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Business Policies & Guidelines Overview
Business Policies & Guidelines Overview
There are a number of policies and guidelines that govern the business of conducting research at the University of Illinois at Urbana-Champaign. Some are unit and campus-specific, while others apply to the entirety of the University. The list below details links that may be of use to the Illinois Research Community.
Policies and Guidelines
Charging of Facilities and Administrative Costs to Sponsored Projects
The policy establishes the campus standards for charging of applicable Facilities and Administrative (F&A) Costs on externally-funded Sponsored Projects based on the classification of the project as Organized Research, Sponsored Instruction, or Other Sponsored Activities.
Frequently Asked Questions
How is F&A calculated?
The basis for our F&A calculation using the applicable negotiated rate is the Modified Total Direct Cost (MTDC). Under MTDC, F&A is not assessed on equipment (a useful life of more than one year and a per-unit acquisition cost of $5,000 or more), capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward and subcontract in excess of $25,000. Our negotiated F&A rate schedules and agreements are available here.
The basis for our F&A calculation using a reduced F&A rate is the Total Direct Cost (TDC). Under TDC, F&A is generally not assessed on tuition remission.
Are there exceptions to using the institutional negotiated F&A rate?
There are certain circumstances under which the institution may elect to accept a reduced F&A rate. Some examples of these circumstances follow:
- Statutory Limitation: Certain federal grant programs such as federal training and fellowship grants may be limited by law as to the amount of F&A allowed to be charged.
- Published Sponsor Policy or Program Solicitation Requirement: Some sponsors like non-profits and foundations will limit the F&A rate they are willing to pay. The institution reserves the right to review any published F&A limitation to ensure the limited rate is consistent with our institutional practices for that class of sponsor.
- Institutional Practice: The institution has established precedence through institutional practice for accepting a lower rate of F&A for some sponsors.
The approved institutional exceptions are available on SPA’s Rate page.
When is the “Off-Campus” F&A rate applicable?
Off-campus is defined as activities performed at sites not owned or centrally leased by the university, or activities occurring in sites for which those site costs are directly allocated and charged to the project. Centrally leased by the university means the lease costs are paid by the Office of the Chancellor (including the Provost Office and the Vice Chancellor for Research) or the System Office.
Criteria for using the Off-Campus designation for the project are as follows:
- Performance at the off-campus project site must be on a continuous basis and of sufficient duration, normally a full semester, summer term, or the period of performance of the project; intermittent performance is not sufficient;
- The university personnel working or engaged on the project must be physically located at the off-campus project site;
- Travel to and from an off-campus project site is considered an off-campus cost. Travel to and from other locations, such as meetings with federal sponsors, is not considered an off-campus cost;
- Subaward and other third-party costs are not a determinant in classifying costs as on-campus or off-campus;
- Costs incurred at the off-campus project site may include administrative salaries when administrative support cannot otherwise be reasonably provided, related fringe benefits, supplies, utility costs, rent, local travel, and other similar costs that are treated as direct costs.
If a project involves work at on-campus and off-campus project sites, a single F&A rate should generally be applied consistent with where the majority of the work is to be performed. A project will be classified as Off-Campus when the majority of activity, defined as 51% or more of the total estimated project expenses, is to be performed off-campus.
How do I determine if my project should be classified as either “research”, subject to the Organized Research rate, or “testing”, subject to the Other Sponsored Activities rate?
A research project typically has the following attributes:
- The work involves original, creative research and is expected to produce new science or technology;
- There is substantial involvement of the Principal Investigator in defining the statement of work;
- University owns the results of the work.
A testing project typically has the following attributes:
- Research methods are pre-existing and of a primarily technical nature with no new science or technology being generated;
- Sponsor designed protocol with no significant input from the Principal Investigator;
- No analysis of project results; d) sponsor maintains ownership of observational data and results of the testing.
What is the appropriate rate for the State of Illinois’ Governor’s agencies?
These agencies are subject to the Grant Accountability and Transparency Act (GATA). Please refer to the most recent “Final State Facilities/Administrative Rates” Rate Schedule for the Urbana-Champaign campus, which is available here.
When will the university accept a sponsor limited rate?
The university will generally accept a sponsor limited rate if the restriction is published and applicable to all applicants. However, absent a special circumstance such as student support, the university will not accept this restriction, even if published and applicable to all applicants, when the source of funding is for-profit organizations, foreign government entities, or other universities.
What is the appropriate F&A rate for use on corporate sponsored projects?
The applicable institutional negotiated rate should be used on all corporate sponsored projects unless institutional practice dictates otherwise. An example of institutional practice would be a reduced rate for a project that is primarily for the support of student competitions or projects.
What is the appropriate F&A rate for use on an Industry Affiliate Program (IAP)?
Approved Industry Affiliate Programs are subject to an Internal Program Rate of 15% Total Direct Costs (TDC).
What is the appropriate F&A rate for use on a foreign-sponsored project?
The institutional negotiated rate should be used for foreign sponsors when the funding originates from a foreign government or foreign commercial sponsor.
What is the appropriate F&A rate for use on non-profit, foundations, or charities?
The F&A paid by the non-profits, foundations, or charities vary widely. The university is generally accepting of reduced rates on non-profits. If the non-profit does not specify a rate in their proposal solicitation or have a published policy, a rate of 10% Total Direct Costs (TDC) should be applied. This Internal Program Rate is also available for municipalities, counties, and community colleges.
If the F&A rate changes between the time of proposal and award or during the course of a project, which F&A rate should be used?
The F&A rate used in the proposal budget will be honored upon award if the F&A rate changes prior to award. Once awarded, the F&A rate remains fixed for the life (competitive segment) of the award including subsequent supplemental increments of funding (Supplement) on the same award. Continuations and Renewals should use the rate in effect at the time of submission.
What is the appropriate F&A rate to use when a project is being transferred from another institution?
The F&A rate issued at the time of the award to the transferring institution will be honored. Note the National Science Foundation (NSF) requires the use of our negotiated rate unless otherwise mandated.
Is F&A assessed on Fellowships?
Normally, we do not assess F&A on Fellowships. However, if a sponsor permits recovery of F&A on fellowship funding, the sponsor-approved rate should be included in the budget.
How is F&A calculated on U.S. Department of Agriculture National Institute of Food and Agriculture (NIFA) proposals?
USDA limits F&A on some NIFA awards to the lesser of 30% of total award (direct plus F&A costs) or the amount that can be recovered using our negotiated rate. For budgeting purposes, the rate of 30% of the total award is equivalent to 42.857% of Total Direct Costs (TDC). In this case, Total Direct Costs (TDC) INCLUDE tuition remission costs. Details for each NIFA program can be found on the NIFA website here. SPA also provides a budget template to assist in determining which rate is appropriate and is available on its website here. Other USDA agency programs are similarly capped at 22% or 15% of the total award.
Do we exclude Tuition Remission costs when the F&A rate is less than our negotiated rate?
No. However, some sponsors do not allow Tuition Remission costs, so please confirm with sponsor policy and program guidelines.
Can the difference between a reduced F&A rate and our negotiated rate be used as cost sharing?
If the reduced rate is a result of a statutory limitation, then any F&A above the limitation may be considered unallowable and thus not eligible to be considered cost share. If the campus elects to charge a rate less than the negotiated rate, then the difference could be used to meet cost sharing if allowed by the sponsor.
What rate should I use for a subrecipient who does not have a negotiated F&A rate?
Uniform Guidance requires recipients to have a federally negotiated indirect cost rate. If the subrecipient does not have and has never had a federally negotiated indirect cost rate, then the university will allow the subrecipient to proposed budget with the de minimus rate of 10% MTDC. The university will not negotiate an F&A rate with subrecipients; however, it will allow a subrecipient an opportunity to secure a federally negotiated indirect cost rate before a subagreement is issued. Please note that some federal agencies may further limit the rate for certain subawardees. For example, NIH does not allow any F&A costs for for-profit entities without a federally negotiated indirect cost rate.
Is F&A assessed on sponsorship supporting a visiting scholar or student?
It depends on the source of the funding, the scope or work, or assignment of the visiting scholar or student. If the source of the funding is a commercial entity, then the negotiated rate should be charged. If the source of funding is a non-profit, foundation, or governmental entity, then the first $10,000 of support is exempted from F&A with any amount in excess of $10,000 being subject to a minimum of 10% or the rate specified by the sponsor.
What is the F&A rate for industry-sponsored clinical trials?
We do not have a separately negotiated rate agreement for industry-sponsored clinical trials, but it is national practice to charge 26% Total Direct Costs (TDC) for industry-sponsored clinical trials. All other clinical trials would use the institutional negotiated rate as a Research project.
What is the F&A rate for the use of the Campus Computing Cluster or the use of contracted cloud services?
The use of the Campus Computing Cluster or the use of contracted cloud services is not subject to facilities and administrative costs. The decision to not charge F&A on these services provides flexibility for our investigators to choose the best technical solution to support their research compute and storage needs. For the campus, the decision promotes cost efficiencies through a reduction in the use of space and consumption of utilities when an investigator elects to use an externally contracted cloud provider. The account code to use for Cloud Computing Services, including Amazon Web Services (AWS) is 155211, and the account code to use for the Illinois Campus Cluster Program (ICCP) is 155210.
The University of Illinois Policy on Conflicts of Commitment and Interest applies to all paid academic staff members, whether part time or full time employees of the university. Annually, faculty and staff must disclose potential conflicts by completing a Report of Non-University Activities (RNUA). For more information and COI contacts, visit the campus COI page.
Cost Sharing on Sponsored Projects
The policy establishes the conditions in which the university will commit to Cost Sharing; the process for including Cost Sharing in a Sponsored Project; and the core principles that Cost Sharing must meet.
Frequently Asked Questions
Do “Cost Sharing” and “Matching” have the same meaning?
While the terms Cost Sharing and Matching are often used interchangeably, Matching has a specific meaning related to the ratio of Cost Sharing. Matching refers to a situation in which the sponsor requires the university to match the level of grant funding in some proportion with funds received from another party (such as a 50% match or a “1 to 1” match). This type of Cost Sharing is usually stated in the program announcement or Request for Proposals (RFP) as an eligibility requirement (mandatory) and is often provided from institutional resources.
Do costs claimed as Cost Sharing have to meet the same cost principles as costs reimbursed by the sponsor?
Yes, costs used to satisfy Cost Sharing commitments are subject to the same policies as the costs directly reimbursed by the sponsor unless the sponsor specifically permits an exception. To be claimed as Cost Sharing, the costs must be allowable under university and sponsor policies, must be allocable to the project, and should be reasonable and necessary for the performance of the project.
Can I cost share my effort?
Yes, if you have a paid university appointment, have eligible time available to devote to the project, have obtained the required approvals, and if the sponsor permits. You must include all contributed effort – person months and the financial commitment—on the internal Proposal Transmittal and approved by the appropriate Unit Executive Officer or delegate. However, to the extent possible, you should include effort to be expended in performance of the project as a direct salary cost in the proposal budget. You may only use effort paid from a sponsored project as Cost Sharing if both sponsors approve of its use.
Can I cost share my effort if the university is receiving no funds from a project?
No, unless you have received prior approval from the Unit Executive Officer. Specific approval beyond the Principal Investigator’s acknowledgement is required for a faculty member or other university employee to voluntarily commit effort as Cost Sharing (university support) for the benefit of an outside entity where there is no funding issued to the university.
Can I use “waived” facilities and adminitrative costs as Cost Sharing?
Sometimes, under special circumstances, depending on whether the sponsor requires a reduced F&A rate and whether the sponsor indicates that unrecovered F&A is allowable as cost share.
Does the central campus support provide Cost Sharing?
The Office of the Vice Chancellor for Research (“OVCRI”) sometimes provides partial Cost Sharing under a limited set of circumstances and only when requested by deans or institute directors. See the OVCRI Cost Sharing Guidelines at http://research.illinois.edu/business-policies-guidelines/cost-sharing.
Are there limits to what I can propose as Cost Sharing?
Given that Cost Sharing frequently involves the use of departmental or college resources, Unit Executive Officers, deans or institute directors may impose limits on the contributed amount of Cost Sharing.
Why is the university concerned with excessive cost share?
The university is required to provide the stated resources that are committed as Cost Sharing in a proposal, whether the commitment of resources is Mandatory Committed Cost Sharing or Voluntary Committed Cost Sharing. Excessive or unnecessary cost share limits the university’s capacity to commit resources when required for eligibility of submission, increases our administrative burden, and reduces the availability of resources for other purposes.
Does Voluntary Committed Cost Sharing include commitments in the proposal’s budget justification?
Yes. The budget justification is treated the same as the budget in this definition.
Do any sponsors or programs prohibit voluntary committed cost share?
Yes. For example, as a policy, the National Science Foundation (NSF) prohibits Voluntary Committed Cost Sharing. NSF policy further states that resources not included in the Budget or Budget Justification should be listed in the Facilities, Equipment, and Other Resources section, but should not contain “quantifiable financial information” for those resources.
My award does not reference the cost share commitment in the budget/budget justification, does it need to be tracked?
Yes. Upon receipt of an award based on a proposal that included voluntary cost sharing in the budget or budget justification (whether or not the agency explicitly calls out the cost sharing), the cost sharing becomes "committed" and an obligation that is subject to audit and must be fulfilled.
Effort and Compensation
In the past few years, the federal government has been paying more attention to how faculty spend their time when they are being paid from grants. Audits have been conducted at several institutions and substantial penalties have been imposed for unallowable salary transactions: Florida State University (2012, $586,000); Louisiana (2011, $1.3M); Michigan (2009, $1.02M); and Yale (2008, $7.6M).
As a condition of receiving sponsored grants and contracts, the University must assure our sponsors that:
- work on a sponsored project justifies the salary charged to that project; and
- the actual time spent on the project is consistent with what we originally proposed.
To conform to federal uniform guidance and audit findings, we must align payroll records on sponsored projects with the time period in which the work is performed, and apply a consistent definition of base salary when charging salary to grants and contracts. Thus, the campus is implementing a new policy that may affect the way in which faculty summer salary is charged to grants and contracts.
Frequently Asked Questions
What are the key components of the policy?
A key requirement of the new policy is that payroll records (for those paid on sponsored funds) must reflect the effort actually spent on sponsored projects during the pay period. Faculty and research staff salary that is paid from sponsored projects should correspond to work that they do, during the period that they actually do it.
The new definition of Institutional Base Salary includes academic year salary and academic year professorship stipends, but not administrative stipends. As required by federal uniform guidance, the principles of IBS apply to calculation of summer salary for all employees, regardless of source of funds.
Most researchers participate in activities that are not allowed to be charged to sponsored funds. To address this, a faculty or staff member shall not charge more than 95% of his/her university effort to sponsored projects during any given appointment period. This policy requires accurate accounting and distribution of effort funded by sponsored projects, and will mitigate the risk of financial penalties in the future.
The Principal Investigator continues to be responsible for confirming that reporting on actual sponsored effort for his/her research team is accurate.
Who is affected?
Researchers in the following situations are potentially affected.
- Staff paid an administrative stipend by the college or unit during the year, where the stipend has been factored into summer salary. It may be necessary to convert the administrative stipend to a 12-month stipend, or to take other action.
- Faculty who expect to be paid more than 2.85 months of summer effort on sponsored grants or contracts during summer 2015. Some portion of salary may need to be covered from discretionary funds or by redistributing some summer effort to the academic year.
- Service-in-excess payments that are funded by sponsored grants or contracts. The grant PI should consult with Post-Award accounting to make sure that these payments are allowable.
- Non-faculty researchers whose appointments are funded 100% on grants should not engage in unallowable activities. If necessary, the appointment should be restructured so that it is not 100% grant funded.
What do our peers do?
Other universities have implemented similar policies to achieve these goals, for example:
Eligibility to Serve as a Principal Investigator
The Principal Investigator (PI) is responsible for the design, scientific and technical conduct, administrative oversight, fiscal accountability, regulatory oversight, and reporting for a research, instructional, or public services project. If the sponsor allows, a project may have multiple Principal Investigators who share the authority and responsibility for the project. If there are multiple Principal Investigators, each shall have the authority and be responsible for the proper conduct of the project. The policy establishes the role and responsibilities of a Principal Investigator, the categories of appointments for those individuals who are eligible, and an approval procedure to allow those individuals who are not included in the default categories to serve as Principal Investigators.
Frequently Asked Questions
Does this policy cover Multiple-Principal Investigators and Co-Principal Investigators?
Yes. However, it does not apply to Co-Investigators and other senior project roles.
Can an emeritus or retired faculty member serve as a Principal Investigator?
Yes, as long as the faculty member has a significant physical presence at the university If not, then the Office of the Vice Chancellor for Research (OVCRI), will need to approve the project role in addition to the applicable academic dean, institute director, or campus administrative officer.
Note: The Unit Executive Officer or institute director determines whether sufficient departmental or unit resources are available to support acceptance of any sponsored research award involving emeritus or retired faculty members as PIs. If someone will serve as PI, then an applicable appointment should be established; the rate of pay that the university may charge a sponsor for a retired faculty member is limited and may be subject to conditions imposed by the retiree’s retirement plan.
Can a student serve as a Principal Investigator, Multiple-Principal Investigator, or Co-Principal Investigator?
No. Students may not serve as either a Principal Investigator, Mulitple-Principal Investigator, or Co-Principal Investigator. In the event a graduate fellowship is awarded as a grant, the Dean of the Graduate College, the Dean’s designee, or the student’s faculty advisor shall be designated as the Principal Investigator. Even if a sponsor requires that the student’s name be listed as Principal Investigator externally, the university still will not permit the student to serve as PI internally. However, these students can be listed as Co-I to help track these projects.
Can a Cooperative Extension Specialist serve as a Principal Investigator?
Yes. However, a Cooperative Extension Specialist’s participation as a PI is generally limited to cooperative extension, training, or public service projects related to the individual’s official duties.
Can a Postdoctoral Research Associate or Research Fellow serve as a Principal Investigator?
Yes. Unlike the other categories, a Postdoctoral Research Associate or Research Fellow can serve as a PI with only the approval of the Unit Executive Officer, provided the Postdoctoral Research Associate’s or Research Fellow’s supervisor also approves the pursuit and administration of external funding, such funding is consistent with the source of funding supporting the Postdoctoral Research Associate’s or Research Fellow’s salary (in compliance with campus salary minimums), and the academic unit is willing to accept responsibility for the Postdoctoral Research Associate’s or Research Fellow’s performance as PI in the sponsored project.
Can a newly hired faculty member serve as a Principal Investigator on a proposal in advance of their contract start date?
Yes, provided that the Board of Trustees has approved the hiring of the new faculty member. The new faculty member must follow all applicable campus procedures for proposal submission, including the requisite certifications.
Can a civil service employee serve as a Principal Investigator?
Prior to having a civil service employee serve as a Principal Investigator, (a) the OVCRI would need to authorize an exception to the approval process; and (b) if the exception is granted, the applicable Unit Executive Officer would also need to approve the request.
Can a Principal Investigator be changed?
Yes. The Principal Investigator serves at the discretion of the institution, and certain events may necessitate a change in Principal Investigator. For example, if the Principal Investigator is departing the institution, but the grant is remaining, the institution would need to designate a new PI. The terms of the sponsored award will typically require prior written approval from the sponsor for a change in Principal Investigator.