The Budget Narrative Guidance outlines requirements for preparing a budget estimate and narrative for federal grants and RFPs. It emphasizes compliance with cost principles and provides a structured breakdown of budget categories, including personnel, fringe benefits, travel, equipment, supplies, contractual, construction, and indirect costs. Each category requires specific details in the narrative to justify costs and demonstrate their necessity for project execution. Key points include defining allowable costs, specifying needed personnel and their roles, detailing travel purposes, and itemizing equipment and supplies with estimated costs. It highlights the importance of a thorough narrative for administrative review and encourages the inclusion of cost-sharing contributions. The document specifies that construction-related costs must be distinctly categorized and provides examples for clarity. Overall, this guidance serves as a crucial tool for applicants to compile comprehensive budget narratives that align with federal funding requirements, facilitating the approval process and ensuring effective financial management of grant projects.