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Developing the Budget

One of the more frequently misunderstood aspects of proposal writing is the preparation of the budget. All too often the budget is left until the final stage of proposal preparation, and unfortunately thrown together in haste. The project budget will be scrutinized as heavily as the proposal itself, and throwing it together at the last minute can compromise the quality of the proposal. If you are unfamiliar with budget preparation, please contact The Office of Research Support for assistance. 

Many funding agencies provide mandatory budget forms and format for the budget justification or narrative page that  must be submitted with the proposal as well as what costs are allowable. The line budget should include personnel, related fringe benefits, travel, other supplies/equipment, and indirect costs associated with the proposal. A good practice when planning your proposal is to ask the following questions:

  • Are the costs I wish to request reasonable for the project (too high or too low)?
  • Is the budget consistent with the proposed activities?
  • Is there a good, detailed explanation of expenses in the narrative page (see paragraph below)?
  • Can the project be accomplished with the budget?
  • Does the funder have restrictions on what may budgeted?

Calculations of particular line items should be as exact as realistically expected. For example, if travel is included, it is not recommended to include a line item that says only "travel: $10,000." This line should be very descriptive about who will be doing the travel, the destination, for what purpose, and the anticipated costs that will be incurred (lodging, meals, transportation, etc.). 


The budget should be divided into periods of 12 months, that is, a fiscal or calendar year, not an academic year. A budget period should specify beginning and ending dates. If cost sharing is required, each budget period should include columns for both sponsor and cost share. A budget summary for each year of funding requested should be included.

The following sections can be pasted into a Microsoft Word document to use a budget justification template. Please update each section with language relevant to your proposal. 

Salary and Wages: This section should specify how many persons, percentage of time, and what position they hold (faculty, graduate student, research associate, clerical staff, etc.). Names and/or position titles should be listed. If the project involves people from other departments, or institutions, there must be supporting documents agreeing to their involvement. Ensure that a faculty member working on more than one project does not exceed 100 percent of effort for all projects and university commitments. Summer salary for faculty with academic year appointments can be calculated on a maximum of 33% of a nine month academic salary. Some sponsors impose specific limitations on summer salaries. PLEASE REMEMBER: academic salaries must be calculated on "percentage of effort" and then converted to a dollar amount. If a graduate student is paid on a sponsored project for a research assistantship, a GAD must also be included in the budget.

Tuition Remission: The Office of Research Support can assist with calculation and documentation of a graduate tuition. This should be budgeted with the sponsor as Tuition Remission. Tuition remission should be included in the "Other" budget category on the sponsor's forms, and F&A charges are applied. Policy questions should be directed to the Graduate School. 

Fringe Benefits: The fringe benefit rates are federally negotiated along with F&A (sometimes referred to as indirect or overhead cost) rates, and are updated annually. The fringe rates are available online or by contacting the Office of Research Support. Fringe benefits must be budgeted for all requested salaries and wages, and increases should be budgeted for future years in a multi-year budget. Specific fringe benefits charged to grant and contract accounts include Social Security, South Carolina retirement, health insurance, dental insurance, unemployment insurance, and worker's compensation insurance.

Equipment: These items are defined as nonexpendable, tangible property, which have a useful life greater than one year costing $5,000 or more per item. Equipment should be itemized by descriptive name, estimated cost, and probable source; adequate justification for their purchase must be included in the budget justification section. F&A (overhead) is changed on the first $25,000 of equipment. Items costing less than $5,000 normally should be included under the "Other" category.

Other:  Items that fit the definitions of "OTHER" budget categories are as follows:

  • Communications - Long distance telephone charges, postage for special bulk mailings, Federal Express or UPS charges that are directly incurred for the benefit of the sponsored project are allowable. Local phone calls, service, or installation costs should not be charged to sponsored projects. The long distance charges must be documented.
  • Publication Costs - Costs for publishing results of research are allowable.
  • Working Meals and Coffee Breaks - Meals/breaks that are an integral and necessary part of a conference (where business is transacted) are allowable. Such charges typically require approval from the sponsor in the budgeting phase. Please check with the grants coordinator for specific guidelines.
  • Other Direct Costs - Photographic services, animal care, and shop charges are allowable in many cases. In order to charge copies made on department copiers, a metering system must be used and all users must be consistently charged at the same rate.
  • Consultants are budgeted under this category, and must include appropriate documentation (scope of work and a detailed budget). Federal agencies often establish a maximum daily rate of pay for consultants-specific dollar amounts vary. Clemson must enter into a formal agreement with the consultant prior to the initiation of effort. Please have supporting documentation when the proposal is submitted for signatures. If consultants are proposed but not named and documented in the proposal, then service must be procured through the competitive bid process.

Subcontracts: These costs are proposed when another university or organization is doing a substantial amount of the proposed work. A formal proposal including a statement of work, a detailed budget, period of performance and a list of personnel should be included along with a letter of support signed by an authorized official at that institution. Subcontracts are entered in the overall proposal budget as a single line item.

Travel: Mileage, airfare, ground transportation, registration, per diem and lodging are common travel charges. Current mileage and per diem rates must be used and may be found on the procurement website. Foreign travel must be in the proposed budget and a foreign travel request must be approved by Clemson University prior to travel.

Participant Support Costs: Participants are individuals taking part in a training workshop, conference, or other educational or research function, funded by the sponsored project. They are not employed by Clemson University. Participant support costs may include travel expenses for participants, registration feels, and supplies given directly to participants for use as part of the program.

Facilities and Administrative (F&A) (also may be referred to as overhead charges). These are real costs of university operations and are determined using a federally negotiated rate. These costs are incurred for common objectives of the university and must be accounted for on all sponsored program proposals. Full recovery is expected on all grants up to the level allowed by the sponsor's written policy. If a sponsor limits or does not allow F&A costs it must be stated in writing in the sponsor's RFP or policy document.

Typical unallowable costs

OMB Circular A-21 guidelines require certain expenses be reviewed to determine if they are allowable. The following are generally unallowable: 

  • supplies (consumable and office supplies),
  • postage,
  • telephone line charges (including local calls),
  • memberships and dues,
  • journal and other subscriptions,
  • books, and,
  • food.

The purpose of these federal guidelines is to confirm that all expenses charged to a research project have a "direct benefit" and should be charged as "direct costs" to the project.

Clemson University is responsible for ensuring that costs charged to a sponsored project are allowable, allocable, and reasonable under these cost principles.