Budget Cost Categories

A budget is the fiscal representation of the project narrative and will guide allocation of expenditure throughout the life of the award. The budget includes direct costs, indirect costs, and cost sharing (when mandatory). These costs should be allowable, reasonable and allocable per federal guidance (UG), university policies and sponsor guidelines. Budget requirements may vary widely by type of award (i.e., cost reimbursement or fixed price) or by sponsor (i.e., federal or private), but below are common budget categories for sponsored projects.

Direct Costs

Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs (UG § 200.413). Direct costs include categories such as personnel, tuition, consultant costs, equipment, supplies, travel, subagreements, and other costs (as applicable).

Personnel

The personnel section of a budget outlines all GW individuals working on sponsored projects with details on the percentage of effort they will be devoting to the project. Personnel budgeting requires identifying staff, calculating their effort (often in person-months or percent effort), applying their institutional base salary plus annual escalation, and adding associated fringe benefits and other project-specific costs in the detailed budget.

Faculty salaries may be applied to grants based on appointment type, sponsor guidelines and the GW Faculty Handbook. Some sponsors will provide compensation to faculty members with nine-month salary bases during summer months at their regular university salary rates, when included as part of the project proposal. Summer compensation is permissible if effort is committed during the summer. Several other types of professional and non-professional staff may be employed on sponsored projects, including technicians, laboratory assistants, programmers, statisticians, and service staff if allowed under the terms of the award.

Administrative and clerical salaries (in certain circumstances) AND programmatic salary costs can be included on competitive proposal budgets. (UG § 200.430) Specific requirements on administrative and clerical personnel charges on sponsored projects are outlined in the GW Direct Charging of Administrative Costs Associated with Sponsored Projects Policy.

Graduate Student appointments is administered by the GW Office of Graduate Student Assistantships and Fellowships (OGSAF) based on the three categories of graduate student appointments that can be funded by sponsored projects. Graduate students can either be a Graduate Research Assistant (GRA), Graduate Research Fellow (GRF) or Graduate Fellow (GF), but cannot have more than one of these statuses on the same project. Additional requirements may apply if the graduate student appointment is being continued during the summer months. For information on fellowships for research awards, forms associated with tuition and stipend awards, including those for tuition cost-sharing and student tax information, see here. See Frequently Asked Questions (FAQs) for Adding Students to Sponsored Research Projects (PDF)

Guidance on the roles and funding policies for graduate students involved in supporting sponsored projects is provided by The Human Resource Management and Development (HRMD) research staff resources page provides information on recruitment of research staff.

Fringe Benefits

Fringe benefits are allowances and services employers provide to their employees as compensation in addition to regular salaries and wages, including, but are not limited to, the costs of leave, employee insurance, pensions, and unemployment benefits. (UG § 200.431). GW’s Negotiated Indirect Cost Rate Agreement outlines current negotiated fringe benefit rates to be included for project personnel.

Equipment

Equipment is defined as an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the institution for financial statement purposes. The Fixed Asset Department oversees capitalized assets and establishes the capitalization threshold. Capital equipment is defined as tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the recipient or subrecipient for financial statement purposes, or $10,000 (UG § 200.313). Equipment costs are exempt from indirect cost recovery unless the indirect cost basis for the award is Total Direct Costs (TDC).

Equipment purchased with sponsored funds must be used in accordance with the grant or contract. It cannot be used for other sponsored projects or for general use. Equipment may only be purchased if it was included in the proposal budget or prior approval has been secured.

Materials and Supplies

Supplies are items priced under the equipment threshold and subject to indirect cost recovery (UG § 200.453). Computing devices and accessories can be included on competitive sponsored project budgets if they are necessary for project activities and no reasonable alternative is available.

Travel

Travel should be treated as a direct cost of the grant or contract when it provides direct benefit to the project and is within sponsor-specific guidelines.

Domestic travel is considered to be travel within the United States and Canada. Reimbursement of travel costs are managed in accordance with GW Reimbursement Policies & Manuals.
Foreign travel is considered to be travel outside the United States and Canada, including travel within the U.S. or Canada when en route to or returning from a foreign destination. Special requirements on International Research are outlined in the GW international research guidance.

The principal investigator (PI) and program staff must review and follow sponsor guidelines and the GW Travel, Entertainment and Business Expense Reimbursement policy prior to traveling under a sponsored project. In addition, the following should be considered before making any travel arrangements:

Availability of funding;
Travel is related to the purpose of the grant; and
Travel occurs within the period of the award.

Participant/Trainee Support Costs

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 individuals participating in or attending program activities under a Federal award, such as trainings or conferences, but who are not responsible for implementation of the Federal award (UG §200.456). See the Participant Support Costs Guidance Document (GW Login required) for additional information.

Contractors (Service Providers/Consultants)

Consultant services are considered to be advice or assistance of a purely advisory nature provided for a predetermined fee by an individual entity, with no GW affiliation. Different from subrecipients, contractors perform goods or ancillary services for GW’s own use under a procurement relationship, where GW generally owns the finished product or deliverable. Individuals providing consulting services must always meet the criteria defining an Independent Contractor per GW Worker Classification.

Subaward/Subrecipients

Subaward is an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services.

Subrecipient is the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided. A subrecipient is a collaborator at an external institution or organization identified to carry out a portion of GW’s statement of work. The term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Federal awarding agency.

Other Direct Costs

Supplemental Compensation may be allowable as a direct charge on sponsored projects if certain conditions are met. More information about supplemental compensation can be found in the GW's Sponsored Projects Handbook (PDF).
Rental Costs applies to the cost of rental space and utilities in buildings not owned or operated by GW. Rental charges are excluded from the indirect cost calculation. If the majority of the program will be conducted off campus and rent is included in the budget, the off-campus F&A rate is applicable.
Tuition remission - Tuition for Graduate Students. When graduate student salaries do not have an associated fringe rate, commensurate tuition may be included in the non-personnel section of the budget as allowed by sponsor guidelines. Tuition for enrolled graduate students, along with any associated required fees, may be budgeted and charged as a direct cost in proportion to the percentage of each graduate student’s effort expended on the project during the semester.
Publication costs include service costs for documenting, preparing, publishing, and making findings and products of the work conducted under the specific award available to others. While costs for professional journal publications, electronic and print media, including distribution, promotion, and general handling, are often permissible, allowability should be confirmed by consulting funding and award terms. If these costs are not identifiable with a particular cost objective, they should be allocated as indirect costs to all benefiting activities of the recipient or subrecipient (UG § 200.461).
Computer Services include any computer-based costs and internal computer service costs, if they can be allocated to the specific project.
Equipment maintenance or Equipment or Facility Rental/User Fees include total funds requested for maintenance of equipment or equipment or facility rental/user fee or user fee, if they can be allocated to the specific project.
Alterations and Renovations may be itemized in a project budget by category, along with justification of the costs of alterations and renovations, including repairs, painting, and removal or installation of partitions, shielding, air conditioning. Where applicable, provide the square footage and costs. Prior approval may be required prior to including these costs in the project budget.

Indirect Costs

Indirect costs are also commonly referred to as Overhead, Facilities and Administrative Costs (F&A), IDC, or Indirects. GW applies indirect rates to sponsored projects based on the university's Negotiated Indirect Cost Rate Agreement (NICRA) with the federal government. The NICRA outlines rates for both on- and off-campus activities for the university (including the Medical Center), a rate used by the Biostatistics Center and specific rates for Other Sponsored Activities. The indirect cost rates are applied to either a Total direct cost or a modified total direct cost amount.

GW’s Guidance on Indirect Costs

Indirect costs (IDCs or F&A) reimburse the university for services rendered in support of sponsored projects. The recovery of IDCs is critical to our research enterprise because IDCs support overhead costs like building operations and maintenance, libraries, legal support, administrative personnel and other essential systems (such as procurement, finance and accounting, and information technology). These costs cannot be readily allocated to any single project or training program. Recovered IDCs may also be reinvested into school and departmental support or to expand PI research programs through Research Enhancement Incentive Awards (REIA) or other mechanisms - depending on each school’s policies.

It is the university’s policy to request the full and appropriate IDC rate for all sponsored projects regardless of the funding source, as allowable by GW’s Negotiated Indirect Cost Rate Agreement (NICRA) with the federal government. The IDC rates and fringe benefit rates outlined in the NICRA have been negotiated with the federal government. The NICRA also outlines which base costs are applicable when calculating IDC rates on a sponsored project.

Total direct cost (TDC)

Total direct cost (TDC) is the sum of all direct costs listed in the budget. When applying to a non-federal sponsor, including industry sponsors, use the total direct cost base unless the notice of funding announcement (NOFO) or sponsor guidance do not permit.

Modified total direct cost (MTDC)

Modified total direct cost (MTDC) is used for all federal proposals. MTDC consists of all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC is the sum of all direct costs excluding the following line items:

Equipment;
Subaward over threshold: the portion of each subaward in excess of $25,000;
Charges for patient care: Hospitalization and other fees associated with patient care whether the services are obtained from an owned, related or third party hospital or other medical facility;
Rental costs: rental/maintenance of off-site activities;
Student tuition remission and student support costs (e.g. student aid, stipends, dependency allowances, scholarships, fellowships.)
Participant support costs; or
Capital expenditures (buildings, individual items of equipment; alterations and renovations).

IDC based on type of sponsored activity

At GW, most externally sponsored projects (i.e., grants, contracts, cooperative agreements) support Organized Research (OR) activities, but a smaller amount may be classified as Other Sponsored Activities (OSA). The type of sponsored activity determines the appropriate Indirect costs (also known as IDC, F&A costs, or overhead costs) rate to be applied. Within each category, projects are further defined as on-campus or off-campus, based on the primary location of the majority of the project’s activities and GW personnel effort.

F&A rates applicable to each type of sponsored project are outlined in rate agreements located on the Office of the University Controller website.

Each GW sponsored project is subject to a single IDC rate. Multiple or split IDC rates (e.g., on-campus and off-campus) may not be applied to one sponsored project. If the sponsored project includes any Organized Research component, then the project must use the Organized Research IDC rate.

Organized Research (OR) and related scholarship activities include the rigorous inquiry, experimentation or investigation to increase the scholarly understanding of the involved discipline(s). These activities may be sponsored by federal or non-federal organizations (e.g., private, foundation, corporate).

The following are examples of Organized Research (OR):

Awards for faculty to support their research activities
Externally sponsored Career Awards (i.e, NSF, NIH, DoD) that support a faculty member’s research efforts
External funding to maintain facilities or equipment and/or fund the operation of a center or facility which will be used for research
External support for the writing of books, when the purpose of the writing is to publish research results
Awards for the support of the research activities of GW students or postdoctoral scholars (e.g., research training grants)Organized Research (OR) and related scholarship activities include the rigorous inquiry, experimentation or investigation to increase the scholarly understanding of the involved discipline(s). These activities may be sponsored by federal or non-federal organizations (e.g., private, foundation, corporate).
The following are examples of Organized Research (OR):
Awards for faculty to support their research activities
Externally sponsored Career Awards (i.e, NSF, NIH, DoD) that support a faculty member’s research efforts
External funding to maintain facilities or equipment and/or fund the operation of a center or facility which will be used for research
External support for the writing of books, when the purpose of the writing is to publish research results
Awards for the support of the research activities of GW students or postdoctoral scholars (e.g., research training grants)

Other Sponsored Activities (OSA) are defined as projects funded by sponsors that involve the performance of work other than Organized Research. These activities may be sponsored by federal or non-federal organizations (e.g., private, foundation, and corporate).

The following are examples of Other Sponsored Activities (OSA):

Travel grants
Conferences, seminars, workshops, symposia
University public events
Projects that involve GW faculty, staff or students in community service activities (where the GW students do not receive academic credit for their involvement or participation)
Projects supporting library or museum collections, acquisitions, bibliographies or cataloging

The Off-Campus rate applies when the majority of project activities and GW personnel effort are performed off-campus (i.e., at facilities not owned by GW and to which rent is directly allocated to the project(s)).

If there is a question whether the off-campus or on-campus rate is appropriate, a decision will be made based on project facts and circumstances presented within the proposal, consistent with the university’s IDC rate agreement.

Cost Sharing (when applicable)

Cost sharing is an institution’s contribution to the total cost of a sponsored project. These are costs not covered by the sponsor and can be in the form of cash, equipment, in-kind contributions by third parties, and/or faculty effort. The PI works with the Research Support Team (RST) to determine the applicability of cost share and secure university approval necessary for cost sharing in line with university policy.

Mandatory vs. Voluntary Cost Sharing

Cost sharing can be mandatory or voluntary.

Mandatory cost sharing is required by the sponsor as a condition of receiving an award.
Voluntary committed cost sharing may be offered by the applicant to demonstrate the institution’s dedication to a program or project. Voluntary committed cost sharing is not required but it does become a binding commitment to the funding agency and a part of the award’s terms and conditions.
- Some sponsors (i.e. NSF) prohibit voluntary committed cost sharing unless specifically outlined in the funding announcement.

In-Kind Contributions

In-kind contributions are a provision of goods or services whose value can be established based on their value. Often, in-kind contributions are provided by GW or a third party.

Types of Cost Sharing

There are three types of cost sharing:

School
Institutional*
Third party contributions

*On a limited basis, the George Washington University (GW) provides institutional support for research, including cost-sharing on sponsored research projects. For more information about requesting institutional support, see the Office of the Vice Provost for Research's website.

Salary Cap Cost Share

For information on Salary Cap Cost Share and to check the Salary Cap Limitations please contact your Research Support Team.

Special Circumstances

Special circumstances are best addressed with your Research Support Team (RST).

Support

For research support team (RST) contact information, click here.
Office of Sponsored Project Teams

Frequently Asked Questions

Where do I find resources for budget development?: OSP Budget Development Sharepoint page [GW Login required] provides detailed guidance on how to calculate project costs for each cost categories to be included in your budget and corresponding resources.