As you prepare your project’s budget, thoroughly review the solicitation as well as the sponsor’s grant preparation guide. It is important to be cognizant of any sponsor restrictions regarding specific budgetary requirements, such as cost-share, and allowances or disallowances.
Budget preparation is an important part of the proposal development process. Ideally, the budget should be considered as you are developing the project itself – not something hastily put together. This is important for two reasons:
You should present in the proposed budget your best estimate of the financial support necessary to carry out the project. Expenses can be divided into two categories:
Not to be overlooked is the budget justification (sometimes referred to as the budget narrative). The budget justification is the narrative in the proposal that substantiates the line items in your budget.
Budgets have to be built obeying the rules of applicable cost accounting standards.
Estimating the cost of a research project is an inherently unpredictable exercise; primarily because the manner in which a research endeavor progresses is itself unpredictable. Experience makes budgeting easier and liberal re-budgeting authority from sponsors (when it is offered) makes precise estimating less critical.