Salaries and Wages - Professional (EPA) and Administrative Staff (SPA)

Consider the following questions regarding salaries and wages:
What positions/personnel resources are needed to complete the project?
Are these positions/personnel resources currently available in the unit?
Are the requested salaries within industry/geographical standards for the proposed job function?
Have positions been identified as professional or administrative staff in your budget?
Do you plan to hire temporary assistance? If so, will an outside agency be used?

• Use current salary figures with an appropriate inflationary factor as of July 1 of each year thereafter. No extra compensation, beyond 100% of salary, may be paid from a sponsored project unless specifically approved by the UNC Division of Finance and it is identified as such and requested from and approved by the sponsor in the proposal. Typically, as a portion of time and effort is supported from grant funds, the salary distribution changes accordingly so total compensation for the appointment never exceeds 100%.
• Salaries and wages are generally expressed as a percentage of a full time equivalent position (example, a half time position would be expressed as 50%).
• EPA professional staff are paid monthly and SPA administrative staff are paid biweekly. Both types of positions are eligible for employer/employee provided contributions to retirement and health insurance.
• Certain sponsors place caps or ceilings on PI salary or compensation. Consult the sponsor guidelines to determine if a cap applies to your proposal.
• To convert 12 month salaried employees to an hourly rate divide the 12-month salary by 2,080 hours (173.3 hours per month for 12 months = 2,080; The average month has 4.33 weeks).
• An inflationary factor of 5%/project year is suggested.

Fringe Benefits - see General Guidance section

Consultants

• Consultants are independent contractors and are not employees of UNC. Likewise, UNC employees cannot be paid as consultants.
• Consult the sponsor guidelines to determine if a cap on cosulting rates `applies to your proposal.
• Principal investigators must report and manage any conflicts of interest when hiring consultants to work on sponsored projects.
• Consultants hired to work on contracts and grants are subject to all applicable UNC procedures relating to personal services contracts.
• Consultants are paid upon receipt of an invoice/statement approved by the PI.
• Consulting fees are taxable and as such are subject to 1099 reporting. Total payments that do not exceed $600 will not be reported. Individuals desiring 1099s for amounts less than $600 should contact UNC-GA finance.
• An inflationary factor of 5%/project year is suggested but not mandatory.

Equipment

• Only items costing $5,000 or more each should be listed in the equipment category.
• Cost estimates for equipment should include shipping charges.
• Computer equipment, communication equipment, office equipment and other general- purpose equipment costing less than $5,000 each should be listed in the materials and supplies category.

Travel

• The UNC subsistence rate for meals and mileage should be used for all proposals. Lodging rates in excess of the per diem rate must be justified.
• Always provide justification of travel expenses. Consult the sponsor guidelines to determine the format for travel cost descriptions. Sponsors often ask for detail when they perform proposal cost analysis. Keep in mind that a lump sum figure with no destinations and/or detail may hold up the award process
• An inflationary factor of 5%/project year is suggested but not mandatory.
• Consult the UNC Administrative Policies and Procedures section 4.0 Travel for the currect State of North Carolina per diem rates

Materials and Supplies

• Budget for all project-specific materials and supplies needed, including consumable office supplies, educational materials, and general purpose and other equipment with a per item price less than $5,000/each. Materials and supplies are not provided through the budgeting or recovery of F&A. Needed materials and supplied not provided by the grant must be provided directly by the Unit.
• The cost basis for materials and supplies is the PI's best estimate based on past experience purchasing similar items, written or oral quotes from a vendor, or catalog price; include shipping costs for each item.
• An inflationary factor of 5%/project year is suggested but not mandatory.

Subawards

• Have each subrecipient prepare and submit a detailed budget. Subrecipient should obtain their standard institutional/agency approvals first.
• Each subrecipient should be listed separately. Arithmetic on budgets submitted by subrecipient should be checked.
• If the subrecipient is requesting facilities and administrative costs, include it as a direct cost to UNC showing only one cost item per subrecipient within the body of the UNC budget.
• Submit a copy (for internal purposes) of the subrecipient's most current negotiated facilities and administrative cost Agreement for audit purposes.
• Inflation rates used by subrecipients should be in accordance with their normal practices and included in their yearly budget.

Other Direct Costs

• Contracted Services - Budget any services that will be obtained through contracts with vendors/providers. Examples of activities that fall in this budget category include the development of instructional/promotional materials or the evaluation of data sets by an outside vendor. The cost basis of items falling in this budget category is the PI's best estimate based on past experience, written or oral quotes from a vendor or catalog price; including shipping costs for each item.
• Current Services - Communication costs such as postage/freight and telephone line charges, long distance phone and fax, and other communication charges should be budgeted to the fullest extent possible. Current services are not provided through the budgeting or recovery of F&A. Needed current services not provided by the grant must be provided directly by the Unit.
• Fixed Charge - Any UNC service center (example UNC-TV) used should be listed as a fixed charge. Contact each center to get estimates for services requested. Make sure to address both scheduling and fees when contacting service centers.
• Printing/Publications - The cost basis of printing and publications is the PI's best estimate based on past experience, written or oral quotes from a vendor or catalog price; including shipping costs for each item.
• Inflation factor for all above items is recommended at 5% but is not mandatory.

Facilities and Administrative Costs

• As indicated in the general guidance section, F&A represents the inherent costs of infrastructure/ support that are not provided at the unit level. The negotiated F&A rate is applied to a base consisting of all direct costs with the exclusion of capital expenditures, including equipment costing more than $5,000 per item, repairs and rennovations and construction, and that portion of each subcontract in excess of the first $25,000. This base is referred to a "Modified Total Direct Costs" (MTFC).
• Some sponsors, such as the U.S. Department of Education, instruct applicants to use of the F&A rate that produces the lowest total F&A. Calculations must be made to determine which rate, the UNC negotiated rate applied to the MTDC, or the agency rate, in most cases 8% of MTDC, results in the lowest total F&A. In these cases, it is important to receive clear guidance from sponsors regarding the required F&A rate and applicable cost base.
• Director of Sponsored Programs at smsmith@northcarolina.edu or (919) 962-4557 if you have any questions regarding the budgeting of F&A.

Cost Sharing

Definition of Cost Sharing and Matching

• Cost sharing is a phrase used to indicate that more than one sponsor will share in the costs associated with a project. The most common relationship is for an external sponsor to provide most of the funds and for UNC to provide the remainder of the funds necessary to carry out a project successfully. Matching is a form of cost sharing that generally defines a specific ratio of sponsor and UNC dollars. This type of cost share is usually an eligibility requirement stated in the RFP (request for proposals). Cost sharing and matching are nearly synonymous and are often used interchangeably.

In-Kind Contribution - a type of cost share

• You should be familiar with two primary types of cost sharing/matching: In-kind contributions; and, cash contributions. In-kind contributions are those wherein a value of the contribution can be readily determined, verified and justified but where no actual cash is transacted in securing the good or service comprising the contribution. Two examples of in-kind contributions are: (1) The donation of volunteer time (valued at a rate that would be reasonable for the time devoted had the volunteer been compensated for the time) and; (2) The donation of non-institution space (where such space would normally carry a use fee for purposes other than supporting this particular project.)

Cash Contribution - a type of cost share

• Cash contributions differ from in-kind contributions in that an actual cash transaction occurs and can be documented in the accounting system. This includes allocation of compensated time and effort to projects. Although it is easy to mistake the allocation of compensated time and effort as a donation or as in-kind because the staff member would be compensated regardless of the advent of the sponsored project, the value is the result of a cash transaction and should be treated as a cash contribution. Other examples of cash contribution include the purchasing of equipment by the institution or other eligible sponsor for the benefit of the project requiring cost sharing.

Committed cost sharing

• Cost sharing included in a proposal or a proposal budget must be documented in the official accounting records upon acceptance and management of an award. In-kind contributions must be documented with official correspondence from the organization providing the in-kind cost sharing to include appropriate substantive documentation such as published rate schedules, time cards for volunteers, etc. Any cost sharing outlined in a proposal document considered by a sponsor for funding is known as committed cost share.  Committed cost share may require documentation and substantiation prior to project completion (e.g. during the project period).
• If Cost Sharing is in the proposal it is deemed committed cost share and an obligation will be set up at the time the award is set up. The cost share obligation must be met within the project period. Projects where cost sharing obligations have not been met may be subject to reduction by the sponsor.

Voluntary versus unvoluntary commitments

• If cost sharing obligations are not required, they should not be listed on the budget page and should not have a dollar value assigned in the narrative. If cost sharing is listed in a proposal where there is no requirement from the sponsor, a voluntary commitment of cost share is established. This results in additional administrative burden for the PI, departmental, and institutional staff to document, track, audit, and report on transactions where a requirement did not exist prior to establishing it in the proposal. Additionally, a natural effect of cost sharing is to lower our federally negotiated indirect cost rate, which in turn reduces the amount of, funds available to the institution for program and infrastructure enhancement.

Some Specific WARNINGS about cost sharing

• Be sure you are not over-committing a person's time beyond 100% effort -- if a person is being paid 100% on other projects and that situation will not be changing, do not commit him/her to this project.
• As a general rule, cost share the minimum amount required.
• Using federal dollars as matching or cost sharing toward another federally sponsored project is not allowed unless you have written authorization from both federal agencies.

F&A Waiver/Cost Share Form