---

In order to assure that appropriate federal regulations and MSU policies are followed in estimating the number of modules proposed and that the related facilities and administrative costs are properly calculated, it is necessary for investigators to submit certain high-level budget information for review by Sponsored Programs and inclusion in the internal documents component of the proposal file. This internal information will not be submitted to the National Institutes of Health.

As with all proposal cost estimates it is the responsibility of the Principal Investigator to assure that only allowable and allocable costs (as defined by OMB Circular A-21) are requested and expended from extramural funds. Should the Principal Investigator, Department Head, Director or Dean desire a full review (as required with all other funding sources) they may submit a detailed budget using the standard NIH format to their conginzant Sponsored Programs Administrator, preferrably one week before the proposal is due in Sponsored Programs. Following is the required internal, high-level information necessary on NIH Modular Grant Applications:

Following are some specific reasons why this information is necessary:

a)  Cost Accounting Standard 501 requires that the institution consistently estimate, accumulate and report costs.  The modular grants process, absent an internal budget, would violate this federal regulation.

b)  DHHS requires that facilities and administrative costs be calculated in accordance with our Federal Rate Agreement.  The modular grants process, absent the internal information described above, would violate this expectation.

c)  The MSU accounting system must track at a minimum, direct versus indirect expenditures in accordance with cost accounting standards.   The Principal Investigator or unit has the option of providing a detailed budget to Sponsored Programs for loading into the accounting system. This option is available to allow for better monitoring of project fiscal matters by the Principal Investigator/unit but will not restrict transactions to the line items outlined in the optional detailed budget. Note, absent the optional detailed budget described above, all direct costs will be loaded in the contractual cost category and expenditures will be monitored only to the extent that they meet the general criteria for allowability pursuant to OMB Circular A-21. The Principal Investigator and the associated management unit are responsible for assuring that costs meet allowability and allocability requirements outlined in OMB Circular A-21.

d) NIH, in promulgating the modular grants program, did not intend to eliminate sound estimating practices, nor did it intend to eliminate the need for careful thought and analysis in costing a proposal.

Should you have any questions regarding this procedure statement, please contact the Director of Sponsored Programs or your cognizant Sponsored Programs Administrator by phone or e-mail.