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Grant Budget Formulation Flashcards

7 cards from real Grant Writing practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is a 'budget justification' (also called budget narrative)?

    Answer: A written explanation of how each budget line item was calculated and why it is necessary

    The budget justification provides reviewers with a clear rationale and calculation methodology for every cost in the proposed budget.

  2. Under 2 CFR 200, which of the following is NOT one of the tests a cost must pass to be allowable?

    Answer: Authorized by state legislation

    The Uniform Guidance requires costs to be allowable, allocable, reasonable, and consistently treated — authorization by state law is not one of the federal tests.

  3. A 'de minimis' indirect cost rate under 2 CFR 200 is set at:

    Answer: 10% of Modified Total Direct Costs (MTDC)

    Organizations without a negotiated indirect cost rate may elect to use the de minimis rate of 10% of MTDC as allowed under 2 CFR 200.414(f).

  4. Which of the following costs is EXCLUDED from the Modified Total Direct Costs (MTDC) base?

    Answer: Equipment costing over the capitalization threshold

    MTDC excludes capital expenditures (equipment), patient care costs, rent, tuition, and subaward costs over $25,000 per 2 CFR 200.1.

  5. When a grantee needs to shift funds between budget categories, they typically must:

    Answer: Obtain written prior approval from the funder if the reallocation exceeds threshold limits

    Many funders require prior written approval for budget modifications above a certain percentage or dollar threshold to ensure the change aligns with program objectives.

  6. What is the purpose of including a 'contingency' line in some grant budgets?

    Answer: To cover unforeseen allowable expenses within the project scope

    A contingency reserve covers legitimate unexpected costs; however, many federal funders restrict or prohibit contingency lines, so grantees must check guidelines.

  7. In grant budgeting, 'fringe benefits' typically include which of the following?

    Answer: Health insurance, retirement contributions, and payroll taxes

    Fringe benefits are employer-paid costs on top of salary, such as FICA, health insurance, workers' compensation, and retirement plan contributions.