Grant Writing Grant Budget Formulation 5

Question 1

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

Accepted Answer

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

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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

Question 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?

Accepted Answer

$56,250

Answer

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

Question 4

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

Accepted Answer

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

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

Grant Writing Practice Test

Grant Writing Practice Test

Grant Writing Grant Budget Formulation 5