Because the University is subject to federal cost accounting standards under OMB Circular A-21, as well as to university and sponsor guidelines, all budgets must be prepared in collaboration with and approved by your pre-award administrator in the Office of Sponsored Programs (OSP) before being submitted to sponsors.

Principal Investigator’s (PI) Responsibility

Pre-Award Responsibility

  • Send budget request to your pre-award administrator in an email (link to example) or use our Request for Budget Development form (link).
  • Request further revisions if necessary
  • Submit final budget to your pre-award administrator at least 2 business days before proposal is due
  • Assist PI in creating a budget based on federal, Virginia Tech, and sponsor policies
  • Approve final budget before submission to the sponsor

The budget is a vital component of the proposal; therefore, the PI should start the budgeting process as early as possible.

Your pre-award administrator will be available during office hours to answer questions about the solicitation and to make budget revisions prior to receiving the final proposal.

OSP is open Monday through Friday from 8:00 am to 5:00 pm.  Pre-award administrators will be available during those times to assist with budget preparation and revision.

Your pre-award administrator will use the Virginia Tech budget template to prepare the budget.  The PI must then use the Virginia Tech budget to complete the specific sponsor budget form.

Labor (Personnel Effort)

Labor is calculated on a percentage of effort basis.  The PI should send his/her pre-award administrator a list of project personnel that includes full names and associated percentages of effort that should be charged to the budget. Depending on a VT employee’s appointment type or job classification, percentage of effort can be expressed in a number of ways. AY faculty, for example, can be budgeted in two separate line items—one during the 9-month academic year and one during VT’s 13-week summer—because fringe rates for AY faculty are charged at a different rate during the summer. Your pre-award administrator can assist with budgeting effort according to university policy.

The University is subject to federal cost accounting standards under OMB Circular A-21 whereby costs are incurred and certified as a percentage-of-effort and not on an hourly basis.  Wherever Direct Productive Labor Hours (DPLH) are required, the DPLH will be derived from the %-of-effort multiplied by standard hours: 2080 (CY)/ 1560 (AY)/ 520 (Summer).  There will be no auditable record to support these DPLH hours except for the percentage-of-effort records.

Graduate Research Assistant

The PI should provide the pre-award administrator with the GRA step level (link to GRA step level) and percentage of effort.

When GRA support is requested in a budget, tuition must be included in proportion to the level of effort.  If tuition is not included in the sponsor budget, your pre-award administrator will need to know from what source of funds tuition is to be charged.

  • Table of graduate stipends by step level

Classified Staff

Administrative classified staff should not normally be charged to a project, as their support for research projects is calculated into VT’s indirect base.  If an exception applies, the Form B must be submitted to OSP with the proposal approval form.

VT3240 Consistency in Charging Administrative and Clerical Costs

Wage employees

Undergraduate wage students must be identified because fringes are not charged while they are enrolled in classes.

Fringes

Annual negotiations with the Office of Naval Research (ONR) result in fixed rates for Employee Benefits covering the period July 1 - June 30.  Benefits include: Fee Waivers, Workman's Compensation, Retirement, Unemployment, FICA, Life Insurance, Hospitalization and Educational Leave.  Separate rates are negotiated for faculty, special research faculty, full-time classified and part-time and wage employees.  Employee Benefit rates are not applied to student wages or assistantships. 

Equipment

Equipment is defined as an article of nonexpendable tangible personal property having a useful life of more than one year and an acquisition cost of $2,000 or more per unit.  Items that do not fall under the above definition are considered Materials and Supplies.

The Government threshold for equipment is $5,000.  However, Virginia Tech’s policy is to budget equipment using the $2,000 threshold.

Materials and Supplies

Materials and supplies are defined as items costing less than $2,000 per unit, energy supplies, manufacturing and merchandising supplies, medical and laboratory supplies, repair and maintenance supplies, field supplies, agricultural supplies, educational supplies, etc.

Administrative supplies such as paper, pens and other office supplies are not allowed as direct costs because they are accounted for in VT’s indirect cost rate calculation. In special circumstances, administrative supplies may be charged as a direct cost line item. In such cases a Form B will need to be submitted to OSP with the Proposal Approval Form.

Contractual Services

Contractual services include costs related to postal services, printing, memberships, subscriptions, consulting services, animal care, repair and maintenance services, and Virginia Tech service center charges.

  • Virginia Tech Service Center Rates

The term Consultant refers to an individual or organization hired to provide services of an advisory nature.  A consultant may be hired when the necessary expertise is not available within the university community.  A Virginia Tech employee cannot serve or be paid as a consultant on sponsored projects. Consultants must submit a letter in which their services and rates are described.

Publications are contractual services but are listed as a separate line item on the Virginia Tech budget.

Other common contractual services include postage and overnight delivery services. These can only be charged as direct costs when required in the exceptional circumstances of a major project (defined in OMB Circular A-21, Exhibit C).

Indirect

Indirect rates are fixed annually through an agreement with the Office of Naval Research (ONR).  Commonwealth of Virginia legislative action obligates the University to recover indirect costs wherever possible.

Sponsors that do not allow our full indirect cost rates to be applied must provide proof that their indirect cost rate recovery is limited. Proof can be in a written form such as a guideline, policy or in a copy of board meeting minutes.  A letter from an individual having authority to bind the sponsor will also suffice.  If there is no proof for the lower rates, the appropriate Virginia Tech indirect rates will be applied to the project’s budget.

Department of Defense grants, contracts, and cooperative agreements may be limited to 35% of the total cost of the project.  The PI should consult with their pre-award administrator to determine if this rate is applicable.

Indirect rates are calculated on either a Modified Total Direct Cost (MTDC) or Total Direct Cost (TDC) basis.

Tuition

Proposal budgets that include graduate student stipends must also include tuition and academic fees for the same time frame (AY) that the student(s) will be on GRA stipends.

Tuition rates differ depending upon location and college. There is a base tuition rate for the Blacksburg campus and a rate for the Northern Virginia campus.  Engineering, MBA, and Architecture, Industrial Design, Interior Design and Landscape students have an additional fee that is included with tuition.

Travel

The University follows the Commonwealth of Virginia travel policy and procedures, which provide for reimbursement of “reasonable” costs in connection with official travel.

Sponsors often require specific calculations in the budget justification (i.e., number of people traveling, destination, mileage, per diem, etc.).

Subcontractors

The term Subcontractor refers to an individual or organization hired by the University to complete a portion of the sponsored program because the necessary equipment or expertise is not available within the university community. 
Funding for the Subcontract is provided by and must be approved by the sponsor.
Your pre-award administrator will need the following information from the subcontractor before submitting the final proposal:

  • Subcontractor’s Statement of Work
  • Subcontractor’s Budget and Budget Justification
  • Subcontractor’s Letter of Intent (Commitment)
  • Copy of Subcontractor’s Federally Negotiated Indirect Rate Agreement

Cost Sharing

Cost Share cannot be included in a proposal unless it is required by the sponsor oris specifically approved in exceptional circumstances by the Director of Pre-Award.

A Cost Sharing Request Form A signed by the appropriate departmental officials must be submitted to OSP with the Proposal Approval Form