The Budget Narrative Guidance outlines the requirements for preparing a budget estimate and accompanying narrative for government funding applications. It emphasizes compliance with the cost principles set forth in 2 CFR Part 200, highlighting that all costs must be allowable, allocable, and reasonable. The document categorizes budget items into personnel, fringe benefits, travel, equipment, supplies, contractual, construction, and other direct costs. Each section requires a detailed narrative, explaining the necessity and estimated costs for items listed. Key points include focusing on sufficient detail in personnel descriptions, justifying fringe benefits, outlining travel justification, itemizing equipment and supplies, describing contractual services, and detailing construction costs. Additionally, it addresses cost-sharing requirements and the inclusion of in-kind contributions. The guidance reinforces that indirect costs must be outlined separately and may include a de minimis rate option for entities without a negotiated indirect cost rate. Overall, the document serves as a comprehensive framework for applicants to present their budget effectively while ensuring compliance with federal and state funding guidelines.