Funding levels in Federal assistance programs change yearly. It is useful to review the appropriations over the past several years to try to project future funding levels (see Financial Information section of the Catalog program description).
However, it is safer to never anticipate that the income from the grant will be the sole support for the project. This consideration should be given to the overall budget requirements, and in particular, to budget line items most subject to inflationary pressures. Restraint is important in determining inflationary cost projections (avoid padding budget line items), but attempt to anticipate possible future increases.
Some vulnerable budget areas are: utilities, rental of buildings and equipment, salary increases, food, telephones, insurance, and transportation. Budget adjustments are sometimes made after the grant award, but this can be a lengthy process. Be certain that implementation, continuation and phase-down costs can be met. Consider costs associated with leases, evaluation systems, hard/soft match requirements, audits, development, implementation and maintenance of information and accounting systems, and other long-term financial commitments.
A well-prepared budget justifies all expenses and is consistent with the proposal narrative. Some areas in need of an evaluation for consistency are:
(1) the salaries in the proposal in relation to those of the applicant organization should be similar;
(2) if new staff persons are being hired, additional space and equipment should be considered, as necessary;
(3) if the budget calls for an equipment purchase, it should be the type allowed by the grantor agency;
(4) if additional space is rented, the increase in insurance should be supported;
(5) if an indirect cost rate applies to the proposal, the division between direct and indirect costs should not be in conflict, and the aggregate budget totals should refer directly to the approved formula; and
(6) if matching costs are required, the contributions to the matching fund should be taken out of the budget unless otherwise specified in the application instructions.
It is very important to become familiar with Government-wide circular requirements. The Catalog identifies in the program description section (as information is provided from the agencies) the particular circulars applicable to a Federal program, and summarizes coordination of Executive Order 12372, "Intergovernmental Review of Programs" requirements in Appendix I. The applicant should thoroughly review the appropriate circulars since they are essential in determining items such as cost principles and conforming with Government guidelines for Federal domestic assistance.
Information courtesy of the The Catalog of Federal Domestic Assistance.
