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Nov 27 / RAS

More Than One Way To Carve A Turkey

Let’s face it: budgeting for a proposal is an educated guess.  You have a good grasp on the salary requirements of personnel, and a rough idea of supply and space requirements, but there comes a time in the life of most awards that a PI or grant manager realizes that money is just not being spent as originally anticipated; and, further, it can’t be spent as originally anticipated in order for the project to do what it was intended.  After a grant or contract has been awarded, the PI may request the formal reallocation of funds from one spending category to another that better reflects the project requirements (“rebudgeting” or “budget revision.”)  Rebudgeting requires the approval of SPA (and, in most cases, the funding agency), but never fear – your Grant and Contract Officer is able to help you with approval, and RAS can help with your rebudget.


Much rebudgeting affects F&A (indirect) cost. Some does not.  Budget categories that do NOT generate F&A are:

  • Capital equipment equal to or greater than $5000
  • Tuition/Scholarships/Fellowships
  • Subcontracts over the first $25,000
  • NSF participant support
  • Rental costs of an off-site facility

The transference of these items may increase or decrease your F&A, however. Remember the following when a rebudget includes non-F&A generating items:

  1. If the rebudget transfers money from a NON-F&A bearing budget item (such as equipment) to an F&A BEARING item (such as materials), the F&A dollar amount will increase in order to maintain the contracted F&A percentage. For example, suppose a grant has a capital equipment budget of $10,000 and an F&A rate of 52%. If only $8,000 was spent for equipment the PI would most likely want to spend the remaining $2,000 on other materials. This is acceptable; however the $2,000 balance in equipment will need to be rebudgeted between materials and F&A since the materials purchases will generate F&A (note: RAS can assist with these rebudgeting calculations). In this scenario, the $2,000 would be rebudgeted so that $1,316 would be added to materials and $684 added to F&A ($1,316 + $684 = $2,000)
  2. If the rebudget transfers money from an F&A BEARING budget item (such as materials) to a NON-F&A bearing budget item (such as equipment), the F&A dollar amount will decrease in order to maintain the contracted F&A percentage. Consider a grant that has a capital equipment budget of $10,000 and an F&A rate of 52%. If $12,000 was spent on equipment, a rebudget would be required to reduce the F&A dollar amount since the additional $2,000 spent on equipment does not generate F&A (remember, RAS can assist with the rebudgeting calculations!). In this case, the F&A budget would be reduced by $1,040 (52% of $2,000) that could be reallocated to the equipment budget.

And don’t forget, NIH (and many other funding sources) requires an explanation when there is a change in budget that affects key personnel effort by more than 25%, as well as reasoning and a plan for balances greater than 25% of the current year’s total budget (including any carry-forward).  If you are unclear as to your award’s requirements for rebudgeting due to balances, carry-forwards or personnel, RAS is happy to help you sort it out.


Funding of any sort is absolutely something for which to be thankful, and you can consume your resources as needed provided you follow a few simple rules.  If you find yourself needing a little less drumstick and a little more wing, RAS is here to walk you through the process whenever you need us.  Happy Thanksgiving!