There are two main types of budgets used in research: fixed fee and cost reimbursable; today we’ll look at building a fixed fee budget. This requires a detailed breakdown of associated expenses when planning how you will be compensated for your work.
Fiscal responsibility is a necessity for all researchers and starts with a project’s budget. A detailed look at all costs involved ensures that the project is being done in a cost effective manner; just as people strive to get the most out of their personal budgets, MMRF strives to achieve the most progress for the most reasonable price. Being able to fully cover the costs of a study, while being compensated fairly for quality work, is always the goal. MMRF follows the cost principals outlined in 2CFR 200 as well as those in our institutional business expense guidelines, both linked in the description.
To start a fixed fee budget, imagine every step involved from project start to finish. Where will the work take place? Will this project involve travel? Will new equipment need to be purchased? An industry sponsor may provide equipment if the project is to test its efficacy; a federal sponsor will allow new equipment to be purchased if it is budgeted and approved. And what about staff; will new personnel need to be hired? What kind of time will be needed to reach the study’s aims? The cost of supplies, materials, or other consumables will also need to be considered. And will there be compensation for patient participation?
The sponsor may have a protocol or schedule of steps they want completed; you will need to consider your costs for each one.
Fixed fee budgets are predominantly paid in terms of either patient visits or milestones reached. The sponsor will let you know what kind of budget they are expecting when they release the funding announcement or get in touch with a protocol. Regardless of which fixed fee budget you are using, you will need to project all your costs for the study and make sure they can be covered with what you will be receiving from the sponsor.
If it’s a milestone budget, the sponsor will agree to pay a certain amount when particular points, such as IRB approval obtained or 10 patients enrolled, are reached. This is based on the overall budget you will have outlined and negotiated with the sponsor as the costs of doing the work outlined in the protocol. The amount given for each milestone will need to cover all the applicable steps to achieve it. So using the IRB approval example, what the sponsor pays for successfully getting IRB approval will need to cover the PI’s time writing the application, attending the IRB meeting to present the application, and responding to any changes in the application and/or consent forms. If the milestone is having 10 patients enrolled, the paid amount will need to cover the cost of supplies, procedures, follow-up visits, data analysis, staff time/effort, any rent for the study space, and any other costs not covered by patient insurance.
For a fixed fee per patient budget, it is helpful to think of the costs in terms of each patient or visit. Often the sponsor will give the schedule of visits and what should happen during each one; from there you will need to think through the necessary procedure and activity costs that would go with each visit. Perhaps the screening visit will include obtaining informed consent, taking vitals, and gathering medical history. It may also involve analyzing the data gathered to see if the patient qualifies for the study. These line items would need to include not only the face-to-face time with the patient but also the time spent analyzing the data, updating or creating a study record for the patient, and determining if they qualify for the study. Often the sponsor will want confirmation of each included procedure’s cost. For a procedure that can be billed to HCMC, MMRF will charge the Medicare rate. Be sure to think about any additional time that may be needed for nights, weekends, on call nurses, etc., and how that might affect the cost of the line items. If the coordinator is performing the procedure or taking the blood draw during a visit, then their salary will need to be covered along with the supplies that will be used. Often there is a physician and coordinator fee associated with each visit that can account for any additional time spent on activities (such as updating records and maintaining compliance); but be sure this is enough time to cover everything going on in the study.
The only thing left to consider are MMRF’s overhead or indirect costs. These are the costs to maintain the institution’s infrastructure and compliance requirements. For industry projects, MMRF calculates indirect costs at twenty four percent of received cash receipts for budgets up to one million dollars. Another way to say this is that MMRF charges thirty two percent overhead on the budget. So when working with your sponsors, be sure you either have a line item for thirty two overhead or make sure that the per procedure line item includes an additional amount to cover overhead costs. Rates vary for industry projects exceeding one million dollars; contact your GA for specific figures.
Overhead can either be included in the milestone or per patient payments or they can be a separate line item. This will be specified in the payment schedule. Looking through the protocol is a good way to make sure that no costs are missed in putting together the budget.
After your project is funded, make sure to check the monthly Financial Accounting Statements sent from MMRF accounting. Be sure to compare the actual costs to what’s budgeted. Occasionally budget adjustments may be needed. Don’t worry; your GA is there for that as well.
If you have questions about budgets or anything else feel free to email us at firstname.lastname@example.org. Thanks for watching and have a nice day.