“Budget justifications are like recipes – if it’s your recipe, you know it by heart and don’t need instructions to make it – but if your friend would like to prepare it, they need to know all of the details.  Like your friend trying to make the recipe, reviewers need those details in order to understand why those costs are necessary.” – University of Texas, Dallas

A budget justification is a categorical description of the proposed costs.  It explains why the proposed costs are needed to accomplish the project tasks.  A thorough justification will explain the necessity of the costs as well as the basis for the proposed costs.  Along with the budget, the justification is a complete snapshot of the proposed work.  Therefore, everything that appears in the budget and justification should appear in your proposed scope of work.

In addition to explaining costs to the reviewers, the justification is another place where the Principle Investigator (PI) can sell the qualifications and responsibilities of key personnel.  It’s also a place where planned activities can be re-emphasized– by explaining the importance of essential project costs, PIs gain additional space to restate their activities.

Considerations when preparing the budget justification:

• Cost categories should appear in the same order as they do on sponsor’s budget form, using the same terms like KEY PERSONNEL, TRAVEL, EQUIPMENT, etc.
• Ensure items in the budget and justification match.  For example, if you have requested funding for two graduate assistants, make certain that it shows numerically in the budget and in narrative form in the justification.
• Ensure items in the budget and justification are reflected in the project narrative.
• Double check for allowability of costs and for unintended or unallowable costs (like cost share).

Considerations by cost category:

• Salary & Wages– list all people (or positions) that appear in the budget, along with qualifications and project roles; include contributed effort to the project (or person months depending on the sponsor).
• Fringe Benefits– tell reviewers if fringes are based on a negotiated rate or actuals.
• Equipment- describe the benefit to the project and include quotes.  For fabricated equipment costs, provide a cost analysis of the estimated labor, materials, and other costs associated with the fabrication.
• Travel- explain the purpose of each trip and how the trip will benefit the project (e.g. dissemination, data collection, team meeting, etc.).  Differentiate between domestic and foreign travel.
• Materials & Supplies– detail categories of materials & supplies and describe how the project will benefit from their use.  For costs normally treated as F&A (e.g., administrative costs or computers), clearly justify the purpose necessitating inclusion as a direct cost.
• Consultants/Vendors– describe role on the project and activities or services to be performed.
• Subrecipients– describe why a portion of the technical or programmatic effort must be subcontracted.  Each subrecipient should have its own budget and budget justification.
• Other– for other costs such as publication costs and costs for recharge centers, subject incentives, animal facilities, etc., specify need and basis for cost estimates.
• Indirect Costs (F&A)– state basis for the indirect cost rate used– whether it be a negotiated rate or de minimus rate.  If using a negotiated rate, specify if base is salary & wages, total direct, or modified total direct.  Indicate if an on- or off-campus rate is being used and if organized research, service, instruction, etc. as applicable.

A final word on budget justifications.  A good budget justification will assist reviewers in understand the need for select budget items while re-emphasizing project objectives and activities.  It will also reinforce the careful planning that went into the proposal and will reassure the reviewers that you know what you are doing.  Remember “Anything that helps reviewers answer questions in your favor is worth doing.”- University of Texas, Dallas