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Budgeting

Background

Policies and procedures for budgeting are necessary to ensure New York University (NYU) is consistent in the way it charges costs and in order to safeguard compliance with sponsor requirements. Proposed budgets must comply with the following criteria:

  • Allowable: The proposed costs are allowed under sponsor regulations or the specific terms of the agreement.
  • Allocable: The goods or services proposed are directly attributable to the award.
  • Reasonable: The proposed costs are appropriate under the circumstances and not excessive.
  • Consistently Treated: The proposed costs must be treated consistently based on the circumstances, i.e., the costs are direct costs or indirect costs.

NYU Approach

It is the policy of New York University that all costs proposed or incurred on sponsored projects comply with sponsor terms and conditions, NYU policies and procedures and applicable Federal, state and local regulations. At NYU, the Office of Sponsored Programs (OSP) works closely with Principal Investigators (PIs) and their staff to develop sponsored program budgets.

Allowability

Proposals and sponsored projects funded by the Federal government should not include expenses that are unallowable as defined by the OMB Uniform Guidance or other regulations. In instances where the project is funded by a non-Federal sponsor, proposed and actual expenses must comply with the sponsor’s terms and conditions.

Similarly, expenses which are normally considered as indirect expenses (e.g., certain types of office supplies and clerical salaries) may not be proposed and budgeted as direct expenses unless they meet the criteria outlined by the non-Federal sponsor or, in the case of Federally funded projects, the exception as defined in the OMB Uniform Guidance.

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Cost Sharing

The total amount of the proposed budget should include both the amount requested from the sponsor and the portion that NYU will contribute. See the Cost Sharing Policy.

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Commitment of Effort

The OMB requires a commitment of effort on the part of the PI during the period in which the work is being performed. This effort may be expended during the academic year and/or summer.

Committed effort shall be directly charged or cost shared, within the limits set forth in the Cost Sharing Policy. In no case may funded commitments exceed 100 percent. For Federal awards, prior agency approval is required for reductions of more than 25% of committed effort of personnel named in the award or listed as key personnel.

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Estimating

When estimating costs, there must be consistency with how expenses will be tracked and reported; moreover, proposed budget must be based upon a good faith estimate, which must have a reasonable basis and the cost categories (i.e., expense accounts) identified and estimated in the budget must be expensed in the same manner.

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Frequently Asked Questions

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