GAP NO. 200.160
Rebudgeting Funds on Grants and Contracts

I.	General
II.	Guidelines for Approval
III.	Computation
IV.	Procedure for Approval of Sponsor
V.	Procedure for University Approval
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I. GENERAL

This procedure gives the general guidelines for rebudgeting funds on grants and contracts. Each award document and the corresponding sponsor guidelines should be reviewed carefully for specific sponsor restrictions and regulations.

 

II. GUIDELINES FOR APPROVAL

The sponsoring agency expects that applicants will anticipate the entire cost of their project in their proposal. Usually the awarding of the project constitutes approval of the expenditures in the proposed budget. However, since it may be in the best interest of the project to depart from the approved budget to meet an unforeseen requirement of the project, some sponsors permit awardee institutions to depart from the approved budget as long as the project funds are used in compliance with their policies and regulations. Such deviations from the approved budget must enhance the project and must conform with the rebudgeting guidelines of the funding sponsor. Rebudgeting may also be restricted by conditions imposed by the individual award.

Most awards require prior written approval by the sponsor for the following purposes:

• Any purpose disapproved or restricted as a condition of the award.
  
  
• Change in scope, objectives, or purposes of the approved project.
  
  
• Change in key personnel whose expertise is critical to the approved project.
  
  
• Decrease in the total amount budgeted for training costs.
  
  
• Any rebudgeting of funds out of patient care costs; also, any addition of patient care costs if no patient care costs were in the approved budget.

Each agency varies in the degree of rebudgeting authority granted to institutions. This is specified in the award document. If any clarification on rebudgeting is needed, contact the appropriate pre-award office or the Office of Sponsored Programs.

 

III. COMPUTATION

When rebudgeting funds, one must consider the impact on Facilities and Administrative (F&A) costs. F&A costs are applied to all direct costs except equipment, student aid, patient care, interest, certain telephone expenses, subcontract amounts over $25,000, and non-salary cost sharing. See the examples below.

EXAMPLE 1:

The Principal Investigator (PI) needs an additional $1,000 in the equipment category and the funds are available in the supplies category. The F&A cost rate is 54%.

Computation: $1,000/1.54 = $649.35 from Supplies

Moving $649.35 from the supplies category to the equipment category, also relieves $350.65($649.35 x .54) from F&A costs. The $649.35 from supplies and $350.65 from F&A cost equals the $1,000 to be spent on equipment.

EXAMPLE 2:

The PI needs an additional $1,000 in the supplies category and the funds are available in the equipment category. The F&A cost rate is 54%.

Computation: $1,000 x 1.54 = $1,540.00 from equipment

When funds are moved from equipment, which carries no F&A cost, to supplies, funds must also be moved for the F&A costs that will be applied against the supplies. In this example, move $1,000 for the supplies and $540 for the related F&A costs.

 

IV. PROCEDURE FOR APPROVAL OF AWARDING AGENCY

If the rebudgeting desired requires the approval of the sponsor Duke must submit a letter to the sponsor requesting approval of the rebudgeting. The letter must specify:

1. the nature of the change (the budget categories to be increased and decreased)
2. justification for the change
3. the grant/contract identification number or agency identification
4. the beginning and ending dates of the budget period(s) affected

The PI should draft the letter and send the letter to the appropriate pre-award office (Office of Research Support for University or Office of Research Administration for Medical Center) for signature by an official of the University.

 

V. PROCEDURE FOR UNIVERSITY APPROVAL

If the type of rebudgeting desired does not require the prior approval of the sponsor, the University is authorized to approve or disapprove the rebudgeting. Complete the form Request for Rebudgeting of Grant Funds. If the desired change was denied as part of the original proposal, the University is not authorized to approve the rebudgeting; rather the PI must submit a request by letter as described in Section IV.

A. Instructions for completing the Rebudgeting form:

1. In the "Budget Item" section of the form, complete lines only for items of the budget to be changed.
   
2. In the first column, list the amount budgeted in the approved budget.
   
3. In the second column, list the actual expenditures to date, as of the last closed fiscal period.
   
4. In the third column, list the requested increase or decrease.
   
5. Describe the intended use of the rebudgeted funds, the justification for the change, and why the funds differ from the original budget.
   
6. The PI and the department chairperson must both sign the form.
   
7. Medical Center departments forward the completed form to the Office of Research Administration.
   
8. University departments forward the completed form to the Office of Research Support.

The PI will be advised in writing of the final disposition of this request. If the rebudgeting request is approved, the Office of Sponsored Programs will revise the category awards in the general ledger to reflect the rebudgeted figures.

 

GAP History
Issued:	January 2000
Revised:	October 2001
Revised:	February 2003
Revised:	September 2005