Grant Writing Grant Writing Budget and Financial Planning Questions and Answers 2 — Questions and Answers
Question 1: What is a modified total direct cost (MTDC) base commonly used for in federal grant budgets?
- Calculating indirect cost rates (Correct answer)
- Determining staff salaries
- Setting travel per diem rates
- Establishing equipment thresholds
Correct answer: Calculating indirect cost rates
The MTDC base excludes certain costs like equipment and subaward amounts over $25,000 and is used to calculate federally negotiated indirect cost rates.
Question 2: When preparing a cost-share budget for a federal grant, which of the following is an unallowable source of matching funds?
- Volunteer labor valued at market rate
- Donated equipment from a partner organization
- Funds from another federal grant (Correct answer)
- State government appropriations
Correct answer: Funds from another federal grant
Federal regulations prohibit using funds from one federal grant as cost-share or match for another federal grant.
Question 3: A grant budget includes $180,000 in personnel costs and the organization's federally negotiated indirect cost rate is 45% MTDC. What is the indirect cost amount on personnel alone?
- $81,000 (Correct answer)
- $45,000
- $90,000
- $72,000
Correct answer: $81,000
$180,000 multiplied by 0.45 equals $81,000 in indirect costs attributable to personnel.
Question 4: Which budget justification element is MOST critical when requesting funds for a consultant in a grant proposal?
- The consultant's home address
- The daily or hourly rate and number of days of service (Correct answer)
- The consultant's educational background only
- A general statement that expertise is needed
Correct answer: The daily or hourly rate and number of days of service
Funders require specific rate and level-of-effort details to evaluate whether consultant costs are reasonable and necessary.
Question 5: What does the term 'budget period' refer to in a multi-year federal grant?
- The entire project duration from start to finish
- A single funding interval, typically 12 months, within the total project period (Correct answer)
- The time allowed to submit a no-cost extension
- The fiscal year of the granting agency
Correct answer: A single funding interval, typically 12 months, within the total project period
A budget period is one discrete funding interval within the total project period, usually lasting 12 months.
Question 6: Which scenario would most likely trigger a prior approval requirement from a federal funding agency?
- Spending 2% less on supplies than budgeted
- Reallocating $500 between two supply line items
- Transferring more than 25% of the total award between budget categories (Correct answer)
- Purchasing office supplies listed in the approved budget
Correct answer: Transferring more than 25% of the total award between budget categories
Most federal agencies require prior written approval when cumulative transfers among budget categories exceed 25% of the total award.
Grant Writing Grant Writing Budget and Financial Planning Questions and Answers 2
What is a modified total direct cost (MTDC) base commonly used for in federal grant budgets?