Rebudgeting Funds

Overview

Watch the Video! Click on the video for a brief presentation on Post-Award Changes. Keep in mind that this same video will be used as part of the requirements to complete CORE’s Certificate in Research Administration. You may be required to watch the video again in order to obtain the necessary CORE credit.

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 and 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 exceeds 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:

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, per the NIH Grants Policy Statement, "Significant rebudgeting occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established for the budget period by 25 percent or more of the total costs awarded."
 
  • If sponsor approval is required: Follow OSP's guidance for preparing and submitting a Rebudgeting MOD.
  • If the sponsor does not require prior approval for rebudgeting: Follow the guidance on GCA's Modifications page to submit a GCA-only Rebudgeting MOD.

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 or decrease in F&A that may occur when rebudgeting.  (See GIM 13 for F&A policy guidance.)

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 from F&A costs (do not incur F&A) to non-exempt F&A categories (do incur 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 an exempt direct cost category to a non-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