Compensation and Effort Allocation on Externally Sponsored Programs

I. Policy Statement

II. Reason for the Policy

III. Definitions

IV. Statements of Elaboration of the Policy


Updated: September 24, 2020

Policy Statement

This policy provides general guidelines for distributing the labor costs of Emerson College employees, post-doctoral fellows, and students to externally funded sponsored programs. Faculty, staff, fellows, and students of the College are expected to charge their salary to sponsored projects commensurate with the amount of effort they expend on each project. Payroll charges that are applied to sponsored awards and cost sharing that is recorded for faculty and staff, serve as the primary data points for the College’s effort and labor reporting practices.

Reason for the Policy

Federal agencies and non-federal sponsors expect to pay only for the portion of an employee’s effort that is devoted to an externally funded project. Subpart 200.430 of the federal government’s “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”[1] requires that institutional recipients of federal awards

  • Ensure that salaries charged to federal awards are allowable, allocable to a given project, reasonable, and consistent with the College’s other labor and salary practices;[2]
  • Calculate salary charges to federal grants based on the individual’s current institutional base salary (IBS), and ensure that such charges do not exceed the proportionate share of the IBS for the period during which the individual worked on the grant(s); and
  • Maintain a system of adequate internal controls and documentation for charging salaries to, and certifying effort on, sponsored projects; and
  • Establish a consistent written definition of work covered by IBS which is specific enough to determine conclusively when work beyond that level has occurred.

Because federal agencies require consistency and uniform application of policies to all faculty, staff, and students who work on federal awards, these practices and policies apply equally to sponsored awards from non-federal sources.

Definitions

Allocability: The concept that a salary expense charged to a sponsored project is directly allocable to that project, i.e. compensation paid in exchange for work that directly benefits the project.

Allowability: The concept that a charge to a sponsored project is permissible based on the sponsor’s terms and conditions pertaining to allowable and unallowable costs.

Consistency: The concept that a charge to a sponsored project is consistent with how similar costs are charged to non-sponsored funding sources.

Course Release: the release of a full-time faculty member from the obligation of teaching one four-credit course in exchange for charging a portion of her/his academic-year salary to a sponsored project.

Effort/Payroll Certification: a recurring process in which a faculty member reviews and certifies the distribution of effort and corresponding labor costs for individuals she/he supports, and for her/himself.

Institutional Base Salary (IBS): the annual compensation paid to an individual by Emerson College for her/his appointment, whether the individual’s time is spent on research, creative work, teaching, administration, or other activities. The IBS amount is exclusive of any income earned for duties performed outside of that appointment. For full-time faculty, IBS is paid over twelve months for a nine-month academic year appointment.

Maximum Effort Threshold: the maximum amount of effort and corresponding salary that a faculty member may charge to a sponsored project (or sponsored projects) in a single month.

Percentage of Effort: a portion of an individual’s time and commensurate salary, typically expressed as a percentage of a 9-month appointment for full-time faculty.

Person-months: a unit of labor that typically denotes one full-time month of an individual’s compensation and time.

Principal Investigator: the individual with primary oversight of an externally funded project, and who is directly responsible for certifying the effort of individuals whose salaries are charged to the project award.

Reasonableness: The concept that compensation paid for work performed on a sponsored award is consistent with that which the College pays for similar work in other activities.

Supplemental/Summer Salary: For a full-time faculty member, this is the categorization for salary that she/he may charge to sponsored projects outside of the academic year (June-August), commensurate with the effort devoted to each project during those months.

Statements of Elaboration of the Policy

I. Procedures for Calculating Effort on Sponsored Projects using Institutional Base Salary (IBS)

  1. The Uniform Guidance defines Institutional Base Salary (IBS) as “the annual compensation paid by an [institution] for an individual’s appointment… [excluding] any income that an individual earns outside of duties performed for the [institution].” Salary charges to a sponsored project “cannot exceed the proportionate share of the IBS for the period during which the [individual] worked on” the project.
  2. For the purposes of calculating proportional effort, one month of salary for a full-time faculty is equal to 1/9 of her/his IBS. This is applicable to both academic-year salary, and any supplemental salary she/he may request during the summer months (June-August). For full-time staff, one month of salary is equal to 1/12 of the staff member’s IBS. [3]

II. Procedures and Guidelines for Charging Salary to a Sponsored Program

  1. When Emerson College receives a sponsored award on behalf of a Principal Investigator (PI), the use of the funds will typically be restricted to the line items in the detailed budget the PI provided to the sponsor in her/his initial or final proposal (also referred to as the “award budget” when the proposal is funded). In many cases, an award budget will contain partial salaries and associated fringe benefits for the PI and others, such as a staff member or student assistant. It is the obligation of the PI to ensure that these salaries are appropriately allocated to the sponsored award in a timely fashion.
  2. Upon receipt of the award notice and the establishment of a new fund account for the award, the PI shall notify ORCS of the intent to charge a portion of an individual’s salary to the new fund. ORCS or a designated administrator will assist the PI with submitting worktag accounting changes for the individual in Workday, [4] so that the appropriate portion of the individual’s salary (and corresponding period of time for this change) is charged to the award. The portion of time for each individual may be provided as a number of person-months, or as a percentage of effort. The PI will be required to review and sign the form; ORCS will then take the necessary steps to finalize the accounting change in Workday.
  3. Unless the terms of the award allow for rebudgeting, the salary and percentage of effort allocated to the award for senior or key personnel may not significantly differ from the amount specified in the award budget without prior approval from the sponsor. Questions regarding budget allowability should be directed to the Office for Research and Creative Scholarship.

III. Guidelines for Charging Faculty Academic Year Salary to a Sponsored Award in Exchange for Course Release

  1. When a sponsored project is carried out during the academic year, a faculty member may use the funds from the sponsored award to cover a portion of her/his academic-year salary and associated fringe benefits. [5] In exchange, the College will release the faculty member from her/his teaching obligation by one four-credit course (“course release”). A course release is subject to the following conditions:
    1. Prior approval of the Provost; and
    2. The availability of sponsored funds, and the prior approval from the sponsor for the charging of faculty salary to the award.

      The standard rate of exchange for a single course release is 1/6 of academic year salary one month of academic year salary, which is equal to 1.5 months. This ratio is derived from section 14.2 of the Emerson College Faculty Handbook, which defines the standard Tenure-seeking Faculty Workload as six units in a year—five (5) four-credit courses and one (1) scholarly / creative / professional equivalency. [6]

      Charging a faculty member’s AY salary to a grant does not increase the amount of compensation that the faculty member receives in the academic year. Rather, it allows Emerson to recover the portion of salary and fringe benefit costs that are allocable to the project, and repurpose the amount for procuring a teaching replacement for the course that the faculty member has been relieved of.

  2. The portion of academic year salary that is charged to a sponsored award will replace the corresponding salary amount normally paid by Emerson throughout the year. The sponsored salary amount will be charged to the sponsored project fund in equal increments throughout the academic year. This is done so as not to exceed the maximum effort threshold for faculty effort. This is the maximum amount of salary that may be charged to a sponsored project (or sponsored projects) in a single month. Emerson caps this threshold at 95% of one month’s salary, which reflects the faculty member’s ongoing commitment to her other obligations, as defined by her appointment. In instances where a faculty member has charged academic year salary to a sponsored award, and the project is slated to end before the end of the academic year, ORCS will work with Payroll to devise an alternate salary charge schedule so that the charges to not extend beyond the project end date. 

IV. Guidelines for Charging Faculty Summer/Supplemental Salary to a Sponsored Award

  1. A full-time (9 month appointment) faculty member may be paid summer salary (supplemental pay over and above the 9-month academic year salary) for effort contributed to a sponsored project between the months of June and August. Summer salary cannot be used to obtain a course release, and summer salary chargeable to sponsored projects is limited to that effort actually expended on the project(s).
  2. One month of summer salary is based on 1/9 academic year salary. To the extent it is allowed by the sponsor[7], a faculty member may charge a maximum of 2.85 months of salary (and associated fringe benefits[8]) to sponsored projects between June and August. This is done so as not to exceed the maximum effort threshold for faculty effort, which is the maximum amount of salary that may be charged to sponsored funding sources in a single month. Emerson caps this threshold at 95% of one month’s salary, which reflects the faculty member’s ongoing commitment to other obligations as defined by her/his appointment. A sponsored project must be active for the summer months in which the faculty member wishes to charge supplemental salary.
  3. Before the beginning of the summer recess, the PI shall notify ORCS of the intent to charge supplemental salary to a sponsored award. ORCS or designated administrator will fill out a “Faculty Supplemental Salary Request[9]”  form. The PI will be required to review and sign the form, ORCS will then take the necessary steps to process the salary request in Workday.
  4. Summer salary charges will be paid out to the faculty member in equal installments throughout the summer months- for accounting and compliance purposes, a single month of salary will not be paid out as a lump sum. In cases where the faculty member is only available to work on a project within a specific window of time (e.g. one month) during the summer, the payment schedule will be determined based on the projected timeframe and total effort devoted to the grant.

[1] Subpart 200.430 of the federal government’s “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards" at www.ecfr.gov

[2] For further information on federal cost principles, refer to Emerson College’s Costing Policy

[3] For budgeting purposes, a sponsor may request that faculty and staff effort be represented as a percentage, rather than person-months. In these cases, a faculty member’s nine-month AY salary covers 100% of her/his effort for the academic year, so 1 month would equal 11.1% of her/his academic year effort. For full-time staff, one month would equal 8.33% of the staff member’s yearly effort and compensation.

[4] View the Prospective/Retroactive Labor Distribution Change form (PDF)

[5] For academic year salary charges to a sponsored account, fringe benefits will be assessed on the same account at Emerson’s federally negotiated rate of 34% (29% for federal awards).

[6] View the Emerson College Faculty Handbook

[7] Certain federal agencies, such as the National Science Foundation, allow no more than 2 months of salary charges (academic or summer) in a single 12-month period. Contact ORCS for more information.

[8] For summer salary charges to a sponsored account, partial fringe benefits will be assessed on the same account at the federally mandated FICA rate of 7.65%.

[9] View the Faculty Supplemental Salary Request form (PDF)