In developing a budget for a sponsored project, the Principal Investigator (PI) must ensure that the project budgets are accurately reflected in the budget periods and project period, as well as accurately defined in the narrative of the budget justification. Grants Offices (GO) works with PIs to develop budgets.
- The budget plan is the financial expression of the project or program as approved during the award process.
A detailed budget should be prepared for every application as it serves as a guideline for spending the project’s funds and outlines the proposed project in fiscal terms. At the time of negotiating and accepting the award, the detailed budget is used to assist in determining whether the award amount is sufficient to accomplish specific aims in the proposal, or whether a modification of the proposal and revised budget is required. In addition to a budget, a budget justification is frequently requested by the sponsor at the time of grant submission. The budget justification is a narrative that describes how the PI plans to expend the grant funds. The budget justification uses the same categories as in the budget but with extra detail to enable the sponsor to determine how the budget amounts were derived. Some sponsors, such as NSF and NIH, have precise requirements for the budget justification. For example, the NIH may use a modular budget format and an applicant will request funds in lump sums of $25,000 intervals. In this case, the budget justification includes the name, role, and number of person months for every person on the project.