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SAMHSA Budget Guidance

SAMHSA Budget Guidance

Table of Contents Using This Guide............................................................................................................................................ 3

Budget Types............................................................................................................................................. 3

Acronyms Used in This Guide ................................................................................................................... 3

General Budget Guidance............................................................................................................................. 4

Introduction .............................................................................................................................................. 4

Summary of Unallowable Costs................................................................................................................ 5

MATCHING................................................................................................................................................ 6

Guidance For Budget Categories .................................................................................................................. 8

Personnel Costs......................................................................................................................................... 8

SALARIES OF INDIRECT OR FACILITIES AND ADMINISTRATION (F&A) PERSONNEL ................ 8

EXECUTIVE LEVEL II SALARY LIMITATION ................................................................................ 8

Guidance on Calculating Salaries and Paid Time Off (PTO)..................................................... 8

Fringe Benefits.......................................................................................................................................... 9

Travel ......................................................................................................................................................11

Equipment...............................................................................................................................................11

VEHICLE LEASE/RENTAL OR PURCHASE................................................................................. 12

Supplies...................................................................................................................................................13

Contractual..............................................................................................................................................13

CONTRACTUAL COST GUIDANCE........................................................................................... 14

EXECUTIVE LEVEL II SALARY LIMITATION .............................................................................. 15

Guidance on Calculating Salaries and Paid Time Off (PTO)................................................... 15

Construction: Not Applicable..................................................................................................................17

Other.......................................................................................................................................................17

MINOR ALTERATION AND RENOVATION............................................................................... 17

RENTAL COSTS ....................................................................................................................... 18

Total Direct Charges................................................................................................................................18

Indirect Charges......................................................................................................................................19

Type of IDC Rate / Cost Allocation Plan................................................................................. 19
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Modified Total Direct Cost (MTDC) Base:.............................................................................. 20

FUNDING LIMITATIONS/RESTRICTIONS..................................................................................................20

References and Resources..........................................................................................................................21

Official Regulations and Guidance..........................................................................................................21

Notice of Funding Opportunities............................................................................................................21

Blank SAMHSA Detailed Budget and Narrative Template ......................................................................21

Blank Microsoft Word Budget Templates...............................................................................................21

Sample Budgets.......................................................................................................................................21
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Using This Guide

Budget Types

There are three types of budgets referenced throughout this guide:

1. No Match Required – These are the simplest budgets to complete. Applicants/recipients do not 

have to provide any matching funds, they are for a single year, and they do not have to split 

funding between multiple SAMHSA centers

2. Match Required – These budgets require the grantees to provide a specified portion of the total 

project costs from non-federal sources. Refer to the NOFO for more information

3. Multi-Year Funded (MYF) Awards – Budgets for MYF awards do not apply to new applications 

for funding, These budgets span more than 12 months and must be broken down by each 

incremental period.

Acronyms Used in This Guide

• CMHS – Center for Mental Health Services

• CSAP – Center for Substance Abuse Prevention

• CSAT – Center for Substance Abuse Treatment

• FG – Flex Grants

• FY – Fiscal Year

• GMS – Grants Management Specialist

• IDC – Indirect Costs

• LOE – Level of Effort 

o Percentage of time worked based on a full-time work schedule of 2,080 hours per year

• MTDC – Modified Total Direct Cost

• NoA – Notice of Award

• NOFO – Notice of Funding Opportunity

• PD – Project Director
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General Budget Guidance

Introduction

The Detailed Budget and Narrative Justification must match the costs shown in the SF-424A and the 

estimated funding in the SF-424 (Section 18) and must be consistent with and support the project 

narrative. The activities, resources, staff, and other items described in the project narrative must be 

referenced in the Detailed Budget and Narrative Justification.

Before preparing the Detailed Budget and Narrative Justification, be sure to review the Notice of 

Funding Opportunity (NOFO) including the Funding Limitations/Restrictions in Section IV-3 and the 

Standard Funding Restrictions in the appendix.

Applicants/recipients must demonstrate that costs are allowable (45 CFR §75.403). In other words, costs 

must be necessary and reasonable for the performance of the Federal award and must be allocable 

under the cost principles in the 45 CFR §75 Subpart E. 

A cost is “necessary” if it meets a program objective.

A cost is “reasonable” if it meets the “prudent person” standard (45 CFR §75.404). 

A cost is “allocable” to a particular Federal award if the goods or services involved are assignable to that 

Federal award in accordance with relative benefits received. In other words, if you charge 100 percent 

of an expenditure to a federal program, you must ensure that the federal program receives the entire 

benefit of the expenditure.

Costs must meet the following additional in order to be allowable (45 CFR §75.403): 

1. Be necessary and reasonable for the performance of the Federal award and be allocable under

these principles

2. Conform to any limitations or exclusions set forth in the cost principles or in the Federal award.

3. Be consistent with the policies, regulations, and procedures that apply uniformly to both Federal

awards and other activities of the applicant/recipient.

4. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct

cost if any other cost incurred for the same purpose in like circumstances has already been

allocated to the Federal award as an indirect cost.

5. Be determined in accordance with generally accepted accounting principles (GAAP), except for

state and local governments and Indian tribes only as otherwise provided in this part of the

regulation (45 CFR 75).

6. Not be included as a cost or used to meet a cost-sharing or matching requirement for any other

federally-financed project in either the current or a prior period

7. Be adequately documented.
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Summary of Unallowable Costs

The costs listed below are usually unallowable under the 45 CFR §75 Subpart E, the HHS Grant Policy 

Statement (GPS), and SAMHSA's Notice of Funding Opportunity (NOFOs). Note that this list does not

include all unallowable costs. 

The allowability of costs under individual awards may also be governed by requirements specified in the 

program legislation, regulations, or the specific terms and conditions of the award, which will take 

precedence over the general discussion provided here (HHS GPS, pg. II-28).

1. Advertising And Public Relations (§75.421 and HHS GPS, pg. II-30): Advertising and public 

relations costs are generally not allowable except under the instances allowed by federal 

regulations such as program outreach and other specific purposes necessary to meet the 

requirements of the federal award. 

2. Automobile Costs for Personal Use (§75.431 f): That portion of automobile costs furnished by 

the entity that relates to personal use by employees (including transportation to and from work) 

is unallowable as ither fringe benefit or indirect (F&A) costs. 

3. Contingency Funds (§75.433 and HHS GPS, pg. II-33): Contingency funds or funds set aside for 

events whose occurrence cannot be foretold with certainty as to time, intensity, or assurance of 

their happening are unallowable under non-construction grants. 

4. Entertainment (§75.438 and HHS GPS, pg. II-33): Costs of entertainment, including amusement, 

diversion, and social activities and any associated costs are unallowable, except where specific 

costs that might otherwise be considered entertainment have a programmatic purpose and are 

authorized either in the approved budget for the Federal award or with SAMHSA’s prior written 

approval.

5. Goods and Services for Personal Use by the non-Federal entity’s employees (§75.445). Costs 

for these items are unallowable

6. Honoraria (HHS GPS, pg. II-34): Unallowable when the primary intent is to confer distinction on, 

or to symbolize respect, esteem, or admiration for, the recipient of the honorarium. A payment 

for services rendered, such as a speaker's fee under a conference grant, is allowable.

7. Incentive Compensation (§75.430(f) and HHS GPS, p. II-40): Generally unallowable; however, 

allowable for employees only if based on cost reduction, or efficient performance, suggestion 

awards, safety awards, etc., to the extent that the overall compensation is reasonable and paid 

or accrued based on an agreement between the organization and the employees before the 

services were rendered, or based on an established plan followed by the organization so 

consistently as to imply an agreement to make such payment.

8. Lobbying/Political Activities (§75.450 and HHS GPS, pg. II-35): The costs of certain influencing 

activities (i.e., attempts to influence the enactment or modification of any pending legislation 

through communication with any member or employee of the state legislature, or with any 

government official or employee concerning a decision to sign or veto enrolled legislation) 

associated with obtaining grants, contracts, cooperative agreements, or loans is unallowable.
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9. Major Alteration and Renovation (A&R) (NOFO): Payment for the purchase or construction of 

any building or structure to house any part of the program is unallowable under nonconstruction grants. However, SAMHSA applicants/recipients may request up to 25 percent of 

the total approved budget (direct and indirect costs) for a budget period, or $150,000, 

whichever is less, for minor A&R of existing facilities, if necessary and appropriate for the 

project. Minor A&R may not include a structural change (e.g., to the foundation, roof, floor, or 

exterior or loadbearing walls of a facility, or extension of an existing facility) to achieve the 

following: Increase the floor area; and/or, change the function and purpose of the facility. All 

minor A&R must be approved by SAMHSA

10. Meals (HHS GPS, pg. II-36 and NOFO): Meals are generally unallowable unless they are an 

integral part of a conference grant (provided that such charges are not duplicated in 

participant's per diem or subsistence allowances) or they are specifically stated as an allowable 

expense in the NOFO. Also, refer to https://www.hhs.gov/grants/contracts/contract-policiesregulations/spending-on-food/index.html

11. Miscellaneous expenses (NOFO): “Miscellaneous” expenses are unallowable. Budget line items 

should reflect specific expenses only. Also refer to item 4 – Contingency Funds. 

12. Promotional Materials (§75.421(e)(3) and NOFO): Appropriated funds shall not be used to pay 

for promotional items and memorabilia including, but not limited to, gifts, souvenirs, clothing 

and commemorative items such as pens, mugs/cups, folders/folios, lanyards, and conference 

bags. Also, refer to https://www.hhs.gov/grants/contracts/contract-policiesregulations/spending-on-promotional-items/index.html

13. Stipends (HHS GPS, pg. II-41): Stipends or payments made to individuals are generally 

unallowable unless they are permitted by a program’s statute authorizing or implementing 

regulations or they are payments made to individuals under a Traineeship, Fellowship, and 

Similar Award Made to Organizations on Behalf of Individuals.

MATCHING

Funds may be in cash or in-kind contributions, fairly evaluated, including donated space, property, 

equipment, or services.

Sources of matching funds include state and local governmental appropriations (non-federal), 

foundations, and other private non-profit or for-profit organizations.

In-kind contributions may include facilities, equipment, or services used in direct support of the project.

Matching funds (whether cash or in-kind) must meet the same test of allowability as the FEDERAL 

REQUEST in that the costs must be reasonable, allocable, and necessary for the accomplishment of the 

project objectives and allowable under the cost principles (45 CFR §75 Subpart E and §75.306 - Cost 

sharing or matching).

Cash or in-kind contributions are accepted as part of the applicant/recipient's cost sharing or matching 

when such contributions meet ALL of the following criteria:

a. Are verifiable from the applicant/recipient's records;
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b. Are not included as contributions for any other Federal award;

c. Are necessary and reasonable for the accomplishment of project or program objectives;

d. Are allowable under the cost principles in the 45 CFR §75 Subpart E; 

e. Are not paid by the Federal Government under another award, except where authorized 

by Federal statute to be used for cost sharing or matching;

f. Are provided for in the approved budget when required by SAMHSA; and

g. Conform to other provisions of the 45 CFR §75, as applicable.
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SAMHSA Budget Guidance

Guidance For Budget Categories

Personnel Costs

SALARIES OF INDIRECT OR FACILITIES AND ADMINISTRATION (F&A) PERSONNEL

Salaries of administrative and clerical staff should normally be covered by indirect (F&A) costs (45 CFR 

§75.413c).

Examples of Indirect/Facilities and Administrative Personnel include, but are not limited to, 

Administrative Assistants, HR Specialists, Accountants, and Clerical Assistants

EXECUTIVE LEVEL II SALARY LIMITATION

Recipients are restricted from using funds awarded under a SAMHSA grant, cooperative agreement, or

applicable contract to pay the direct salary of an individual at a rate in excess of the Executive Level II of 

the Federal Executive Pay Scale. For the purposes of the salary limitation, the direct salary is exclusive of

fringe benefits and indirect (F&A) costs. The Office of Personnel Management will release new salary 

levels for the Federal Executive Pay Scale annually. Please refer to the SAMHSA Standard Terms and 

Conditions for the current Executive Level II salary level. 

The salary limitation applies to organization staff and to all contracts and subawards, but does not apply 

to consultants; however, consultant payments must meet the test of reasonableness and be consistent 

with institutional policy for rates paid to consultants, regardless of funding source.

An individual's institutional base salary is not constrained by the legislative provision for a limitation of 

salary. The rate limitation simply limits the amount that may be awarded and charged to SAMHSA 

grants, cooperative agreements, and contracts. For individuals whose salary rates are in excess of 

Executive Level II, the applicant/recipient, contractor or subrecipient may pay the excess from nonFederal funds.

Guidance on Calculating Salaries and Paid Time Off (PTO)

After answering important questions, such as: (1) who from your organization will work on the grant; 

(2), their authorized pay; and (3) level of effort needed, you will also need to identify whether you are 

budgeting using hourly rates or percentages of annual salary and how your organization recovers paid 

absences (vacation, holiday, sick, and other paid leave). You will be prompted below to tell us if you will 

be using hourly rates vs. annual salaries. Regarding recovery of paid absences, there are two (2) 

possibilities: (1) you recover paid absences as part of a rate; or (2) you recover paid absences as part of 

salaries and wages.

You recover paid absences as part of a rate. 

This means you recover paid absences: (a) through a federally-approved fringe benefit or indirect cost rate, 

including the de minimis rate; or (b) through an internally-calculated fringe benefit rate. If paid absences 

are recovered through a rate, the number of hours and hourly rate, or percentages and annual salary, and 

the resulting budget request using either option, is calculated as shown in the examples shown under 

Hourly Rate and Annual Salary.

Example 1 - Budget Calculations Using an Hourly Rate:
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If an employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40), the maximum number of hours budgeted for the grant cannot exceed 1,840 hours (2,080 – 

240 = 1,840). NOTE: the maximum number of hours budgeted on the grant will necessarily be less than 

the industry-standard 2,080 hours which denotes total, possible annual hours. Instead, up to 1,840 

hours can be recovered as a direct cost from the grant with the remaining 240 paid absence hours 

recovered through the rate. Therefore, if an employee’s Annual Salary is $75,000, the Hourly Rate 

should be $36.06 ($75,000 / 2080 = $36.06). If the employee is budgeted to work full-time on the grant, 

the salary requested will be $66,350 (1,840 hours x $36.06 = $66,350). The remaining $8,650 of salary 

($75,000 - $66,350) relates to paid absences and will be recovered through the rate (240 hours x $36.06 

= $8,650).

Example 2 - Budget Calculations Using Percentages of Annual Salary: 

If an employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40), the maximum percentage of annual salary budgeted for the grant cannot exceed 88.5 

percent (2,080 -240 = 1,840/ 2,080 = 88.5 percent, rounded). Up to 88.5 percent of annual salary can be 

recovered as a direct cost from the grant with the remaining 11.5 percent related to paid absences and 

recovered through the rate. Therefore, if an employee’s Annual Salary is $75,000 and budgeted to work 

full-time on the grant, the salary requested will be $66,350 ($75,000 x 88.5% = $66,350). The remaining 

$8,650 of salary ($75,000 - $66,350) relates to paid absences and will be recovered through the rate.

You recover paid absences as part of salaries and wages. 

This likely means: (a) you have a federally approved indirect cost rate that is directing you to recover 

paid absences as part of salaries and wages; or (b) you elected the de minimis rate to recover indirect 

costs, but chose to recover paid absences, not as part of the de minimis rate, but rather as part of 

salaries and wages. If paid absences are recovered as part of salaries and wages, you may not use 

percentages of effort and annual salaries to budget salaries. Rather, you must use hourly rates to 

calculate budgeted salaries. You must also use hourly rates in your accounting system when recovering 

incurred salary costs related to employees’ efforts on federal grants. The use of hourly rates is 

necessary because paid absences must be “loaded” into salaries and wages as demonstrated in the 

following example:

Example:

An employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40). Paid absences must be “loaded” into the employee’s labor rate to achieve a fair and 

equitable allocation of paid absence costs distributed across all cost centers on which the employee 

works (2,080 – 240 = 1,840). NOTE: 2,080 hours represents maximum possible annual hours. Therefore, 

if an employee’s Annual Salary is $75,000, the Hourly Rate should be $40.76 ($75,000 / 1,840 hours). If 

the employee is budgeted to work 700 hours on the grant, the salary requested will be $28,532 (700 

hours x $40.76).

Fringe Benefits

Fringe benefits are allowances and services provided to employees as compensation in addition to 

regular salaries and wages.
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Applicants/recipients with an approved indirect cost (IDC) rate agreement must ensure that the 

treatment of fringe benefits including the fringe benefits rate base, fringe benefit components, and the 

applicable fringe benefits rate are consistent with the rate agreement.

Fringe benefits charged to an award must comply with HHS regulations at 45 CFR §75.431

(Compensation – fringe benefits). The cost of fringe benefits in the form of employer contributions or 

expenses for social security; employee life, health, unemployment, and worker's compensation 

insurance (except as indicated in §75.447 – Insurance and indemnification); pension plan costs; paid 

absences; and other similar benefits are allowable, provided such benefits are reasonable and are 

required by law, organization-employee agreement, or an established written policy of the 

applicant/recipient organization.

It is unnecessary to populate the Fringe Benefits Components Table in the following situations:

1. Your organization has a federally approved fringe benefit rate. Populate the Fringe Component

column with the following description, “Fringe benefits are recovered through a federally

approved fringe rate.” Then, in the Rate (%) column, provide the federally approved rate

percentage. It is unnecessary to populate the Fringe Benefits Narrative box.

2. Your organization has a federally approved indirect cost rate (including a de minimis rate) and all

fringe benefits listed above (see above definition) are recovered through the indirect cost or de

minimis rate. Leave the Fringe Component and Rate (%) columns blank. In the Fringe Benefits

Narrative box, include the following description, “Fringe benefits are not separately requested,

but rather are recovered through a federally approved indirect cost rate or de minimis rate.”

Only populate the Fringe Benefits Components Table in the following situations:

1. You use an internally calculated, organization-wide, fringe benefit rate that recovers all fringe

benefits listed above (see above definition). Populate the Fringe Component column with the

following description, “Fringe benefits are recovered through an unapproved, internally

calculated fringe benefit rate.” Then, in the Rate (%) column, provide the organization-wide

fringe benefit rate percentage. In the Fringe Benefits Narrative box, itemize the individual fringe

benefit categories that comprise the internally calculated, organization-wide fringe benefit rate.

2. You recover paid absences as part of salaries and wages but individually direct charge all other

fringe benefits. Populate the Fringe Component column with each individual fringe benefit

category that is directly charged. Also, populate the Rate (%) column with the rate percentage

that coincides with each individual fringe benefit category. In the Fringe Benefits Narrative box,

provide an explanation stating, “Paid absences are recovered through salaries and wages. All

other fringe benefits are identified in the Fringe Components table and individually charged as

direct costs using the corresponding rate identified in the Rate (%) column.”

Applicants/recipients with an approved indirect cost (IDC) rate agreement must ensure that the Fringe 

Components shown are consistent with the fringe benefits listed in the IDC rate agreement if they are 

described in the remarks or elsewhere in the agreement.

Fringe benefits may be in the form of employer contributions or expenses for FICA (Social Security and 

Medicare tax), employee life, health, unemployment, worker's compensation insurance, paid absences, 
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and other similar reasonable and allowable benefits as required by law, organization – employee 

agreement, or established written policies of the applicant/recipient organization (45 CFR §75.431: 

Compensation – fringe benefits).

Travel

Funds requested in C. Travel should be for relevant and allowable travel costs for applicant/recipient 

organization staff only. For travel that will be reimbursed from federal grant funds, 

applicants/recipients are required to use U.S. flag air carriers (49 U.S.C. 40118, commonly referred to as 

the “Fly America Act”).

Travel costs for consultants, contractors, and subrecipients (along with their fees and other costs) 

should be shown in F. Contractual. 

Registration fees for conferences and other events to be attended by organization staff should be shown 

in H. Other. 

Registration fees and other travel costs for training participants should be shown in H. Other and 

itemized accordingly.

Travel costs must comply with HHS regulations at 45 CFR §75.474 – Travel costs. If your organization 

does not have documented travel policies, the Federal GSA rates available at 

https://www.gsa.gov/travel-resources must be used.

Equipment

Equipment is an item of tangible, non-expendable, personal property (including information technology 

systems – means computing devices, ancillary equipment, software, and firmware etc.) having a useful 

life of more than one year AND an acquisition cost of at least $5,000 per unit or a cost capitalization 

threshold established by the applicant/recipient organization that is less. Organizations should follow 

their documented capitalization policy for classification of equipment. For example, an organization may 

classify equipment at $1,500 with a useful life of one year. For title, use, management requirements, 

and disposition of equipment, refer to 45 CFR §75.320 – Equipment.

List expendable items or materials in E. Supplies.

For vehicles and other high-value equipment, applicants/recipients should consider the cost benefits of 

rental/lease versus purchase (45 CFR §75.327 – General procurement standards).

Applicants/recipients are encouraged to use Federal excess and surplus property instead of purchasing 

new equipment whenever such use is feasible and reduces project costs (45 CFR §75.327f).

Note that capital expenditures for general purpose equipment such as office equipment and furnishings, 

modular offices, telephone networks, information technology equipment and systems, air conditioning 

equipment, reproduction and printing equipment, and motor vehicles are unallowable as direct costs 

without SAMHSA’s prior written approval (45 CFR §75.439).

If you are proposing to purchase vehicles and other high value equipment instead of rental/lease, 

provide a purchase versus rent/lease analysis, or a statement explaining whether it is more feasible 
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and/or cost effective to purchase versus rental/lease (45 CFR §75.327 – General procurement 

standards).

VEHICLE LEASE/RENTAL OR PURCHASE

Vehicle rental/lease and purchase are reviewed and approved on a case-by-case basis. Per the HHS Grants Policy

Statement (p. II – 43), if patient care or other direct health or social services are approved activities of the grantsupported project or program, the costs of transporting individuals participating in the program or project to the

site where services are being provided, including costs of public transportation, are allowable. The purchase of

motor vehicles for this purpose also may be allowable. However, for vehicles and other high-value equipment,

recipients should consider the most cost-effective procurement method, which may be rental/lease instead of

purchase (45 CFR §75.327d).

ADDITIONAL INFORMATION TO INCLUDE WITH BUDGET SUBMISSION

Include in the Equipment Narrative your responses to the following questions and attach the

rental/lease versus purchase analysis and three (3) price/rate quotes with your budget submission:

1. Justify the need for the vehicle rental/lease or purchase in relation to serving the population of

focus within the geographic catchment area consistent with the required activities in the NOFO. 

Be sure to address the following:

1. How many clients do you anticipate transporting each trip and how many clients served

will benefit from this vehicle during the budget period and project period?

2. How often do you anticipate transporting clients (e.g., number of times each week)?

3. If requesting to rent/lease or purchase more than one vehicle, explain why more than

one vehicle is necessary. 

4. Who will drive the vehicle?

5. What is your budget for the driver’s salary and fringe benefits in subsequent budget

periods?

2. Does your organization have other SAMHSA awards where the rental/lease or purchase of

vehicle was approved? If so, have you considered using the vehicle under other SAMHSA

grant(s) or transferring the vehicle to the current SAMHSA project? 

3. Is your organization able to purchase the vehicle using its own funds or finance it? If so, you may

be able to recover the depreciation on the vehicle through your indirect (F&A) charges. 

4. Can the vehicle be purchased using other sources of funds (other federal or non-federal funds,

e.g., program income, foundation funds, etc.)?

5. Has your organization considered a used vehicle?

6. Has your organization considered the following alternative transportation options for clients?

1. Other vehicles in the organization that may be used considering that you may request

reimbursement for POV mileage?

2. The use of ride sharing service(s)?

3. The use of public transportation?

7. Submit a rental/lease versus purchase analysis so SAMHSA can determine the most economical

and practical procurement for the vehicle. Include price or rate quotes for both rental/lease and

purchase options from three (3) qualified sources/vendors (45 CFR §75.327d).

For more information on vehicle leases, refer to the GSA guidance:
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https://www.gsa.gov/buying-selling/products-services/transportation-logisticsservices/fleet-management/vehicle-leasing

Per the 2 CFR §200.322, the applicant/recipient should, to the greatest extent

practicable under a Federal award, provide a preference for the purchase, acquisition, or

use of goods, products, or materials produced in the United States.

8. Will other programs/activities in the organization use the vehicle or will it be dedicated to the

SAMHSA project only? If other programs/activities will use the vehicle, address the following:

1. How will SAMHSA's fair share of the vehicle lease/rental or purchase cost be

determined?

2. Provide the breakdown of the vehicle lease/rental or purchase cost showing both the

organization and SAMHSA's fair share? 

9. Will non-project funds be used for maintenance/repairs, insurance, and fuel? If not, why?

Supplies

Supplies are items that cost less than $5,000 per unit and often have a one-time use, that is, materials 

which are expendable or consumed during the performance of the Federal award. A computing device is 

a supply if the acquisition cost is less than the lesser of the capitalization level established by the 

organization for financial statement purposes or $5,000, regardless of the length of its useful life.

For each line-item cost, include adequate justification and a detailed breakdown of your estimate. List 

the items by type of supplies (e.g., training materials, desktop computer, laptop, projector etc.), unit 

cost, quantity, and/or duration. 

If the organization will be serving clients/participants, include the number of clients/ participants in the 

basis for the costs.

Contractual

Describe the services and deliverables to be provided by each consultant, contract, or subaward and 

provide the detailed budgets with the supporting narrative justification. Explain how the services and 

deliverables relate to the accomplishment of specific project objectives.

All procurement transactions must be conducted in a manner providing full and open competition 

consistent with the federal procurement standards in 45 CFR §75.328 – Competition. 

Applicants/recipients must use their own documented procurement procedures which reflect applicable 

State, local, and tribal laws and regulations, provided that the procurements conform to applicable 

Federal law and the standards identified in the 45 CFR §75.327. 

Applicants/recipients must maintain oversight to ensure that contractors perform in accordance with 

the terms, conditions, and specifications of their contracts or purchase orders.

For additional guidance, refer to the 45 CFR §75.326 through §75.335 on Procurement Standards.

Per the Suspension and Debarment regulations in the 45 CFR §75.213, non-federal entities and 

contractors are subject to the non-procurement debarment and suspension regulations implementing 

Executive Orders 12549 and 12689, and 2 CFR §180 and §376. These regulations restrict awards, 
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subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded 

from or ineligible for participation in federal assistance programs or activities. 

For each contract, consultant, or sub-award, provide the following information:

a) Method of selection/procurement (45 CFR §75.329 – Procurement procedures) – indicate 

whether the procurement method is a micro-purchase, small purchase, sealed bid, competitive 

proposal, or non-competitive proposal (provide justification if non-competitive/sole source);

b) Summary of specific tasks/activities to be performed and deliverables (any verifiable outcome, 

result, service, or product that must be delivered, developed, performed, or produced by the 

organization or individual as defined by the statement of work);

c) Method of accountability – describe how the progress and performance of the consultant, 

contractor, or subrecipient will be monitored; and

d) Period of performance.

Note that costs incurred outside the award project period cannot be charged to the Federal award.

If the Project Director (PD) key position will be held by a consultant or subrecipient, show the PD in this 

table, and ensure the PD shown is the same PD identified in the SF-424 section 8f. 

Also, if the PD key position will be held by a consultant or subrecipient, include a copy of the formal 

written agreement that specifies the roles and responsibilities of the PD even if the relationship does 

not involve a fee or other form of remuneration.

CONTRACTUAL COST GUIDANCE

Consultants are members of a particular profession or possesses a special skill who are engaged by the 

applicant/recipient to provide professional and consultant services under the Federal award. 

Consultants are not officers or employees of the applicant/recipient organization. In determining the 

allowability of professional service costs, several factors may be considered per 45 CFR §75.459

A contract is a legal instrument by which the applicant purchases goods and services needed to carry out 

the program or project under a Federal award and creates a procurement relationship with the 

contractor. Some characteristics indicative of a procurement relationship between the 

applicant/recipient and a contractor are when the contractor:

1. Provides the goods and services within normal business operations

2. Provides similar goods or services to many different purchasers;

3. Normally operates in a competitive environment; 

4. Provides goods or services that are secondary to the operation of the Federal program; and

5. Is not subject to compliance requirements of the Federal program as a result of the agreement, 

though similar requirements may apply for other reasons.

Per 45 CFR §75.2, when the substance of a contract meets the definition of a subaward, it must be 

treated as a subaward even if the applicant/recipient considers the legal instrument as a contract.

Subrecipient refers to a non-Federal entity that receives a subaward from a pass-through entity to carry 

out part of a Federal award, including a portion of the scope of work or objectives. Some characteristics 
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which support the classification of the non-Federal entity as a subrecipient include when the nonFederal entity:

1. Determines who is eligible to receive what Federal assistance;

2. Has its performance measured in relation to whether objectives of a Federal program were met;

3. Has responsibility for programmatic decision-making;

4. Is responsible for adherence to applicable Federal program requirements specified in the 

Federal award; and

5. In accordance with its agreement, uses the Federal funds to carry out a program for a public 

purpose specified in authorizing statute, as opposed to providing goods or services for the 

benefit of the pass-through entity. 

Recipients are responsible for ensuring that all subrecipients comply with the terms and conditions of 

the award, per 45 CFR §75.101. 

The applicant/recipient must make case-by-case determinations whether each agreement it makes for 

the disbursement of Federal program funds casts the party receiving the funds in the role of a 

subrecipient or a contractor (45 CFR §75.351 – Subrecipient and contractor determinations).

EXECUTIVE LEVEL II SALARY LIMITATION

Recipients are restricted from using funds awarded under a SAMHSA grant, cooperative agreement, or

applicable contract to pay the direct salary of an individual at a rate in excess of the Executive Level II of 

the Federal Executive Pay Scale. For the purposes of the salary limitation, the direct salary is exclusive of

fringe benefits and indirect (F&A) costs. The Office of Personnel Management will release new salary 

levels for the Federal Executive Pay Scale annually. Please refer to the SAMHSA Standard Terms and 

Conditions for the current Executive Level II salary level. 

The salary limitation applies to organization staff and to all contracts and subawards, but does not apply 

to consultants; however, consultant payments must meet the test of reasonableness and be consistent 

with institutional policy for rates paid to consultants, regardless of funding source.

An individual's institutional base salary is not constrained by the legislative provision for a limitation of 

salary. The rate limitation simply limits the amount that may be awarded and charged to SAMHSA 

grants, cooperative agreements, and contracts. For individuals whose salary rates are in excess of 

Executive Level II, the applicant/recipient, contractor or subrecipient may pay the excess from nonFederal funds.

Guidance on Calculating Salaries and Paid Time Off (PTO)

After answering important questions, such as: (1) who from your organization will work on the grant; 

(2), their authorized pay; and (3) level of effort needed, you will also need to identify whether you are 

budgeting using hourly rates or percentages of annual salary and how your organization recovers paid 

absences (vacation, holiday, sick, and other paid leave). You will be prompted below to tell us if you will 

be using hourly rates vs. annual salaries. Regarding recovery of paid absences, there are two (2) 

possibilities: (1) you recover paid absences as part of a rate; or (2) you recover paid absences as part of 

salaries and wages.
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You recover paid absences as part of a rate. 

This means you recover paid absences: (a) through a federally-approved fringe benefit or indirect cost rate, 

including the de minimis rate; or (b) through an internally-calculated fringe benefit rate. If paid absences 

are recovered through a rate, the number of hours and hourly rate, or percentages and annual salary, and 

the resulting budget request using either option, is calculated as shown in the examples shown under 

Hourly Rate and Annual Salary.

Example 1 - Budget Calculations Using an Hourly Rate:

If an employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40), the maximum number of hours budgeted for the grant cannot exceed 1,840 hours (2,080 – 

240 = 1,840). NOTE: the maximum number of hours budgeted on the grant will necessarily be less than 

the industry-standard 2,080 hours which denotes total, possible annual hours. Instead, up to 1,840 

hours can be recovered as a direct cost from the grant with the remaining 240 paid absence hours 

recovered through the rate. Therefore, if an employee’s Annual Salary is $75,000, the Hourly Rate 

should be $36.06 ($75,000 / 2080 = $36.06). If the employee is budgeted to work full-time on the grant, 

the salary requested will be $66,350 (1,840 hours x $36.06 = $66,350). The remaining $8,650 of salary 

($75,000 - $66,350) relates to paid absences and will be recovered through the rate (240 hours x $36.06 

= $8,650).

Example 2 - Budget Calculations Using Percentages of Annual Salary: 

If an employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40), the maximum percentage of annual salary budgeted for the grant cannot exceed 88.5 

percent (2,080 -240 = 1,840/ 2,080 = 88.5 percent, rounded). Up to 88.5 percent of annual salary can be 

recovered as a direct cost from the grant with the remaining 11.5 percent related to paid absences and 

recovered through the rate. Therefore, if an employee’s Annual Salary is $75,000 and budgeted to work 

full-time on the grant, the salary requested will be $66,350 ($75,000 x 88.5% = $66,350). The remaining 

$8,650 of salary ($75,000 - $66,350) relates to paid absences and will be recovered through the rate.

You recover paid absences as part of salaries and wages. 

This likely means: (a) you have a federally approved indirect cost rate that is directing you to recover 

paid absences as part of salaries and wages; or (b) you elected the de minimis rate to recover indirect 

costs, but chose to recover paid absences, not as part of the de minimis rate, but rather as part of 

salaries and wages. If paid absences are recovered as part of salaries and wages, you may not use 

percentages of effort and annual salaries to budget salaries. Rather, you must use hourly rates to 

calculate budgeted salaries. You must also use hourly rates in your accounting system when recovering 

incurred salary costs related to employees’ efforts on federal grants. The use of hourly rates is 

necessary because paid absences must be “loaded” into salaries and wages as demonstrated in the 

following example:

Example:

An employee receives 240 hours of paid absences each year as a fringe benefit (vacation-120; holiday80; sick-40). Paid absences must be “loaded” into the employee’s labor rate to achieve a fair and 

equitable allocation of paid absence costs distributed across all cost centers on which the employee 

works (2,080 – 240 = 1,840). NOTE: 2,080 hours represents maximum possible annual hours. Therefore, 
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if an employee’s Annual Salary is $75,000, the Hourly Rate should be $40.76 ($75,000 / 1,840 hours). If 

the employee is budgeted to work 700 hours on the grant, the salary requested will be $28,532 (700 

hours x $40.76).

Construction: Not Applicable

Construction or major alteration and renovation (A&R) is not authorized under this program. Leave this 

section blank on line 6g of the SF-424A. Such activities are allowable only when program legislation 

includes specific authority for construction. If requesting consideration of minor A&R, provide those 

costs under the H. Other budget category and line 6h of the SF-424A. 

Other

The Other category is for any expenses not covered in the previous budget categories. Ensure that costs 

shown under “Other” are not already covered by your indirect costs requested in J. Indirect Charges. 

Costs must be consistently charged as either indirect or direct cost and may not be double-charged or 

inconsistently charged (45 CFR §75.403 – Factors affecting allowability of costs): 

• Minor Alteration and Renovation (A&R)

• Rent

• Participant/ client incentives (up to $30 non-cash incentive for required data collection follow 

up) 

• Training activities (except for consultant and contractual costs)

• Travel for training participants

• Registration fees

List items or type of expense and explain why each item is needed to achieve the project goals and 

objectives. Show the basis for the calculations – breakdown costs into the cost per unit or rate (e.g., cost 

per square foot, cost per participant etc.) and quantity.

If the individual or organizational entity will be serving clients/participants, include the number of 

clients/ participants in the basis for the costs.

For training projects, list the travel for trainees separately. Show the number of trainees/ attendees/ 

participants and the unit costs involved. Itemize travel costs the same way as in C. Travel.

MINOR ALTERATION AND RENOVATION

A&R is defined as improvements, rearrangements, or alterations to a facility that is incidental to the 

purpose of the project and is required to use the space more effectively for its designed purpose to 

meet a programmatic need or requirement. Per the HHS Grants Policy Statement (p. II – 30), routine 

maintenance and repair of the organization’s building/operational facility or its equipment, which is 

allowable and is ordinarily treated as an indirect cost, is not considered A&R.

Applicants/recipients may request up to 25 percent of the total approved budget (direct and indirect 

costs) for a budget period or $150,000, whichever is less, for minor A&R of existing facilities, if necessary 

and appropriate for the project. Minor A&R may not include a structural change (e.g., to the foundation, 

roof, floor, or exterior or loadbearing walls of a facility, or extension of an existing facility) to achieve the 
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following: Increase the floor area; and/or change the function and purpose of the facility. Construction is 

specifically excluded. All minor A&R must be approved by SAMHSA.

ADDITIONAL INFORMATION TO INCLUDE WITH BUDGET SUBMISSION

Include in the Other Narrative your responses to the following questions and attach three (3) price 

quotes with your budget submission:

1. Describe the minor A&R work that is needed. Explain how the improvements to the existing 

facility will enable it to be used more effectively for its designed purpose to meet a 

programmatic need or requirement.

2. Will the renovated space be used by other programs or as a common space by the organization 

as a whole? If so, how was SAMHSA’s fair share of the minor A&R cost determined? Will 100% of 

the minor A&R cost be charged to the SAMHSA project?

3. Certify that the minor A&R is consistent with the following criteria (HHS Grants Policy 

Statement, p. II – 30):

1. The building has a useful life consistent with program purposes and is architecturally 

and structurally suitable for conversion to the type of space required.

2. The A&R is essential to the purpose of the grant-supported project or program.

3. The space involved will be occupied by the project or program.

4. The space is suitable for human occupancy before the A&R work is started except where 

the purpose of the A&R is to make the space suitable for some purpose other than 

human occupancy, such as storage.

5. For minor A&R, if the space is rented, evidence is provided that the terms of the lease 

are compatible with the A&R proposed and cover the duration of the project period.

6. If the A&R will affect a site listed in (or eligible for inclusion in) the National Register of 

Historic Places, the requirements specified in “Preservation of Cultural and Historic 

Resources” have been followed.

4. Provide 3 different quotes with cost breakdowns or estimates of the minor A&R work that will 

be needed. Quotes must be submitted on the organization’s/contractor’s letterhead and dated 

and signed.

Funds may not be used to pay for the purchase or construction of any building or structure to house any 

part of the program. 

RENTAL COSTS

Costs related to office space are typically included in the indirect cost rate. (45 CFR §75.414b)

Total Direct Charges

Direct charges/ costs are those costs that can be identified specifically with a particular final cost 

objective, such as a federal award. Typical costs charged directly to a project include the compensation 

of employees who work on that project, their related fringe benefit costs, the costs of materials, 

supplies, and other items of expense incurred for the project.

Costs incurred for the same purpose in like circumstances must be treated consistently as either direct 

or indirect (Facilities and Administrative or F&A costs). Refer to the 45 CFR §75.413 – Direct costs and 

§75.405 – Allocable costs.
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Indirect Charges

Indirect charges/costs (IDC) or Facilities and Administration (F&A) are those costs incurred for common 

or joint objectives which cannot be readily identified with an individual project or program but are 

necessary for the operations of the organization. 

IDC (F&A) is classified into two broad categories: “Facilities” and “Administration.” “Facilities” is defined 

as depreciation on buildings, equipment and capital improvement, interest on debt associated with 

certain buildings, equipment and capital improvements, and operations and maintenance expenses. 

“Administration” is defined as general administration and general expenses such as the director's office, 

accounting, personnel, and all other types of expenditures not listed specifically under one of the 

subcategories of “Facilities.”

As described in 45 CFR §75.403 – Factors affecting allowability of costs, costs must be consistently 

charged as either indirect or direct costs, but may not be double charged or inconsistently charged as 

both.

For more guidance on IDC or F&A costs, refer to the 45 CFR §75.414 – Indirect (F&A) costs.

Type of IDC Rate / Cost Allocation Plan

Indirect costs may be charged to the project if: 

a. The applicant/recipient has an approved federally negotiated IDC rate agreement.

b. The applicant/recipient has never had a federally negotiated IDC rate agreement and elects to 

charge a de minimis rate of 10% of modified total direct costs (MTDC) which can be used 

indefinitely for all awards until an IDC rate is approved.

c. If the NOFO is for a training grant/cooperative agreement, the IDC rate is limited to 8% of MTDC.

d. If the applicant/ recipient has an approved Cost Allocation Plan or method of sharing the total 

IDC among related agencies/organizations.

De Minimis Rate of 10%:

Per 2 CFR 200.414(f), any non-Federal entity that does not have a current negotiated (including 

provisional) indirect cost rate, except for state/local governments and Indian Tribes, may elect to charge 

a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. If 

chosen, this methodology once elected must be used consistently for all Federal awards until such time 

as a non-Federal entity chooses to negotiate a rate, which the non-Federal entity may apply to do at any 

time.

Approved Federally Negotiated IDC Rate Agreement:

This is applicable only to those applicants/ recipients with an approved federally negotiated IDC rate. 

Such applicants/ recipients should use their approved rate to charge IDC to the project and include a 

copy of their approved federally negotiated IDC rate agreement in effect at the beginning of the budget 

period.

In order to charge IDC to the project using a federally negotiated IDC rate agreement, your approved 

federally negotiated IDC rate agreement must be in effect at the beginning of the budget period unless 

one of the following applies:
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a. Your IDC rate agreement permits you to use a provisional rate for a fiscal year extending beyond 

the last permanent rate period.

b. You are subject to the 45 CFR §75 Appendix III – Indirect (F&A) Costs Identification and 

Assignment, and Rate Determination for Institutions of Higher Education (IHEs). IHEs may use 

the negotiated rate in effect at the time of the initial award throughout the life of the project.

Training/Technical Assistance Rate of 8%:

If the NOFO is for a training grant/ cooperative agreement, the indirect cost rate is limited to 8% of the 

modified total direct costs (MTDC). 

Cost Allocation Plan: 

This typically applies to state/county governments and county/city governments that share the total IDC 

among related agencies. 

Modified Total Direct Cost (MTDC) Base: 

Note that the MTDC base consists of:

1. All direct salaries and wages,

2. Applicable fringe benefits,

3. Materials and supplies,

4. Services,

5. Travel, and 

6. Up to the first $25,000 of each subaward or contract (regardless of the period of performance of 

the subaward or contract under the award).

The MTDC base must exclude: 

1. Expenditures for equipment,

2. Capital expenditures (e.g., office equipment and furnishings, alterations and renovations, 

telephone networks, and motor vehicles),

3. Charges for patient care,

4. Rental costs,

5. Tuition reimbursement,

6. Scholarships and fellowships,

7. Participant support costs (direct costs for items such as travel allowances and registration fees 

paid to or on behalf of participants or trainees (but not employees) in connection with 

conferences, or training projects), and 

8. The portion of each subaward or contract in excess of $25,000.

FUNDING LIMITATIONS/RESTRICTIONS

Review Section IV-3 of the NOFO to determine whether there are any funding limitations or restrictions 

for the project. If there are limitations, include a NARRATIVE and SEPARATE BUDGET for each year of the 

project showing the percent of the award for the year that you will use in the area where there is a 

limitation.
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An example of a funding limitation/restriction is “No more than 20 percent of the total grant award for 

the budget period may be used for data collection, performance measurement, and performance 

assessment, including incentives for participating in the required data collection follow up.”

NOFO Section IV-3: Funding Limitations/Restrictions 

Be sure to include in the narrative the specific line items from the various budget categories that make 

up the costs shown for each funding limitation/restriction.

References and Resources

Official Regulations and Guidance

45 CFR 75 -UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS 

FOR HHS AWARDS: https://www.ecfr.gov/cgi-bin/text-idx?node=pt45.1.75

Notice of Funding Opportunities

List of NOFOs by Fiscal Year: https://www.samhsa.gov/grants/grants-dashboard

Blank SAMHSA Detailed Budget and Narrative Template

To expedite review of your application, it is recommended you use the following PDF budget template 

to complete the Detailed Budget and Narrative Justification for submission with your application:

To locate the budget template Click here SAMHSA Forms and Resources – scroll down to “SAMHSA 

Budget Template” section. You must download the budget template PDF to your computer first before 

opening it directly in Adobe Acrobat or Acrobat Reader (not your internet browser):

1. Right-click the link "SAMHSA Budget Template (PDF)"

2. Select "save link as" and save to a location on your computer

3. Go to the saved location and open the "SAMHSA Budget Template (PDF)" using Adobe Acrobat

or Acrobat Reader.

Blank Microsoft Word Budget Templates

For a Section 508 accessible budget template, please use the MS Word DOCX budget templates. To 

access these MS Word DOCX templates, Click here SAMHSA Forms and Resources – scroll down to 

“SAMHSA Budget Template” section. You will find links to both a Non-Match and a Match MS Word 

DOCX template. Simply add or delete table rows for each budget category and complete the narrative 

sections as needed. 

Sample Budgets

To access sample budgets, Click here SAMHSA Forms and Resources – scroll down to “SAMHSA Budget 

Template” section. You will find links to various sample budgets, both for Match and Non-Match.