Revised Budget and Budget Impact Statements

As you know, a good indication that an NSF proposal will be funded is the request to submit a Revised Budget.  This is generally good news!  Going forward, I will be paying very close attention to the details in the Budget Impact Statement.

The NSF states:

“The NSF Program Officer may discuss with PIs the "bottom line" award amount, i.e., the total NSF funding that will be recommended for a project. NSF Program Officers may not renegotiate cost sharing or other organizational commitments.

When such discussions result in a budget reduction of 10% or more from the amount originally proposed, a corresponding reduction should be made in the scope of the project. Proposers must use the FastLane Revised Proposal Budget Module to submit this information. A revised proposal budget also must include a Budget Impact Statement that describes the impact of the budget reduction on the scope of the project.”

This is important to bring to your attention because our office sees a lot of impact statements that indicate that there will *NOT* be any reduction of the scope of work.  If you originally proposed a budget of $500,000 and the program official requests a budget for $450,000, there be $50k LESS work being completed.  By indicating that there is no reduction in the scope of work, you are essentially stating that either the original budget was too high and unnecessary or that the same work will be performed but charged elsewhere (cost-shared/paid by another sponsored project, which is strictly prohibited).  Either impression should be avoided, and can be done so by using the Budget Impact Statement as intended.  The NSF EXPECTS that you will have to reduce the work if they reduce the amount of the award, and we should use the given opportunity to explain that accordingly.  It is also important to keep in mind that IF you state that the same amount of work can/will be accomplished with a reduced budget, the funds are awarded, and you discover that you are actually unable to carry out the work with those limited funds, you may not have the opportunity to seek additional funding under this premise because you have already stated that you would be able to complete the same scope of work with less funding.

In summary, when the NSF requests a 10% or more reduction in the budget via a Revised Budget, please review the Budget Impact Statement to ensure that it describes how the scope of the project will be impacted by the reduction.