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Policy: Effort and Compensation on Sponsored Projects

Policy: Effort and Compensation on Sponsored Projects

Policy

Background: 

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.

View the CAM Policy

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 funds1.  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 period2. 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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.

Peer Institutions

Other universities have implemented similar policies to achieve these goals, for example:

Stanford University: Effort for Faculty and Staff

University of Washington: Effort Reporting Policy for Sponsored Agreements

University of Wisconsin: Guidelines for Effort Reporting 

Yale: Salary from Grant Funds

 

Unallowable activities in this context include general administrative work, proposal development, committee service, teaching and teaching preparation.
2 Research staff may in some cases be appointed 100%, if their positions are narrowly defined and do not include unallowable activities.

Principal Investigators

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Limited Submission Information

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Sponsored Research