Budgets – A Comprehensive Guide

Tips on Developing a Proposal Budget and Budget Narrative

As you’re developing the program, you’ll also need to develop the budget needed to support the project objectives. Here are some frequently asked questions concerning proposal budgets.

How much can you request?


Cost sharing / in-kind support vs. leveraged funds

F&A / indirect costs 

Subawards and subcontracts to third-party

Budget approval process


How much can you request?

For federal grants, this is specified by the award ceiling amount. Sometimes a range or a typical grant amount is given instead. Funders are typically mindful of who asks, how they ask, and what they ask for.


Sometimes less is more

On federal or state grants, it can sometimes be wiser to ask for an unrounded amount less than the award ceiling. This could imply that you are requesting funds for only the absolutely necessary expenses to implement the project. Keep in mind that you should always ask for allowable, allocable expenses that are necessary to fulfill the project objectives, otherwise you could be stuck with outstanding costs, or a partially executable project.



This buzz word is becoming more and more frequent in program requirements and many budgets are partially scored according to a sustainability plan. Sustainability is closely linked to matching requirements, also known as cost share or in-kind contributions.


Cost sharing and In-kind support

refers to KCC’s contributions to a project in lieu of money. Examples include staff time (excluding salaries of administrative & clerical staff), space and utilities, long distance phone calls, education materials, travel, volunteer hours and products. UH does not allow cost sharing for salaries of administrative & clerical staff, office supplies, postage, local telephone costs, membership in professional associations, and salaries in excess of cap.

How to document cost sharing without making a binding commitment


**Avoid cost share when possible! The University of Hawaii’s official cost share policy is to avoid any in-kind or cost share commitments if possible. If matching funds or other cost share commitments are required, then this must be properly documented in a letter of commitment by the Chancellor in detail (dollar amount, person months committed, and other relevant details). This must receive approval from the Chancellor, KCC Business Office and UH Office of Research Services prior to proposal submission.


Third party cost sharing

Third party cost sharing requires commitment letter signed by authorized representative, including a description and estimated dollar value. At project close out, a confirmation letter documenting the shared costs is required. Documentation must be retained for three years following project close out. This includes rental value of facilities and equipment.

Letter of commitment sample (to be included with proposal)

Letter of commitment sample (upon completion of project)


F&A (facilities and admininstrative) costs / Indirect costs

Indirect costs are the expenses incurred by the University of Hawaii (UH) to develop and maintain the facilities and administrative infrastructure necessary to support extramurally funded research and non-research activities.  Please be sure to check the ORS website “Rates” section for the current applicable indirect cost rate, depending on the type and location of program activities.  For example, different indirect cost rates apply for projects conducted on-campus versus off-campus.

ORS website rates section

F&A costs FAQs


Indirect cost waiver

Some federal grants and subawards do not allow indirect costs, or allow indirect costs lower than the university approved rate.

UH Manoa indirect cost wiaver policy


Prohibited expenses

UHM Telecom and UHM Transportation Services costs for services should not be budgeted for in proposals or paid from federally funded projects. Please refer to the UHM Telecom and UHM Transportation Services for more details.




Subaward and contracts

Some grants involve subawards and/or subcontracts for project activities to be carried out by a community partner or contractor. These must be carefully documented in commitment letters from the potential subawardee prior to the proposal submission, and should include an agreement to the proposed subaward amount, project timeline, proposed activities, cost share or in-kind contributions if applicable. It is always wise to consult the campus fiscal officer a few weeks in advance before drafting any subaward or subcontract letter.

Two examples of KCC’s grant funded projects that required subawards are Palolo Valley Homes and Kapahulu Learning and Outreach Center. Both were funded by the U.S. Housing and Urban Development Office of University Partnerships.


Budget approval process

Budget details – including budget break down, accompanying narrative, and commitment letters – are reviewed by OFIE and the campus fiscal officer.  Upon approval, the budget materials are uploaded into myGRANT, then submitted to the UH Office of Research Services for final approval prior to submission to the funding agency.