The budget is the proposal expressed in terms of the dollars that you require to bring your project to a successful conclusion. It indicates the total expenses of the project as you have carefully anticipated them.
The financial report, on the other hand, tells where the money went. It is the proposal expressed in terms of the dollars that you spent to implement your project successfully. The budget looks forward to where you're going. The financial report looks back to where you've been. They are two sides of the same coin.
Since preparing the budget can be complicated, you are encouraged to work with your ORD officer in drawing it up, especially if you are relatively new at seeking outside funding. If you decide to prepare the budget on your own, be sure to check the latest rate sheet -- it is available on ORD's gopher server -- for figuring salaries, benefits, tuition rates, and indirect costs.
The Budget
Some sponsors specify the format of the budget, while others do not. Whatever system you are working with, your budget should be as specific, detailed, and complete as you can reasonably make it. It should adhere to the agency's guidelines, or to guidelines for usual budgeting provided to you by ORD. This way of working is honest, and it also builds credibility for your proposal and for you as the project director.
Ordinarily, a budget is divided into two broad categories: direct costs and indirect costs.
Direct costsare those that can be identified with your specific proposal and include such matters as personnel (salaries and benefits), equipment, services, supplies, travel (domestic and foreign), and consultants.
Indirect costsare pooled expenses impossible to attach specifically to any particular proposal. The term refers to such items as office and lab space, utilities, use of University equipment, administrative services, and custodial costs, "overhead" expenses that are simply taken for granted. These indirect costs are usually expressed as a percentage of wages and benefits.
It is vital for you as the proposal writer to remember that all aspects of the budget must be directly linked to the project and must be consistent with the costs as they are delineated in the narrative part of the project plan. Furthermore, all charges must be incurred within the grant period. The budget needs also to be clear about how the totals for each category have been reached. Lay the numbers out for all to see.
This chart shows a simple arrangement for ordinary budget categories:
Personnel
Salaries and Wages
Fringe Benefits
Travel
Local
Interstate
Foreign
Consultants and Contracts
Services, Supplies, and Materials
Office Supplies
Postage
Telephone
Training Materials
Printing and Duplicating
Other (itemize)
Equipment
Other
Room Rental
Equipment Lease
Total Direct Costs
Total Indirect Costs
Total Project Costs
Financial Report
The financial report is prepared after the project has been completed. It shows in money terms what you have accomplished, based upon your plan. It lays out what you have done with the sponsoring agency's money in order to implement the project that they have funded. Grants Accounting, a unit of University Accounting, normally completes the financial report. Occasionally sponsors also require interim financial reports.
