Budget Justification

A budget justification is the narrative explanation of the budget. It helps the sponsor to evaluate the reasonableness of the budget. A budget justification is required when proposing administrative expenses. The budget justification should explain and defend each major budget category.

Pay particular attention to the items listed below in your budget justification as these cost are usually scrutinized more by the sponsor.

• Tuition
• Travel
• Equipment (especially General Purpose)
• Administrative Costs
• Clerical/administrative salaries
• Supplies and other office expenses
• Vacation & Disability Sick Leave

It is a requirement when charging administrative costs to a federal project to justify administrative costs. When justifying administrative costs explain, “What makes this a major project or activity?” Include project specific details to highlight the activities that make the project administratively intensive and thus a major project. Include a description of the expense or service. Also include how the administrative expense relates to, and benefit the project. See "Administrative Charging" for more information.

We do not budget additional expenses to cover vacation/disability sick leave expenses. For budget purposes, we assume that the vacation earned and used will offset each other each year. Please add the following statement to your budget justification:

“Per our negotiated rate agreement with the Office of Naval Research, the budgeted salary amount for staff includes XX% vacation accrual/disability sick leave (DSL) for exempt employees and XX% for non-exempt employees. [NOTE: Verify current percentages on the web] This amount does not exceed total salary. The vacation accrual/DSL rates will be charged at the time of the salary expenditure. No salary will be charged to the award when the employee is on vacation, disability or worker’s compensation.”

Refer to a sample budget justification.