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Budget Justification/Narrative

Developing a Detailed Budget Narrative

The budget narrative/ justification is a vital part of the proposal. It serves as the basis for the figures included on the budget pages and is critical in the proposal review process. When developing a budget narrative, remember that the reviewers and program officer are not the only individuals reading your budget justification. If a proposal is recommended for funding, many sponsors send the proposal for a pre-award audit. Many pre-award auditors do not have a scientific or technical background and may not understand vague budget items. It is recommended that you provide as much detail as possible in the budget justification during the submission phase—it may result in a faster pre-award audit and award processing.

Budget Justification Tips:

  • Show your work. Reviewers and sponsor administrators should be able to determine how you arrived at your budget figures.
  • The budget justification serves as the rationale for your costs. Be certain to tie each cost to the overall project so that readers understand the importance of each cost/item to the overall project.
  • If portions of your budget include an escalation for costs, be sure to state this in the budget justification. If you use Budget Tool salary may be escalated within the Budget Tool. Fringe benefits are automatically escalated by one percent each year within the Tool.
  • Be certain to keep your back-up documentation. Sponsors may request estimates for equipment and other major purchases during a pre-award audit.
  • Present the budget justification in a format that allows a reader to easily assess the costs in relation to the budget. For instance, if the budget uses headers such as “salaries,” “fringe benefits,” and “travel,” be certain to use the same headers in your budget justification. It allows readers to quickly skim the budget and the budget narrative to find specific items of cost.
  • Take time to read the budget, budget justification, and narrative. Do all of the expenses in the budget appear in the budget justification? Do the budget, budget justification, and proposal narrative all align?