Grant Writing Grant Budget Formulation 3

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

Authorized by state legislation

Answer

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

Question 3

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

Accepted Answer

10% of Modified Total Direct Costs (MTDC)

Answer

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).

Question 4

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

Accepted Answer

Equipment costing over the capitalization threshold

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

Grant Writing Practice Test

Grant Writing Practice Test

Grant Writing Grant Budget Formulation 3