A cost budget is the estimated cost of all activities and all purchased supplies and services required to complete a protocol or scope of work. It is an estimate of all expenses that will be incurred to complete the study. In comparison, the contract/negotiated budget contains the negotiated amounts that will be used in funding sponsor payments. As a result, the contract/negotiated budget contain the amount that will be recorded as revenue when payments are received from the funding sponsor.
There are at least two major uses of a study cost budget:
1. The cost budget provides the estimated expenses/costs that need to be covered by the study sponsor through contract negotiations.
a. If there is not sufficient funding to cover the study costs, the cost budget can be used to estimate the final cash deficit so that it can be decided if the study should proceed.
b. The exercise of completing a cost budget helps identify where there may be some “wriggle” room in preparation for the contract budget negotiation with the sponsor
2. The cost budget provides the baseline to be used to compare actual expenses against as the actual expenses are booked in the General Ledger(G/L). This comparison of actual expenses to budgeted expenses should be completed periodically - it will help you:
a. Verify all expenses booked to your study speed type belong there
b. Project the cash balance/deficit by using the subject tracking data in OnCore.
c. Determine where cost budgeted amounts (especially study team effort) can be improved
In addition to the estimated UCD Total Costs Budget being useful, the Negotiated Budget included in the study contract is also helpful. As a result, each should be saved – as two separate budgets - and kept for use in various financial management reviews:
|Budget Quality Review|
|Estimated UCD Total Costs Budget - Research Amount in OnCore||less||Actual Costs at Study Completion||=||Quality Review of Budgeted Amounts|
|Negotiation Quality Review||Negotiated Total Budget - Negotiated Amount in OnCore||less||Actual Costs before Study Completion||=||Projected Cash Deficit/Surplus of Study|
|Planned Deficit/Surplus of Study|