�鶹����AV

• This document provides guidelines for faculty members requesting summer compensation (referred to as “summer salary” and period outside of the base salary period) to be covered by external funds such as federal, State, private, or local government sponsored research.
• The guidelines outlined in this document are intended to allow faculty members to earn the maximum summer salary while maintaining compliance with federal, state, private, and local sponsor and university polices.��
• These guidelines are applicable to full-time faculty on campus that have 9-month or 10-month academic year appointments who conduct summer research.��
• These guidelines do not apply to faculty members paid on a fiscal year 12-month appointment or 12-month conversion.
• �鶹����AV / �鶹����AV Research Foundation defines the summer months as May 5 – August 5.

• Summer salary is permissible subject to the regulations of the sponsoring agency and �鶹����AV / �鶹����AV Research Foundation policies.
• Charges for work performed by faculty members on sponsored projects during the summer months or other periods not included in the base salary period will be determined for each faculty member at a rate not in excess of the IBS rate divided by the period to which the IBS relates.
• The summer pay rate is determined by the base academic salary rate that goes into effect for the fiscal year that begins on July 1^st of that summer.
• Faculty who receives summer salary must expend the effort associated with the summer salary during the summer period. Effort expended during the academic year does not satisfy a commitment related to the receipt of summer salary and individuals may not transfer effort from one month to another.
• Charges to sponsored projects for summer research must be consistent with the level of effort devoted to each project worked on for the period and with the funding provided. ��In particular, federal regulations require that for faculty that request 100% effort in a given month, 100% of the faculty’s time and effort must be spent on activities covered by the award(s) for the period of time when a faculty member is receiving summer salary on the award(s). This requires faculty to forego teaching, proposal preparation, administrative work, vacation, and business or conference travel unless the travel is exclusively related to grant-funded activities. This effort must be subsequently certified on the faculty member’s Effort Report, which includes the faculty’s summer salary charges on sponsored projects.
  • To ensure compliance with federal regulations, the University recommends that faculty not charge more than 2.5 ninths (83.3% effort) of summer salary support to a sponsored award (includes federal, State, local government, or private awards) or a combination of awards including flow-through dollars.
  • Faculty can earn the full 3 month maximum using non-sponsored funds such as funds from non-federally sponsored grant(s), discretionary funds, etc.
  • Although not recommended, faculty can request the full 3 month maximum at 100% effort earned from sponsored awards although the faculty should obtain approval from their Chair and attach it to their ePAS as part of the process in the event of an audit.������
• NSF limits the salary compensation requested in the proposal budget for senior personnel to no more than two months, or two-ninths, of their regular AY salary in any one year. This limit includes salary compensation received from all NSF-funded grants.
  • NOTE: If anticipated, any compensation for such personnel in excess of two months must be disclosed in the proposal budget, justified in the budget justification, and must be specifically approved by NSF in the award notice budget. Please contact your Research Foundation Grants & Contracts Administrator for further questions and guidance.
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Summer Salary Enrollment

• The responsibility for initiating a summer salary electronic payroll authorizations (ePAS) submission lies with the faculty member.��
• All summer salary submissions must be made prior to conducting any research on sponsored projects compensated with external funds during enrollment window from April 1^st thru May 5^th through the �鶹����AV Research Portal self-service form. ��
• Requests for summer salary shall be in compliance with sponsor’s contractual requirements.�� For example, from the sponsored project, the budget justification shall state and list explicitly the salary in the budget for the faculty in question or the funding source needs to allow rebudgeting.��
• Faculty should obtain Chair approval for the full 3/9^ths maximum earned from 100% sponsored awards for summer salary.��

1. �ʱ�’s:�� Principal Investigator. Ensures that all requests for salary support in sponsored projects proposals are based on the individual’s IBS, or in cases where the IBS exceeds the federal salary cap or any other sponsor limitation, the salary cap or limit amount is used instead of the IBS.
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2. Base Academic Year Salary (or Institutional Base Salary): The “institutional base salary” (IBS) is the total annual pay set in advance of each fiscal year for an employee’s primary job or appointment and is used as the basis for the salary to be charged on awards. IBS includes University and Faculty Practice Plan base salary pay regardless of the source of funding, certain supplemental pay, and administrative stipends that are inextricable to the primary job or appointment.
   • Examples of supplemental compensation that are part of IBS include but are not limited to: administrative supplements for the role of chair, vice chair, division chair, program director, and center or institute director.
   • The IBS does not include
     • clinical incentives/bonuses
     • teaching overloads
     • summer pay administrative stipends for ten-month faculty
     • summer research supplements for ten-month faculty
     • bonuses that are not set in advance and part of regular salary commitment
     • housing subsidies
     • temporary pay or supplements provided for taking on significant additional responsibilities (such as service as a grad school director, overseeing accreditation related projects, development of new curriculum) are considered temporary and end when the additional duties conclude
     • external consulting or speaking engagements (or any income earned outside of �鶹����AV and for effort not related to the primary job or appointment)
     • bonuses, one-time payments, publication royalties.��
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   • Intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time salary and is generally included in the base salary.
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3. Summer Salary: Work during the summer months including summer teaching, research pay in any proportion, additional, pay, etc.
4. Extra Service (i.e. Supplemental or Overload Pay): ��Extra compensation above the IBS paid to an eligible employee for performing additional work
5. Temporary Salary Increase: An increase in base salary for a limited period of time, associated with a temporary increase in assigned duties and responsibilities.
6. Monthly Base Salary: IBS / 9
7. Summer Salary Base Limit Calculation from Sponsored Projects
   • Base for 2.5 Ninths Limit Calculation: (RECOMMENDED):Institutional Base Salary / 9 x # months summer work x 83.3%.�� For example: if the faculty member has a nine-month academic appointment, the faculty member’s IBS is $90,000, and the faculty will work for two months in the summer.�� The summer salary calculation is as follows: ($90,000 IBS / 9 months) x 2 summer months work x 83.3% = $16,660.
   • Base for the full 3/9^th Limit Calculation: (RECOMMEND OBTAINING CHAIR APPROVAL)��Institutional Base Salary / 9 x 3
8. Beginning and end dates for calculating summer salary: May 5^th – August 5^th ��
9. Calculating Summer Compensation from Sponsored Projects: 2.5 Ninths Limit – Total $ Summer Compensation Earned = Maximum faculty member can pay themselves from the grant(s) to remain in compliance with regulatory requirements. ��
   • It is recommended that a faculty member on a nine-month contract earn only up to 2.5 months summer salary.
10. 1/9th Limit Calculation from Sponsored Projects: Institutional Base Salary / 9 x 83.3%
    • Federal regulations restrict the amount a faculty member can charge to a grant in any given summer month to no more than 1/9^th of the IBS.��
    • In a summer month (May, June, July), where a faculty earns compensation from multiple sources (i.e., teaching, research), the compensation added together from all activities may not exceed the academic year monthly rate of 1/9^th.��
    • Compensation earned in any given summer month that is derived solely from teaching activities is not subject to the 1/9^th limits.�� The 1/9^th limit only applies in a summer month where any fraction of summer compensation is earned from sponsored research grants.��
    • If a grant begins mid-month, the faculty member is subject to the 1/9^th limit, but it is not possible to earn an entire 1/9^th of their IBS that month from the grant.�� To calculate the amount the faculty member can earn during that month, you would divide the 1/9^th limit by the total workdays (defined as Monday – Friday) during that month to determine the daily rate. Then, multiply that daily rate by the number of workdays from the start date of the grant to the end of the month to get the maximum amount of compensation the faculty can earn that month from the grant.�� The remaining difference between that and the 1/9^th limit can be earned from compensation from other activities (such as teaching).��

• Request for summer salary is made by completing an ePAS �鶹����AV Research Portal.
• Summer salary ePAS submissions will continue to be initiated by faculty.
• Summer salary enrollment will open April 1^st and close May 5^th each year.����
• All summer salary ePAS submissions paid from a sponsored project will be routed to the �鶹����AV Research Foundation and �鶹����AV Academic Affairs for review.
• The Research Foundation will verify the salary, budget, period, and approve as appropriate or return to the sender for corrections.
  • Please note, any requested amount may need to be reduced due to constraints imposed by either: 1) a specific sponsor, 2) a specific program, 3) the specific terms and conditions of a particular award, or 4) lack of funding.
  • Any ePAS requesting the full 3/9^ths maximum earned from 100% sponsored awards should include Chair approval as an ePAS attachment.��
• The �鶹����AV Research Foundation and Academic Affairs are responsible for checking the IBS that is provided in the FACFILE and on record.��
• Once the ePAS is approved, it is processed into the next payroll cycle.

• Q1: Professor A’s AY salary is $54,000. Professor A plans to pay their entire summer salary from a grant they has received. In other words, they would like to use 100% of their 2.5 ninths. Their calculated 2.5 ninths limit is $14,994 ($54,000 / 9 = $6,000 x 3 months x 83.3%); their recommended 1/9th limit is $4,998. Since 100% of their summer salary is derived from research activities, it is recommended that they earn no more than $4,998 in any month or a total of $14,994 in June, July, and August.
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• Q2: Professor B’s AY salary is $54,000.�� Their recommended 2.5 ninths limit is $14,994; her 1/9^th limit is $4,998 (see Q1).�� Professor B has no research funding to pay themself over the summer, so they decides to teach two classes in June at a rate of $4,000 per class, for a total of $8,000.�� Since 100% of their summer salary is derived from teaching activities, they are not subject to the 1/9^th limit of $4,998.�� As long as they do not receive any payment from a sponsored research grant, they are also not subject to the recommended $14,994 limit over those summer months.
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• Q3: Professor C’s AY salary is $54,000.�� Professor C is the chair of their department and receives a stipend in the amount of 21% of their AY salary paid over 12 months or $945 per month (54,000 x 21% = 11,340 / 12 months). Their recommended 2.5 ninths limit is $18,143 and their recommended 1/9^th limit is $6,048.�� Professor C also has a grant, which they plans to use to pay themself a summer salary.�� The maximum salary they can pay herself from her grant while staying in compliance with the 1/9th limit at the recommended 83.3% is $6,048. ��
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• Q4: Professor E’s AY salary is $63,000.�� They will be teaching one summer school class in May for $4,000 and wants to pay themself from their grant during the months of June and July. They did not have money to pay themself from the grant in May but would otherwise like to pay themself from his grant the recommended limit for the remaining months. Their recommended 2.5 ninths limit is $17,493 ($63,000 / 9 = $7,000 x 3 months x 83.3%); their recommended 1/9^th limit calculation is $5,831 ($63,000 / 9 = $7,000 x 83.3%).�� From May to June they earned a total of $9,831. Over the course of the summer months, they are not able to earn their entire 2.5 ninths limit and remain in compliance with the recommended university 1/9^th limit.�� See Table 1 below.

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• How should I determine if salary should be academic year vs. summer?
  • Salary should be charged during the time period that the effort is expended. If the effort is spent during the academic year, the salary should be charged during the academic year. If the effort is spent during the summer, the salary should be charged during the summer. If the effort is spent as a combination of academic year and summer, the salary in the grant should reflect that as well.
• Is there a limit to how much salary I can charge to a grant?
  • Each organization has its own rules and regulations governing limitations on salary charges about which you need to be aware. Some typical items that will create a potential red flag for a sponsor or an auditor is a faculty member with 100% effort, or fully committed for 3 months over the summer for a nine-month employee. Fully committing your time and effort means you work on nothing but the research, and do not work on other activities such as administration or even grant writing of future proposals. Fully committing your summer time means you take no time off or vacation over the summer. The University recommends 2.5 ninths of a faculty member’s institutional base salary as the maximum summer salary compensation.

• Principal Investigators
• Co-Principal Investigators
• University Faculty
• University and Research Foundation staff responsible for sponsored programs administration

Grants and contracts that may be accepted in Ledger V will include those in which the agency requires, with accompanying documentation, that the university or other public entity be the awardee of record to accept and/or administer the award and other circumstances where �鶹����AVRF is ineligible to receive the award by virtue of its corporate status. The vice president for research will make a determination whether or not the Ledger V account is subject to 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in general, including standards for allowability of costs, cost transfer, cost sharing, fixed asset, and effort reporting, in particular.�� If the Ledger V account is a sponsored program subject to Uniform Guidance, the vice president for research will also determine whether to assign it to �鶹����AVRF to administer. No project activity for such account may start without a formal proposal signed off by either �鶹����AV Division of Research or �鶹����AVRF or both.

Educational institutions that receive Federal grants and contracts (including Federal flow through projects) must comply with Uniform Guidance, which sets forth the governing rules for determining the various costs that can be charged to grants and contracts, and for establishing whether those costs may be charged directly, or charged through the application of the institution’s Facilities and Administration (F&A) rate. �鶹����AV and �鶹����AVRF apply these same cost principles to non-federal funding as well in order to be consistent. In some instances, program-specific requirements may define costs differently than is generally the case for federal sponsors.

The cost principles include Cost Accounting Standards (CAS) with which both �鶹����AV and �鶹����AVRF are required to comply. The standards are listed in 2 CFR Part 200, 200.419 and require educational institutions with annual federal sponsored programs expenditures of $50 million or more to submit a disclosure statement (DS-2) to their cognizant agencies.�� �鶹����AV and �鶹����AVRF submitted their joint DS-2 to the Office of Naval Research as required.�� ONR determined adequacy of our disclosure per FAR 30.202-7(a) on March 31, 2007 and the most recent determination of adequacy was received on January 7, 2011.

CAS seeks to (a) make the best use of available funds to achieve outcomes; (b) avoid problems of fraud, waste, and abuse of sponsor support; (c) prevent the charging of unallowable costs to awards; (d) standardize university costing practices; and (e) standardize requirements for recipients of federal funds. Non-compliance may result in sanctions, including fines and penalties, exclusion or suspension from participating in federal programs, and or criminal charges.�� The mandated federal standards are:

1. 48 CFR 9905.501: Consistency in Estimating, Accumulating and Reporting Costs
   Principal Investigators and administrative support personnel must ensure compliance with this standard by maintaining consistency in the manner in which budgets are prepared during the proposal submission period, and how those funds are budgeted and expenses accounted for upon receipt and during the life of an award.
2. 48 CFR 9905.502: Consistency in Allocating Costs Incurred for the Same Purpose
   The University must ensure compliance with this standard by ensuring that costs incurred for the same purposes, in like circumstances, must be given consistent treatment in the accounting system.
3. 48 CFR 9905.505:�� Accounting for Unallowable Costs
   Principal Investigators and administrative support personnel must ensure compliance with this standard by insuring that those costs defined as “unallowable” are not directly charged to Federal projects, and when incurred in accordance with university policy, are charged to other funding sources and identified as “unallowable” so that those costs are excluded as well from the University’s F&A rate.
4. 48 CFR 9905.506:�� Cost Accounting Period
   This standard requires that the University comply with a number of rules governing how costs are treated for the purpose of calculating and negotiating the University’s F&A and other institutional rates.

This procedure applies to all sponsored programs, Federal (including Federal flow through funding) and non-Federal, awarded to �鶹����AV with postaward management delegated to �鶹����AVRF.

�鶹����AV Office of Finance
Within the �鶹����AV Office of Finance, organization codes are established to record accounting transactions for each grant by award year. Upon completion and approval of the “Request for Establishment of University Organization” form, the Project Directors and �鶹����AVRF, if applicable, are notified of their respective budget number.�� A copy of the grant budget is submitted to the Budget Office for processing.

Principle Investigators (PI)/Budget Unit Directors are responsible for managing and monitoring each award function or activity supported by the award to ensure all applicable guidelines and regulations are met by reviewing financial data recorded in Banner and preparing reports timely.�� The PIs must work to ensure that they maintain high standards, achieve their stated goals and objectives, meet agreed upon deadlines, stay within budget, expend funds as required, comply with the granting entity’s terms and conditions, maintain appropriate records, meet financial and programmatic reporting requirements, and communicate results. ��The Grant Accountant is responsible for accounting, verifying that the expenditures/revenues relate to the specific objectives funded in the grant contract/agreement, provide guidance for budget changes and maintain effective control over and accountability for all funds, property and other assets.

�鶹����AVRF

After all needed forms are completed, the PI obtains all required signatures (PI, Dean, VP of Academic Affairs, VP for Research) and delivers the materials to the �鶹����AVRF grant and contract administrator (GCA).

GCA reviews forms for completeness and assures that the RF project number is written in the upper right-hand corner of the Request for Establishment of University Organizational Code.�� The GCA then delivers the following Ledger V paperwork to the �鶹����AV Office of Finance:

• Request for Establishment of University Organization Code (Attachment B)
• Budget Adjustment Form (Attachment C)
• Project Setup Sheet;
• Award document;
• Fully-signed proposal transmittal form;
• Budget; and
• PI notification e-mail.

After the �鶹����AV Office of Finance receives the Ledger V paperwork, they assign an �鶹����AV Budget code number (five-character alpha/numeric code).�� This number is written on the �鶹����AVRF project abstract and in the “Notes” section of the �鶹����AVRF Project Setup sheet. ��The GCA then notifies the PI and the �鶹����AVRF Accounts Receivable Technician of the �鶹����AV budget code.

Once the �鶹����AVRF account is established, the project is administered by �鶹����AVRF staff consistent with routine sponsored program practices and �鶹����AVRF procedures, including travel guidelines and procurement processes, will apply.�� The GCA monitors expenditures and works with the PI on administrative matters, such as sponsor approvals or no cost time extensions.����

Throughout the project and particularly at close-out, the GCA coordinates with the �鶹����AVRF Accounts Receivable Technician to ensure that the �鶹����AVRF’s final invoice is submitted to �鶹����AV early enough, at least two weeks in advance, to allow �鶹����AV to meet the sponsor’s final invoice due date.��