Research Budgets

Development and Negotiation

Developed by:

Marianna Betro

Business Manager

Research Budgets - An Overview

Effective Budget Development and Negotiation

Budgets from both the Principle Investigator and the sponsor perspectives represent are negotiable. From the sponsors’ perspective, the goals of the budget are cost effectiveness, pay for value, to avoid any surprises and compliance with regulations. From the PI’s perspective the goals of the budget are full recovery of costs and intangible benefits. Both the sponsor and the PI want to conduct a successful study, which can initiate quickly and minimize any administrative burden. The important factor is to ensure that it represents a fair and accurate estimate of the actual costs required to conduct the study. It is not the PI’s responsibility to subsidize the study for the sponsor. The budget may be an estimate on behalf of the sponsor but institutional costs will vary and they are aware of this. The person who is most closely linked to the day to day activities of the study should play a primary role in developing the budget.

Budget Development

In developing a budgets there are important factors which should be considered by the PI.

  1. Determine Activities: What needs to be done for the study or a chart of events. Do not forget to include any coordinator time or physician time.
  1. Determine time per activity: Based on your protocol how long will activities take. Please keep in mind that you can not be an expert in everything and that outside professionals might be asked to help.
  1. Determine who will complete activities: Will the activities be completed by the PI, nurse, coordinator, research assistant or a combination of professionals.
  1. Determine Salaries: Follow set HR salary guidelines and do not forget increases and then once the salaries are set, take into account how long the study is going to run.
  1. Determine per Patient costs: For example, patient training is equal to ½ hour of a nurse’s time therefore the cost would be time x salary.
  1. Determine Institutional Charges: Such charges as overhead, REB fees and other institutional charges like, Pharmacy, research vivarium, Diagnostic Imaging, Lab costs etc.
  1. Determine other charges: Such charges as office start up costs (equipment and phone lines, recruiting, advertising, stipends, sample processing, shipping of samples, collection maintenance, protocol amendments, premature termination, record retention, conference presentation costs, publishing costs, etc.

Budget Review

Once complete review the budget for accuracy, completeness, reasonableness and compliance with any contract or grant guidelines.

Budget Monitoring and Forecasting

Use your budget to develop a tracking tool for monitoring payments received versus payments owed. For a Clinical Trial, keep track of the payments received to ensure that all payments are received for all visits completed. It might be helpful to also keep track of payments owed versus payments made to internal departments for services rendered.

Another important part of monitoring is comparing the actual versus the budgeted costs. This will be helpful for you to develop budgets for future studies and we see whether you need to make revise your budget.

Steps to the Calculation of yourResearch Budget

Starting the Budgeting Process

Review the budget template at under Finance/ Financial/Research Budget Template Tool. Must verify how tool will be distributed.

Approximately 30% of the time required in a study is non clinical but administrative.[1] Examples are REB submissions, communication with sponsor or Research Business Analyst, budgeting, preparing grant submission etc.

Use a program like MS Excelto develop and maintain your budget so that your total numbers can be moved easily to your Budget Template Tool. This will help you avoid any errors in calculations and help you capture all expenditures. Insert link to excel tool attached.

If the budget is for a Clinical Trail, some tools that you will need are a copy of the Case Report Form (CRF) in order to determine what is required for data collection, current interdepartmental fees for departments that may be providing services.

The main objective when applying for research funding is to obtain sufficient funding to cover all the proposed costs.

Identify all direct costs and include provision for indirect costs.

Examine the sponsors funding guidelines which in some cases will dictate eligible and ineligible expenses.

Direct costs to consider when completing your Budget

Direct costs include actual traceable expenses incurred such as;

  1. Start up costs
  • Costs that are incurred before the study is begun and in clinical trails can represent non refundable costs whether potential participants are enrolled in the study or not.
  • REB review fee if applicable of $ 2,500
  • Medical lab start up for setting up lab specimens
  1. Salaries
  • In budgeting for salaries take into account what type of staff will be required to complete the study and the length of time each staff will spend on the study.
  • For clinical trials, take into account the informed consent process and estimate the time required to conduct the process, take into account the complexity of the study and the length of time the patient will need to fully understand. Also take into account any increase in length of time if translation services are required.
  • Salaries for staff must be within range for the appropriate SMH classifications.
  • Allowances should be made for increases to the salaries effective April 1st of each year. We recommend that you use the hourly rate at the top of the range and then from year to year the increase would be 3%. If you do not use the top hourly rate then the increase from year to year should be 8% to include step increases plus inflationary increases.
  • Salaries must include benefits.
  • For clinical trails if there is a salary for the PI take into account the time to prepare the REB application, meetings, etc.
  • Also in salaries there could be stipends that are being paid for independent contractors.

Clinical Trials and Salaries

For Clinical trials there are other factors that need to be taken into consideration when budgeting for salaries. One should take into account:

  • The informed consent process and estimate the time required to conduct the process which will depend on the complexity of the study and the length of time the patient will need to fully understand. Also take into account any increase in length of time if translation services are required.
  • There are certain activities that need to be done for patient trials, so the time required to do some of the following should be taken into account;
  • to take the patient for a test, pre-screening time
  • pre visit preparation (planning logistics of a visit and booking tests, and preparing source documents,
  • transcription from source documents to CRF
  • communication with PI, study participant
  1. Equipment

You should consider whether a protocol requires equipment that the hospital does not have. Also if equipment is purchased please ensure that maintenance and certification of equipment is accounted for in the budget amounts. Other items that can fall this category are;

  • Computers
  • Telephone line charges and phone sets
  • Other minor equipment required for the study
  1. General Expenses

Items that can fall this category are;

  • Inter department printing charges
  • Long Distance Charges
  • Postage
  • Courier
  • General supplies
  • Conference attendance
  • Storage costs
  • Travel reimbursement
  • Honorariums
  • Training courses
  • Publication costs
  • Sub contract costs which are costs for portions of the projects which are done by other organizations or institutions.

Allowances should be made for inflationary increases to the expenses from year to year. We recommend you use 3%.

  1. Research Vivarium costs

If the study requires the use of the vivarium and cost for the animals and the monthly vivarium maintenance charge should be included in the budget.

  1. Research Supply Costs

Research supplies are special supplies required to equip the lab or to carry out special procedures as part of the protocol.

  1. For Clinical Trials – Per Patient Costs

For clinical trials, there are also some per patient costs that should be considered in the budget process. Some of these are:

  • Participant reimbursement – ensure the amount is adequate to cover the patient costs for travel, a meal if necessary
  • Sample processing if required – the time for blood draw, or cost of draw tubes, time for completion of requisition forms and specimen labels, time for preparing slides, etc
  • Laboratory testing – cost of tests required times the frequency
  • Pharmacy charges for the dispensing of medications
  • Diagnostic Imaging costs if tests required
  • Advertising costs – consider whether advertising would be helpful in recruiting participants
  • One time, flat rate & invoiced – these are costs related but not dependent upon the number of patients enrolled in the study. Before adding those to your budget consider the financial benefit to the risk of asking for too much from the sponsor. Such cost may be general supplies such as
  • General supplies such as stamps, paper, photocopying, shredding, phone charges, computer, fax etc. Consider asking for a lump sum to cover general costs as long as those costs can be accounted for.
  • after hours pharmacy dispensation
  • dry ice
  • close out visit or study termination costs such as close out visit, data clarification, REB notification of study closure, account reconciliation and closure, return of unused study materials and unused drugs, preparation of study documents and debriefing of participants

Indirect costs to consider when completing your Budget

Indirect costs can not be specifically traced to a particular study and can include;

  • building lease
  • depreciation of equipment
  • physical plant and maintenance
  • 30% overhead charge if applicable to the study

Other Points to Consider

Footnotes – insert subscript numbers after budget items that require further clarification

Signatures – ensure the budget is signed off on

Ensure the final Clinical Study Agreement contains the approved budget (and not an earlier version or sponsor’s version)

Review your calculations and estimates

Take into account US dollars or Canadian Dollars in revenue calculations.

[1] Costs of Conducting Clinical Research. Journal of Clinical Oncology; 21: 4145-4150, 2003. Emanuel et al.