Budget Basics


The proposal budget must be as accurate as possible. When proposing a budget for a sponsored project, the PI assures Stanford and the sponsor that project finances are represented as accurately as possible. It ensures the sponsor pays its fair share of the project costs. It is the first opportunity you have to control costs.

Specific requirements must be adhered to at the proposal stage, as well as when funds are expended: cost principles as defined by federal regulations and consistency requirements as imposed by the CAS (Cost Accounting Standards)) Board, must be adhered to at the proposal stage, as well as when funds are expended. Estimating methods must be consistent with Stanford accounting practices and must allow expenditures to be accumulated and reported to at least the same level of detail as the estimate.

Each proposal must contain a budget for each year of support requested (unless a program announcement stipulates otherwise.) The amounts requested for each budget line item should be documented and justified in the budget justification. When proposing administrative salaries that are integral to a project, a justification is required.

Although you can’t foresee how the project will unfold and exactly what the costs will be, you must develop a budget that is as realistic as possible. A budget that fails to request an adequate amount of funds is just as problematic to a proposal as one that requests an unrealistically large amount of funds. The objective is to create an accurate and detailed budget based on the proposal objectives. Always follow Stanford policy and the sponsor's proposal instructions.

The proposal budget ensures the sponsor pays its fair share of the project costs. It is the first opportunity you have to control costs. It becomes a management tool once the project is awarded. It  prevents problems such as:

  •  shifting costs to a non-benefiting sponsored project (unallowable)
  • cost transfers
  • cost overruns
  • late spending
  • overspending to “burn” the balance

Read the proposal application instructions carefully. Look for items that will require a special approval early in proposal development.  Some approvals can be processed while the rest of the proposal is being developed. Special approvals include: indirect cost waivers, PI waivers, emeritus faculty participation, other departments participation, possible conflict of interest, renovation/construction, subawards, human subjects, lab animals, biohazards or other safety issues.

  1. Who is the sponsor?
  2. What is the period of performance?
  3. Who will be involved in the project?
  4. Will there be new hires or additional students?
  5. Will there be domestic or foreign travel?  If yes, then where and for how long?
  6. What type of technical supplies are required?
  7. Is a subaward required?
  8. Does the sponsor require cost sharing?
  9. Is specialized equipment required?
  10. Is administrative staff integral? (for federal projects only)

School administration teams can assist with budget questions and with preparation of the budget. Local administration teams by school:

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Accounting Periods

Stanford Accounting Periods

Appointment Type

Salary Increases on Sponsored Projects

Fiscal Year

September 1 through August 31

12 month appointment/ calendar year appointment

Salary increases for employees on a calendar year appointment (medical school faculty and all staff) must be charged to a sponsored project beginning September 1, the beginning of Stanford’s fiscal year.

Academic Year 

October 1 through June 30

9 month appointment/ academic year appointment

Salary increases for employees on an academic appointment (non-med school faculty, grad students, instructors, lecturers) must be charged to a sponsored project beginning October 1.


July 1 through September 30

summer appointment

Paid at no greater rate than the same rate as previous quarter


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Budget Methods

Zero Based

Gather data to estimate costs. Use current data from: People Soft, Vendor Quotes, and Travel Quotes. Break the work down to small increments so you can project costs. Apply judgment based on the facts and circumstances of this project and the PI’s portfolio. Discuss your estimates with the PI and make changes.


Assess actual costs and spending patterns from a similar project. Was that project:  within budget, on time, were performance specifications met?  Was the project free from disallowed cost at closeout? Review burn rates for non-salary expenses. Use your assessments to estimate costs for the new project.

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Write a Budget Justification

A budget justification is the narrative explanation of the budget. Each line item in the budget should have a justification.  A good budget justification will help minimize a sponsor’s questions and avoid harmful budget cuts. It is a narrative explanation of the budget that helps the sponsor evaluate the reasonableness of the budget. It is required for all proposals. 


The primary purpose of a justification is to provide support for the funds requested to ensure adequate funding. Experience has shown that including budget justifications in the proposal increases the likelihood that the sponsor will award the cost. The amount of detailed information in the budget justification should be tailored to sponsor-specific requirements and the specific project or activity. When costs are explicitly listed and justified in the sponsor-accepted budget, grant/contract administrators, auditors, and sponsoring agencies can easily understand the nature of the costs and their allowability under the regulations. 

When writing the budget justification explain and defend each major budget category and identify the indirect cost and fringe benefit rates used in the budget. For personnel and other expenses, explain the function of the position or cost as it directly relates to and benefits the project. A budget justification is required for direct charging administrative salaries that are integral to the project.

For Vacation Disability and Sick Leave

For budget purposes, assume that the vacation earned and used will offset each other every year. Continue to budget only the full salary (not the vacation burden or the credit for vacation used). Do not budget additional expenses to cover vacation/disability sick leave expenses. Do explain that we charge the rate. View rates. 

Add this statement to the budget justification:

Stanford's agreement with the Office of Naval Research provides for xx% vacation accrual/disability sick leave (DSL) for exempt employees and yy% for non-exempt employees.  The vacation accrual/DSL rates will be charged at the time of the salary expenditure.  No salary will be charged to the award when the employee is on vacation.


Budget Justification for Administrative Charging

Write a budget justification for each administrator or clerical staff member included in the proposal budget. The purpose of the justification is to increase the likelihood that the sponsor will award the administrative cost and to ensure adequate funding.

An adequate budget justification helps administrators, auditors, and sponsoring agencies to easily understand the nature of the costs and why they are allowable under the regulations. 

The justification should include the following.

  • A description of the administrator’s role tailored to sponsor specific requirements and the specific project or activity
  • Why the activity qualifies as integral to the project
  • How the administrator’s effort relates to and benefits the project
  • The level of effort expressed as a percentage FTE or person months per sponsor instructions
  • The time period(s) in which the person will be working
  • Any other information that will aid the sponsor in evaluating and funding the proposed salary
  • In addition, you must establish that the project being proposed meets the Stanford policy requirement for integral costs

NOTE: Although NIH modular grants or similar grant instruments do not require line-item justifications, the personnel, including administrative salaries, do need to be described in a modular budget justification. 

Sample Budget Justification

The PI has included effort for administrative salary that is integral to the project, and not for general support of the academic activities of the faculty or department.  Effort charged to this project can be specifically identified to the project.

Then you proceed to describe how the administrative role is integral to the project.....

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Budget Cost Sharing

The Uniform Guidance made the following changes to cost sharing for federally sponsored agreement and any new funding increment awarded on or after December 26, 2014 that states it incorporates the Uniform Guidance.

  • Under Federal research proposals, voluntary committed cost sharing is not expected
  • Cost sharing cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity

Note, a sponsor may choose not to incorporate the Uniform Guidance.


Cost sharing is defined as the portion of total costs of a sponsored project paid for by Stanford, rather than the sponsor.

Mandatory cost sharing is required by the sponsor as a condition of obtaining an award. The cost-sharing commitment must be included in the proposal to be considered by the sponsor.

Voluntary cost sharing is not required by the sponsor as a condition of obtaining an award. It must be included in the proposal, although the sponsor does not require voluntary cost sharing as a condition of the award.

Committed cost sharing is when an award is received in which there was either a mandatory or voluntary cost sharing commitment by Stanford in the proposal. The cost sharing activity becomes a binding commitment which the University must provide as part of the performance of the sponsored agreement. This commitment must be tracked in the accounting system as cost sharing.

Voluntary uncommitted cost sharing is faculty-donated effort or other direct costs above those agreed to as part of the award. Since it was not proposed and constitutes “additional” time or materials it is not considered a binding agreement and is not accounted for as cost sharing.

Matching refers to the sponsor requirement that the University match grant funds in some proportion with funds from another party, either from the University or more typically another sponsor (with both sponsors’ approval). Matching requirements may be in the form of actual cash expenditure of funds or may be an “in-kind” match, which is the value of non-cash contributions to the project. An in-kind or matching contribution made by a party other than Stanford requires documentation from the third party supporting the use of the funds as in-kind/matching and may require a certification of fair market value.

Allowable Cost Sharing Expenditures

When submitting a proposal that requires cost sharing, make sure to follow the sponsor's instructions and Stanford policy. You can propose cost sharing only for those expenses that would qualify as allowable project costs.

Examples of Allowable Cost Sharing

  • Salary and Staff Benefits (School of Medicine prohibits faculty cost sharing)
  • Tuition (the Stanford's contribution only)
  • Equipment when the  award is contingent upon such cost-sharing
  • Travel
  • Material and supplies
  • Other project expenses
  • F&A costs

F&A costs are real costs of conducting instruction, research and other sponsored activities. These F&A costs do not disappear simply because a sponsor refuses to pay for them; the University must fund any F&A costs that have not been reimbursed. When direct costs are cost shared, the F&A costs associated with the direct costs are automatically cost shared. PIs may take advantage of the automatic cost sharing of these costs, and include them on the proposal budget. PIs may also include any waived F&A costs as University cost sharing in proposals. For federal awards, unrecovered indirect costs on cost sharing may be included as part of cost sharing only with the prior approval of the federal sponsoring agency.  

Unallowable Cost Sharing Expenditures

The following expenses cannot be offered as cost-sharing commitments in sponsored project proposals.

  • Unallowable costs as defined in A-21, section J or the Uniform Guidance
  •  Costs designated as unallowable for a particular sponsored project
  • Salary dollars above a regulatory cap, e.g., NIH salary dollars
  • Effort above 90% (95% for Research Faculty) for those faculty with an appointment of less than 12 months
  • Stanford facilities such as laboratory space. PIs should take care in preparing proposals for sponsored agreements not to commit use of facilities as cost sharing, but rather to characterize the facilities as available for the performance of the sponsored agreement at no direct cost to the project.
  • Stanford utilities depreciation on government-funded equipment F&A costs in excess of the 26% administrative cap, except for DOD contract.
  • Equipment unless it is a requirement of obtaining the award
  • PI Salary ( School of Medicine only)
  • Stipend - If the student is being paid a stipend from another source, it should NOT be accounted for as cost sharing because stipends are paid to students for training rather than effort

​Cost sharing may not be proposed where the sponsor has explicitly prohibited it (e.g., National Science Foundation).

Sources of Funds for Cost Sharing Commitments

It is the PI's responsibility to identify and provide resources for cost sharing of direct costs (including equipment).

The PI may not utilize funds from another federal award as the source of cost sharing, except as authorized by statute. The PI may utilize funds from non-federal awards as the source of cost sharing only when specifically allowed by both parties. Funds for cost-shared expenditures are typically identified from among gift, endowment income, operating budget (except in the School of Medicine), or other department designated funds.

At the time of proposal submission, the OSR or RMG is notified of the cost-sharing commitment through the Proposal. When OSR/RMG receives the award from the sponsor, the notice of award will indicate if the project involves cost sharing. In addition, the existence of cost sharing is noted in SeRA and Oracle.


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Budget Faculty Salary

Salaries make up the largest category of direct costs on a sponsored project. When preparing a budget, start by making a list of all Stanford personnel who will support the proposed statement of work. If a person will be hired once the award is funded, simply estimate their salary and percentage of effort and list them as TBD (to be determined).

Project personnel salaries budgeted as direct costs

Stanford employees: the PI, co-PIs, co-investigators, ASR (Academic Staff Researchers), technical support staff, graduate students, research assistants, and administrative support staff (working directly on a major project), Stanford employees acting as collaborators.

Project Personnel salaries NOT budgeted as direct costs

Stanford Hospital and VA employees are not budgeted in the personnel budget category. Stanford Hospital employees are budgeted in “Patient Care.” Check with your  RPM (Research Process Manager) in the School of Medicine or OSR for advice regarding VA employees. Other non-Stanford employees may be proposed as consultants or as the personnel in a subaward.

Salary information to include in the budget:

1. The person's role on the project (not job title) and the person's name 

Example: Rafael Nadal, Lead Protein Synthesizer not Rafael Nadal, Professional Tennis Player

2. The percentage of effort or person months devoted to the project

This includes all responsibilities (including teaching and research) together and may not exceed 100% FTE. The portion of salary charged to the project is based on the percentage of FTE committed to the project. Remember that any percentage of effort committed in a proposal and subsequently devoted, must be accounted for later as project expenditure (either a direct project charge or cost sharing).

Nominal contributions of effort “as needed” may be included and NOT quantified. In this case, where no % FTE is specified, no cost sharing is committed. A “part-time” commitment, on the other hand, implies a specified % FTE, and that amount should be quantified. If awarded, “part-time” effort must be either directly charged or cost shared.

View how to convert percent effort to person months.  

3.  The appointment type (academic, summer or calendar) 

Nine Month Appointment and Summer Effort A faculty member on a nine-month appointment can only be paid from sponsored projects up to 90% during any of the summer months. Salary charged to sponsored projects during the summer months must be consistent with effort expended during the same period.

Limits on Salary Amounts (Salary Caps)


NSF limits salary compensation for senior project personnel to no more than two months of their regular salary in any one year from all NSF-funded grants. This effort must be documented in accordance with the applicable cost principles.

If anticipated, any compensation for such personnel in excess of two months must be disclosed in the proposal budget, justified in the budget justification, and must be specifically approved by NSF in the award.


NIH will not pay requested salary above the annual salary cap. If salary is requested above the salary cap, NIH will reduce that line item to the salary cap, resulting in a reduced total award amount.  When preparing a detailed budget, you must base your request on actual institutional base salaries (not the cap) so that NIH staff has the most current information in hand at the time of award and can apply the appropriate salary cap at that time.

The DHHS (department of Health and Human Service) salary cap limits the amount which can be charged to a DHHS project (or related cost sharing account) by limiting the maximum annual salary rate for a 100%, 12-month FTE. The rate is set annually and applies to all awards made that year.

DHHS establishes the funding limitation for salaries at the time that a competitive award is made. However, if subsequent (non-competing) funding is awarded during a year with a higher salary cap, NIH will allow existing funds to be re-budgeted to that level. Typically, no new funds will be awarded for this purpose. 

  • DHHS salary cap may change annually
  • DHHS funds salary up to the level of the cap in effect on the award date
  • Use a special expenditure type to capture difference between actual pay & what can be charged to a DHHS award

View Salary Cap details

Other sponsors

Other sponsors such as Juvenile Diabetes Association may have salary caps. Read  the program announcement carefully to determine if a sponsor has a salary cap.

Proposal Preparation Costs

Proposal preparation costs (typically comprised of salary for the PI and/or others) may not be charged to sponsored projects unless the proposal is being prepared for submission to a current sponsor for a non-competing extension or continuation of its currently awarded project. In those circumstances, it is appropriate to charge those proposal preparation costs directly to current projects. Costs for development of proposals for submission to other sponsors, or for work that does not relate to ongoing projects, is not allocable to current projects and may not be charged to those projects.

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Budget Graduate Student and Postdoc Funding

Graduate Student Assistantship

This is a form of student employment in which the student earns a compensation package that includes both salary and TAL (tuition allowance) for the performance of research or teaching as part of the student’s academic and professional training and development.

Stanford establishes Minimum Salary Rates for RA/TA AppointmentsDepartments may establish their own guidelines as long as funding rates meet or exceed those established by Stanford. View salary and TAL Tables.

All graduate students receive a tuition allowance. View Tuition Allowance for Research Assistants.

Note:  TA salary is not an appropriate charge on a research grant.  Also, stipends, tuition and health insurance are not appropriate charges on research grants other than federal training grants or federal fellowships.

NIH Special Requirements

NRSA Requirements (Graduate Student Compensation) NIH Stipend Levels

Stanford clarification: The Graduate Student Compensation Limit for Fiscal Year 2016 NRSA (National Research Service Award) awards research grants is tied to the "0" level of experience stipend level for postdocs. Therefore, the limit is $43,692 (salary plus benefits and tuition) when budgeting graduate students on research grants. 

Postdoctoral Scholars

The Stanford provost establishes minimum funding levels based on the years of cumulative research experience a Postdoctoral Scholar has accumulated when appointed. Departments may establish their own guidelines as long as funding rates meet or exceed those established by Stanford. If you have questions about funding rates or guidelines, please contact the Office of Postdoctoral Affairs.

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Budget Administrative Salaries

While administrative salaries and expenses are normally charged through the F&A (Facilities & Administrative) cost rate, federal regulations describe when administrative and clerical salaries can be charged directly to federally sponsored projects.

You can propose charging administrative and clerical salaries to a federally sponsored project if ALL of the following conditions are met:

  1. Administrative or clerical services are integral to a project or activity. The requirement that the cost is “integral” means the services are essential, vital, or fundamental to the project or activity
  2. Individuals involved can be specifically identified with the project or activity
  3. Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency
    • A budget justification must be included in the proposal
  4. The cost are not also recovered as F&A costs

NIH modular grants or similar grant instruments do not require line-item budgets. (Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH administrative requirements.)

All deans' office administrative activities must be consistently treated as F&A costs. Therefore, no deans' office administrative expenses shall be charged directly to sponsored awards . Deans' sponsored project activities are subject to RPH 15.4.3

Any other administrative costs that are required to perform the technical scope of work may be directly charged as long they provide technical benefit to the sponsored project.

Non-federally Sponsored Projects

Direct charging of administrative or clerical salaries to a non-federally sponsored project is appropriate if the services benefit the sponsored project. Some non-federal sponsors may have specific requirements for direct charging of administrative costs. Such requirements need to be addressed in proposals.

Read  RPH 15.4: Charging for Administrative and Technical Expenses


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Budget Fringe Benefits

Fringe benefits are directly related to salary charges and require separate line items in the budget (apart from salary). There are four separate rates for the following employment statuses.

  • Benefits-eligible faculty and staff
  • Postdocs
  • Casual/temporary employees
  • Graduate students Research Assistants /Teaching Assistants

The fringe benefit rate is applied to salaries to cover ancillary expenses such as retirement benefits, health and dental insurance, life and disability insurance, contributions to social security and retirement plans. 

The federal government reviews and negotiates the fringe benefit rate with Stanford. Use the most current rates by viewing the rate chart on the web. See fringe benefit rate here. An additional rate is added to the benefits rate for faculty and staff on non-governmental awards.

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Budget Tuition Grant Program

The TGP (Tuition Grant Program) Fringe Rate is assessed on regular benefits eligible salaries charged to all NON-government funded PTAs including sponsored projects, operating budgets, and auxiliary PTAs.

Regular benefits-eligible salaries charged to government-funded PTAs, academic service centers and sponsored project cost sharing PTAs are exempt from the TGP charge.

The TGP charge is subject to facilities and administrative costs (F&A) and infrastructure charges. The TGP fringe benefit rates can be found on the Rates page of this site. The TGP charge appears in expenditure type 51770 Fringe Benefits TGP.

If you have any questions or need more information about the application of the TGP Fringe Benefit Rate, please contact Andrew Harker, Provost Office, at extension 5-0666 or Jesse Charlton, Research Administration Policy and Compliance, at extension 3-9102.

View the TGP Rate

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Budget Vacation & Disability Sick Leave Accrual

For budget purposes, assume that the vacation earned and used will offset each other each year. Continue to budget only the “full salary” (not the vacation burden or the credit for vacation used).  The amounts do not exceed total salary. Vacation/DSL accrual is charged at the time of the salary expenditure.

Include in the budget justification:

"Stanford's agreement with the Office of Naval Research provides for xx% vacation accrual/disability sick leave (DSL) for exempt employees and yy% for non-exempt employees.  The vacation accrual/DSL rates will be charged at the time of the salary expenditure.  No salary will be charged to the award when the employee is on vacation."

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Budget Equipment

Unless otherwise specified by the sponsor terms and conditions, assets are defined as capital equipment by Stanford when the following three criteria are met.

  1. Cost is $5,000 or greater
  2. Useful life of more than one year, and
  3. Individual, stand-alone, moveable, tangible item

Sponsor Terms and Conditions

Always read the award terms and conditions as sponsors may define equipment differently. Verify equipment ownership as well. Review the terms and conditions for required prior approvals and check for other management obligations. It is critical to use the correct Expenditure Types for purchases.

Include in the budget: type of equipment, manufacturer’s name or identifying mark, quantity, estimated cost, and basis for the estimate, vendor quote, and sales tax.

Budget for a specific item “or equivalent.” This will give you the flexibility to substitute something equivalent later for the same amount of money. 

Budget sales tax and freight if applicable.

Expenses included in the price of the equipment 

Expenses included in the price of the equipment are listed below. Although some expenses must be excluded from the purchase price they can and should be proposed if applicable. Include these types of expenses  in the "other" expense category.

Expenses Included

in the Price of Equipment

Expenses Excluded

in the Price of Equipment

  • Asset cost
  • Freight
  • In-transit insurance
  • Federal excise tax
  • Sales or use tax
  • Duty
  • Vendor installation costs directly attributed to the asset
  • Accessories (e.g., lenses, covers, etc.)
  • Warranties
  • Maintenance service agreements
  • Installation services or other in-house labor provided by Stanford personnel
  • Upgrades to the infrastructure of a building necessary for the asset to become operational 
  • Training costs
  • Vehicle license and registration fees

Equipment Fabrication

“Equipment fabrication” is the building of a unique individual piece of equipment, or scientific instrument by Stanford personnel (not a vendor or subcontractor).

A fabrication must meet all of the following criteria:

  1. The item has unique specifications and is described in the research proposal or award.  Details are specified in a dimensioned engineering drawing.  When design changes occur, the engineering drawing should be subsequently updated.
  2. The total cost for acquired materials, supplies, and components must be $5,000 or greater. All items acquired for a fabrication must be permanently integrated into the resulting discrete item.
  3. The completed fabrication has an estimated useful life of one (1) year or more.  (Note:  If the fabrication is owned or funded by NASA, the useful life must be two (2) years or more.)
  4. When completed, the item will not be affixed permanently to a building or structure.
  5. The fabrication results in a unique, stand-alone, tangible item capable of specific identification and continuous control through tagging and periodic physical inventory. Components should be designed to remain at one position in the fabrication; they are not to be removed and replaced throughout the useful life of the fabrication.
  6. It must be completed in ample time to directly benefit the funding project and used for its intended purpose.  If it is a contract-deliverable item, it must be completed in time to meet the delivery schedule as outlined in the funding sponsored project.

General Purpose Equipment

General purpose (non-scientific) equipment budgeted in a proposal will require an especially careful budget justification. A similar type of justification is needed if you are proposing to purchase general purpose equipment. Office equipment is normally considered an indirect cost. 

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Budget Subawards

A subaward is a formal written agreement made between Stanford and another entity to perform a portion of the SOW (Statement of Work) under a sponsored project awarded to Stanford. The work the non-Stanford entity provides must be intellectually significant, and typically uses the subrecipient's personnel, resources, and facilities. 

The subrecipient takes full responsibility for adhering to the terms and conditions of the subaward including those flowed down from Stanford's sponsor, and assumes creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling the subrecipient's SOW within the subrecipient's approved budget.

Subawards may be referred to as subcontracts, subgrants, or subagreements. Subawards differ from procurement contracts used to acquire goods or services from vendors. The process is as follows:

  1. The subrecipient must submit a proposal to Stanford. It must include the following.
  • SOW (Statement of Work)
  • Budget and justification
  • Any other documents required by Stanford or by Sponsor
  • Signed Subrecipient Commitment Form

2. The Stanford PI will then incorporate the subrecipient’s material into his/her proposal following the sponsor’s instructions.

3. The potential subrecipient’s budget should be incorporated into the Stanford budget as a line item.

4. The Stanford proposal (with the subrecipient component) is endorsed by an IO (Institutional Official) and submitted to the sponsor.

Those that manage a subaward are required to take the class on Subawards, DOR-1122.

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Budget Travel

Travel and its relation to the proposed activities must be specified, itemized and justified by destination and cost. Funds may be requested for field work, attendance at meetings and conferences, and other travel associated with the proposed work, including subsistence. In order to qualify for support, however, attendance at meetings or conferences must be necessary to accomplish proposal objectives, or disseminate its results. 

Summarize travel costs in the budget. Separate foreign and domestic travel.In the Budget Justificatio

Document how the travel benefits the sponsored project. It is important to note that federal sponsors require air travel on U.S.-owned air carriers. Include the following.

  • Describe and list each trip separately
  • Distinguish between foreign and domestic travel
  • Person traveling, purpose, and duration of trip
  • Transportation costs to and from destination
  • Per diem costs or actual projection for room and board
  • Ground transportation costs
  • Other expenses as determined by the statement of work

 Federal sponsors require air travel on US owned air carriers


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Budget Office and Administrative Supplies

You cannot directly charge office and administrative supplies to federally sponsored awards unless the supplies provide technical benefit as described in the project SOW (statement of work). Example: Aluminum foil used to block light on a telescope.

You can directly charge office and administrative supplies on non-federally sponsored awards that do not prohibit it as long as they directly benefit the project.

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Budget Supplies

General Purpose Supplies 

You cannot directly charge general purpose or office supplies to federally sponsored awards unless the supplies provide technical benefit as described in the project SOW (statement of work). Example: Aluminum foil used to block light on a telescope.

You can directly charge general purpose supplies on non-federally sponsored awards that do not prohibit it as long as they directly benefit the project.

Technical Supplies

Technical supplies is a broad category of costs that contains the following.

  • all non-capital items
  • laboratory materials and supplies
  • chemicals

The SOW (scope of work) drives what you can budget and spend in this cost category. The costs must benefit the project, and be specifically identifiable to the project. 

Computing Devices

Computing devices are defined as machines that cost less than $5,000 and are used to acquire, store, analyze, process, and publish data and other information electronically, including accessories or peripherals for printing, transmitting and receiving, or storing electronic information.

Stanford policy which reflects the Uniform Guidance defines computing devices as supplies that may be charged directly to federally and non-federally sponsored awards.

Federally Sponsored Awards

  1. Charging computing devices as direct costs is allowable for devices that are essential and allocable (provide benefit), but are not solely dedicated, to the performance of a federal award.
  2. Such devices are also allowable if solely dedicated to the performance of a federal award
  3. Federal sponsors may impose requirements for these costs to be included in the proposal budget and may require a budget justification. Until the federal agencies release specific information, budget justifications may be used at the discretion of the principal investigator.  Requirements may be forthcoming from each sponsoring agency in fall 2014 or winter 2015.
  4. Inventory tags may be affixed to computing devices at the discretion of the department; inventory tagging facilitates accountability, availability for reuse, and appropriate disposal.

Non-Federally Sponsored Awards

Direct charging of computing devices to a non-federally sponsored project is appropriate if the computing device benefits the sponsored project.  Some non-federal sponsors may have specific requirements for direct charging of computing devices.  Such requirements need to be addressed in proposals.

Stanford’s policy (RPH 15.4) on charging other technical expenses remains unchanged by the Uniform Guidance. 

Animal Costs 

There are two types of animal costs. You must budget the cost to purchase laboratory animals separately from the cost of animal care. Animal purchases are considered technical supplies. Full F&A costs apply.

The cost of  animal care provided by SVSC (Stanford Veterinary Services Center) should be budgeted as "other expenses" A special F&A rate applies to all SVSC animal care. If your budget includes lab animal costs, be alert to the need for an approved lab animal protocol.

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Budget Other Direct Costs

Review burn rates for other similar projects. Each scope of work requires different other expenses such as: tents, sleeping bags and groceries for those studying in remote areas, fish tanks for those studying fish. Get vendor quotes.

Remember: sales tax, shipping costs, maintenance, publications, animals including care and handling.

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Budget Consultants

If you plan to use a specialist who offers professional advice or service, include the following in the budget and budget justification.

  • Name and title
  • Daily salary rate
  • Number of days engaged
  • Other expenses (e.g., travel)

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Budget Tuition Allowance

Tuition allowance for graduate student RAs (Research Assistants) must be charged to the project where the graduate students' effort is charged. Each school has their own tuition rate.

  • Non-School of Medicine: Charge 60% of full tuition allowance directly to the project; the balance is the University’s contribution. This is not cost sharing.
  • School of Medicine: Charge 81% of full tuition directly to the project

TAL (Tuition Allowance), is the tuition component of an assistantship compensation package. The cost of TAL is shared between Stanford general funds and school, department, and/or sponsored project funds providing the assistantship. TAL is paid for a full quarter. We cannot bill the government for expenses if the corresponding service has not been provided. In other words, we cannot be reimbursed for tuition by a government sponsor until the end of the term but tuition allowance is provided to the student at the beginning of the term.

Include this language in the budget justification:  "OMB memorandum M-01-06, dated January 5, 2001, Clarification of OMB A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs, is incorporated into the Uniform Guidance (200.306 (4)(k)) and allows Stanford University to charge tuition allowance directly for Graduate Research Assistants working on sponsored projects. Tuition for a 50% time research assistant equals 10 units and XX% of that is included."

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Budget Participant Support Costs

Participant support costs are defined in the Uniform Guidance as 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 conferences or training projects. The Uniform Guidance excludes participant support costs from the MTDC base and defines this base for sponsored projects awarded on or after December 26, 2014.

You should not propose Participant Support Costs on non federal sponsored projects unless required by the sponsor. Categorize such costs using the expenditure types for travel, stipend etc..


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Budget F&A (Facilities & Administrative) Costs

The negotiated F&A (Facility and Administrative) rate is applied based on the type of activity described in the proposal and the location, on or off campus. The activities are listed below.

  • Research
  • Instruction
  • Other sponsored activity
  • Animal care
  • Non-Federal clinical trial rate

The F&A rate is applied to a base. MTDC (Modified Total Direct Cost Base) is most commonly used. It is the total direct cost TDC (Total Direct Cost) minus exclusions. Exclusions are listed below.

  • Capital equipment
  • SLAC (Stanford Linear Accelerator) services
  • Tuition/tuition allowance
  • Cost of renting/leasing project space or equipment
  • Portion of each subaward over $25K. The $25K threshold for subawards applies over the life of the award. Each new subaward is included in the MTDC base up to $25K
  •  Student aid support (stipend)
  • Participant Support Costs (after 12/26/14)
  • Patient care costs
  • Animal care/VSC costs. Animal Care costs are excluded from MTDC but carry a separate F&A cost rate
  • Entire cost of renovation/construction projects over $50K

The program announcements indicates when the TDC (Total Direct Costs) base can be used. It is typically used when a reduced rate (other than the negotiated rate) is specified. This base includes all direct project costs with no exclusions.

Salaries and wages are specified in program announcements. This base is applied against only salary and wages.

Applying F&A Rates

  • New Proposals: The negotiated F&A rate is used and applied to the appropriate F&A base.
  • Continuation Proposals: The awarded F&A rate is fixed for the life of the project and is used in all continuation year proposals.
  • Competitive Renewal Proposals: The negotiated F&A rate is used and applied to the appropriate base.

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F&A (Indirect Cost) Waivers

Stanford's policy is to apply the University's full negotiated Facilities & Administrative costs to all externally-sponsored projects.

In certain circumstances, the Vice Provost and Dean of Research may approve full or partial waivers of the F&A costs normally incurred by sponsored projects. However, such waivers will not be considered for projects where the sponsor is:

1.      A for-profit organization, whether US or international, or

2.     An office or agency of a foreign government, including organizations funded by that government.

F&A waivers or reductions are not granted to remedy incorrect classifications of costs. PIs may request supplemental funding from sponsors, but such requests are rarely granted.

Pre-Approved F&A Waiver Exceptions

Some programs or sponsors are pre-approved by Stanford for a waiver of a portion or all of our normal F&A cost recovery. In most cases, these programs or sponsors require such a waiver as a condition of the award.  View the Pre-approved F&A Waiver List here.

Publicly Available Policy on Overhead Expenses

Stanford recognizes that many non-profit foundations have their own policies regarding the use of their funds for overhead expenses. In the case where the foundation has an official written and publicly disclosed policy published on line that is applied on a consistent basis, or where a public solicitation for proposals defines a limit on indirect cost recovery as a condition of the program, Stanford will normally accept those requirements. The foundation's publicly available public policy statement or program solicitation should be submitted to the Office of Sponsored Research or the Research Management Group as an attachment to the Proposal Development & Routing Form (PDRF) as part of the completed proposal package.

No Publicly Available Policy on Overhead Expenses

Case-by-Case Exceptions

The Dean of Research will consider other requests for indirect cost waivers only in very limited circumstances.

Note: This approval authority is delegated to the Dean of the School of Medicine for projects to be administered within the School of Medicine. All requests must go to the Director of the Research Management Group.

Special requests are initiated by the PI and must be approved by the PI's department chair and school dean's office before being sent for approval to the Dean of Research. The decision whether to grant or deny an exception request is at the sole discretion of the Dean of Research, or of the Medical School Dean for projects in that school. In determining the institutional costs and benefits of such requests, the Dean of Research may take any or all of the following into consideration.

  • The equity of granting the waiver when the projects of other faculty carry full overhead
  • The total cost to Stanford
  • The likelihood that an award would be seriously jeopardized without a waiver, and the potential effect of the loss on the faculty member's overall research program
  • The benefit of the waiver to new or junior faculty members or in support of research efforts in new directions which otherwise might not be sufficiently developed to attract typical peer-reviewed awards
  • The effect of a waiver to increase direct costs available for student support

Steps to Request Approval

The Dean of Research will consider requests for F&A cost waivers in very limited circumstances. The PI’s Research Administrator and the PI should initiate the request, and it must be approved by the PI and the PI’s school dean's office before being sent for approval to the Dean of Research.  This can be done electronically in SeRA on the budget page.  See: IDC Waiver User Guide.

For projects administered within the School of Medicine, the Research Administrator and the PI should coordinate the request with their Research Process Manager (RPM) in the Research Management Group.  The RPM will submit the request to the Director of the Research Management Group for review/approval where it will be reviewed and approved as appropriate.

For projects administered within the School of Engineering, the request must be sent to Engineering Research Administration prior to being routed to the school dean or Dean of Research. Please review the ERA Job Aid.

See the Research Policy Handbook Policy 15.2 Facilities and Administrative (Indirect Cost) Waivers for detailed information.


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Budget Infrastructure Charge

This rate only applies to non-government sponsors.

If a project does not include at least an 8% F&A rate, then the project or on the PI must plan to fund an 8% infrastructure charge levied by Stanford on specified expenditures.

Designated funds

For designated funds, the infrastructure charge will be applied at the time funds are received from the external revenue sources.

Restricted funds

For restricted funds (expendable gift funds, endowment income funds, and sponsored project funds that carry an F&A rate of 0%), the infrastructure charge will be applied at the time funds are expended or transferred.


Gifts for building projects are waived from the infrastructure charges.

Gifts of donated capital equipment are waived from infrastructure. However, restricted funds used to purchase capital equipment will be assessed as an Infrastructure charge. 

Waiver of Infrastructure Charge

Any exceptions to the policy require approval of both the Provost and Chief Financial Officer. If the donor or sponsor will not pay the infrastructure charge, the department or office may request to pay the charge themselves by applying to the Budget Office for permission to use an alternate PTA (project/task/award). Departments must use the "Request for Infrastructure Exemption" form. The alternate source of funds must be able to support an expense of this nature. Designated, endowment income or expendable funds may be used. Sponsored projects may not be used.  See additional guidelines concerning sponsored projects and exemptions below.  If the exemption is not granted by the Provost and the Chief Financial Officer, the funds must be refused.

A waiver of F&A (indirect) costs granted by the Dean of Research does not waive infrastructure.

  • For questions about infrastructure charge policy, exemptions or waivers, contact Dana Shelley, Director of Budget Planning and Policy Analysis.
  • For questions related to sponsored projects please contact your OSR Representative.
  • For all other inquiries, please call your Fund Accounting representative.

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Understanding the Out Years of a Proposal

You May Request an Escalation Factor

You cannot expect your budget to predict perfectly how you will spend your money five years down the road. However, you must propose a reasonable approximation of what you intend to spend. Be thorough enough to convince the reviewers that you have a good sense of the overall costs. You may request an escalation factor for recurring costs in accordance guidance received by RMG (Research Management Group)or OSR (Office of Sponsored Research).

Large Year-to-Year Variation

Any large year-to-year variation should be described in your budget justification. For example, if you have money set aside for consultants only in the final year of your budget, be sure to explain why in your justification (e.g., the consultants are intended to help you with the statistical interpretation of the data and therefore are not needed before the final year). In general, grantees are allowed a certain degree of latitude to rebudget within and between budget categories to meet unanticipated needs and to make other types of post-award changes. Some changes may require prior approval.

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