Grant Managers Guide to Creating a Budget/Financial Plan

Grant Managers Guide to Creating a Budget/Financial Plan

According to 2 CFR §200.8, budget means the financial plan for the project or program that the Federal awarding agency or pass-through entity approves during the Federal award process or in subsequent amendments to the Federal award. It may include the Federal and non-Federal share or only the Federal share, as determined by the Federal awarding agency or pass-through entity.

In short, 
Budget = Financial Plan

In this blog post, we are sharing how you can create a financial plan for your organizational grant programs: 

  1. For the current year, make a copy of the grant budget from the grant proposal. 
  2. For every line item, write down a target date to spend those funds. 
  3. Review the dates with the Principal Investigator to ensure fund will be spent accordingly. Make changes if you need to. 
  4. Establish roles & responsibilities on who will make the purchases, request purchase orders.  
  5. Monitor & control the purchases to ensure target dates are met and grant funds are being spent per the funder's guidelines. 
  6. If moving funds from participant costs please contact your funder as it requires prior approval. 
  7. If moving funds from other budget categories and it's over 5%, please contact funder for authorization; it's always good to communicate any budget changes with funders before modifying any budget. 
  8. Equipment and any big ticketed items should be purchased in a timely manner. You don't want to wait until the last minute to use the grant funds. It can create issues with the finance office not able to pay the funds in grant year 1. 
  9. By not having an effective financial plan, it can result in excess carryover in year 2 which could result in the funder cutting your budget in year 2. 
  10. If you have not spent all your grants funds in the last month, you must ensure the funds are obligated so that you can include them in your year 1 budget. 

Bonus: A budget plan will help you ensure grant activities are happening as planned in the original grant budget and you can tie them to the programmatic activities.