USDA: Preparing Budgets for the US Department of Agriculture
USDA: Preparing Budgets for the US Department of Agriculture
After taking the Developing a Research Proposal Budget 101 course, this course will help you to develop proposals specific to USDA, using their forms with tips specific to USDA including ARS.
0:00
Hello, I'm Dale Halls, Director in the Office of Sponsored Programs at Montana State
University.
0:05
Welcome to our training on preparing a budget for your USDA research proposal, brought
to you by the Office of Sponsored Programs or OSPMSUS.
0:14
Office of Research Development, or Ord and OSP have staff who are experts in budget
development across federal, state, and private funding sources.
0:25
You can work with either of these groups to get your budget developed.
0:28
Our job is to make this process as straightforward and as easy as possible.
0:34
USDA is an important sponsor of research at Montana State University, with about 10%
of fiscal year's 2023 research dollars coming from USDA funding.
0:45
In the first ever three-year strategic plan published by the USDA, 5 science priorities
are identified accelerating innovative technologies and practices driving climate
smart solutions, bolstering nutrition, security and health, cultivating resilient
ecosystems, and translating research into action.
1:06
We are proud at MSU to be part of these priorities.
1:09
Within our research, there is another online module that is a prerequisite to this
course called How to Get Started Developing a research Proposal.
1:21
You'll want to complete that module before this one because it provides general budget
guidance as a precursor to this training, which is specific to USDA.
1:30
Now let's dive into the content.
1:36
Let's start with some important key points.
1:38
Please be sure to pay careful attention to the USDA proposal instructions.
1:43
It's easy to miss key details that could cause delays or worse.
1:47
Some of the USDA programs will require a Request for Applications process.
1:52
This is a pre proposal process that you'll need to apply to before being able to submit
a full proposal.
1:58
SCRI, the Specialty Crop Research Initiative, is an example where we often see this.
2:03
MSU is already registered in grants.gov, so there's no need for you to complete this
section of the proposal.
2:10
Usually you'll submit your USDA proposals through this platform, but we've seen occasional
instances of proposals needing to be submitted directly to subsidiaries of the USDA.
2:21
When an authorized organizational representative is required, that's the VP of Research
or her designee, not the Pi.
2:28
And finally, when submitting your proposal to OSP, please do so 72 hours in advance
of the due date so that we can give the review the right attention.
2:38
There are three types of grants at USDA competitive capacity and non competitive grants.
2:45
Almost all the grants we received from USDA are in the competitive category.
2:49
Capacity grants are quite rare.
2:51
We do see some non competitive grants from ARS, the Agricultural Research Service,
which is part of the USDA, but in most cases you'll hear about those opportunities
directly from the sponsor.
3:04
USDA adheres to the federal cost reimbursable document called the Uniform Guidance
or the UG, and that's where MSU personnel go when determining whether a specific expense
can be paid for with federal funds.
3:17
Within this document are the overarching rules of allowability, allocability, reasonableness,
and consistent treatment for similar costs.
3:27
And these are the standards that MSU is held to when audits are performed on our campus.
3:32
At the end of the day, a quick litmus test when analyzing whether you can include
a cost in your USDA budget or not is whether the expenditure will directly benefit
the project in the most cost effective means available.
3:45
That said, there are a few budget categories worth drawing your attention to so we
can avoid any issues with your budget or your expenses in the future.
3:55
The most important one, which we'll dive more into later in the presentation, is sub
awards versus contracted services.
4:03
Determining which category your collaborator is in can be tricky, but very important
to get right early in the process.
4:11
A lot of USDA research uses contracted services, so this is an important one.
4:17
We also have an online module dedicated to sub awards that you may want to review.
4:22
Travel is always an area that receives intense scrutiny.
4:26
Graduate student appointments, tuition, scholarships, and fellowships.
4:30
There are often restrictions in this category, so you need to make sure to read your
grant terms and conditions carefully to determine if these costs are allowable in
your grant and if there are limits that apply and cost sharing at MSU.
4:43
This isn't allowed unless it's a requirement for funding.
4:47
We do find this to be the case with ARS in particular, so this is something you'll
want to understand.
4:53
This is also one of those topics.
4:55
We recommend getting help from OSP with the following slides.
5:01
Share guidance for using the most common USDA form SF 424 research and related.
5:08
There is another form that you may come across, particularly if you are working with
ARS.
5:13
They will usually require the RE E455 form.
5:17
Often when this form is required, it will be provided directly by your ARS sponsor.
5:24
You can access this form at grants.gov Your sub awardee, if you have any, will be
using this form as well.
5:30
For their budget proposal.
5:33
Let's start with section A, the senior or key person.
5:37
This category is not where you would include consultants or other non employees.
5:42
This is for MSU employees only.
5:44
Note that Project Director or PD is the preferred terminology for the senior or key
person rather than the Pi At USDA.
5:53
Salaries entered should be in proportion to the effort expected on the project.
5:57
They are the IBS that is listed on MSU's employment contract.
6:02
No more than two months of IBS is allowed in a one year.
6:06
Salaries are subject to standards of documentation through Ms.
6:10
US Time and Effort Reporting system, so be realistic about the amount of time your
project might take in terms of salary you need to accomplish your programmatic goals
and milestones.
6:21
A warning, we can't use funds to augment the total salary of the project personnel
or to reimburse them for consulting unlike some other agencies.
6:31
In a multi year proposal you can request a small COLA increase.
6:35
This should be addressed in your budget justification.
6:38
In the form you'll identify the number of calendar months indicating either academic
year or summer, if applicable.
6:45
If you are identifying Co PDS or Pis, use the additional key person button, but note
these must also be MSU employees.
6:57
Section B is for other personnel.
6:59
The number of personnel often trips people up.
7:02
You want to put in the number of people and their cumulative number of months being
worked.
7:06
In this category, you'll include post docs, graduate students, and their level of
effort.
7:12
Section F8IS where tuition reimbursement goes.
7:15
That's in the other direct cost section, not in this section where you have multiple
people in the same role, such as lab techs for example.
7:23
Just indicate the number of individuals in the left column.
7:26
Generally, admin and clerical roles are not allowable costs.
7:31
For fringe benefit percentages, reference the OSP information sheet for the latest,
since these do change periodically.
7:39
Note that the actual benefit percentages will vary by employee, you just need a reasonable
estimate here for the budget.
7:47
Section C is for equipment.
7:49
Equipment is defined as any item with the cost of more than $5000 and with a life
expectancy greater than one year.
7:56
Equipment is usually a straightforward budget category, but if there are extenuating
circumstances or details, use the budget narrative to explain.
8:06
Here's a clarifying example.
8:08
Adding ten cameras and parts together to make one camera worth $6000 does not qualify
it as equipment.
8:16
The total of a single item purchased with the cost more than $5000 is equipment.
8:21
If it's not equipment, it's generally supplies.
8:23
However, general purpose items like a printer, stapler, or general computer, anything
that's not exclusively used for this grant cannot be included.
8:35
Section D is for travel.
8:36
Travel is one of the most highly scrutinized budget categories, and there are lots
of specific details and rules that accompany it.
8:43
Auditors and state legislators seem to suspect that travel is some kind of vacation
for grant funded personnel, and so it's really important to clearly document travel
expenses.
8:52
You may not know the specific future costs for airfare, hotel, or conference registration,
so a reasonable estimate will do.
8:59
Ask OSP if you're looking for some guidance here.
9:02
The bottom line here is that we must travel on the lowest cost fare available, usually
economy, and the burden of proof falls to MSU.
9:09
For example, paid seat upgrades on flights are not allowed unless there's a documented
medical need.
9:14
Federal regulations default to the State of Montana Travel rules.
9:18
Even though the funding is federal, the Federal rules and rates don't apply.
9:23
We are subject to State of Montana rules and regulations, lodging and meal per diems.
9:27
To find the most current lodging and meal per diem rates, visit the MSU Business Office
website.
9:33
You must break up travel between foreign and domestic and all foreign travel must
be approved by USDA.
9:39
We are required to comply with the Fly America Act, which means we need to fly in
US flag carriers.
9:44
See the reference to this legislation on the slide.
9:49
Section E is for participant or trainee support costs.
9:54
Participants are not MSU students or employees.
9:57
They are guest participants who are being included in the budget and are paid for
their participation.
10:02
This is a common budgeting misconception.
10:05
This category is not related at all to MSU affiliated students or employees.
10:11
This category is where you would budget for transportation, travel per diems, stipends,
etcetera for participants.
10:18
Although rarely used in USDA grants, we have seen proposals that include critical
training programs and associated costs for participants.
10:27
Travel would be included here.
10:29
Note that these costs are not charged F&A and typically you can't move costs out of
this category without prior approval from USDA.
10:39
Section F is for other direct costs, materials and supplies.
10:45
These have to be 100% dedicated to this project.
10:48
General office supplies are not allowable costs.
10:52
Publication costs.
10:53
These expenses must be either within the grant.
10:57
Or less than 90 days past the grand end date.
10:59
Once in a great while we'll see 120 days past the grand end date.
11:04
Consultant services.
11:05
These are not sub awardees.
11:07
They can provide advice or services, but they have no programmatic responsibilities
for the project, ADP, or computer services.
11:15
These would include any research specific computer services, but not general desktop
or tech support.
11:22
Because those costs are not generally specific to a grant.
11:25
They're also not allowable.
11:29
Also in Section F is item 5 for sub awards or consortiums and contractual costs.
11:34
This is one of the most confusing budget categories to differentiate, but it's critical
to do so at the proposal budget stage.
11:42
One of the most important criterion for determining whether an expense is a sub award
or consortium versus a contractor is whether the other entity is going to assume a
a portion of the programmatic aspects of the project.
11:55
Sub awardees or consortiums typically have specific outcomes and deliverables that
are critical to the success of the project and named specifically at the proposal
stage.
12:05
They have programmatic responsibilities for the project.
12:09
Contractors typically only advise or provide a very specific and limited service.
12:14
Each sub award or consortium will need an independent budget form filled out which
will include both direct and indirect costs.
12:24
Let's review some of the guidelines for managing your sub awardees.
12:27
MSUOSP has a sub award team available to assist you with establishing and managing
your sub awards, but we can also answer questions at the proposal stage, as can your
OSP fiscal manager.
12:39
As noted earlier, we have another online training module dedicated to sub awards for
your reference.
12:45
First off, MSU is responsible for monitoring the programmatic, financial and compliance
aspects of all sub awards.
12:54
Pi should approve all technical work and invoices coming from sub awardees.
12:58
OSP will handle the processing of approval for these invoices.
13:02
Sub awardees and sub recipients are allowed to charge and collect their federally
negotiated F and A or IDC rate.
13:09
Since they are also incurring these types of costs at their respective campuses, we
include these costs in our budget proposal and they must be adhered to.
13:17
Multiple sub awards can be issued to the same institution, but each sub award requires
its own sow budget and associated F and A.
13:25
If you are working with an entity that doesn't have a negotiated rate with the federal
government, the feds do allow a de minimis rate that can be applied.
13:33
Finally, USDA requires specific written approval to rebudget if the sub award budget
is more than 50% of the total budget or if the sub awardee is a federal agency managing
contractors.
13:47
This is an area where we often see additional scrutiny.
13:50
Notably, we received lots of funding through the Montana Department of Agriculture
or MDA and they care a lot about this.
13:58
It's really important to get this right in the proposal stage.
14:01
To share how this can be confusing, here's an example.
14:05
Let's say you're buying test tubes and getting samples analyzed by a lab.
14:08
One might think of this as a supply, but because getting the analysis conducted is
actually considered a service, it should go into this category.
14:18
MSU doesn't have responsibility or liability for these contractors, products or deliverables.
14:24
It's one of the key things that differentiates it from a sub award accounting for
these services will be managed through procurement services.
14:33
Because F and A does apply to contractors and vendors, there are two possible IDC
calculation methods.
14:41
The method is determined by the total direct costs.
14:45
We highly recommend working with your fiscal manager and OSP to determine the right
method because the calculations are complex and it's easy to get wrong.
14:55
Finally, changes to the budget for this area have the same guidelines as sub awardees
as was discussed in the prior slide.
15:05
Let's talk more about indirect costs or F and A facilities and administration.
15:10
This is another tricky area for budgeting, and we recommend working closely with your
fiscal manager to budget in this area.
15:17
We hope to get the full 45% allocated in the budget, which as of early 2024 is our
negotiated federal rate.
15:25
But USDA often only allocates a maximum of 30% of the total cost of the award when
calculating the indirect cost.
15:33
Some budget categories are exempt from FAFNAIDCS, including equipment sub awards greater
than $25,000, tuition fees, rental costs, participants support costs, and scholarships
and fellowships after these costs have been deducted from total direct costs.
15:51
This is called the Modified Total Direct Cost Base and that sum is used for the percentage
calculation.
15:58
There's also an off campus three that can be utilized when more than 50% of the grants
work is being conducted in a rented facility and can be directly allocated to the
project.
16:08
This doesn't happen very often, but the rate can be found in the OSP information sheet.
16:13
It does change periodically.
16:16
Section J is used for fee, which you'll leave blank for USDA.
16:20
In the case of ARS, the sponsor may charge a fee and it will be provided to you.
16:26
Last but not least, budget justification best practices.
16:30
You'll attach a PDF document that explains the goals and timeline of your project
and ties expenses to the benefits.
16:37
The best advice we can give here is to be very clear about how your proposed expenses
will deliver benefit to your project outcomes.
16:45
Sub Awards will provide a separate justification document to support their own detailed
budget that addresses only their part of the total budget.
16:54
Ms.
16:54
U.S.
16:54
policy is that cost sharing is not permitted unless eligibility criteria require it.
17:00
So you don't want to offer up any additional budget dollars in your proposal because
MSU will be required to provide and document this and it may become an audit item.
17:09
However, cost sharing is often required by ARS.
17:13
When this is the case, we recommend contacting your fiscal manager to set up the proper
tracking mechanisms that will be required and for other guidance on calculations.
17:23
The image on this slide is from the form REE 455, which you will often use with your
ARS proposals.
17:31
Let's revisit this list showing some areas where we often see more scrutiny.
17:36
The UG lists more than 50 expense items that are called out as allowable or unallowable.
17:42
Contact your OSP staff if you have a question regarding whether any cost is in question
or allowable or not.
17:48
Sub awards versus contracted services and getting these costs allocated properly.
17:53
Travel, graduate student appointment tuition and fees which are sometimes, depending
on the grant language, not allowable in USDA awards, and cost sharing which isn't
allowed at MSU unless it's a requirement for the proposal.
18:08
Here are some additional resources for you, a glossary of terms, FAQs, and a full
grants application guide from the USDA.
18:16
Also, the details on Fly America Act.
18:18
And if you're wondering what the USDA building in Washington looks like, that's what's
showing in this picture.
18:25
Finally, MSUORD and OSP are ready and happy to assist you with the preparation of
your budget, so please don't hesitate to reach out to our offices.
18:35
It is our job to help.