What to enter in the project budget
The budget in the grant application to the Research Council is where you provide details about the expected costs of the project and how these costs will be funded.
All applications for project support from the Research Council must contain a complete budget. The budget includes a cost plan detailing all the expected project costs and a funding plan showing how these costs will be covered under the project. The budget is to be specified by calendar year.
The call for proposals will specify the kinds of costs that can be funded.
The cost plan shows how costs will be distributed across different categories over the project period. The cost plan in the Research Council’s grant application form consists of the following four cost categories:
- Payroll and indirect expenses
- Procurement of R&D services
- Other operating expenses
The Project Owner obtains information about costs from each project partner. These costs are to be entered into the cost plan under the relevant category. If the partners do not come from the same sector as the Project Owner, then the costs are to be entered according to the budget calculation rules for the sector to which the partner belongs.
Direct and indirect project costs
Project costs are defined as costs that are necessary for the execution of the project. Project costs are divided into two main categories:
- Direct project costs are payroll costs for project staff and other costs of resources set aside specifically for the implementation of the project.
- Indirect project costs encompass use of general resources within the entity that the project benefits from. Indirect project costs include the project’s share of the office space rental cost, IT/telephone and other joint administrative services at the entity where project activities are carried out.
It is common practice to present indirect costs in entities by distributing them across the number of person-years. You are therefore to group indirect costs together with payroll costs in project budgets on the Research Council’s grant application form.
Different sectors are to enter their payroll and indirect expenses into their budgets as follows:
- Universities and university colleges
- Research institutes
- Companies, the public sector and other applicants
Here you are to enter costs relating to procurement of R&D services for the project. A supplier of R&D services is an entity that delivers a contracted R&D task to the Project Owner or other project partners.
Here you are to enter the costs for use of equipment and research infrastructure that is necessary for the execution of the project. These costs may be entered into the budget as follows:
- The project’s share of the depreciation costs for equipment and research infrastructure that is necessary for the execution of the project, when this equipment or infrastructure has not been procured using funding from the Research Council or other public project funding.
- The project’s share of the operating costs or "user fee" for equipment and research infrastructure that is necessary for the execution of the project (costs for “research infrastructure resources”).
- Procurement costs for equipment that can only be used for this project.
Smaller-scale procurements of equipment that can be used outside the scope of the project are included in the indirect expenses, and should not be entered under “Equipment”.
Determining whether equipment is “research infrastructure resources”
The general rule is that equipment and infrastructure are owned by the research organisation or another project partner, and not by the project. Costs for equipment and infrastructure are therefore to be entered as depreciation costs in the accounts of the entity that owns the equipment.
Equipment defined as "research infrastructure resources"
Operational and depreciation costs may be entered under “Equipment” if the equipment has been defined as “research infrastructure resources”.
These costs are to cover operation of research infrastructure, consumables, costs associated with infrastructure administrative or technical support personnel and depreciation costs for the institution’s internal investments.
This means that operating expenses, including depreciation costs, are to be identified separately in the entity’s accounts and distributed among the projects that use the infrastructure.
If the equipment or infrastructure has been or will be procured using funding from the Research Council, the depreciation costs are not to be included in the costs for "research infrastructure resources".
Equipment that is not defined as "research infrastructure resources"
If the equipment is not defined as “research infrastructure resources”, then a portion of the depreciation costs for equipment and research infrastructure may be entered under costs for equipment in the budget, according to the following principles:
- The equipment has not been procured using funding from the Research Council or other public project funding.
- The depreciation schedule must be based on the time frame that the owner of the equipment (Project Owner or partner) has stipulated for equipment depreciation in its ordinary accounting procedures or financial planning. If the institution does not have any established guidelines, a five-year period of depreciation is to be applied.
- The depreciation costs are limited to the percentage of the equipment capacity to be used in the project. If the project will be using x% of the equipment capacity, then x% of the depreciation costs may be entered as a project cost. Depreciation costs may only be included within the period of depreciation established for the equipment.
- Good accounting practices and any existing guidelines for accounting-based write-offs are to be employed.
Here you are to enter all costs that are necessary for the execution of the project and that do not belong under the other cost categories. The call for proposals will set guidelines for the kinds of expenses can be approved as necessary project costs. This may include costs for:
- travel and accommodation;
- dissemination activities;
- activities to make research data from the project accessible in accordance with a potential data management plan;
- other materials that are not covered under "Equipment".
The budget for all types of operating expenses may need to be revised if the project is granted funding.
The funding plan is to show how project costs will be covered. The plan must clearly indicate how much of the funding will come from the Research Council and how much will be provided from other sources, such as own financing, contributions from partners, or other funders.
The call for proposals will state which types of project costs are eligible for full or partial funding from the Research Council. Requirements relating to own financing and other limitations on the support available from the Research Council will also be set out in the call.
This section of the budget is used to show how the project costs are distributed among the various sectors, such as
- Trade and industry
- Research institutes
- Universities and university colleges
- Other sectors
- Abroad (combined category)
The amount that the Research Council can contribute to project funding may be subject to certain limitations. If the budgeted costs exceed the amount that the Research Council can contribute, the Project Owner must cover the difference through own financing or from other sources. Own financing may comprise both cash financing and in-kind resources for use in the project.
- For the university and university college sector, the Research Council funds payroll costs for academic personnel and fellowship-holders based on a lump-sum rate. These are the fixed rates for researcher time in the university and university college sector.
- These are the fixed rates for Research Fellowships.
- These are the fixed rates for Visiting Research Grants.
- These are the fixed rates for Overseas Research Grants.
- The state aid rules stipulate special rules for projects that are related to the economic activities of the Project Owner and/or one or more partners.
- Other funding limitations may be set out in the call for proposals.