From The Vault: Budget Justifications

[Occasionally, we like to revisit posts from days gone by that either (1) are always relevant, or (2) are the subject of recent questions received by our office.  Today, we’ll look at the importance of budget justifications, given that award opportunities are becoming more competitive and that ORA requires such information with each proposal.]

Originally Published April 25, 2012

In the current environment, a strong budget justification is more important than ever to insure adequate funding.  Federal agencies are quite honest concerning their efforts to cut out spending that isn’t adequately justified, and will do so without discussion.  Consequently, in order to preserve the research budget and make sure PIs are receiving funds sufficient for their projects, budget justifications are becoming increasingly important.  A good justification should be detailed and specific, remembering that only the information in the justification will be the deciding factor for whether or not money is awarded fully.  As a result, making them an afterthought could mean significant cuts to your proposed budget and many resultant issues.

Our departments write great justifications for the personnel areas, but the remaining sections of the budget are where we regularly see significant cuts and questions about necessity from our federal sponsors.  However, if you pay close attention to detail, you reduce your chances of your funding being cut, or even simply the barrage of questioning at the just in time (JIT) stage. A strong justification avoids being a laundry list, and instead creates a narrative of how each cost correlates to the project. Treating each item of the budget with equal importance and attention will make sure that awards come back as expected.

Overall, the budget justification is your opportunity to showcase just how important each itemized cost is to accomplishing the statement of work. If you know that, in certain years, the cost will escalate above the normal built-in rate of inflation, you should explain the reason for the escalation.  And, for budget justifications, the more details the better.

Narrating the budget in a way that clearly explains why each item is an important expense will also make it easier for the sponsor to understand your reasoning.  If the justification doesn’t make sense to the person reviewing it before it goes off to the agency, it likely won’t make sense to the sponsor. Spending more time on a budget justification will save a budget from unnecessary reductions and lead to less administrative burden come award time.