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Policy number: 10.2

Policy section: Research

Revised Date: December 16, 2019

1. Definitions

Definitions of capitalized terms are set forth in Appendix A.

2. Purpose

The purpose of this policy is to establish basic principles for enabling compensation of Principal Investigators and others working on, participating in, or contributing to Sponsored Projects to be treated as allowable direct costs, as defined by current federal law, regulations, and policies identified in the Research Handbook. Compensation of individuals from Funding, without regard to origin of the Funding, must be consistent with the conditions prescribed by federal law, regulations, and policies, the terms of the Award, relevant Sponsor guidelines, and the approved Award budget.

3. Personal Services

Compensation for Personal Services will be determined, paid, and recorded as required by federal law, regulations and policies. Each Principal Investigator/Project Director is responsible for completing and approving payroll authorization forms (“PAFs”) for all personnel working on and charged to Sponsored Projects under the Principal Investigator/Project Director’s direction following instructions provided in the Research Handbook. In no case will a salary paid by the University be determined or increased solely by the fact that the University received Funding for a Sponsored Project.

4. Payroll Distribution

Projections for payroll distribution are based on the payroll authorizations for the services to be performed as indicated on PAFs for salaried employees and on PAFs in combination with the time-keeping system for hourly employees. Personnel Activity Reports (“PARs”) for both salaried and hourly employees paid from Funding are provided regularly by the Office of Grant and Contract Accounting. For each Sponsored Project, the Principal Investigator/Project Director is responsible for certifying the accuracy of time and Effort reported for all Sponsored Project personnel, and is required to review all payroll distributions for Sponsored Project personnel and report in a timely manner to the Office of Grant and Contract Accounting all changes in time and Effort as a result of actual services performed. Procedures for reviewing, revising, and reporting changes are provided in the Research Handbook. Except in cases of demonstrable error, PARs will not be changed once they are certified by the Principal Investigator/Project Director and submitted to Grant and Contract Accounting.

5. Preparing Project Budgets

In preparing Sponsored Project budgets, the budget category for salaries in future years may be increased at the current, official University raise rate or at a greater or lesser rate if appropriate documentation is presented attesting that an individual will receive a greater or lesser raise, approved by the University employee with approval authority. Procedures for documenting these changes in compensation are provided in the Research Handbook.

6. Compensation of Faculty

Compensation of faculty will be calculated based on the faculty member’s current salary and base period of employment established in his or her employment contract. During the academic year, a faculty member is not eligible for extra compensation from Funding unless the Sponsored Project is outside the scope of the faculty member’s regular duties and the Sponsor approves. Faculty on a nine-month, academic year contract may receive summer compensation equivalent to, and not exceeding, one third of the nine-month salary. Compensation from Funding for Effort on Sponsored Projects during the academic year will reimburse the home base Org, usually a department Org, for the salary through payroll distributions at the time of payment or cost transfers after the fact. In this case, and in cases where fractions of academic year salaries are shown as direct cost sharing in the Proposal or Award, the Principal Investigator/Project Director must report Sponsored Project time and Effort on PARs on a monthly basis to document that the obligated Effort has been expended. Procedures for reporting time and Effort are provided in the Research Handbook. Additional guidance is provided in University Policy 10.15, Sponsored Project Effort Reporting.

7. Compensation of Staff

Staff compensation from Funding will be calculated using current salaries for the position and fractions of times allocable to work on the Sponsored Project(s).

8. Staff Positions

For Soft Money Appointments:

1. Appointment must be by a formal letter from the Dean of the college or school following approval by the Provost and Vice President for Academic Affairs.
2. The letter must describe the following:
   1. the conditions of the appointment;
   2. the compensation level;
   3. the Award(s) which is/are to be the source of the Funding;
   4. the period of the appointment, which must not exceed the period of the Award(s);
   5. that employment and compensation is contingent upon continuation of the Award(s); and
   6. that vacation time accrued, if any, must be taken during the period of the Sponsored Project as defined by the Award.
3. It is the responsibility of the Principal Investigator/Project Director to ensure compliance with the requirements of the appointment letter.

9. Related Policies, Procedures, and Guidelines

• University Policy 10.1, Sponsored Research and Activities
• University Policy 10.15, Sponsored Project Effort Reporting
• Research Handbook

Appendix A: Definitions

"Award" means a Grant, subgrant, Contract, subcontract or Cooperative Agreement that provides for Funding.

"Compensation for Personal Services" means all amounts paid or accrued by the University to employees for services rendered during the period of performance under an Award. Such amounts include salaries, wages, and fringe benefits.

"Contract" means a legally enforceable agreement between the University and a Sponsor that provides Funding when a primary purpose is delivery to the Sponsor of property or services for the benefit of the Sponsor, in addition to the research, educational, or service benefit to the University.

"Cooperative Agreement" means a legally enforceable agreement between the University and a Sponsor that provides Funding when substantial interaction between the Sponsor and the University is anticipated during the performance of the Sponsored Project.

“Effort” means the time spent on Sponsored Projects and all other activities for which an individual is compensated by the University. See University Policy 10.15, Sponsored Project Effort Reporting

“Funding” means financial support for a Sponsored Project, including money, property, services, or anything of value in lieu of money.

"Grant" means a legally enforceable agreement between the University and a Sponsor that provides Funding when:

1. the Sponsor has no expectation of delivery of a specific product or service other than a final written report;
2. no substantial interaction between the Sponsor and the University during performance is anticipated; and
3. the agreement contains general terms and conditions that stipulate a period of performance and minimal reporting requirements.

“Organization code” or “Org” represents a department or discrete operating unit within the University.

“PAFs” are Payroll Authorization Forms. PAFs identify each individual, his/her employee identification number, frequency of pay, Sponsored Project to be charged, rate of pay and time period during which each individual will be paid.

“PARs” are Personnel Activity Reports as described herein.

“Principal Investigator/Project Director” means the individual solely responsible for technical conduct of a Sponsored Project, technical contact with the Sponsor, expenditure of Funding, and fulfillment of technical performance and reporting obligations under an Award. "Principal Investigator” (PI) includes an individual designated in an Award as "Project Director" (PD), when performing the functions of a Principal Investigator, or other individuals performing the functions of a Principal Investigator. For the period of the Award, the Principal Investigator/Project Director must be a full-time employee (staff, tenured or, tenure track faculty, Research Professor, Research Associate Professor, Research Assistant Professor, or, if approved by the Provost or his or her designee, a non-tenure track, non-tenure eligible faculty member) appointed pursuant to University Policy 2.3, Faculty Ranks, Academic Titles, and Voting Rights. 

“Proposal” means the document submitted to a Sponsor requesting Funding for a Sponsored Project which includes, without limitation, (i) Financial Obligations, Regulatory Obligations, Reporting Obligations or Accounting Obligations, as described under “Sponsored Projects”, (ii) a Statement of Work and (iii) a budget.

“Research Handbook” is a document maintained by the Office of Research and Graduate Studies specifying current procedures and requirements for the Proposal, acceptance, execution, and oversight of Sponsored Projects.

“Soft Money Appointment” means a staff position for which the compensation is derived from and dependent upon Funding from Sponsored Projects.

"Sponsor” means any external entity that provides Funding to the University. Sponsors may be (i) governmental agencies (for example, federal, state or local governments or their administrative organizations); (ii) nonprofit organizations (for example, universities, nonprofit corporations, foundations or associations); (iii) for profit organizations (for example, corporations, partnerships, sole proprietorships and other business entities); or (iv) individuals.

"Sponsored Projects” means all projects, programs, research, training, public service, and other activities that receive external Funding through Grants to the University or through Contracts or Cooperative Agreements between the University and a Sponsor, where one or more of the following obligations applies:

1. Financial Obligation. The University is required to comply with conditions imposed when a Sponsor awards Funding for the performance of services or delivery of products described in a Statement of Work;
2. Regulatory Obligation. The University is required to comply with Sponsor regulations.
3. Reporting Obligation. The University is required to provide to the Sponsor technical performance reports or regulatory or administrative reports; or
4. Accounting Obligation. The University is required to establish a separate accounting record of Sponsored Project expenditures to demonstrate allowability of costs, to maintain financial accountability, to make financial reports to the Sponsor, and to preserve appropriate records for audit.

“Statement of Work” means the component of a Proposal or an Award that describes the specific work to be undertaken and the products that will be produced by the Sponsored Project.

Revised: December 16, 2019

Adopted: January 15, 2015