Sponsored Programs Budgeting Policy

Responsible Unit: OSA | Executive lead: CRO
Created: 10/2021 | Reviewed/Revised: N/A | Effective: 06/2024
Compliance:
Approving Body: PAC | Classification: Institution-wide

Policy:   
It is the policy of Pacific Northwest University (PNWU) that all costs proposed or incurred on sponsored projects comply with sponsor terms and conditions, PNWU policies and procedures and applicable Federal, state and local regulations.  

At PNWU, the Office of Scholarly Activities (OSA) and Finance works closely with Principal Investigators (PIs) to develop sponsored program budgets. The purpose of this policy is to provide basic guidance to PIs in development of sponsored program budgets that are in compliance with sponsor requirements and University policy.  

Definitions:  
N/A

Procedure:            

Procedures for Implementation  
The following are guidelines that should be followed in the development of sponsored program budgets. In proposing budgets for sponsored projects, the PI ensures PNWU and the potential sponsor that project budgets are represented as accurately as possible. At PNWU, PIs work with OSA and Finance to develop all sponsored program budgets. In addition, specific requirements – including cost principles as defined by the Federal Office of Management and Budget Uniform Guidance (OMB Uniform Guidance) or other sponsor regulations and consistency requirements as imposed by the Cost Accounting Standards (CAS) Board – must be adhered to at the proposal stage as well as when funds are expended.  

Allowability  
Proposals and sponsored projects funded by the Federal government should not include expenses that are unallowable as defined by the OMB Uniform Guidance or other regulations. In instances where the project is funded by a non-Federal sponsor, proposed and actual expenses must comply with the sponsor’s terms and conditions. Similarly, expenses which are normally 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 outlined by the non-Federal sponsor or, in the case of Federally funded projects, the exception as defined in the OMB Uniform Guidance (See Charging Administrative Expenses to Federal Awards Policy.)  

Cost Sharing  
Proposed budgets should include the total cost of the project, identifying the amount requested from the sponsor and other costs that PNWU commits to cost share, if any. The PI must adhere to PNWU’s Cost Sharing Policy which discourages cost sharing if not mandated by the sponsor. After an award is received, these commitments (mandated and voluntary committed cost share) must be identified and tracked separately as cost sharing. Cost sharing accounts are established by Finance, using a separate parallel account as the sponsored funds account. PIs must ensure that department funds are identified and separately budgeted for cost sharing. Voluntary uncommitted effort beyond what was committed in the proposal should not be recorded and tracked as cost sharing.  

Commitment of Effort  
The Federal Office of Management and Budget requires a commitment of effort on the part of the PI during the period in which the work is being performed. Committed effort shall be directly charged or cost shared, within the limits set forth in the Cost Sharing Policy. The requirement of PI effort does NOT extend to:  

  • Equipment grants.  
  • Awards for students/postdocs where the faculty mentor is named as PI, e.g., for dissertation support or other training purposes.  
  • Limited-purpose awards characterized as Other Sponsored Activities. (Examples of such limited-purpose awards include awards granted specifically for PIs to travel or to attend conferences.)   

In preparing proposals, PIs must be careful not to overcommit themselves or others in the proposal budget. Distribution of effort must take into account the time required for teaching and service roles. PIs may submit proposals on the assumption that not all proposals will be awarded. However, a reasonable estimate of time devoted to the project, whether that effort will be paid for by the sponsor or by PNWU, is necessary. Subsequent changes in levels of effort may also require advance notification and approval by the sponsor. For a complete discussion of time and effort, see the Effort Reporting Policy for Sponsored Programs. In no case may funded commitments exceed 100 percent. For Federal awards, prior agency approval is required for reductions of more than 25% of committed effort of personnel named in the award or listed as key personnel.  

Estimating  
When estimating project expenses, make sure to follow these guidelines:  

  • Estimating direct and indirect costs must be consistent with PNWU’s Costing Policy. 
  • The cost categories (i.e., expense accounts) identified and estimated in the budget must be expensed in the same manner.  

Related Documents:
Charging Administrative Expenses to Federal Awards 
Sponsored Programs Costing Policy  
Sponsored Programs Cost Sharing Policy 
Sponsored Programs Effort Reporting Policy 
Sponsored Programs Data Management and Sharing Policy 

Policy Resources

For assistance with policies and procedures contact:

Lori Fulton
lfulton@pnwu.edu