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WSU Research Developing a Budget

Developing a Budget

For industry sponsors, we suggest a simplified budget format

Establishing the budget is a key step in determining whether it is feasible to proceed with a sponsored project. The project budget must clearly articulate the funding required undertake the proposed project and allow the industry sponsor to assess whether the budget is consistent with the funding available. The budget should be the best estimate of the actual costs required to successfully perform a project.

If changes to the budget are needed as the research progresses, budgets may be renegotiated, but the changes must be agreed to in a formal amendment or modification of the sponsored project agreement. Similarly, if there is a major change to the scope of work, re-evaluation, and possibly re-negotiation, of the budget will be needed.

A properly prepared budget clearly identifies the various cost components and gives sufficient detail to ensure that the sponsor can easily correlate the budget with the scope of work. Any budget estimate provided to a sponsor must reflect the full cost of the work, including both direct and indirect costs. Because of this, we strongly recommend that investigators first prepare an approved WSU budget in collaboration with their departmental research administrator before providing a budget estimate to the sponsor.

Industry sponsors are often unfamiliar with the budget format used by universities. We recommend the official WSU budget be re-formatted before being provided to the industry sponsor.

For industry sponsors we suggest a simplified budget format. Each budget category must include both the direct costs and the applicable indirect costs (using the WSU federally-negotiated indirect cost rates). A simplified budget can be formatted in many different ways, but categories may include:

  • Personnel (including benefits)
  • Travel
  • Goods and Services
  • Sub-contracts
  • Equipment

Guidance on properly allocating costs among the various budget categories is provided in Guideline 2 and the Budget Workbook.

Industry budgets provided to the sponsor may be structured very differently from our internal budget template, such as a milestone-based budget or lump sum. BUT the corresponding approved WSU budget must be prepared in accordance with all official WSU policies and guidelines. This includes, for example, allowance for 4% inflation in future years of multi-year projects and prior approval of any cost share or matching commitments.

 

 

 

Washington State University