Grant Writing Grant Budget Formulation 2 — Questions and Answers
Question 1: What is 'cost sharing' in a federal grant budget?
- The funder splits costs equally with the grantee
- The grantee contributes resources beyond the grant award toward project costs (Correct answer)
- Two grantees share one award
- Overhead costs shared across departments
Correct answer: The grantee contributes resources beyond the grant award toward project costs
Cost sharing (also called matching) means the grantee commits its own funds or in-kind resources to complement the federal award.
Question 2: Which budget category typically includes salaries AND fringe benefits for project staff?
- Other Direct Costs
- Indirect Costs
- Personnel (Correct answer)
- Contractual
Correct answer: Personnel
The Personnel category covers wages, salaries, and associated fringe benefits for employees working on the grant.
Question 3: A grant requires 25% match on a $200,000 award. What is the minimum matching amount?
- $25,000
- $40,000
- $50,000 (Correct answer)
- $75,000
Correct answer: $50,000
25% of $200,000 = $50,000 that the grantee must contribute from non-federal sources.
Question 4: What does 'unallowable cost' mean in grant budgeting?
- A cost that exceeds the budget cap
- A cost the funder prohibits from being charged to the grant (Correct answer)
- A cost submitted after the deadline
- A cost without a receipt
Correct answer: A cost the funder prohibits from being charged to the grant
Unallowable costs are explicitly prohibited by the funding agency's regulations or program guidelines and cannot be charged to the award.
Question 5: Which OMB circular (now part of 2 CFR 200) governs cost principles for nonprofit organizations receiving federal grants?
- OMB A-21
- OMB A-87
- OMB A-122 (Correct answer)
- OMB A-133
Correct answer: OMB A-122
OMB Circular A-122 established cost principles for nonprofits; it was consolidated into 2 CFR Part 200 (Uniform Guidance) in 2014.
Question 6: In a grant budget, 'personnel effort' is typically expressed as:
- Dollar amount per task
- Full-Time Equivalent (FTE) or percentage of time (Correct answer)
- Number of hours per year only
- Headcount regardless of hours worked
Correct answer: Full-Time Equivalent (FTE) or percentage of time
Effort is reported as a percentage of total professional activity or FTE, ensuring accuracy in charging staff time to the grant.
Question 7: Which item would most likely be placed in the 'Supplies' budget category rather than 'Equipment'?
- A $6,000 desktop computer
- A $15,000 laboratory centrifuge
- A $500 box of disposable lab gloves (Correct answer)
- A $12,000 projector system
Correct answer: A $500 box of disposable lab gloves
Supplies are consumable or low-cost items (often under $5,000 per unit), while equipment typically has a per-unit cost above the threshold and a useful life over one year.
Grant Writing Grant Budget Formulation 2
What is 'cost sharing' in a federal grant budget?