VP FOR RESEARCH and TECHNOLOGY TRANSFER
COLORADO SCHOOL OF MINES
FROM: John Poate
DATE: 8 August 2008
Kirsten Volpi, Ralph Brown
SUBJ: New Budget Exception Policy
Current Budget Exception Policy
Indirect Cost (IDC) Return Policy and Practices
As a result of the new IDC return policy implemented 1 January 2008, the Budget Exception
Policy will be changed effective immediately to give Department Heads and Division Directors,
Center Directors, and Principal Investigators a more-substantive role in requests for budget ex-
ceptions. The following policies and procedures apply to all budget exceptions including seed
money, cost sharing and reduced overhead.
These policies and procedures are intended to accomplish at least the following objectives:
1. Provide Department Heads and Division Directors more involvement in decisions and en-
courage them to consider institutional priorities when making recommendations
2. Ensure that PIs have approval of special requests before they invest time in writing proposals
3. Give the VPRTT time to request additional information (if necessary) and make carefully-
considered decisions on exceptions
4. Streamline the processing of proposal preparation in ORA
5. Ensure that the full cost to CSM is documented and is justified by the projected benefits
6. Make the decisions and the reasons for those decisions open to public scrutiny
The following policies apply to requests for budget exceptions:
1. The internal base budget for all research proposals must comply with all CSM policies and
procedures, including budgeting all direct costs at full value and using the full F&A rate. All
exceptions to the base budget (including reduced F&A rates and in-kind cost sharing) must
be shown as CSM cost sharing at the bottom of the budget sheet.
2. Department Heads and Division Directors (DHDDs), Center Directors, and Principal Investi-
gators are authorized to commit any portion of their IDC return on a research project to fund
cost sharing for budget exceptions. Department Heads and Division Directors also have the
authority to commit in-kind contributions and other funds under their control for cost sharing.
3. In special cases, Department Heads and Division Directors (or Directors of Institutional Cen-
ters) may request additional cost sharing from the VP for Research and Technology Transfer.
Those special cases include the following situations:
a. A government agency or philanthropic foundation has published guidelines that require
cost sharing or reduced overhead on all grants or contracts under the program to which
the proposal will be submitted.
b. A proposal is being submitted by an Institutional Center that is receiving startup support
from the institution.
c. The request seeks startup support for a new research initiative that contributes to the ad-
vancement of CSM’s strategic goals.
Cost Sharing by DHDDs, CDs or PIs
Cost sharing by Department Heads and Division Directors, Center Directors, and Principal In-
vestigators must be authorized by a memo indicating the amount of funds and the account(s) to
be charged. In-kind contributions must be approved by the appropriate Department Head or Di-
Additional Cost Sharing by the VP for Research and Technology Transfer
To request additional cost sharing, the Institutional Center Director or (in the case of individual
PIs or departmental centers) the responsible Department Head or Division Director must submit
a memo to the VPRTT at least two weeks prior to the deadline for the proposal. If submission
of the proposal is contingent on approval of the request, the memo should be submitted before
the faculty begin writing the proposal. The memo must include:
1. A budget sheet meeting the policy requirements outlined above
2. The amount and sources of cost sharing funds being provided by the Department Head, Divi-
sion Director, Center Director, or Principal Investigator
3. The amount and form of the request for institutional support
4. Rationale for the exception, including the benefits that CSM will receive as return on its in-
The rationale for the exception will be the most important part of the memo. In order to justify
approval, CSM needs to know how its investment will enhance the institution, help it fulfill its
mission and produce a return on investment in the future. A statement such as: "The agency re-
quires this," is not an acceptable rationale, because it provides no information about why it is in
CSM's interest to accept the agency's requirement.
Upon review of the exception memo, the VPRTT either will request more information or return
the memo with written approval. The approved memo should accompany the research proposal
to ORA, where a proposed budget will be prepared in accordance with the memo.
Startup Support from the VPRTT
On occasion, a major new research initiative may be initiated by faculty, department heads, divi-
sion directors, and/or the administration. Such initiatives should be discussed with the VPRTT
as early as possible to determine whether:
1. The initiatives are a close fit to the institution’s strategic priorities
2. They address a national or international grand challenge of such importance that significant
research funding is likely to be available
3. CSM has a critical mass of expertise to do innovative and valuable research in the subject
When all three conditions are satisfied, the VPRTT may authorize additional institutional support
(including cost sharing or increased overhead return) to increase the probability of success.
ORA is authorized to approve exceptions, and memos need not be submitted to the VPRTT when
all of the following conditions are satisfied:
1. The sponsor requires cost sharing or reduced overhead as outlined in Policy 3.a. above
2. At least 75% of the total direct costs are for graduate student tuition, fees and stipends
3. All graduate-student positions in the proposal receive their full support from this project
4. The remainder of the budget is limited to overhead and non-salary support of the graduate
students (travel, expenses, etc.)
When the prospective sponsor requires CSM’s contribution in a specific format (such as a re-
duced F&A rate), the budget submitted to the prospective sponsor will be in accordance with that
requirement. In such cases, the internal process for requesting additional cost sharing from the
VPRTT will be as outlined above. If the sponsor budget includes a reduced F&A rate, then there
will be no F&A return on that project if it is funded.
At the end of each fiscal year, the VPRTT and ORA will report to the Research Management
Cabinet and Research Council on the exceptions that were approved and the rationale for those
approvals. The RMC will evaluate the costs and benefits to CSM and recommend changes in
policies, procedures and practices that will help achieve the objectives described above.