Video 12: Developing a Project Budget

This section describes the importance of creating a budget andaligning it with the project workplan. The budget is the dollarexpression of the project being proposed. It must be reasonable and tie intothe project’s objectives and work plan. The line-item budget and a narrativebudget justification explain how estimated costs relate to the projectapproach.

Budgeting involves considering such factors as: availableresources, regulations, cost estimates, staffing and the non-federal sharecommitment.

The non-federal share (NFS) is the grantee’s resources used tosupport the project and can include cash, donated goods, or donated services.

The responsibilities of managing grant fundssuch as fund accounting, fiscal management, and being in compliance withregulations for funding are also discussed.

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Welcome to the ANA Project Planning and Development on-Demand Training series.
This is video 12, Developing a Project Budget.
The federal cost categories for your budget include personnel, fringe benefits, travel, equipment, supplies, other and indirect. Personnel, or any staff that support your project. This includes those paid with grant funds or those who are utilizing their time as match. Remember to identify their time on the project. Someone who works solely for the project may be a one FTE or 100%. If they only spend half of their time on the project, then they would be a 0.5 or a 50%. Remember to provide that time delineation. Fringe benefits vary between tribe or organization. This can include your healthcare plans, retirement, social security, and various taxes. Your HR or finance staff will have access to this information and if you're not friends with them already, buy them coffee and become their friends. You'll need them through this budgeting process. Your travel line item is where you include all the expected travel pertaining to your project. Airfare, lodging and per diem are included in this category. Some funding opportunities can be restrictive on travel cost so please be aware of these when pursuing an opportunity and read that NOFO. Equipment and supplies are separate line items in the budget, but we're gonna discuss them both, as they have similarities. Supplies, or items purchased that support your project. This can include office supplies, technology, laptops, et cetera. Equipment is defined as a single item that costs more than $5,000. This number might be lower depending on your agency's policies and procedures. Just know that equipment costs typically need pre-approval as well. Contractual costs involve any financial obligation to contractors or partners, which are outlined in a contract. The other category is where you put expenditures that do not fit in the other defined budget categories. This can include postage, telephone, photocopying, equipment repairs or subscriptions. Just make sure that these are expenses are allowable, based on the funding regulations. Lastly, we have the indirect line item. This is also sometimes referred to as overhead or administrative costs. These are the expenses of your organization or tribe doing business and not readily identified by a particular grant or activity, but are necessary for the operation of the overall organization. Organizations can negotiate federal indirect rates and if they haven't done so already, you still can capture what they call a de minimis rate just right now, 10%. It's important to be aware that some funders do limit your indirect rates or don't allow them at all, so thoroughly read your funding announcement to make sure that you're aware of what's allowable.
This table, it's an abbreviated budget, but offers an example of how you can build a budget using your work plan activities and the process determining what the funder will pay and what the tribal organization will contribute in the form of match. You can see the categories are separated by rows and that you have a federal or funder share and your non-federal or match, separated by the columns. Your budget can get pretty extensive and lengthy depending on your project, but it's important to be as thorough as possible. The more accurate you are when you're putting together your budget, the less work you're going to have do later, such as budget revisions or modification requests. A helpful reminder when developing your budget is to also double check all of your formulas in the spreadsheet. Your match funds are the dollar investment some funders require to apply for a funding opportunity. Now, these can be monetary, which includes salaries or supplies purchased by the organization. Sometimes they can be in kind and the dollar amount from sources such as space or time, et cetera. Each funder may have different match requirements, but they will be clearly outlined in that funding announcement. When thinking of where to get your match funds, you can get pretty creative with this. Room space can be used as match, land can be used for a project. Just indicate the space and how much it costs for that item that you're using as match within your budget. It's also worth noting that there's some exceptions to matching funds. Usually, federal funds cannot be used to match other federal dollars. However, sometimes you can use things that we discussed earlier such as your 638 funds or your TANF 477 funds. If you're unsure on if you are matching funds can be used or they're eligible, it might be a good idea to reach out to the funding agency or a technical assistance center to get that information and see if that can be allowed. Please keep in mind that unless the funding agency is giving bonus points for extra match, avoid over matching. We here refer to the acronym, N.O.P.E., which is not one penny extra and it's a good reminder not to overmatch when possible. Match can be hard to find, and using it when it's not necessary can impact future matching opportunities. Lastly, there are two different types of match percentage calculations, the total project cost and percentage of federal share, and this can get a little confusing. We do have a supplemental video in this section that can help explain this more in depth.
Remember, compliance is the most important thing for your project. There could be different compliance rules that you'll need to follow, but keep in mind there are a lot of resources that can help with this. If you're unfamiliar with any of these acronyms, please note that CFR stands for the Code of Federal Regulations and OMB is the Office of Management and Budget. Some of you might be familiar with 2 CFR Part 200. Just note, this is the uniform administrative requirements for all federal funding. All federally funded projects must adhere to these guidelines and will help you stay in compliance. There are other layers of compliance at the state, municipal, borough and organizational level. The spending guidelines you follow in in this image can be more restrictive than the guidelines above 'em, but not less restrictive. What's really important is that the set of rules that you follow within your organization. These can be found in your agency's policies and procedures.
Fund accounting is a financial practice that separates funds by funding award or source. In fund accounting, funding sources are separated into their own accounts and balance sheets so that users can determine which cash has been used for its intended purpose. They're usually separated by financial or expense codes. This type of accounting system focuses on assuring that funds are spent in a way that the funder will approve of and typically governments and nonprofit organizations already use this type of accounting, including tribal governments. There are many financial tools out there to help you manage funds, but if your organization or tribe doesn't have a full-time bookkeeper or accounting person, you should consider outsourcing your bookkeeping functions to make sure that you're staying in compliance.
Okay, obtaining cost estimates are going to be very important when you're determining the cost and justifying everything in your budget. Building your budget is all about estimating project cost to ensure that there's enough money to complete everything in the work plan. Before you start getting cost estimates, make sure that you understand your tribe's or organizations procurement or purchasing policies. The project planners will need to research cost and consider whether the items listed in the budgets are reasonable and necessary to carry out the project work plan. Now, this is true when you're seeking funding from a organization board when you're trying to get that approval or seeking outside funding. Some other things to take into account are that cost may be more when it's time to actually implement the project, so try to avoid using discounted quotes or trying to find savings in your budget planning that it will be a little bit more expensive closer to when you implement. Shipping costs can also get expensive, especially in rural parts of our state, so be sure to add shipping when you're shopping online. Building the budget and getting accurate cost quotes will allow project developers to determine whether the scope of a project is too large or if the current costs are too high to complete the project at one time. The most important thing I can recommend when you're researching cost estimates is to save them. You're going to need these later, so having 'em accessible is gonna be a good idea.
Okay, for activity 10, I'd like you to open your line item budget Excel document. Using the concepts that we've discussed in this chapter, please fill out all the budget line items. This will include the federal share and non-federal share or match categories. Fringe rates can be unique to each agency, so if you aren't aware of what these rates are for your specific agency, you might want to check with your HR person or your finance person to get these. Also, if you're unsure if you have an indirect rate that's federally negotiated or what your current rate is, for this exercise, you can use a 10% de minimus rate.
Thank you for viewing Video 12 of the Project Planning and Development on Demand Training series. If you have any questions regarding project development or the Administration for Native Americans, please feel free to contact us at anaalaska.org.
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Up next

Video 13: Organizational Capacity

Training episodes

Video 1: ANA Funding Opportunities

Video 2: Community Led Planning

Video 3: Long Term Community Goal

Video 4: Identify the Condition

Video 5: Project Goal

Video 6: Objectives

Video 7: Data Metrics of Success

Video 8: Resources and Partnerships

Video 9: Approach and Workplan

Video 10: Contingency Planning

Video 11: Sustainability

Video 12: Developing a Project Budget

Video 13: Organizational Capacity

Video 14: Next Steps

Video 12: Developing a Project Budget