The level of justification required in a proposal varies among sponsors.
Be sure to adhere to any specific sponsor guidelines in regards to the budget justification.
Regular Budget Justifications
PIs must be prepared to explain to the sponsor how they arrived at their cost estimates and justify the costs for each budget category. If a sponsor decides to fund a project, they may ask for further budget detail or verification of certain costs. There are generally three ways to describe the basis for a cost: actual cost (for items such as salaries), vendor price lists or quotes (equipment, airfare, lodging), or prior experience (supplies).
Modular Budget Justifications
For a NIH modular budget, the narrative justification is provided only for personnel and, when applicable, consortium or contractual costs. There is no routine escalation for future years. In determining the total for each budget year, applicants should first consider the direct cost of the entire project period. Additional narrative budget justification is required only if there is a variation in the amount requested for each budget period. For example, purchase of major equipment in the first year may justify a higher overall budget in the first year, but not in succeeding years.