3.1 Types of Proposals

What is a Proposal

Preliminary Proposals

Preliminary proposals are not formal commitments by the Health Science Center. In general the Certificate of Proposal (as described in Section 4.3) is not required. However, a copy of a preliminary proposal should be furnished to the appropriate Department Chair or Academic Director's Office. If the preliminary proposal contains substantial cost-sharing contributions and/or commitments, the appropriate Chair or Academic Director should be consulted for his/her agreement to such commitments. If the sponsor requests a formal proposal, refer to Chapter Four for processing procedures.

Formal Proposals

Solicited Proposal. Submitted to a specific program and responds to sponsor requirements and guidelines.

Unsolicited Proposal. Developed independently by the principal investigator/project director in accordance with his/her field of technical expertise and submitted to an appropriate funding sponsor. May or may not be subject to non-routine requirements as specified in a program announcement.

Response to a Request for Proposals (RFP). Submitted in response to a specific work statement developed by the sponsor. RFP's generally have a fixed response time, contain proposed contract provisions, and require lengthy certifications to be completed.

Note:

Grants Management should be notified as soon as possible when intending to submit a response to an RFP. GM will need to review proposed contract provisions as exceptions can normally be stated only at the time of proposal submission. In addition, GM will require adequate time to complete any necessary representations, certifications, and other special RFP business requirements.

Competing Renewal and Continuation Proposal: A competing renewal proposal is a formal request for continued funding of a project where the project funding period is ending. These proposals are normally subject to the same sponsor review criteria as new proposals. Competing renewals must be routed through the standard University proposal approval and sign-off process.

Non-competing Continuation Proposal: Requests for the next period's funding within a multi-year grant or approved project period. Continuation proposals are generally brief and usually consist of a progress report and, if required, a budget and other relevant materials. Non-competing continuations may require institutional endorsement by Grants Management, as specified by the Sponsor. For account establishment purposes, budgets are typically required by Grants Management even though they may not be submitted to the sponsor.

Transmittal Letter
If a transmittal letter by an authorized official of the Health Science Center is required, Grants Management will prepare the letter using information provided on the Certificate of Proposal. Alternatively, the PI/PD may elect to write the transmittal letter, which will be reviewed by Grants Management.

Cover Page *
The cover page should contain enough information to clearly identify the proposed project and relevant parties and contacts. A sample cover page is located at Appendix D.

Abstract
Most sponsors require an abstract of approximately 200 words that outlines the proposed scope of work, methods, and significance of the project.

Statement of Work
The statement of work is a complete and detailed explanation of the proposed project, including general background, proposed methodology, goals and objectives, significant milestones, available preliminary data, and any other items relevant to presenting a detailed plan of the proposed work.

Personnel
Project personnel and their responsibilities must be identified and the effort proposed must be presented.

Biographical Sketches/Curriculum Vitae
Current vitae for all key personnel and consultants should be included.

Current and Pending Support
Some sponsors require a listing of each key personnel's listing of pending proposals and current awards. This information should include the percentage of effort devoted to these other projects and an explanation of any relevant scientific or budgetary overlap.

Facilities and Equipment
This section describes equipment or other relevant Health Science Center resources that will be available to the project and that offer unique advantages to the proposed research.

Budget and Budget Justification
Developing an accurate budget acceptable to the sponsor and which matches the activities to be conducted is critical. Budget development and costing guidelines are discussed fully in Sections 3.4 and 3.5.

Appendices
Appendices may include letters of endorsement or cooperation, previous publications, or other materials that are relevant and would enhance the proposal.

3.4 Budget Development

Overview

In addition, OMB Circular A-21 limits reimbursement for certain types of expenses that the government considers administrative. Included in those expenses are costs of administrative and clerical staff, postage costs, telephone costs, and routine office supplies. These costs are only appropriate when they are absolutely essential to the project's success and are provided for the sole benefit of the project. Proposal budgets that include these items must contain well-documented justifications. Further information about the allowability of those costs can be found in Sections 3.5 and 6.1 of this Manual.

Cost Categories

Direct Costs
Direct costs are those expenses that can be directly identified with a particular project. Categories of direct costs may include salaries and wages, benefits, consultants, subawards, equipment, supplies and travel. Other allowable direct costs are described in OMB Circular A-21, Section J, or in the sponsor's own application guidelines.

Modified Total Direct Costs (MTDC)
MTDC is a subset of direct costs and is the base to which facilities and administrative (indirect) costs are applied on most proposals. (There are many exceptions; consequently, the sponsor's application guidelines should be consulted.) Primarily used in budgets for federal funding, MTDC is equal to total costs less any tuition and fees, capital equipment (items of equipment whose acquisition cost exceeds $1,000), lease or rental of facilities or equipment, renovation, patient care expenses, and subaward expenditures in excess of $25,000. An example of the application of MTDC is described in Example 3.5.

Facilities & Administrative (F&A) Costs
Facilities & Administrative (indirect) costs are those costs which are not easily identified with a particular project and include such categories as utility costs, depreciation of buildings and equipment, operations and maintenance expenses, general administrative expenses, and library costs.

F&A costs must be requested at the Health Science Center's current negotiated rate, on or off campus, unless restricted by agency regulations. Further discussion of F&A costs is contained later in this chapter.

Note:

Waivers of F&A (indirect) costs can only be approved by the Vice President for Administration and Business Affairs. Requests for a waiver should be submitted to the Vice President through the Director of Grants Management.

Note:

The National Institutes of Health has instituted procedures for more research grant proposals with direct costs of $250,000/year or less to be submitted through the Modular Grants Format. Information and guidance for the NIH Modular Grants can be found at the Grants Management website at http://research.uthscsa.edu/osp.

The proposal budget should reflect an accurate assessment of the essential project costs that are allowable and reasonable for the proposed project. Current and complete cost estimates and documentation used in these estimates must be kept by the budget preparer as support for the reasonableness of the request to the sponsor. This is especially important if the proposal undergoes a pre-award audit; such audits are typically done only for large proposals. Sponsor request for additional budget information or pre-award audits should be coordinated through Grants Management.

SALARIES
The salary section of the proposed budget should indicate the personnel working on the project, their role, an estimate of the percentage of effort to be devoted to the project, and the salary anticipated to be charged to the project. The percentage of effort proposed should normally correlate to the salary requested; uncompensated salary is considered cost sharing and treated in accordance with Health Science Center policy (see Section 3.6). Unless otherwise stated all salaries should be budgeted at current base salary levels and include projected increases consistent with the escalation factors cited in the Proposal Budgeting Information Table. If a promotion is anticipated during the project period, the appropriate salary increase should be projected in the applicable year of the project and fully justified. In general, all key personnel (Principal Investigators, Project Directors, Senior Scientists and Researchers) should be named. Specific salary guidelines follow:

Faculty Salary
The majority of faculty at the Health Science Center are typically appointed on a twelve-month basis. However, some appointments may be made on a nine-month basis. The base for the salary must be applied appropriately in the proposal budget.

Calculating Salaries
The following examples have been provided to illustrate how to calculate salaries on proposal budgets.

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Example 3-1 Salary
Assistant Professor Jones is currently earning $60,000 for a twelve-month appointment. She will expend 25% effort on the proposed project. Assistant Professor Jones' salary is calculated as follows:

Step 1) Determine Professor Jones' salary for the start date of the project.

Step 2) Multiply the projected salary by 25% effort.

$62,400 x .25 = $15,600

Note that fringe benefits have not yet been calculated (these are generally shown as a separate item from salary). Subsequent years should be calculated at the Health Science Center's suggested escalation factor of 4%. (NIH restricts salary escalation to 3% per year.)

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Example 3-2 NIH Salary Cap
Dr. Smith has a twelve-month appointment in the Medical School with a projected base salary of $150,000. He will expend 33% effort on an NIH project for the year.

Step 1) Because NIH has a salary cap of $141,300 (as of 01/01/00), the salary cap should be multiplied by 33% to determine the total salary request for the grant year.

$141,300 x .33 = $46,629 (total salary request)

Step 2) If Dr. Smith were to expend 33% effort for anything less than the full 12 months, the monthly salary based on the salary cap should first be calculated:

$141,300 ¸ 12 = $11,775 (monthly salary)

Step 3) Multiply the monthly salary by the number of months:

$11,775 x 7 months = $82,425

Step 4) Determine the 33% effort:

$82,425 x .33 = $27,200 (total salary request)

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Example 3-3 Person Months
Some sponsors, most notably the National Science Foundation (NSF), ask for a calculation of person months on the project rather than percentage of effort. To calculate person months, multiply the percentage of effort by the number of months of support requested.

For a twelve-month appointment and expended effort of 10% per year, the person months would be calculated by multiplying .10 by 12 months with a result of 1.2 person months.

For a nine-month appointment which requests effort of 10% per year and 100% effort for two months summer, the calculation would be 10% x 9 months which equals .9 months plus 2 months (summer) for total person months of 2.9 months.

Veteran's Administration Appointments *
Some faculty have appointments in both the Health Science Center and the Veterans Administration. Federal granting agencies will not pay salary support for the VA effort of these faculty. Such payment would represent dual compensation by the federal government for the same work. Faculty with a joint appointment may request only the university's share of their salary in proportion to the effort proposed to be devoted to the sponsored project. The faculty member's Health Science Center salary determines the base for computing that request.

For applications to the NIH, institutional signature on the application certifies that

1. the individual is applying as part of a joint appointment specified by a formal Memorandum of Understanding (MOU) between the Health Science Center and the VA, and
2. that there is no possibility of dual compensation for the same work, or of an actual or apparent conflict of interest regarding such work.

For this reason, each new proposal submitted having key personnel with a joint appointment will need a new MOU executed for the proposed project. The published application packet for a NIH grant proposal gives detailed instructions for documenting a joint appointment. In addition, the Health Science Center instructions for completing the MOU can be accessed at the following web site: http://research.uthscsa.edu/osp/forms_ut.htm , Memorandum of Understanding for Faculty with Joint VA-UTHSCSA Appointments. Guidance is also given at Appendix F to this Manual.

PHS 398 Instructions: For applications under joint appointment conditions, list the number of months per year reflected in the university appointment. Identify with an asterisk and provide a full explanation about the individual's total responsibilities under the joint appointment in the Budget Justification section of the proposal. Specify the title of each appointment, the types of responsibilities (teaching, research, clinical, consulting, and administration) and the proportion of each to the total set of responsibilities.

List the percentage of the university appointment that is to be devoted to this project.

For VA responsibilities, complete the type of appointment and percent of effort on a separate line.

Postdoctoral Salary
Postdoctoral appointments are typically made to individuals conducting research. These individuals primary goals are to extend their own education and experience. Postdocs work primarily under the direction of a faculty member and are not considered independent researchers. Benefits should be charged at the 26% rate. Most traineeships may be supplemented with non-federal (institutional) funds.

Note:

Postdoctoral trainees applying for individual fellowships or included as part of an institutional training grant should request a stipend in accordance with the guidelines provided by the sponsoring agency. These are trainee appointments and not salaried positions. In general, fringe benefit rates are not applied. Note that while most agencies allow calculation of single-only health insurance, HSC policy does not allow for inclusion of that cost in the proposal budget.

Graduate Student Salary
Each Health Science Center has a Committee on Graduate Studies which establishes salary guidelines for graduate student salaries. Typically, a graduate student is appointed to a grant at 50% time. For those students appointed at 50% effort, full benefits (26%) should also be requested. For those students appointed at less than 50% effort, a 10% benefit rate should be used.

Note:

In the case of graduate students, it is important to make the distinction between work and training. Salaries are paid to graduate students for work on a research grant; those salaries are listed in the salaries and wages portion of the budget. Stipends, which are generally received for training activities, are not allowable on research grants. Stipends may only be paid on training grants and are not included in the salaries and wages portion of the project budget.

Administrative and Clerical Staff Salary
Staff members responsible for providing administrative coordination and support of a funded program are considered administrative/clerical staff. Federal costing principles ( OMB Circular A-21) limit reimbursement for administrative and clerical staff; consequently, such costs are appropriate only when these individuals and their related effort can be specifically identified with the project or activity. Administrative and clerical salaries must be separately listed, justified, and specifically assignable to the project with a high-degree of accuracy. Examples provided by OMB that illustrate with direct charging may be appropriate are as follows:

"Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocol/IRB preparations and/or other project-specific regulatory protocols; and multiple project-related investigator coordination and communications."

Undergraduate Student Salary
Undergraduate student salaries are proposed on a hourly rate basis consistent with the student's level of expertise and prior experience. Section 5.2.4 of the Handbook of Operating Procedures addresses student employment issues. Benefits for undergraduate student employees are generally calculated at 10% of wages; however, when student appointments are at 50% effort or more, the 26% benefit rate should be used.

EQUIPMENT
Equipment is defined at the Health Science Center as any unit item with a life expectancy of one year or more and an acquisition cost of $1,000 or more. Shipping, taxes, in-transit insurance, and installation charges should be included under this category for new purchases, provided that these costs are included on the original purchase order. If an item falls outside of this definition, it is considered "expendable materials and supplies."

The equipment budget should contain an estimate and justification for all equipment needed to perform the scope of work. It is suggested that all equipment purchases should be listed on the budget by type of equipment, manufacturer's name or identifying mark, quantity, estimated cost and the basis for the estimates. Estimates should be based on catalog quotes, telephone quotes, historical costs, engineering estimates or experience. Purchasing can help to obtain vendor quotes. It is very important to document the basis for the cost estimate, as this is often requested by sponsoring agencies or must be produced in the event of a pre-award audit.

On occasion, the sponsor may request certification that the requested equipment is not already available at the Health Science Center for use on the project. Grants Management will provide this certification if necessary.

Note:

Software is not generally defined as equipment unless it is purchased as a package with the initial equipment order and is classified as operating software essential to operate the computing equipment. Application software is not considered equipment and should be budgeted in expendable materials and supplies.

Special Purpose vs. General Purpose Equipment
The Federal cost principles subdivide equipment into two classifications: special purpose and general purpose. Special purpose equipment is equipment that is used primarily for "research, medical, scientific, or other technical activities." As a rule, only special purpose equipment is funded in sponsored programs because it can be proven that such equipment is necessary for the goals of the project. General purpose equipment is not limited to these activities and includes equipment such as office furniture, printing and copying equipment, pagers, typewriters, copiers, word processing equipment, fax machines, and any other item one would normally find in an administrative office. General purpose equipment is unallowable as a direct charge, except where it is used primarily or exclusively for the actual conduct of the project. Therefore, the contemplated purchase of any item of general purpose equipment should be fully outlined and justified in the budget as being essential to the conduct of the project and reserved only for the use of the project.

Fabricated Equipment
Fabricated equipment is special purpose equipment, which is engineered, designed or constructed in order to accomplish a unique purpose in the performance of the project. The criteria for fabricated equipment is as follows:

1. The non-salary cost of the fabrication must equal or exceed $1,000. (Note: the Health Science Center does not capitalize in-house labor used for fabrication.)
2. The useful life of the fabricated item must be at least one year.
3. The item must have a nature allowing for accountability, must be identified as a discrete item, and be tagged in accordance with standard Health Science Center policies.

EXPENDABLE MATERIALS AND SUPPLIES
The expendable materials and supplies category of a budget generally refers to consumable materials or supplies that will be used during the budget period. Supplies may consist of items such as: items costing less than $1,000 or with a useful life of less than one year; computer supplies; project-related consumables such as glassware and chemicals; project-related items such as books, periodicals and tapes (which are not readily available through the Library or which must be used on a daily basis for the conduct of the project), software packages, laboratory animals, and radioactive isotopes.

Supplies should be listed in the budget by type (e.g., chemicals, computer supplies, and glassware) and by estimated cost. Some sponsors will require that the basis for cost estimates be included in the budget justification; federal sponsors have restrictions on basic office supply purchases.

General office supplies are only appropriate to request as a direct cost if the cost can be justified as have a sole direct technical benefit to the project and essential to the performance of the project.

CONSULTANTS
Consultant costs are included when personnel outside the Health Science Center are needed to provide a professional service for a fixed period of time; Health Science Center employees are generally not eligible to serve as a consultant for compensation beyond their base salary. When budgeting for consultants, it should be first determined that the person meets the Health Science Center's criteria for such consulting (see Section 7.2). Consultants should be budgeted only when on-campus expertise does not exist or is not readily available.

Consultants should be proposed by describing the individual's name, services to be rendered, number of days charged, justification for selection, and daily rate proposed. The daily rate may include fees and travel expenses, or related travel expenses that are itemized. Costs should be based on actual quotes from the consultant; sponsoring agencies normally require a curriculum vita for each consultant to be included with the proposal.

SUBAWARDS
A subaward is an agreement with a separate organizational entity outside of the Health Science Center to perform a significant portion of the proposed statement or work. Distinguishing characteristics of a subaward include performance that meets the objectives of the program and responsibility for programmatic decision making. The subawardee directs and takes full responsibilities for its portion of the project.

The following items are required in the proposal if it has a subaward component:

1. Justification of the need for the subaward in the proposal narrative, along with the defined tasks of the subawardee or a work statement for that subawardee.
2. A budget at the same level of detail that is being proposed by the Health Science Center. Note that commercial subawardees may include costs such as labor overhead, general and administrative expense, cost of money and profit or fee. Some federal agencies limit or disallow profit or fee; guidance may be obtained from Grants Management. The PI is responsible for reviewing the subaward budget to ensure that is reasonable and consistent with the goals of the project.
3. A letter of commitment or statement of intent must be submitted with the proposal. Proposals from other organizations must include a signature of an official authorized to legally commit that organization or institution to the portion of work described and the corresponding budget.
4. A copy of the subawardee's current F&A rate negotiation agreement. This can usually be obtained from the organization's equivalent Grants Management Office.

Note:

Determination of whether someone is a consultant, whether a subaward should be issued to an individual's organization, or whether a vendor purchase order should be issued can be obtained from the Office of Grants Management. A vendor purchase order is defined as an order for normal supplies, services, or equipment.

TRAVEL
Separate detail should be provided in the budget for foreign and domestic travel. Foreign travel is any trip outside the United States, its territories, possessions, and Canada. Foreign travel usually requires special authorization from the sponsor.

The Health Science Center's Travel Operating Procedures should be consulted when proposing travel costs. The Health Science Center will reimburse the travel on a per diem basis; it will not reimburse travelers for costs in excess of fares as published in the Travel Operating Procedures .

It is suggested that each trip proposed in the budget be listed separately and include the following detail: names and numbers of travelers; point or origin and destination; cost of transportation (e.g., airfare or mileage); per diem costs for lodging and meals, incidental expenses such as ground transportation, and conference or registration fees.

It is important that the relevance of the trip to the proposed project be described in the budget justification. Expenses are reimbursed for the period of travel only and must be reasonable to the project. Entertainment expenses (e.g., movies, alcohol, and payment of guest meal expenses) are generally unallowable.

OTHER DIRECT COSTS
Other direct costs proposed for sponsored funding may include the following:

Communications
These costs include charges for postage and telephone. On federally funded projects, postage costs for routine correspondence and local telephone costs (equipment, installation, maintenance, line charges, fax lines, pagers) are generally unallowable and are only appropriate to budget if the purpose of such is for the sole direct benefit of the project. Network expenses are allowed if appropriate to the project and justified; these costs must be explicitly budgeted and specifically identified. Examples of allowable communication expenses include shipment of project materials and deliverables, express mail charges, long distance telephone charges, and fax transmission charges. A listing of such items and the estimated cost is required.

Repair and Maintenance
These costs include charges for maintenance, repair or upkeep of property utilized in the performance of the sponsored project. Budgeting should be based upon actual experience or costed in accordance with actual maintenance agreements. Proposal detail should include a listing of the type of equipment to be maintained and the estimated cost.

Other Services
Other services include professional services by Health Science Center departments and outside firms. Internal services include those performed by Instrumentation Services, the Copy Center, and Health Science Center departments or organizations offering services to projects, such as shared institutional facilities. For internal services, budgets should reflect actual quotes received from those departments based upon the current fee structure. Budgets should list the types of services required and the estimated fee.

Publication Costs
Publication costs consist of the preparing, publishing, and sharing of project findings and supporting material. Budgets should use reasonable efforts for publication and page charges. If color reproductions are required (to accurately depict the photograph, for example), explicit justification should be made.

Human Subjects Fees
Human subjects sometimes receive financial compensation for their participation in research projects or clinical trials. The number of subjects and related fee should be stated in the budget. Guidance on appropriate fees for human subjects can be obtained from the Institutional Review Board (extension 2351).

Patient Care Costs
Patient care costs may include the following: inpatient room charges, use of outpatient space, ancillary tests (e.g., laboratory, radiology), supplies used directly with patients (IV's, syringes, drugs, disposables, etc.), food provided to patients as part of special research diets. Expenses such as separately identifiable nursing and dietary salaries, equipment, and non-patient costs are anticipated in other budgetary categories. Patient care expenses are excluded from F&A costs.

Rental Space
Lease and rental expenses for non-university buildings and offices are included in this category. Budgeting should be based upon actual experience or upon the actual lease agreements. PI's requesting reimbursement for rental property should coordinate such rental facilities with their department chairs and deans in advance. Proposals should list the type of lease or rental and the estimated costs. Budgets proposing space rental may include building maintenance and upkeep, if appropriate. Rental space is excluded from F&A costs.

Alterations/Renovations or Construction
Costs of alterations or construction to a sponsored project are rare and must be fully justified and supported. PI's should discuss any proposed renovation charges with the sponsor's scientific liaison in advance. Proposals directly in response to an RFP for a facilities construction grant are generally limited in numbers that can be submitted by each institution. All such proposals are coordinated with the department and dean's offices in advance and approved proposals should also be coordinated with Facilities Management. Capital expenditures for construction, alteration and/or renovation are excluded from F&A costs.

FACILITIES AND ADMINISTRATIVE (INDIRECT) COSTS

Facility Components

Building Depreciation. Depreciation on all Health Science Center buildings less any construction financed by federal funds;

Equipment Depreciation: Depreciation on all Health Science Center-owned equipment which was not purchased with federal funds;

Operations and Maintenance Expense: Utilities, maintenance and repair of Health Science Center buildings; and

Library: Library operations including the purchase of books, journals, and serials, less any applicable credits.

Administrative Components

General Administration: Administrative salaries and expenses of offices such as the President, the Vice Presidents, Human Resources, Purchasing, Payroll and Accounting;

Department Administration: Administrative salaries and expenses of Department and Dean's offices; and

Sponsored Project Administration: Expenses of Grants Management, certain Accounting functions, Institutional Review Board, and related activities.

Negotiated F&A Rate *
The Health Science Center's negotiated rates as listed in Appendix E, Proposal Budgeting Information table.

Explanation and Example of MTDC Base
The F&A cost rate is applied to a Modified Total Direct Cost Base, The base is comprised of most of the direct costs of a specific project; however, there are several costs that are specifically excluded from the F&A cost charge. These exclusions have also been negotiated as part of the Health Science Center's approved federal rate and match those exclusions stipulated in the federal cost principles. The exclusions are:

Capital equipment costing $1,000 or more;

Tuition remission, scholarships and fellowships (not allowable on Health Science Center Research Projects);

Costs of each subaward (for substantive work) in excess of the first $25,000 for the entire project period;

Rental or lease of space or equipment;

Costs of any construction, alteration and or renovation; and

Patient care costs.

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Example 3-5 Computing the MTDC Base

The total direct cost proposed to the National Institutes of Health by Dr. Smith equals $335,000. This sum includes $12,000 in equipment, $20,000 in laboratory renovation costs, and a $115,000 subaward to University X.

Total Direct Costs		$ 335,000
Less Exclusions:
Capital Equipment ($1,000 or more per item)	12,000
Subaward balances over $25,000	90,000
Laboratory renovation costs	20,000
Subtotal Exclusions	$ 122,000
Resultant MTDC Base = $213,000
Apply the Current F&A Rate (44.5%)		94,785
TOTAL PROJECT COSTS (Direct Costs plus F&A)		$ 429,785

Industry-Sponsored/Clinical Drug Study Rate
The F&A rate assessed to industry-sponsored agreements, including clinical drug studies, is 20% of total direct costs with no modifying exclusions. For Phase I SBIR or STTR proposals, where the Health Science Center is to be a subawardee, the 20% rate is applicable; Phase II SBIR or STTR proposals should use the full, federally-negotiated rate.

Other Applications of the F&A Rate
There are a number of sponsors who, through published policy, limit payment of F&A costs. These sponsors generally include foundations, voluntary health organizations, and state agencies. There are also certain federal programs, such as training grants, which limit F&A costs. The Health Science Center will abide by the written policies and F&A limitations of these organizations and agencies. If a sponsor does not have a written policy on the payment of F&A, the full rate must be requested in the proposal unless a wavier of F&A is obtained.

It may be appropriate to propose a reduced F&A rate for non-research proposals (i.e., service or testing agreements). Grants Management should be consulted for the appropriate rate to be applied to these types of proposals.

Waivers of F&A (Indirect) Costs
Waiver authority of F&A is vested in the Vice President for Administration and Business Affairs. "Automatic" waivers are granted to those federal, state, and non-profit agency programs that have written guidelines on limitation of indirect cost rates, such as the 8% limitation on training grants or the American Cancer Society's limitation of 10% on all its grant programs. There are also specific programs of the Health Science Center that have approved lower rates such as those sponsored under the auspices of the Industry University Cooperative Research Center. Information on the written policies of a sponsor's reimbursement of F&A costs can be obtained from Grants Management. Any waiver should be discussed with Grants Management as soon as possible when planning to submit a proposal. Requests for F&A waivers are initiated by the Principal Investigator/Project Director and must be endorsed by the appropriate department chair and dean. The endorsed request should be sent to the Vice President for Administration and Business Affairs through the Director of Grants Management. Sufficient information should be provided to justify the request. At a minimum, information provided should include a rationale as to why the waiver is required, the likelihood that an award may be jeopardized without a waiver, and the total budgetary impact on the Health Science Center.

3.6 Cost-Sharing

Matching Grants
Matching grants are grant programs requiring that funds awarded be matched proportionately by other sponsors or the Health Science Center. Some federal and state sponsors require matching support from non-governmental sources, such as from industry.

Proposing Cost Sharing
Caution should be used when proposing cost sharing on a sponsored program. For example, stating that a faculty member will devote 5% of his/her time to a project at no cost to the project commits the Health Science Center to tracking and accounting for that faculty member's time and, ultimately, this unreimbursed effort has a negative effect on the indirect cost rate. Other types of cost sharing, including volunteer time of those not on the Health Science Center payroll, or various supplies and services will generally require that the Health Science Center maintain auditable records of that cost sharing. Contingent on sponsor policy, the difference in indirect costs allowed by the sponsor and the Health Science Center's actual indirect cost rate may also be used as cost sharing.

Some programs require cost sharing. In those instances, individuals are urged to contact Grants Management for suggestions on how those obligations might be portrayed in the budget. For those programs where no cost sharing is required (most research grants, for example), individuals are urged not to volunteer such cost sharing through unreimbursed faculty effort or through other means. Individuals should also be mindful that cost sharing used on one federally-funded proposal can not be used on another federally-funded proposal.

When proposing cost sharing, it is also useful to be mindful of the accounting requirements for such cost sharing; see Section 6.8.

Note:

Funds used as cost sharing on one federal project cannot be used for cost sharing on another federal project.