Preparation of a budget is an important part of the proposal preparation process.  The budget should be accurate, realistic and reasonable in light of the work proposed.  The requested amount should not be so small as to preclude successful completion of the stated goals nor so large that the sponsor will not seriously consider funding the proposal.

Research expenses can be divided into direct costs, which are specific line items in a budget such as salaries and fringe benefits, equipment and travel, and indirect costs (also called Facilities and Administrative (F&A) costs), which are other costs that are less readily allocable to specific individual projects, such as the administrative support and the operation and maintenance of facilities.  Indirect costs are paid as a fraction of direct costs, with the fraction negotiated by the University and the sponsor.