Federal and State Government Funding
continued

page: 1 | 2 | 3 | 4

I. Budget AND BUDGET NARRATIVE

While making mistakes in budgeting will not necessarily kill your proposal, strong financial planning will make your life much easier in the long run. You will avoid headaches down the road, because a federal agency might decide to approve your proposal but make you completely redevelop the budget. It is fairly easy to make minor budget adjustments to your funded grant; major budget changes require a more involved federal approval process.

More than anything, budget planning leads to frenetic late night emergency sessions and hair pulling. It can be a struggle to budget necessary staff and resources to sustain your project and fit within the maximum federal grant award amount. In some cases your proposal will be funded if you request less than the top award level. Be honest in your budgeting. Find ways to consolidate costs or absorb expenses as in-kind contributions from your organization. Budget as fairly and accurately as possible. While cost-efficiency is important, federal reviewers will be concerned if you do not budget adequately to carry out the project. Make sure your organization is providing adequate in-kind or cash contributions to meet the required match, if applicable.

You will be required to complete budget information on two pages of Form 524. On the first page, detail the actual amount of funding you are directly requesting from the federal government. On page two, describe in which budget categories your agency, your organizational partners, or other sources will provide cash or in-kind resources. On the Application for Federal Assistance (Form 424) you will also be required to break out the source of matching funding.

You are usually required to estimate costs for each year of the grant. For future grant years, you can budget a cost-of-living increase for salaries, and inflation projections for supplies, rent, and other cost items. The federal budget categories are as follows:

Personnel : Include staff who will be directly hired and managed by your agency. Charge the federal government only for the percentage of time that each staff member will spend working on grant activities-and less than that amount if your agency has decided to fund any portion of that salary as a match. In some areas, the cost-of-living means that the salary range will be budgeted at a higher rate than is normally expected. Personnel should be budgeted at a level that will attract qualified candidates; be sure to explain this reasoning in the narrative. If you are contracting with other agencies to provide their staff for the project, place those expenses under other .

Fringe : Include the cost of fringe benefits for the personnel hired by your agency for the grant.

Travel : Include only expenses related to staff travel, such as conferences and local mileage. Often, you will be required to attend a conference in Washington related to the grant. Include participant travel under other.

EQUIPMENT: Include only property that has a life of more than one year and a per unit cost of $5000 or more. Do not include items such as computers and office equipment in this category.

Supplies: Include cost items such as office equipment, office supplies, program supplies, and any other physical materials that your agency will use to carry out the grant.

CONTRACTUAL : Usually this section is used only to list procurement contracts and sub-contracts or sub-grants. It is not used to list consultants, or agreements with other agencies to provide services.

OTHER: Include all budget items that do not fit in the above categories under OTHER. List expenses such as staff or services provided by partnering agencies, telephone, rent, utilities, participant travel, and consultants.

INDIRECT COSTS: The federal granting agency will negotiate an indirect cost rate to cover your administrative and financial costs associated with implementing your project. If you have a negotiated indirect cost rate, multiply that percentage with total direct expenses to calculate these costs. Keep in mind that your indirect rate will not fully cover administrative expenses related to carrying out the grant. Sometimes grants limit indirect costs to 8 percent of all direct costs, regardless of your negotiated rate.

TRAINING STIPENDS: These stipends are expenses related to the cost of training participants. For example, employment programs often budget for participants to attend certificate programs offered by a local community college. Another example is paying stipends to youth participants for attending summer education programs.

In addition to completing the budget forms, you will also be required to complete a budget narrative. In a budget narrative, explain in as much detail as possible how you arrived at each line item in your budget. Justify in detail the salary levels of your staff, the amount of time they will spend on the project, and the fringe benefit percentage of your agency. Explain how you arrived at costs for travel, contractual, equipment, supplies, other, indirect, and training stipends. Complete a budget narrative for both the funds you are requesting from the government, and the funds being contributed by your organization or your partners.

When you finish your budget, make sure that all cost items relate directly to a program service that you describe in the narrative. Also make sure that all costs related to delivering services are adequately covered in your budget. Project-related expenses not accounted for in the budget will become your agency's responsibility.

J. Other INFORMATION

Always include a table of contents . Some proposal packages specifically outline required headings for a table of contents. If no format is required, be sure to list all of the grant's major categories and other key information that you want to be as easy as possible for reviewers to find. You may also want to list page numbers for any tables or charts.

I usually place a cover sheet prior to the table of contents, with the title of the project, the agency's name, the date, the federal agency receiving the proposal, the grant program name and federal domestic assistance catalog number. I often divide the proposal's key sections with "title pages," or sub-cover pages for the budget, budget narrative, assurances, proposal narrative, and attachments.

Form 424

Form 424, Application for Federal Assistance, should be included as the first page of your application. It asks for information such as your employer identification number, the congressional district where services will be provided, budget information, and signatures from authorized officials. This form also requests that you provide a descriptive title of the project in a small box. They actually want you to describe the project and highlights as best you can in that small square. Form 424 also asks you to list the total amount requested from the federal government (include the amount for the first grant year only), and sources of any matching funds (applicant, state, local, other, program income).

Assurances, and Certifications

All federal agencies require you to complete assurances, such as Drug Free Workplace Certification, Assurances for Non-Construction Programs, and Disclosure of Lobbying Activities. Different departments request other attachments and required information. These forms can be confusing; call the grants administrator listed in the application packet if you have any questions.

K. Finishing the proposal

Once you have a complete draft of the proposal and all the attachments in order, you will want to double check information to make sure it complies with all application requirements. Make sure that your proposal narrative responds to all application questions. Have other people review the application, using the scoring system that is provided by the federal agency with the proposal materials. Double check that you have followed guidelines for the budget, and any requested attachments.

Carefully review the grant application checklist before submitting a proposal. Place all information in the order that is requested. If the agency does not specify an order for submitting a proposal, I usually use the following format:

1 st : Form 424

2 nd : Table of Contents

3 rd : Budget Form 524

4 th : Budget Narrative

5 th : Certifications and Assurances

6 th : Proposal Narrative

7 th : Other attachments

Some applicants bind their proposals into a small book. Be sure that the guidelines allow you to bind your application. Sometimes they want your grant package unbound in order to make additional copies.

You may be required to provide your state's Single Point of Contact office or other agencies with a copy of your proposal. You may even be required to send this information prior to submitting the full application to the federal government; you are usually only required to send the appropriate state agency a duplicate copy of the full application. Be sure to check these requirements when you receive the proposal packet.

Some federal agencies accept a postmark or other proof of mailing indicating that your application was submitted by mail or courier on the closing date. If yours does not, it may be best to use an express mail carrier to be sure that the proposal arrives in the federal office prior to the closing date of the application.

L. After submitting the proposal

Some federal agencies are notorious for extending grant review deadlines. Often, the timeline for completing the review process is expressed vaguely. There are many factors that delay this process, and your best bet is to respectfully contact the grant program officer for updated information.

If you are not funded, you will receive a scoring sheet documenting how well your proposal fared in the different review categories. Sometimes reviewer comments are included with the scoring sheets. As mentioned earlier, all funded proposals are public domain. You might want to review proposals that did receive funding to better understand how other organizations developed stronger proposals, and how you can improve upon your own application in future grant competitions.

If you are funded, congratulations! You will begin the process of implementing the activities outlined in your proposal. However, you must first work closely with a grant officer from the federal government to establish a final contract, and make changes to the proposal as required. Document every step of the contracting process, every phone call, every letter, and every fax.