The budget is an indicator of the magnitude of the project and serves to identify the cost of the project to the sponsor. Budgets that are too high or too low can alert the reviewer to the possibility that the PI does not have a realistic grasp of project needs. It is essential that a budget be drafted early in the proposal development stages so that assistance can be provided by the Academic Grants Office and unnecessary delays in processing the proposal avoided. A proposal must include an estimate that reflects the cost required to perform the work and a corresponding budget justification. If a proposal requests support for a multi-year project, annual budgets and a summary budget should be included.
Many sponsors provide guidelines and budget forms.
Budgeting details and requirements vary considerably depending on the sponsor and type of proposal. Under these principles, all costs charged to sponsored agreements should conform to the principles of reasonableness, allocability, consistency, and allowability as well as any specific conditions stated in the agreement. A cost is considered reasonable if the nature of the expenditure and the amount involved reflects the action that a prudent person would take under the circumstances. A cost is allocable if it is beneficial to the project. The method used to estimate, record, and report costs must be consistent.