Budget Preparation

Research Office

Research Tools

Proposal Development

Budget Preparation

The Office of Sponsored Programs is responsible for reviewing the budget portion of proposals. Each proposal budget will be reviewed and approved by OSP before submission. For budget questions contact: Joanne Lee.

Budgeting Basics

When developing your proposal budget, create a budget that covers all costs of the proposal and stays within the sponsor and Montana Tech/Montana University System guidelines. Make sure to identify all costs associated and any funding restrictions by the sponsor.

Here are some budgeting basics to help with developing your proposal budget. Every project and sponsor is different, so make sure to consult the program guidelines when developing your budget. If you do not  know where to start, contact OSP for assistance in starting your budget development.

  • Salary/Wages: A major budget category on most sponsored program budgets is personnel expenses (salary and fringe benefits). Proposal budgets should accurately represent the amount of direct research effort personnel are committing to the project. Compensation on sponsored programs must not exceed an employee’s authorized base rate of pay at Montana Tech.
    • Academic Year (AY): Most faculty members are employed by Montana Tech on a nine-month appointment. In order to request AY funds, a buyout of academic responsibility must be budgeted by the project and approved by the department head. For example, the buyout could relieve the faculty member from teaching one course, which would be budgeted as a percent of time.
    • Summer Salary: For faculty with nine-month appointments, most sponsors permit compensation during the summer. Montana Tech allows nine-month faculty to budget up to three months of summer salary. However, some sponsors restrict the amount of summer salary allowed to be requested.
    • Calendar Year (CY): Some research positions and administrative positions at Montana Tech are on 12-month appointments/employment. Salary can be budgeted for these positions to buy out the percentage of their time to be spent on the project.
    • Students: The typical undergrad hourly rate is $11.  If you want to employ a graduate research assistant you must budget a stipend of $6,120 per semester and $8,160 for the summer plus tuition. A PhD student should be budgeted at $7,920 per semester and $10,560 for the summer stipend plus tuition.
  • Fringe Benefits: Salary and wages must have associated fringe benefits in the budget. Benefits are a direct cost estimate as a percentage of salary. Fringe rates include retirement, worker’s compensation, FICA, FUTA, leave assessment and insurance. View the current fringe rates.
  • Equipment: Equipment includes tangible property exceeding $5,000 and having more than one year of useful life. Acquisition cost for equipment, for example, means the net invoice price of the equipment, including the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired. Ancillary charges such as taxes, duty, and protective in transit insurance, freight, and installation are included in the acquisition cost. Equipment rental, maintenance, or repair costs should be listed under other direct costs/operation.
  • Travel: Travel costs related to the project can be to present project results, meet with collaborators or sponsors, or enable data collection. Travel should be itemized by trip and include transportation costs, per diem, hotel, registration fees, and number of travel days. Make sure to identify domestic and foreign travel separately. View travel rates.
  • Participant Support: Participants are individuals the project is intended to benefit. Tuition payments on behalf of a graduate research assistant doing research for the project are participant costs, but the student’s assistantship stipend would be listed as a personnel expense. Other participant support can be books or travel/lodging/meals/stipend for summer programs. For projects such as, undergraduate research programs or teacher training, with the primary purpose of benefitting participants, the participant stipends are also participant costs.
  • Contracted Services: Contracted services are purchased services provided by independent contractor or vendor to perform a specific objective of the project. The services provided are typically within their normal business operations and operate in a competitive environment where they provide similar goods or services to many different purchasers. You are paying for a service, not collaborating together.
  • Subawards: Subawards are used with the subrecipient is functioning as a co-investigator or partner on the project (i.e. they are involved in a creative way designing and/or conducting the sponsored activity.) Prior to proposal submission, all subawards required to submit a line item budget, scope of work for the portion of the project they will conduct, and a signed letter of collaboration on letter head at a minimum.
  • Other direct costs include:
  • Materials and Supplies: May include lab supplies, teaching aids, and office supplies;
  • Publication Costs: Anticipated cost of publishing the results of the research, including page charges, poster production, and reprint costs;
  • Consultants: Personnel who provide professional service for a fixed period of time and are not Montana Tech employees. Consultants should be budgeted only where on-campus expertise does not exist or is not readily available. This may include fees and travel expenses. The use and payment of consultants is often restricted; therefore, discuss it with OSP, Joanne Lee.
  • Photocopying, telephone costs, mailings, equipment maintenance, rental and/or lease.
  • Space rental and renovation as appropriate;
  • Hazardous Waste Disposal Costs (Contact the Montana Tech Office of Environmental Safety and Health).
  • Total direct costs: These are all of the costs being budgeted to the project.
  • Facilities and Administrative Costs (F&A): F&A, also known as IDC or overhead, includes all activities essential to support sponsored projects that cannot be directly charged to a specific grant or contract.
  • Total Requested Funds: The sum of total direct costs and F&A.


Facilities and Administration costs (F&A), also referred to as indirect costs (IDC) or overhead, are costs incurred for common or joint objectives and cannot be specifically identified with a particular sponsored project, instructional activity, or any other institutional activity.

Examples of IDC costs include:

  • General use office supplies;
  • Campus security;
  • Use of laboratory, office space, equipment, Internet, etc.;
  • Time spent by academic departments, deans, Research Office, OSP, HR, payroll, janitorial services, etc.;
  • Library Facilities

Montana Tech’s federally approved F&A rate: 33.5% MTDC

View the IDC rate agreement.

In compliance with Montana University System Board of Regent Policy 404 – Indirect Cost Recovery Rate, Montana Tech seeks to recover full IDC allowed by the sponsor. If the sponsor does not allow Montana Tech’s full negotiated IDC rate, Montana Tech will honor the reduced rate of the sponsor with appropriate documentation.

State of Montana IDC rates:

State-funded projects (not federal pass through funding)

  • Research: 25% of total direct costs
  • Training: 8% of total direct costs

Cost Share

Cost share (matching funds) is the portion of the project costs not paid by the sponsor. (CFR Title 2 part 200.30) The resources being cost shared must be quantifiable, trackable, and reported to the sponsor.

  1. Montana Tech will not provide or support any matching/cost share for proposals where it is not explicitly required by the RFP.
  2. In cases where the RFP explicitly requires cost share, the following process will be followed:
    1. First, the time [salary, proportional benefits, and associated overhead] of the PIs will be used as match, assuming that such time is available and not already committed.
      • A PI may commit up to his/her fractional research appointment, i.e. when 15 credits are the standard departmental teaching load, the number of hours assigned to research may be used as cost share.  For example, if a faculty member is teaching 6 credits per semester, with 3 credit hours of service and 6 hours of research, then 6/15 (40%) of the faculty member’s salary may be used as cost share.  When the assignment is 9 credits teaching, 3 credits service, 3 credit hours of research, then 3/15 (20%) may be used as cost share.
      • It is recommended that the PI commit only up to 90% of the research appointment, i.e. 36% in the 40% example. If 100% of the research fractional appointment is committed, this implies the PI will only work on that research project during the academic year, and no time will be allocated to other research projects.
      • Faculty may not commit the fraction of their salary that is allocated for administration, service, or teaching.
    2. Next, the anticipated fraction of IDC that will be returned to the PI(s) (if the proposal is awarded) will be used. Please refer to the Montana Tech cost share policy for the current IDC return procedure.
    3. Finally, the VCR will negotiate with the Dean(s) and Provost to identify any remaining necessary funds.

      Unrestricted “cash” contributions from the Research Office will typically be applied towards equipment, provided sufficient funds are available. PIs requesting cost match of equipment should send a brief description of the equipment and a quote to the Vice Chancellor of Research.

      All remaining cost share from Montana Tech is dependent upon availability of funds, and will typically require a match between the Research Office, the PI(s), the Department Chair(s), and the Dean(s) subject to further negotiation.

      The PI/departmental contribution to cost share may include the following funds:

      1. Department discretionary funds
      2. Faculty IDC return accounts
      3. Faculty start-up funds
      4. Departmental graduate student tuition waivers.  Note that funds allocated for Graduate Teaching Assistants may not be used.
      5. Equipment usage fees, provided the equipment has an established public rate.
      6. Department chairs may commit to “buying out” faculty teaching time, at the rate of 10% per course, with 10% calculated based on the faculty’s 9- month base salary. When this option is used as cost share, the faculty must be released from teaching one course per every 10% cost share commitment. These funds will count toward the faculty time commitment, and the department will not receive reimbursement of funds.
  3. It is possible that for some proposals some of the match will come from industrial partners. Industrial partners may include “in-kind” cost share (i.e. time committed) when the funding agency allows, provided sufficient documentation is used to track this in-kind cost share.
  4. If the proposal has subcontractors that are contributing negotiated cost share, the subcontractors must commit in writing to their share of the cost share. In general, the fraction of cost share provided by the subcontractor should match the subcontractors share of the budget.
    1. In cases when a proposal is awarded and the subcontractor reneges on their promise of cost share, the subcontract and possibly the whole proposal may need to be renegotiated.
  5. It is possible that in rare cases no match can be identified. In such cases the proposal will not be submitted.

NOTE: Cost share arrangements must be completed at least 10 full business days before the sponsor’s deadline for proposal submission. To apply for cost share, pleas request a cost share budget sheet from the pre-award specialist. Send this document, with both the full budget and the cost share budget, to the pre-award specialist to handle the cost share request.

Common Sponsor Budget Restrictions

PIs should closely review the sponsor guidelines for budget restrictions. Common restrictions are:

  • Allowable costs;
  • Required cost-sharing (match);
  • Limits on total amount requested;
  • Limits on total direct costs;
  • F&A restrictions; and
  • Required budget forms and/or budget format.