Rebudgeting Funds on a Grant or Contract


Definition/background

The budget plan is the financial expression of the project or program as approved during the award process. After a grant or contract has been awarded, the PI may determine that the approved budget allocations are not consistent with actual project needs. S/he may request the formal reallocation of funds from one spending category, or object code, to another object code category that better reflects the project requirements. This process is called Rebudgeting or Budget Revision.

Informal rebudgeting occurs when actual expenditures exceed or fall short of the allocated amount budgeted in an object code or when actual expenditures occur in an object code that has no budget allocation.

Many sponsors allow rebudgeting without prior approval while others require approval when rebudgeting into or out of a spending category exceed a specified percentage of the award amount. If prior approval is not required then formal rebudgeting is not necessary but may be requested to assist in budget management.

Note: Rebudgeting may have an effect on Facilities and Administrative (F & A)Costs

Procedure

To request rebudgeting of funds on a grant or contract:

  1. Determine if the sponsor of the grant or contract allows rebudgeting and whether prior approval is required or not
(Note:  If the sponsor requires prior approval for rebudgeting that exceeds a certain percentage of the budget, care must be taken to ensure this limit is not exceeded when multiple rebudgeting events occur in a single budget period. For example: on NIH non-modular budgeted awards, sponsor concurrence is required when a single direct cost budget category deviates (increase or decrease) from the categorical commitment level established for the budget period by more than 25 percent of the total costs awarded.
    • If sponsor approval is required:
      • Forward a copy of the budget revision request to Office of Sponsored Programs (OSP) for their concurrence. GCA waits for this approval from the sponsor before processing the budget revision.
      • OSP will send the rebudgeting request to the sponsoring agency
    • If the sponsor does not require prior approval for rebudgeting:

GCA responsibilities

  • GCA will review the rebudgeting request to determine if it is allowable, based on sponsor regulations or contractual agreements in the award documents.
  • If prior sponsor approval is required, GCA will forward the request to OSP.  
  • Rebudgeting requests that do not require sponsor approval will be completed within a week of receipt of your request.
  • GCA will notify the department about the status of the request.

Effect of rebudgeting on F&A costs

When a sponsor allows rebudgeting between the direct costs and F&A costs it is necessary to provide for the increase/ (decrease) in F&A that may occur when rebudgeting.  (See GIM 13, http://www.washington.edu/research/osp/gim/gim13.html)

Occasionally after an award is received the planned site where the project is to take place changes from on-campus to off-campus or vice versa. A change in location may have an impact on the F&A rate to be applied. Such a move will require formal rebudgeting.

When rebudgeting from direct cost categories that are exempt or excluded from F&A costs to categories not exempt from F&A cost, the amount being rebudgeted is reduced proportionately by the associated F&A cost of the non-exempt category.

Example: If the F&A rate on your grant is 50%, and you want to move $2,000 from a non-exempt direct cost category to an exempt direct cost category:

$2,000 / 1.5 = $1,333
$1,333 is the amount transferred as direct cost
$667 difference is the amount transferred as F&A cost  

When rebudgeting from exempt direct cost to any non-exempt direct cost, provide for additional F&A costs (example #1):

 Example #1 - Addition to F&A Cost Budget

Object
Code

Current
Budget

Amount
Rebudgeted

Revised
Budget

01-XX-XX (non-exempt)

4,000

3,000

7,000

05-XX-XX (non-exempt)

1,000

0

1,000

06-XX-XX (exempt)

2,000

(2,000)

0

08-02-XX (exempt)

3,000

(2,500)

500

 

Direct Cost total

10,000

-1,500

8,500

25- F&A Cost total

2,500

1,500

4,000

 

Total

$12,500

$0

$12,500

*Note - 50% F&A  rate used

Rebudgeting to exempt direct cost from non-exempt direct cost will result in a reduction to F&A costs that may be rebudgeted (example #2):

Example #2 - Reduction to Facilities & Administrative (F&A) Cost Budget

Object
Code

Current
Budget

Amount
Rebudgeted

Revised
Budget

01-XX-XX (non-exempt)

4,000

(2,000)

2,000

05-XX-XX (non-exempt)

1,000

0

1,000

06-XX-XX (exempt)

2,000

1,000

3,000

08-02-XX (exempt)

3,000

2,000

5,000

 

Direct Cost total

10,000

1,000

11,000

25 F&A Cost total

2,500

(1,000)

1,500

 

Total

$12,500

$0

$12,500

*Note - 50% F&A  rate used

 

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