Guidance for Writing a Budget Justification
The Budget Justification is a very important part of your application. Peer reviewers will use it to evaluate the appropriateness of the financial resources you have identified as necessary for your project and IMLS staff will use it to check your calculations and to make determinations regarding the allowability of specific expenses according to the applicable cost principles.
Your Budget Justification should align with your IMLS Budget Form. It should identify the purpose for each expense and explain how you arrived at each cost, including any that you may have consolidated and summarized on the budget form.
Below is a suggested format with examples of what to include.
1. Salaries and Wages
For each person whose salary or wages will be paid with IMLS funds or by cost share, identify them by name, describe his/her role in the project, the percent of time to be devoted to the project, and at what rate of pay. If cost share is being provided by unpaid volunteers, explain how you arrived at the dollar figure used to represent the value of their services.
2. Fringe Benefits
Identify your institution’s fringe benefit rate and explain the base for the calculation for each person. If you have consolidated several persons’ fringe benefits into a single line on the IMLS Budget Form, break out the detail here.
For each trip, explain the purpose of the trip and specify the points of origin and destination, the name of the traveler, and break out the costs of transportation, lodging, per diem, and any other expenses associated with the travel. Explain how you arrived at the cost figures.
4. Supplies, Materials and Equipment
List each type of supply, material, and equipment you propose to purchase or provide as cost share for the project. Detail the number and unit cost for each item, and explain how you arrived at the cost figures. Provide vendor quotes or price lists as supporting documents with your application.
5. Contracts and Subawards
List the costs of project activities to be undertaken by a third party. Identify each third parties by name, describe their importance to the project, the activities they will carry out, and the cost. Explain the basis on which you selected each and detail their qualifications. Provide relevant supporting documents with your application.
Please be aware that you are responsible for making a case-by-case determination as to whether the agreement you make with a third party should be a contract or a subaward. That determination will depend upon the characteristics and substance of your relationship with the third party with respect to the activities to be carried out. Recent changes in Federal grant regulations impact the responsibilities of recipients of Federal awards with respect to contracts and subawards.
As these new regulations would apply to all grants awarded after December 26, 2014, applicants are advised to review the requirements in order to understand their responsibilities under any award.
6. Student Support
If you are applying to a program that allows student support, detail the nature and cost of each scholarship or other form of support. Identify the nature, number, and cost of any student materials including books or other supplies, student memberships in professional organizations, internship expenses, and travel, and explain how you arrived at each cost figure.
7. Other Costs
Use this section for costs that are not assignable to other categories.
8. Total Direct Costs
Indicate the total direct costs, and specify how much you are asking from IMLS and how much you intend to provide as cost share.
9. Indirect Costs
If you include indirect costs in your project budget, identify the rate and explain the base on which you are calculating the costs here. If you are a non-Federal entity, other than a State, local government, or Indian tribe subject to specific indirect cost requirements, and you have never received a negotiated indirect cost rate, you may elect to charge a rate of 10% of modified total direct costs. If you do so, explain how you are treating the portion of each subaward or contract in excess of $25,000 in your indirect cost calculation. If you are using an indirect cost rate already negotiated with a federal agency, verify that the agreement is current. If you are using an indirect cost rate proposed to a federal agency for negotiation but not yet finalized, specify the date of your proposal and describe your plan if the rate is not finalized by the time IMLS award determinations are made.
10. Total Project Costs
Indicate the total project costs here, and specify how much you are asking from IMLS and how much you intend to provide as cost share.