Budget and Budget Narrative

CMS Guidance for Preparing a Budget Request and Narrative

All applications must include a detailed budget and narrative that explains the federal and the non-federal expenditures broken out by the object class cost categories listed on SF-424A − Section B (Budget Category) for non-construction awards. 

  • You must request funding only for activities that will support this specific Notice of Funding Opportunity.
  • The budget and narrative must be consistent with and support the Project Narrative. The proposed costs must be reasonable, allowable, allocable, and necessary for the supported activity.
  • Both the Standard Form SF-424A and the Budget Narrative must include a yearly breakdown of costs for the entire period of performance. 
  • Refer to the program specific Funding Restrictions and Limitations and Standard Funding Restrictions, as well as to 45 CFR Part 75 (for applicable administrative requirements and cost principles).

Assurances and Certifications

When the Authorized Organization Representative (AOR) signs the Application for Federal Assistance SF-424 form, they certify that the they agree to comply with the Assurances for Non-Construction Programs (SF-424B) (PDF | 65 KB).

Cost Sharing

Voluntary committed cost sharing or matching is not expected unless specifically stated otherwise in section C2 of the NOFO. Inclusion of voluntary committed cost sharing requires CMS to monitor the recipient's compliance with non-federal cost sharing. Monitoring includes CMS reviewing the non-federal expenditures on the FFR, SF-425. 

Standard Form SF-424A

Review the general instructions provided for form SF-424A as well as the instructions outlined below. 

Note: The directions in the Notice of Funding Opportunity (NOFO) may differ from those provided by Grants.gov. Please follow the instructions included in this NOFO when completing the SF-424A.

Note: The total requested on the SF-424 (Application for Federal Assistance) reflects the overall total requested on the SF-424A (Budget Information – Non-Construction) for the entire period of performance. 

Section A – Budget Summary

  • Grant Program Function or Activity (column a)
    • Enter “Name of Notice of Funding Opportunity” in row 1.
  • New or Revised Budget, Federal (column e)
    • Enter the Total Federal Budget Requested for the project period in rows 1 and 5.
  • New or Revised Budget, Non-Federal (column f)
    • Enter Total Amount of any Non-Federal Funds Contributed (if applicable) in rows 1 and 5. Voluntary committed cost sharing or matching is not expected unless specifically stated otherwise in section C2.
  • New or Revised Budget, Total (column g)
    • Enter Total Budget Proposed in rows 1 and 5, reflecting the sum of the amount for the Federal and Non-Federal Totals.

Section B – Budget Categories

Enter the total costs requested for each Object Class Category (Section B, number 6) for each year of the period of performance. Notice of Funding Opportunities with a 5-year project period require a second SF-424A form.

  • Column (1)
    • Enter Year 1 costs for each line item (rows a-h), including the sum of the total direct charges (a-h) in row i. Indirect charges are reflected in row j. The total for direct and indirect charges for all year 1 line items is entered in column 1, row k (sum of row i and j).
  • Column (2)
    • Enter Year 2 estimated costs for each line item (rows a-h), including the sum of the total direct charges (a-h) in row i. Indirect charges are reflected in row j. The total for direct and indirect charges for all year 2 line items is entered in column 2, row k (sum of row i and j).
  • Column (3)
    • (If applicable) Enter Year 3 estimated costs for each line item (rows a-h), including the sum of the total direct charges (a-h) in row i. Indirect charges are reflected in row j. The total for direct and indirect charges for all year 3 line items are entered in column 3, row k (sum of row i and j).
  • Column (4) 
    • (If applicable) Enter Year 4 estimated costs for each line item (rows a-h), including the sum of the total direct charges (a-h) in row i. Indirect charges are reflected in row j. The total for direct and indirect charges for all year 4 items are entered in column 4, row k (sum of row i and j).
  • Column (5) 
    • Enter total costs for the period of performance for each line item (rows a-h), direct total costs (row i), and indirect costs (row j). The total costs for all line items are entered in row k (sum of row i and j). The total in column 5, row k should match the total provided in Section A – Budget Summary, New or Revised Budget, column g, row 5.

      If the NOFO is for a 5-year period of performance, please complete a second SF-424A form and upload it as an attachment to the application (this specific attachment does not count towards the page limit). Year 5 information is included in column 1 of Section B. Then enter the total for years 1-4 (per the first SF-424A form) in column 2 of Section B. The second SF-424A form will compute columns 1 and 2, reflecting total costs for the entire project period. This total should be consistent with the total Federal costs requested on the SF-424, Application for Federal Assistance. A blank SF-424A form can be found at Grants.gov. 

Budget Narrative – Sample Narrative and Instructions

You must complete a Budget Narrative and upload it to the Budget Narrative Attachment Form in the application kit. Only request funding for activities not already funded/supported by other funding sources. In the budget request, applicant distinguishes between activities funded under this application and activities funded with other sources. Other funding sources include other HHS grant programs, and other federal funding sources as applicable. Insufficient budget detail and justification may negatively affect the review of the application.

A sample Budget Narrative is included below.

 A. (Personnel) Salaries and Wages

For each requested position, provide the following information: 

  • title of position
  • name of staff member occupying the position, if available
  • annual salary
  • percentage of time budgeted for this program (FTE or level of effort)
  • total months of salary budgeted
  • total salary requested
  • justification and description of each role and the scope of responsibility for each position, relating it to the accomplishment of program objectives. These individuals must be employees of the applicant organization. 

Note: The Consolidated Appropriations Act restricts the amount of direct salary to Executive Level II of the Federal Executive Pay Scale. This salary cap applies to direct salaries and to those salaries covered under indirect costs, also known as facilities and administrative (F & A). 

See the following link for the applicable current salary cap: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/   

 Sample Budget                                                                                       

Personnel Total                  $______

Grant                                   $______

Recipient Share*                $______

Position Title

Name (if known)

Annual

Time

Months

Amount Requested

Project Director

Susan Taylor

$45,000

100%

12 months

$45,000

Finance Administrator

John Johnson

$28,500

50%

12 months

$14,250

Outreach Supervisor

Vacant

$27,000

100%

12 months

$27,000

Total:

 

 

 

 

$86,250

13.5

3

 Job Description: Project Director - (Name)

This position directs the overall operation of the project; responsible for overseeing the implementation of project activities, coordination with other agencies, development of materials, provisions of in-service and training, conducting meetings; designs and directs the gathering, tabulating and interpreting of required data; responsible for overall program evaluation and for staff performance evaluation; and is the responsible authority for ensuring necessary reports/documentation are submitted to CMS. This position relates to all program objectives.

B. Fringe Benefits

Fringe benefits are usually applicable to direct salaries and wages. Provide information on the rate of fringe benefits used and the basis for their calculation (reference NICRA if applicable). If a fringe benefit rate is not used, itemize how the fringe benefit amount is computed. This information must be provided for each position (unless the rates for all positions are identical).

 Sample Budget

Personnel Total                  $______

Grant                                   $______

Recipient Share*                $______

Fringe Benefit

Rate

Salary Requested

Amount Requested

FICA

7.65%

$45,000

$3443

Worker's Compensation

2.5%

$14,250

$356

Insurance

Flat rate - $2,000 (100% FTE for 12 months)

$2,000

$2,000

Retirement

5%

$27,000

$1,350

Total

 

 

$7,149

 *Cost sharing only.

C. Travel

Dollars requested in the travel category are for applicant staff travel only. Travel for consultants is in the consultant category. Allowable travel for other participants, advisory committees, review panel, etc. is itemized in the same way specified below and placed in the “Other” category. Travel incurred through a subrecipient or contract is in the contractual category.

Provide a narrative describing the travel staff members will perform. This narrative includes a justification of why this travel is necessary and how it will enable the applicant to complete program requirements included in the NOFO. List where travel will take place, number of trips planned, who will be making the trip, and approximate dates. If mileage is to be paid, provide the number of miles and the cost per mile. The mileage rate cannot exceed the rate set by the General Services Administration (GSA). If travel is by air, provide the estimated cost of airfare. The lowest available commercial airfares for coach or equivalent accommodations is used. If per diem/lodging is to be paid, indicate the number of days and amount of daily per diem as well as the number of nights and estimated cost of lodging. Costs for per diem/lodging cannot exceed the rates set by GSA. Include the cost of ground transportation when applicable. Please refer to the GSA website by using the following link http://www.gsa.gov/portal/content/104877.

 Sample Budget

Fringe Benefits Total         $______

Grant                                   $______

 Recipient Share*               $______

 Purpose of Travel

Location

Item

Rate

Cost

Site Visits

Neighboring areas of XXX

Mileage

$0.655 x 49 miles (use mileage rate in effect at time of mileage incurrence) x 25 trips

$668

Training (ABC)

Chicago, IL

Airfare

$200/flight x 2 persons

$400

 

 

Luggage Fees

$50/flight x 2 persons

$100

  

Hotel

$140/night x 2 persons x 3 nights

$840

  

Per Diem (meals)

$49/day x 2 persons x 4 days

$392

  

Transportation (to and from airport)

$50/shuttle x 2 persons x 2 shuttles

$200

  

Transportation (to and from hotel)

$25/shuttle x 2 persons x 2 shuttles

$100

  

 

 

$2,700

*Cost sharing only.

Sample Justification

The Project Coordinator and the Outreach Supervisor will travel to (location) to attend a conference on the following topic XXXX held once a year in Chicago, IL. Attending this conference is directly linked to project goals/objectives and is a necessity because XXXX. The information and tools we will gather from attending this conference will help us to carry out project objectives by XXXX. A sample itinerary is provided upon request. The Project Coordinator will also make an estimated 25 trips to birth center sites to monitor program implementation (# of birth centers, # of trips per site). We are still in the process of identifying all birth center sites, and identified an average mileage total for each site. This travel is necessary to ensure birth center sites are consistently and systematically collecting birth center data and submitting by deadlines provided. On-site monitoring will enable us to address concerns. This travel also furthers our efforts to carry out specific project goals for the following reasons___________________________________________________________.

D. Equipment 

Equipment is tangible nonexpendable personal property, including exempt property, charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, consistent with recipient policy, lower limits may be established. 

Note: Technology items such as computers that do not meet the $5,000 per unit threshold or an alternative lower limit set by recipient policy that may therefore be classified as supplies, must still be individually tagged and recorded in an equipment/technology database. Provide justification for the use of each equipment item and relate it to specific program objectives. List maintenance or rental fees for equipment in the “Other” category. Ensure that all IT equipment is uniquely identified. Show the unit cost of each item, number needed, and total amount. 

 Sample Budget

Equipment Benefits Total   $______

Grant                                     $______

Recipient Share*                 $______

*Cost sharing only.

 Item(s)

Rate

Cost

All-in-one Printer, Copier, and Scanner (large scale)

1 @ $5,800

$5,800

X-Ray Machine

1 @ $8,000

$8,000

Total:

 

$13,800

 *Cost sharing only.

Sample Justification 

Provide complete justification for all requested equipment, including a description of how the program uses the equipment. For equipment and tools shared amongst programs, please cost allocate as appropriate. Applicant should provide a list of hardware, software and IT equipment that will be needed to complete this effort. Additionally, they should provide a list of non-IT equipment that will be needed to complete this effort.

E. Supplies

Supplies includes all tangible personal property with an acquisition cost of less than $5,000 per unit or an alternative lower limit set by recipient policy. Individually list each item requested. Show the unit cost of each item, number needed, and total amount. Provide justification for each item and relate it to specific program objectives. Classify technology items such as computers that do not meet the $5,000 per unit threshold or an alternative lower limit set by recipient policy as supplies and individually tag and record in an equipment/technology database. If appropriate, General Office Supplies may be shown by an estimated amount per month times the number of months in the budget category.

Sample Budget

Supplies Total                                    $______

Grant                                  $______

Recipient Share*               $______

Item(s)

Rate

Cost

Laptop Computer

2 @ $1,000

$2,000

Printer

1 @ $200

$200

General office supplies

12 months x $24/mo x 10 staff

$2,880

Educational pamphlets

3,000 copies @ $1 each

$3,000

Educational videos

10 copies @ $150 each

$1,500

Total:

 

$9,580

*Cost sharing only.

Sample Justification

General office supplies will be used by staff members to carry out daily activities of the program.

The project coordinator will be a new position and will require a laptop computer and printer to complete required activities under this Notice of Funding Opportunity. The price of the laptop computer and printer is consistent with those purchased for other employees of the organization and is based upon a recently acquired invoice (which can be provided upon request). The pricing of the selected computer is necessary because it includes the following tools XXXX (e.g. firewall, etc.). The education pamphlets and videos will be purchased from XXX and used to illustrate and promote safe and healthy activities. Usage of these pamphlets and videos will enable us to address components one and two of our draft proposal. Word Processing Software will be used to document program activities, process progress reports, etc.

 F. Consultant/Subrecipient/Contractual Costs

A complete description and cost breakdown, as outlined below, is provided for each consultant, subrecipient or contract.  

Required Reporting Information For Consultant Hiring 

This category is appropriate when hiring an individual who gives professional advice or provides services (e.g., training, expert consultant, etc.) for a fee and who is not an employee of the Recipient organization.  Submit the following required information for consultants:

  1. Name of Consultant:  Identify the name of the consultant and describe the person’s qualifications.
  2. Organizational Affiliation:  Identify the organizational affiliation of the consultant, if applicable.
  3. Nature of Services to be Rendered:  Describe in outcome terms the consultation to be provided including the specific tasks to be completed and specific deliverables.  
  4. Relevance of Service to the Project:  Describe how the consultant services relate to the accomplishment of specific program objectives.
  5. Number of Days of Consultation:  Specify the total number of days of consultation.
  6. Expected Rate of Compensation:  Specify the rate of compensation for the consultant (e.g., rate per hour, rate per day).  Include a budget showing other costs such as travel, per diem, and supplies.
  7. Justification of expected compensation rates: Provide a justification for the rate, including examples of typical market rates for this service in your area.
  8. Method of Accountability:  Describe how the applicant monitors progress and performance of the consultant.  Identify who is responsible for supervising the consultant agreement.

Required Reporting Information For Subrecipient Approval 

The costs of project activities to be undertaken by a subrecipient is included in this category.  Please use formats from “Sample Budget” and “Sample Justification” above. For more information on subrecipient and contractual relationships, please refer to HHS regulation 45 CFR 75.351 Subrecipient and Contractor Determinations and 75.352 Requirements for pass-through entities. 

Require Reporting Information For Contact Approval 

All recipients must submit to CMS the following required information for establishing a contract to perform project activities.   

  1. Name of Contractor:  Who is the contractor?   Name the proposed contractor and indicate whether the contract is with an institution or organization.
  2. Method of Selection: How was the contractor selected?  State whether the contract is sole source or competitive bid.  If an organization is the sole source for the contract, include an explanation as to why this institution is the only one able to perform contract services.
  3. Period of Performance: How long is the contract period?  Specify the beginning and ending dates of the contract.  
  4. Scope of Work: What will the contractor do?  Describe in outcome terms, the specific services/tasks performed by the contractor as related to the accomplishment of program objectives.  Clearly define the deliverables.
  5. Method of Accountability:  Describe the monitoring plan of the progress and performance of the contractor during and on close of the contract period.  Name who will be responsible for supervising the contract.
  6. Itemized Budget and Justification:  Provide an itemized budget with appropriate justification.  If applicable, include any indirect cost paid under the contract and the indirect cost rate used.

G. Construction (not applicable)

H. Other

This category has items not included in the previous budget categories. Individually list each item requested and provide appropriate justification related to the program objectives.

 Sample Budget

Other Total                        $______

Grant                                  $______

Recipient Share*              $______

Item(s)

Rate

Cost

Telephone

$45 per month x 3 employees x 12 months

$1,620

Postage

$250 per quarter x 4 quarters

$1,000

Printing

$0.50 x 3,000 copies

$1,500

Equipment Rental

*Specify item

$1,000 per day for 3 days

$3,000

Internet Provider Service

$20 per month x 3 employees x 12 months

$720

Word Processing Software (specify type)

1 @ $400

$400

Total:

 

$8,240

*Cost sharing only.

[Some items are self-explanatory (telephone, postage, rent) unless the unit rate or total amount requested is excessive. If the item is not self-explanatory and/or the rate is excessive, include additional justification. For printing costs, identify the types and number of copies of documents to be printed (e.g., procedure manuals, annual reports, materials for media campaign).]

 Sample Justification

We are requesting costs to accommodate telephone and internet costs for the 3 new hires that will be working on this project in the new space designated. We are also requesting printing and postage costs to support producing fliers to disseminate in the community and brochures to educate participants enrolled in the program. The word processing software will be used to help us track data and compile reports. To track and compile the data, we will need to rent ______. Without this equipment, we will not be able to produce this information in an accurate and timely manner.

I. Total Direct Costs  

$______

 Show total direct costs by listing totals of each category.


J. Indirect Costs

$______

To claim indirect costs, the applicant organization must have a current approved negotiated indirect cost rate agreement (NICRA) set up with the cognizant federal agency unless the organization has never established one (see 45 CFR §75.414 for more information) or cost allocation plan.  If a rate has been issued, a copy of the most recent indirect cost rate agreement or cost allocation plan must be provided with the application.  See Appendices III – VIII to 45 CFR part 75, as applicable.

If you have never received an indirect cost rate agreement, except for those non-Federal entities described in Appendix VII(D)(1)(b) to 45 CFR part 75, you may choose to charge a de minimis rate of 10% of modified total direct costs (MTDC). 

 Sample Budget 

The rate is ___% and is computed on the following direct cost base of $__________.

Personnel $__________

Fringe $__________

Travel $__________

Supplies $__________

Other     $__________

Total $               x ____% = Total Indirect Costs

Page Last Modified:
02/16/2024 02:51 PM