The budget is the financial presentation of major cost categories specified by the sponsor. These are typically personnel and other than personnel costs for each project year as well as the cumulative total for the entire project. Complementing the budget is the budget justification or budget narrative, which describes the need for and reasonableness of costs in supporting project objectives and may present specific information describing how costs were derived (calculations, rates, etc.).

NOTE: Even if the sponsor does not require a detailed or line-item budget, ordinarily all financial requests (fixed price or lump sum amounts) should be substantiated by use of the OSP budget template to ensure the allowability and completeness of funds requested. Similarly presentation of an activity-based or functional budget organized by tasks should also be derived from the OSP budget template categorical items.

There are two general strategies used to develop your application’s budget:

If the award amount is capped at some level, based on your understanding of your project's needs, work backwards from the sponsor cap and allocated funds to direct and indirect costs, or
Work forward from major types of expense as described below to arrive at total project costs.

However, in both cases the budget should be an accurate reflection of the project (statement of work). If there are insufficient funds to support the proposed work, either increase the budget, if allowed, or modify (reduce) the work plan accordingly. We recommend you review Conceptualizing your Budget to establish a solid foundation.