and human subject payments.

All projects should include F&A costs unless the sponsor restricts these costs in their guidelines. F&A is also referred to as overhead or indirect costs. IU’s current F&A Cost Rates as well as the F&A Rate Agreement are available on the IU Rates page.

Estimating increases for future years is recommended, where allowable by agency (e.g., NIH currently prohibits inflationary costs).