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Creating a Modular Budget

Last Updated: 5/10/2018

The National Institutes of Health (NIH) uses a modular budget format for some applications rather than requiring a full detailed budget. The modular budget format allows applicants to request funds in $25,000 intervals up to $250,000 in direct costs per year. Even though the modular budget is all that is required for submission to NIH, internally MSU still requires a detailed budget to ensure the project has been properly costed and that Facilities and Administrative (F&A) costs have been calculated correctly. In Kuali Coeus, users can create their detailed budget within the application and use the “Sync” functionality to automatically generate the modular budget.

*NOTE: Job aid assumes that a detailed budget has already been created

WHO:

  • College/ Department Administrators
  • Principal Investigators/ Key Personnel

WHEN:

  • Preparing an NIH proposal with a Modular Budget

HOW:

Split into the Following 3 Sections:

Syncing to the Modular Budget

This is the recommended method for creating your modular budget. Take the following steps:

  1. Navigate to the Budget Overview panel on the Parameters tab and check the Modular Budget? box. This ensures that the Modular Budget form will be populated with the budget information.

    Under the Parameters tab, the Budget Overview panel is shown with an option to select the Modular Budget box

  2. Set the periods Direct Cost Limit to the appropriate modular amount on the Budget Periods & Totals panel.
    Note that if you have a subaward, you would set the period direct cost limits to the modular amount plus the consortium F&A for any period impacted by that subaward.

    The Budget Periods & Totals panel displays the modular dollar amount in the Direct Cost Limit column

  3. Sync to the direct cost limits by selecting the Non‐Personnel tab and performing the following steps:
    1. Select the appropriate Budget Period from the drop down menu
    2. Click show next to the Non‐Personnel budget category you would like to sync to
    3. Click show next to the Line Item Details subpanel for the budget category
    4. Click the sync to period direct cost limit button to change the cost for that line item to a dollar amount that will bring the direct costs for that budget period to equal the Direct Cost Limit field Under the Non-Personnel tab, direct cost limits can by synced NOTES:
      • The system will not sync to Personnel line items; you can only sync to Non‐Personnel line items.
      • The system provides the following warning when reducing a line item: “Period direct cost is greater than the direct cost limit for this period. Do you want to reduce this line item cost to make the period direct cost the same as the period direct cost limit?” You will need to click yes to continue
  4. Repeat step 3 for each budget period
  5. Click save to finalize your selections
  6. Click on the Modular Budget tab
  7. Click the Sync button at the bottom of the page to bring in the modular calculations and totals.

    Under the Modular Budget tab, the calculations and totals can be synced

    • NOTE: the application will always round up to the nearest modular amount based on the total direct cost for the budget period. If you have already built your budget to the modular cost limits you should not experience any changes to the modular amount
  8. To view one budget period at a time, select the budget period drop down menu and select the budget period you would like to view.
  9. Click update view to bring up the selected budget period

    The modular budget period can be selected and the view updated

  10. Verify that the Direct Cost Less Consortium F&A in the Direct Cost panel contains the correct modular amount for the budget period selected

    The Direct Cost Less Consortium F&A dollar amount is shown in the Direct Cost panel

  11. Verify that the F&A Rate Type, F&A Rate, F&A base and Funds Requested are correct

    The F&A Rate Type, Rate, Base and Funds Requested are displayed in the F&A panel

  12. Repeat steps 9‐11 for each budget period
    • If the Direct Cost Less Consortium F&A and/or F&A Base amount is incorrect, return to the personnel and non‐personnel tabs and make corrections to the detailed budget
  13. Click save to update your selections
  14. Navigate to the Parameters tab and mark your budget Final. Email your OSP Proposal Team and let them know the budget is ready for review.

    Once the budget is ready for OSP review, mark as Final on the Budget Overview panel under the Parameters tab

  15. Click < return to proposal; navigate to the S2S tab and expand the Forms panel
    • Check the box to include the PHS398_ModularBudget form, to be included with the submission to Grants.gov (and eRA Commons).

      Under the S2S tab, the form entitled PHS398 Modular Budget needs to be included with the submission to Grants.gov

Manual Entry of a Modular Budget

We highly recommend following the above steps to create your modular budget, however, there is an option to manually enter your modular budget rather than syncing to the modular budget. Take the following steps:

  1. Navigate to the Budget Overview panel on the Parameters tab and check the Modular Budget? box. This ensures that the Modular Budget form will be populated with the budget information. Modular Budget checkbox highlighted on the Budget Overview panel
  2. Navigate to the Modular Budget Tab and click the Budget Period dropdown. Select the first budget period from the dropdown list and click the update view button. Budget Period dropdown and update view button highlighted on the Modular Budget Tab
  3. Click show on the Direct Cost panel.
  4. Enter the module amount for year one in the Direct Cost Less Consortium F&A field. If the budget includes subawards, enter the total subaward(s) F&A in the Consortium F&A field. The system will automatically calculate the Total Direct Cost. Example amount of $250,000 entered in Direct Cost Less Consortium F and A and $16,750 entered in the Consortium F and A field for a total direct cost of $266,750
  5. Click show on the F&A panel.
  6. In line 1, verify the F&A Rate Type and F&A Rate are correct. Enter the appropriate indirect cost base in the F&A Base field and click recalculate. The system will automatically calculate the F&A in the Funds Requested column. Example $240,000 entered in F and A Base field on the F and A panel; also showing the recalculate and save buttons highlighted
  7. Click save.
  8. Follow steps 2-7 for each budget period, making sure to click save before moving between periods.

NOTE: Do NOT click sync on the Modular Budget tab after you’ve manually entered your figures, or the information will be overwritten

REMINDER: You will still be required to provide OSP with a detailed budget.

How to Enter Subawards in a Modular Budget

In order for the system to calculate a modular budget and exclude the subaward F&A costs from the module amount, we have to tell the system which portion of the subaward budget is for F&A. We also have to tell the system the portion of the subaward costs that are under and over the $25,000 threshhold. We tell the system this information through the use of object codes:

  • Subawards <= $25,000
  • Subawards > $25,000
  • Subawards F&A <= $25,000
  • Subawards F&A > $25,000

Rule 1: the object codes “Subaward <= $25,000” and “Subaward F&A <=$25,000” amounts added together will never exceed $25,000 for all years.

Rule 2: the total amounts for object codes “Subaward <= $25,000” and “Subaward > $25,000” equals the total of direct costs for all years.

Rule 3: the total amounts for object codes “Subaward F&A<= $25,000” and “Subaward F&A > $25,000” equals the total F&A budgeted for all years.

  • If the total subaward amount for all years is less than or equal to $25,000, only use the object codes “Subaward <= $25,000” and “Subaward F&A <=$25,000” with the applicable amounts in the appropriate years.
  • If the total subaward amount for the first year is no more than $25,000, only use the object codes “Subaward <= $25,000” and “Subaward F&A <=$25,000” in the first year applicable amounts.
  • If the total subaward amount for the first year is more than $25,000 use the following guidelines:
    First, use the object code “Subaward <= $25,000” with the direct costs amount for no more than $25,000.
    • If the direct costs amount is less than $25,000 in the first year, use the F&A amount in the object code “Subaward F&A <=$25,000” so that the object codes “Subaward <= $25,000” and “Subaward F&A <=$25,000” total no more than $25,000 (i.e. Rule 1).
      • For any remaining F&A amount in the first year, use the object code “Subaward F&A >$25,000”.
    • If the direct costs amount is more than $25,000 in the first year:
      • Use $25,000 for object code “Subaward <= $25,000” of direct costs.
      • Use object code “Subaward > $25,000” for any remaining amount of direct costs.
      • Do not use object code “Subaward F&A <=$25,000”
      • Use object code “Subaward F&A >$25,000” for the amount of subaward F&A.
    • For any additional years, only use the object codes “Subaward > $25,000” and “Subaward F&A > $25,000” once the object codes “Subaward <= $25,000” and “Subaward <= $25,000” total $25,000 (i.e. Rule 1).

 

Let’s look at a few examples.

Example 1:The Direct and F&A Costs do not surpass the $25,000 ($25k) threshhold in year one

  Year 1 Year 2 Year 3 Year 4 Year 5
Direct Cost 15,000 20,000 23,000 25,000 26,000
F&A Cost 7,500 10,000 11,500 12,500 13,000
Total 22,500 30,000 34,500 37,500 39,000

 

Year 1 object codes would be as follows:

Year 1 example of subaward object codes and costs

Notice both of the object codes are <= $25,000, however one is for direct costs and the other is for F&A costs.

Year 2 object codes would be as follows:

Example 1, Year 2 example of Subaward object codes and costs

The remaining direct costs that were within the $25k threshhold (i.e. $2,500) are budgeted in the object code for direct costs <= 25k; the remaining direct costs are budgeted in the object code for direct costs that are over $25k ($20,000‐$2,500 = $17,500); and the F&A costs are budgeted in the F&A object code that is over the $25k threshhold.

Year 3 object codes would be as follows:

Example 1, Year 3 example of Subaward object codes and costs

Now that we have exceeded the $25k threshhold, the only object codes that are necessary are the object code for the direct costs over $25k and the object code for F&A over $25k.

Years 4 and 5 object codes would be budgeted using the same methodology as year 3.

 

Example 2: The Direct and F&A Costs surpass the $25,000 threshhold in year 1

  Year 1 Year 2
Direct Cost 23,000 24,500
F&A Cost 12,650 13,475
Total 35,650 37,975

 

Year 1 object codes would be as follows:

Example 2, Year 1 example of Subaward object codes and costs

 

The first $23k in direct costs are budgeted with the object code for direct costs that are <= $25k; the remaining $2,000
within the $25k threshhold are budgeted with the subaward F&A <= object code (i.e. $25,000‐$23,000); the balance in
F&A is budgeted with the F&A > $25k object code (i.e. $12,650 – $2,000 = $10,650).

 

Year 2 object codes would be as follows:

Example 2, Year 2 example of Subaward object codes and costs

 

Now that we have exceeded the $25k threshhold, the only object codes that are necessary are the object code for the
direct costs over $25k and the object code for F&A over $25k.

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