Grant Writing Budget and Financial Planning 4

Question 1

What is a 'de minimis' indirect cost rate, and who may use it?

Accepted Answer

A 10% rate available to organizations that have never had a negotiated indirect cost rate

Answer

The de minimis rate of 10% of modified total direct costs (MTDC) may be used indefinitely by any non-federal entity that has never negotiated an indirect cost rate with the federal government.

Question 2

Modified Total Direct Costs (MTDC) typically EXCLUDES which of the following?

Accepted Answer

Equipment purchases over $5,000

Answer

Under the Uniform Guidance, MTDC excludes equipment, capital expenditures, patient care charges, rent, tuition remission, and sub-awards in excess of $25,000 per sub-award.

Question 3

Which of the following best describes 'program income' in the context of a federal grant?

Accepted Answer

Gross income earned by the grantee that is directly generated by a federally supported activity

Answer

Program income is gross income earned by the grantee as a direct result of grant-supported activities, such as fees charged for services rendered under the grant.

Question 4

An organization's auditor finds that grant funds were used for costs incurred after the grant's period of performance ended. This is an example of:

Accepted Answer

A questioned cost or unallowable expenditure

Answer

Costs incurred outside the approved period of performance are unallowable and become questioned costs, which the grantee must typically repay to the funder.

Question 5

When developing a multi-year grant budget, which approach best accounts for salary increases over time?

Accepted Answer

Apply an annual escalation factor (e.g., 3%) to salaries in each subsequent year

Answer

Applying a consistent annual escalation factor reflects expected cost-of-living or merit increases, making the multi-year budget realistic and defensible to reviewers.

Grant Writing Practice Test

Grant Writing Practice Test

Grant Writing Budget and Financial Planning 4