3.1 Preparation and Submission of Proposal Budgets
Summarizes some of the obligations imposed on Principal Investigators by law and by Stanford policy. Establishes guidelines for the preparation and submission of proposed budgets, including consideration of allowability, cost sharing, commitment of effort, and estimating methods.
1. Responsibilities of the PI
At Stanford, the Principal Investigator (PI) has overall responsibility for the technical and fiscal management of a sponsored project. This includes the management of the project within funding limitations, adherence to reporting requirements and assurance that the sponsor will be notified when significant conditions related to project status change. This document addresses specific responsibilities concerned with the financial management of sponsored projects. While responsibility for the day-to-day management of project finances may be delegated to administrative or other staff, accountability for compliance with Stanford policy and sponsor requirements ultimately rests with the PI.
In proposing budgets for sponsored projects, the PI assures Stanford and the potential sponsor that project finances are represented as accurately as possible. In addition, specific requirements, including cost principles as defined by the federal government in §200 of the Uniform Guidance, and consistency requirements as imposed by the federal Cost Accounting Standards (CAS) Board, must be adhered to at the proposal stage, as well as when funds are expended.
Stanford University requires all Principal Investigators including those receiving University Research awards to review their obligations for stewardship of sponsor funds and compliance with applicable regulations. This can be accomplished by completing DOR 680, PI Training: Steward and Compliance for Principal Investigators. Individuals can certify their review of this material in the training section of this website.
Proposals should not include expenses which the federal government (in the Uniform Guidance or other regulations) or the sponsor has identified as unallowable. Similarly, expenses which are to be considered as indirect expenses, e.g., certain types of office supplies and clerical salaries, may not be proposed and budgeted as direct expenses, unless they meet the criteria defined in the RPH, Charging for Administrative and Technical Expenses.
3. Cost Sharing
When a PI proposes, and the University agrees to cost share University resources, the University is required to provide the stated resources in the performance of the awarded project. Considering the administrative requirements and responsibilities inherent in the cost sharing commitment, the PI (or other person responsible for the identified fund) should carefully weigh the cost effectiveness versus the expected benefits of each potential cost sharing commitment. Cost sharing of direct expenditures represents a redirection of departmental or school resources from teaching or other departmental and school activities to support sponsored agreements. This commitment must be indicated on the Proposal Development Routing Form (PDRF). By approving the PDRF, the department chair or designee approves the cost sharing commitment.
Implicit in the University’s commitment to cost share is the PI's agreement to ensure that:
- Voluntary cost sharing is permitted by the particular sponsor and project for which it is being proposed and that funds are available for cost shared direct costs.
- He/She understands that unless specified in both the Federal awarding agency regulations and in a notice of funding opportunity, voluntary cost sharing is not expected by Federal sponsors and cannot be used as a factor during the merit review of proposals.
- Cost shared expenses are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
- Cost shared expenses will be appropriately charged, tracked, reviewed, certified and accounted for in compliance with University and sponsor requirements.
- University space is coded in the University's Space Inventory System, consistent with the coding of expenditures in the accounting system.
The PI will review and certify these expenditures in the same manner as all sponsored project spending. The tracking, reporting, and certifying of cost sharing are subject to audit.
Review RPH 15.3 Cost Sharing Policy for more information.
A. Federal Agency Guidelines on Cost Sharing
According to the Uniform Guidance (effective 12/26/14), cost sharing may not be a factor in the review process unless it is both in accordance with Federal awarding agency regulations and specified in the notice of funding opportunity.
B. NSF Guidelines on Cost Sharing
The National Science Foundation prohibits the inclusion of voluntary committed cost in proposal budgets. Cost sharing will only be allowed when explicitly authorized by the NSF Director and included in specific program announcements.
4. Commitment of Effort
Stanford University requires a commitment of effort on the part of the PI during the period in which the work is being performed. This effort may be expended during the academic year, summer quarter only, or both. Committed effort shall be direct charged or cost shared.
The requirement of PI effort does NOT extend to:
- equipment grants
- seed grants for students/postdocs where the faculty mentor is named as PI, dissertation support, training grants or other awards intended as "student augmentation"
- limited-purpose awards characterized by Stanford as Other Sponsored Activities, including travel grants, conference support, etc. (see RPH, Categories of Sponsored Projects for definition and further examples.)
In preparing proposals, PIs must not over commit themselves or others. Distribution of effort must take into account the time required for teaching and campus citizenship.
Research-only faculty on 12-month appointments may typically charge up to 95% to sponsored projects year round. Research activities include sponsored research, university funded research, and departmental research.
Individual schools may have their own thresholds for how much FTE faculty members must reserve for non-research activities. In the School of Medicine, all faculty (UTL, MCL and NTL) must reserve effort commensurate with their non-research activities (e.g., clinical, administrative, teaching, proposal writing); 5% being the minimum level of effort which must be reserved for non-research activities.
See below for requirements for summer salary.
PIs may submit proposals on the assumption that not all will be awarded, but, at the time of award, a reasonable representation of time to be devoted to the project, whether that effort will be paid for by the sponsor or by Stanford, is necessary. Subsequent changes in levels of effort may also require advance notification to and approval by sponsors (see RPH Special Requirements Related to Sponsor Notifications and Prior Approvals).
Find more information and Frequently Asked Questions on Faculty Effort here.
A. Summer Salary
A faculty member who is on a nine-month appointment may be paid from federal and/or non-federal sponsored projects for no more than 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.
5. Estimating Methods
When estimating dollars to be budgeted for project expenses, 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.
6. Budget Justifications
Stanford is obligated to treat types of expenses consistently as either direct or indirect costs. If a proposed budget includes the direct expenditure of project funds for costs that would normally be charged indirectly, e.g., clerical and administrative expenses, general-purpose equipment, or operations and maintenance, then those items must be supported in the proposal by an explicit budget justification. In addition, when administrative and clerical salary costs are being proposed to a federal sponsor, the proposal must include an explanation of how the activities being performed by the administrative person are integral (i.e., vital, essential, fundamental) which allow the effort to be direct charged. (see RPH: Charging for Administrative and Technical Expenses).
This section is not intended to override sponsor requirements related to proposals.