Budget justifications are required for administrative costs that will be incurred for the direct support of a federal sponsored project. An overall budget justification that explains the activities that qualify the project as a major project must be included in the proposal as well as justifications for each category of administrative cost. (See example below of an overall budget justification.) After-the-fact budget justifications are allowable when approved by the sponsor. It is the responsibility of the PI in conjunction with knowledgeable departmental administrators to determine whether a project is major.

The following are key elements that are to be included in budget justifications:

• A description of the expense or service
• How it relates to and benefits the project
• The anticipated cost
• The time-period in which it will be utilized
• Any other information that will aid the sponsor in evaluating and funding the proposed item of cost

When writing budget justifications for categories of administrative costs, the amount of detailed information in the justification should be tailored to sponsor-specific requirements and the specific project or activity. For personnel and other expenses, explain the function of the position or cost as it directly relates to and benefits the project. Be sure to include project specific details to highlight the activities that make the project administratively intensive and thus a major project. When such costs are explicitly listed and justified in the sponsor-accepted budget, grant/contract administrators, auditors, and sponsoring agencies can easily understand the nature of the costs and their allowability under the regulations. The primary purpose of a justification is to provide support for the funds requested to ensure adequate funding. Experience has shown that including budget justifications in the proposal increases the likelihood that the sponsor will award the administrative cost. See RPH 10.1 for more information on the budget justification requirement. Also, the Proposal and Budget Preparation class, FIN 660, is taught quarterly and should be attended by those who will be involved in the proposal preparation process.

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Sample Overall Budget Justification

This project is major, as defined by OMB Circular A-21, and meets government requirements. It is major because______________________________

(e.g., it will require the accumulation and distribution of large quantities of real-time data from Stanford University to other institutions and collaborators).

The Principal Investigator will require administrative support to ensure meeting the goals of this project. All personnel effort and expenses charged to this project will be for services specific to the project and not for the general support of the faculty or the academic activities of any University department. In addition, all effort charged to this project can be specifically identified through an effort allocation system such as that reflected on a ___________________________________

(e.g. Personnel Action Form (PAF), Lab Time Card, other).

Note: Only include information that is applicable to and accurate for your project.