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Where Do I Start in Building a Cost Budget?

Before we go through the process, let’s jump to the end to provide a picture of our endpoint.   

The rows in the following example will contain all activities required to complete the study.  The columns will identify the type of expense.  This format provides the ability to sum by row/activity for budget negotiations purposes for industry-sponsored studies.  This format also provides the ability to sum by column/expense type that can be used in comparison to actual expenses. 

So the intersection of each activity and column is the common building block that we use to determine if the study is financially “on-track” – using two different measures.  Specifically, this cell (the intersection) from the UCD Total Budgeted Costs can be compared to the same actual cost in the General Ledger to determine the accuracy of the budget costs.  Or the Negotiated Budget Amount can be compared to the same actual cost in the General Ledger to project the final cash balance (surplus or deficit) of the study.

Budgeted AmountsEffortPurchased ServicesPurchased SuppliesTotal Direct Costs
Protocol Level:
Start-up Base$ Lab SuppliesTotal direct startup costs
Start-up Add-on One$Perhaps UCH Pharmacy Total direct startup add-on's
Maintenance - Base$  Total direct maintenance costs
Close-out Base$  Total direct close-out costs
Note: Pass-throughs would be listed for each study - example, small equipment
Subject Level:
Visit 1$UCH patient careCopies of questionnairesTotal per visit direct costs
Visit 2$UCH patient care Total per visit direct costs
Screen Failure$Labs Total Screen Fail direct costs
 Total EffortTotal Operating Expenses - Purchased ServicesTotal Operating Expenses - Purchased Supplies 

The first critical step is to identify all activities that will be performed to:

1. Plan, start-up and initiate the study (“Protocol-related” Start-up)

2. Manage and maintain the protocol (“Protocol-related” Maintenance)

3. Complete the sponsor’s schedule of events  (“Subject-related” Treatment/Management)

4. Complete all reporting requirements through the study’s lifecycle (“Subject-related” Treatment/Management)

5. Closeout the project (“Protocol-related” Closeout) 

 

There are several documents that can be helpful in this step:

1. The protocol and especially the Schedule of Events

2. The consent form

3. The Clinical Trial Agreement

4. Lab manuals

5. Ancillary department manuals (e.g., Radiology or Pharmacy)   

 

In addition to the above documents, also consider the life cycle of an average Industry-sponsored clinical trial to help step you through all activities that will be completed for the study.  These activities can then be grouped into those activities that are performed to manage the protocol or manage the subjects.  These two types of expenses have very different characteristics and the cause (i.e., cost driver) of the expense is also very different.  As a result, each type of expense follows a different data flow.  These different flows are also consistent with how OnCore functions.

 

Identify All Activities Required to Complete the Study
Protocol ManagementSubject Management

Scheduled Activities:

  • Start-up
  • Maintenance
  • Close-out
Calendar of Events

As-Incurred Activities

  • Amendments
  • Monitoring Visits
  • Audits
Coverage Analysis
 Plus Effort and other Supplies and Services to Sum to Total Direct Costs
 Plus F&A, Inflation and Contingency to SUm to Total Costs

 

As each activity is identified, note the supplies and services that would be needed in the completion of each task.  For example, an activity associated with compiling and submitting the package for IRB review and approval, might require to have the Informed Consent Form (ICF) translated into a second language.  In this instance, the associated service that you might need to purchase is the cost of translation services.

A three-column list of all activities may help organize your thoughts:

 

ActivityEffortPurchased SuppliesPurchased Services
Compile the IRB submission packageEstimated hours to compile package by the role of the study team Internal University Research Administration Fee
Have Informed Consent Form TranslatedContact vendor and agree on a price for translation Translation Service Fee
Understand what lab will be used to processThe effort for this piece will probably be included in the time estimated for readingShipping boxes for lab samples if not provided by the sponsorPostage for shipping lab samples, if applicable

 

Only activities that are required in order to complete the study’s scope should be included.  Activities/expenses that may only enhance the department’s ability to complete the study are not appropriate to include.   

For example, if a laboratory staff is completing a course on Good Clinical Practices at the time the study is starting, in most circumstances it should not be charged to the study.  This type of training will certainly enhance/benefit the outcome of the study and is required to properly work in a lab on any study.  However, it is not specific to complete a particular study’s scope of work.  Therefore, it would – in most circumstances – be more appropriate to charge this training to a non-fund 30 speed type.   

By contrast, the following are some examples of sometimes missed expenses that are appropriately found in cost budgets (both protocol related and subject-related): 

  1. ​All study staff effort spent on either a protocol related or subject related activities
    1. Time spent preparing for and document subject visits
    2. Time spent researching and responding to sponsor/CRO monitoring questions
    3. Time spent on sponsored required meetings and training including travel time, if any
    4. Study team meetings can cover topics such as coordination, communication, training, etc.
    5. Time spent to create, submit and follow-up on unpaid invoices
    6. Time spent to monitor actual expenses charged to the study speedtype
    7. Time spent to reconcile sponsor payments to the invoices and subject visit data at closeout to ensure all payments have been received.
    8. Time spent to create SOP's and required study documentation logs/master file/notebooks
  2. Inflation factor to estimate the increase in costs over the life of the study
  3. F&A ​
    1. On all Protocol related events
    2. On all subject related events if the funding sponsor is Industry
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