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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.

Read the first 7 Grant Budget Formulation flashcards as text

  1. A program officer tells you the budget cap is $500,000 but your detailed costs total $520,000. The best approach is to:

    Answer: Cut lower-priority line items, adjust scope, and resubmit at or under $500,000

    When costs exceed the cap, grantees must reduce scope or prioritize activities to align the budget with the funder's limit while maintaining project integrity.

  2. Which of the following describes 'period of performance' in a grant context?

    Answer: The approved start and end dates during which grant funds may be obligated and expended

    The period of performance defines the grant's active window; costs incurred outside this period are generally unallowable.

  3. An organization's indirect cost rate is 45% MTDC. Direct salaries total $100,000 and fringe is $25,000. If no other MTDC-eligible costs exist, what are the indirect costs?

    Answer: $56,250

    MTDC = $100,000 (salaries) + $25,000 (fringe) = $125,000; indirect costs = 45% × $125,000 = $56,250.

  4. Why should grant budgets avoid 'padding' (inflating cost estimates)?

    Answer: Inflated budgets undermine credibility, may violate cost principles, and can trigger audits

    Intentionally inflating costs violates the reasonableness standard under 2 CFR 200 and can damage the organization's reputation and compliance standing.

  5. Which statement about equipment purchases in a grant budget is most accurate?

    Answer: Equipment costing above the organization's capitalization threshold often requires prior funder approval

    Many federal awards require prior approval for equipment purchases above certain thresholds to ensure the purchase is necessary and reasonable for the project.

  6. What is the significance of a 'budget period' vs. a 'project period' in multi-year grants?

    Answer: The project period is the overall grant timeline; budget periods are incremental funding intervals within it

    A multi-year grant may have a 3-year project period broken into annual budget periods, with funds released and accounted for separately each year.

  7. When must a grantee use 'competitive procurement' for purchasing goods or services under a federal award?

    Answer: When purchases exceed the simplified acquisition threshold or micro-purchase threshold as specified in 2 CFR 200

    Under 2 CFR 200.320, grantees must follow procurement standards including competition requirements based on dollar thresholds to ensure fair and open competition.