Virginia Tech is subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards or Uniform Guidance (2 CFR Part 200), as well as Commonwealth, university and sponsor guidelines. All budgets must be prepared in collaboration with and approved by your pre award associate in the Office of Sponsored Programs (OSP) before being submitted to sponsors. For futher information on the proposal process please see the procedure OSP 20002 Proposal Submission. SUMMIT is the university's research administration system and should be used to facilitate and complete the proposal process.
Principal Investigator’s (PI) Responsibility
Pre Award Responsibility
The budget is a vital component of the proposal; therefore, the PI should start the budgeting process as early as possible.
Pre award associates are available during office hours to answer questions about a solicitation and to make budget revisions prior to receiving the final proposal.
OSP is open Monday through Friday 8:00 a.m. – 5:00 p.m., except for days the university is officially closed. Pre award associates are available during those times to assist with budget preparation and revision.
Your pre award associate 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. Specific information on effort and effort reporting can be found in the university policy 3105 Effort Reporting and the OSP Frequently Asked Questions page Effort Reporting FAQ. The PI should send their pre award associate a list of project personnel that includes full names and associated percentages of effort that should be charged to the budget. Depending on a Virginia Tech employee’s appointment type or job classification, percentage of effort can be expressed in a number of ways. Academic Year (AY) faculty, for example, can be budgeted in two separate line items—one during the nine month academic year and one during the university's 13 week summer—because fringe rates for AY faculty are charged at a different rate during the summer. Your pre award associate can assist with budgeting labor in accordance with university policy and procedures.
Virginia Tech is subject to federal cost accounting standards under the Uniform Guidance (2 CFR Part 200). Labor 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 percent of effort multiplied by standard hours: 2080 (Calendar Year or CY)/ 1560 (AY)/ 520 (Summer).
Graduate Research Assistant
The PI should provide the pre award associate with the Graduate Research Assistant (GRA) step level (see Graduate Stipend Table) and a 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 associate will need to know the source of funds where tuition is to be charged. Additional information is contained the procedure OSP 10002 Tuition and Related Fees on Sponsored Awards.
University or Classified Staff
Administrative and clerical university or classified staff should not normally be charged to an award, as their support for projects are calculated as part of Virginia Tech’s Facilities and Administrative (F&A) indirect or overhead base. Administrative and clerical personnel provide non-technical support services that benefit departmental, institute, center, or departmental activities. The services of these individuals could include: clerical support, financial management, procurement of materials and services, budget and planning, and personnel management. The treatment of these types of costs are covered under the Uniform Guidance, 2 CFR Part 200.413(c).
If an exception applies, the Form B must be submitted to OSP with the proposal approval form. Additional information is contained in the university policy 3240 Consistency in Charging Administrative and Clerical Costs and the proceudure OSP 30010 Sponsored Award Expenditure General Guidelines (Allowable Costs) section 11.a.
Part-time and Wage employees
Each classification of part-time and/or wage employees should be separately identified. Undergraduate wage students must be identified because employee benefit rates are not applied to student wages or assistantships.
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, worker's compensation, retirement, unemployment, FICA, life insurance, medical insurance and educational leave. Separate rates are negotiated for tenure track faculty, research faculty, part-time faculty, staff, wage employees, and graduate research assistants (summer faculty use the same rate as wage employees). Employee benefit rates are not applied to student wages or assistantships. More information on the actual fringe rates can be found in our Resources section under Resources/Rates/Fringe Benefits.
Equipment, Computing Devices and Software
Equipment, computing devices and software may be charged as a direct expense when it is necessary for the performance of a sponsored award. These items should be justified in the budget.
Equipment is defined as an article of nonexpendable tangible personal property that is generally mobile and is not permanently affixed to any building or room having a useful life of more than one year and an acquisition cost of $2,000 or more per unit.
Computing devices are programmable electronic devices designed to accept data, perform prescribed mathematical and logical operations at high speed, and display the results of these operations.
Software is the programs, programming languages, and data that direct the operations of a computer system with a development or acquisition cost of greater than $100,000.
Items that do not fall under the above definitions whose cost is below the capitalization thresholds are considered Materials and Supplies.
The Uniform Guidance threshold for equipment is $5,000. However, Virginia Tech’s policy is to budget equipment using the $2,000 threshold. Equipment is covered in the Uniform Guidance under sections 2 CFR Part 200.439, 200.33, 200.452, 200.453. See the university’s capital equipment policy, 3950 Fixed Asset Accounting and OSP 10001, Computers, Peripheral Devices, Software or Intangibles Purchased Using Sponsored Awards for a further discussion of equipment and other capital items purchased on sponsored awards.
Under 2 CFR Part 200.452, equipment, including fabrications, is considered capital equipment and may only be charged as a direct expense when it is necessary for the performance of the sponsored award. The university’s capitalization threshold is currently $2,000. Items (excluding software) above that amount will be coded as equipment and must be justified in the budget.
Computing devices with a development or acquisition cost greater than $2,000 should be coded as computing devices and justified in the budget. Software with a development or acquisition cost of greater than $100,000 should be capitalized and justified in the budget. Computing devices or software under these threshold amounts are budgeted as materials and supplies (see OSP 10001, Computers, Peripheral Devices, Software or Intangibles Purchased Using Sponsored Awards).
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 using the SUMMIT system..
Postage, Freight, Cartage, and Express Delivery
Postage, freight, cartage, or express mailing/delivery expenses are generally treated as indirect costs. More information on these types of costs can be found in the Uniform Guidance, 2 CFR Part 200.473, and the proceudure OSP 30010 Sponsored Award Expenditure General Guidelines (Allowable Costs) section 11.p.
When the expenses are required for a sponsored award and can be linked to that specific award, the cost may be charged as a direct expense. Follows are some examples of expenses that may be charged as direct costs:
Shipping specimens to a lab facility for processing,
Postage for surveys,
Shipment of animals for use on a specific project,
Sharing model organisms as required by the terms and conditions on the award, and
Shipping research presentation materials for a conference.
Professional Services and Service Center Charges
Professional services include costs related to consulting services, animal care, repair and maintenance services, and Virginia Tech service center charges. For information on the university's service center rates, see the Virginia Tech Service Center Rates.
The term consultant refers to an individual or organization hired to provide professional 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.
Costs of professional and consultant services are allowable as direct expenses when all of the following conditions are met:
The service has been determined as allowable and necessary for the federal award;
The professional or consultant is not an employee of Virginia Tech; and
The expenses are reasonable in relation to the services rendered (i.e., the service cannot be performed more economically by direct employment).
All Virginia Tech employees must be budgeted as salary and cannot be included as consultants, advisors or vendors.
Additional guidelines for consultant services can be found on the university’s Procurement website: Consulting Services Guidelines.
Indirect or Overhead (F&A costs)
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.
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.
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.).
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 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