5. Planning and developing the budget

Dear Friend,

In the previous unit you had the opportunity to develop your project plan in a simple form, not yet using the specific templates and rules of different programs and grants. If you remember the main parts of a project plan, there is one missing part, the financial one. In this unit, we try to highlight the basics and the most important aspects of a project budget in general terms. If this unit is too detailed for the moment, you may decide to skip this part, because you will also be asked to develop your first draft. The role of this budget can be different in grant types where no template is offered for budget, and your tables can be directly used in the real application and in grants where well defined, on-line templates should be used.

A proper budget table normally has two sides: income and expenditure. In this module we generally talk about projects without specific grants, therefore here in the budget unit we cannot go into detail of the income side, only the expenses. Income may be generated during the mobility project, whereas most of the grants exclude this possibility. Once you have selected a specific programme, you will have to focus on this side: rules, limitations, administrative requirements of the income side of the budget as well.

1. Expenditure

As at this stage the scope is quite broad, let us start with some general issues:

Currency basis of the budget

Expenditures may occur in different currencies but the budget should be calculated in a unified currency, either the currency of your country, or the currency of another country. In the European environment, it is obvious to calculate in Euros, in most global mobility plans, it is quite likely that you will have to calculate in USD (USA Dollars). The basis of calculation is always regulated always by the tendering organisations. (We link you to an official currency converter: http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/index_en.cfm)

Own contribution

Not all of the expenses are financed in some grants, therefore a certain amount, or percent of the budget will have to be paid by third party (i.e. the participants, or the organizing institutions). In this drafting stage we advise you to draw up the total expenses in the planned budget.

Eligible costs

It is important to check which cost types are eligible and which are not. Grant descriptions list the typical eligible costs and the typical ineligible costs. In mobility programs, the major expenditures like staff cost, travel and subsistence are eligible but you will have to check the details before making decisions.

Direct costs

Most of the expenditure that you plan will be direct costs, like travel tickets or accommodation invoices. Direct costs may be: real cost (the documented amount of expenditure is financed), unit cost or flat-rate (a calculated normative cost is paid for an expenditure type).

Indirect costs

Some of the expenditure that will occur cannot be directly related to the mobility program, like communication costs, copying costs, other management/administrative costs. Those costs may be estimated by a low percentage of the total costs (3-10%). We advise you to include indirect costs in your budget, as some of the mobility grants will compensate those extra costs of the institution or participants. In case of unit cost financing (see above) indirect costs are normally not allowed.

Value Added Tax

In European environment, value added tax should be paid for most of the services (invoices), but institutions may recover it, so as a major rule VAT is not eligible. It will be important that in your budget calculation you decide to calculate with net prices without VAT, or gross prices including VAT. We advise to calculate with VAT separated from gross prices, so that you can easily calculate later in both cases.

2. Headings of a mobility budget

The previous characteristics were more general and can be applied for most of the grant types. Let us see the key expenditure types of a mobility grant:

Management/organization

Here you can calculate the involvement of the person(s) who is (are) dealing with planning and development of the project, dealing with recruitment, but also the organizational work during the program lifecycle and also the administrative work after mobility.

Linguistic preparation

In some projects you can spend funds on linguistic courses, so this can be seen as a kind of preparation.

Travel

This is one of the headings which can be found for all programs. There are generally two types of travel: travel to the mobility destination and local travel during the stay. Try to separate them and later check the regulations of both types. It is important that, in most of the programs, cost-effectiveness is a requirement, so it is worth calculating with more travelling options.

Subsistence

Another important heading will be the subsistence costs. Two main categories may occur here: accommodation and daily allowance (per diem) for living. Sometimes local transport has to be budgeted under subsistence heading.

Dissemination

In some of the mobility programs marketing and dissemination costs can be budgeted, so it is worth thinking of a well-managed communication activity and to document and disseminate the program during and after the project.

Other

An expenditure may come under this heading that is not listed under other headings. Typical other costs are: course fees, entrance tickets for museums, registration fees for conferences.

Until now, the budget was too general. In the next activity you have the chance to study a budget structure example in a mobility guide from outside Europe to help you decide your own budget structure.

In most of the programs there are specific regulations you have to follow.

3. Limitations, ceilings

This is a short section about the possible limitations when you plan the budget. Limitations may occur in relation to the normative (for one hour, day, week, journey, person) maximum expenditure:

• Overall budget for the application.
• The geographical location: your participants come from, or go to, e.g. country, regional ceilings.
• Time periods: overall project time, minimum, maximum periods, number of trips.
• Role of the participant (teacher, undergraduate student, post-graduate student, age group, researcher, VET student, trainee worker, administrator).
• Special needs: different ceilings may occur for special needs learners.

As previously stated, many other regulations have to be checked before setting the final budget. These regulations may be the currency, taxes and the eligibility of claiming the expenditures (costs that occurred before signing a mobility contract for example).

Look at the next example of a typical non EU research project.

Share your observations, and possible questions in your blog.

The last part of your budget plan is the download of the templates and budget regulations of your mobility project budget.

4. Templates and supporting documents

Although this module is a general planning module, it is time to search and download all possible documents that you will possibly use at the application phase. This section may be optional, if you think it is too early, or you develop a general budget.

Now it is time to start the calculations.

5. Table structure and headings

The first activity will be to work out the budget table structure and headings without specific numbers. Most budgets are nowadays made in calculation table spreadsheets like Microsoft Excel, or even on-line spreadsheets like Google docs that you can share directly with colleagues (see module 2 unit 6 ). However, a well-designed table in any text editor may be used as well. If you choose a calculation table, you can easily set functions that will automatically calculate the overall budget sums.

6. Unit costs

Now you can explore all details of the possible expenses

7. The first budget version

The final step to get the budget data out of your table is to determine the main measures of your mobility, for example:

• Number of students
• Number of teachers
• Days/months of mobility

Dear Friend,

At the end of this unit, we hope that you already developed your project budget. The next unit is the final one in this module, where you will have the chance to assemble your application and send it to your tutor.