Detailed proposal budget material usually includes a definitive budget for each period (usually a year) of a proposed project, a cumulative budget for all periods (usually years), and a budget narrative providing justification for key cost elements. The budget should reflect the PI’s/PD’s best estimate of the actual cost of conducting the scope of the work outlined in other sections of the proposal. Thus, it is important for the individual developing the budget to review, at a minimum, a draft of the proposal narrative.

In addition to following the budgeting requirements of the prospective sponsor, budgets for federally-sponsored programs should be prepared in accordance with the federal Office of Management and Budget (OMB) Circular A-21 (Cost Principles for Educational Institutions). Non-federal sponsors normally have their own requirements specified in their published guidelines and/or their Requests for Proposals (RFPs) or other solicitation notices. Whether the prospective sponsor is federal or non-federal, UNH and University System of New Hampshire (USNH) financial policies and guidelines must be followed as well.

Budgets generally include both direct and indirect costs. Indirect costs are referred to by federal sponsors as Facilities & Administrative (F&A) costs. Both direct and F&A costs are real costs. Direct costs plus F&A costs equal total project costs.