June17,1991

Memorandum to Provosts, Vice Presidents, Deans/Academic Unit Directors,
Department Chairpersons, Principal Investigators

From Felix E. Browder, Vice President for Research and
Susan A. Cole, Vice President for University Administration and Personnel

Grant-Funded Summer Compensation for Faculty: Administrative Policies Concerning Percentage of Salary Permissible and Basis for Calculation of Compensation

THIS MEMORANDUM SUMMARIZES ADMINISTRATIVE POLICIES GOVERNING COMPENSATION FOR FACULTY MEMBERS IN GRANT-FUNDED SUMMER PROGRAMS. IT CONTAINS SIGNIFICANT CHANGES IN ADMINISTRATIVE POLICY FOR COMPUTING SUMMER COMPENSATION FOR GRANT-FUNDED ACTIVITY. THE CHANGES ARE EFFECTIVE AS OF FISCAL YEAR 1991, AND PERMIT RETROACTIVE ADJUSTMENT OF GRANT-FUNDED SUMMER SALARIES FOR THE MONTHS OF JULY AND AUGUST 1990.

1. Percentage of Salary Permissible for Summer Compensation

Since July 1980, the University has permitted faculty members on academic year appointments to receive summer compensation from external sources in excess of 2/9 of their academic year salaries up to a maximum of 3/9, provided that (a) there is no conflict with the policies of the relevant funding agencies, and (b) there is approval by the faculty member's dean or director through the University's grant endorsement procedure. Similarly, calendar year appointees may receive up to 1/11 additional compensation. In effect, this policy allows recipients of external grants on calendar year appointments to receive compensation for time spent on grant-funded activity which would otherwise be used as compensated vacation time.

The payment of summer compensation obligates the faculty member to full-time work on the sponsored program for the full period for which compensation is paid and specifically, in the instance of 1/11 or 3/9 payment, presupposes that the faculty member will forego vacation entirely during the particular fiscal year.

To insure that such payments are carefully monitored so that the University remains fully accountable to external funding agencies, it is essential that faculty members receiving such compensation, whether from a single grant or a combination of grants, abide by conditions stated in University policy. For many faculty members, all that will be required are the following steps:

(a) In completing the form entitled "Endorsement of an Application for External Funding," faculty members submitting a proposal should read instruction 19 and check the "YES" box at item 19 on the form.

(b) In obtaining endorsements of the application, faculty members simultaneously should obtain approval of summer compensation on the endorsement form from their director or dean.

(c) Several deans have developed forms for use in their units in order to monitor the extent of such compensation. Faculty members should comply with such arrangements in keeping with the practices of their own units.

(d) Grant budgets should make the degree of summer compensation clear to funding agencies by specifically stating the fraction or percentage of the regular University salary being charged to the grant. Please note that NSF limits summer compensation to 2/9, although an NSF applicant may request an additional 1/9 through applications to another source. If it is not clear whether payment in excess of 2/9 is permitted, the University's Office of Research and Sponsored Programs will consult the funding agency or request the applicant to do so. In determining the base year for budgeting summer salaries, faculty members should follow the administrative policies outlined in Part 2 of this memorandum.

(e) Applicants must understand that their commitment to perform the percentage of summer work budgeted to external grants will be monitored by the Division of Grant and Contract Accounting office through the federally mandated Certification of Effort reports. Faculty members receiving 3/9 summer compensation are required to work in June, July, and August with no vacation being taken during those months. In all circumstances, the amount of time away from University responsibilities in the years affected must always be reduced by the period of time for which summer compensation is received.

 2. The Determination of Base Salaries for Grant-Funded Summer Compensation

Investigators preparing budgets for grant-funded activity in the summer should budget for faculty compensation at the announced and authorized salary for the period to be compensated. For example, a grant requesting 3/9 compensation for work during June, July, and August will usually have to budget the month of June separately at the rate in effect during one fiscal year and July and August at the rate in effect during the next fiscal year.

Responsibility rests with the academic units administering grants to provide Personnel Authorization Forms (PAFs) with appropriate commitment amounts and Time Report Forms (TRFs) showing actual amounts to be paid for each pay period. The sum of actual payment amounts on all TRFs for summer compensation should not exceed the amount committed on the PAF. If any doubt exists concerning the range and step applicable for the PAF of a given faculty member, the administering academic unit should consult the Division of Personnel Services.

From time to time, salary changes that may affect the summer months will not be known at the time of budget preparation. In such circumstances, where the funding agency permits, the principal investigator may base budgeted summer salaries on estimates of the salary levels that may be in effect. In all circumstances, the payment of summer salaries must be based on the actual salary in effect at the time the payment is made.

From time to time, retroactive salary adjustments will be made that change, after the fact, the effective salary for a certain period. If such a change occurs, altering retroactively the effective salary for a period during which summer salaries were paid, the summer salaries may be adjusted subject to the following conditions:

            1.  The adjustment must be permitted by the funding agency.

            2.  The grant in question must have sufficient funds to cover both the salary and any associated indirect costs.

            3. The grant must still be in effect at the time of the adjustment. No adjustment may be made on a grant that is already terminated.

            4. If a budget reallocation is necessary to implement the retroactive payment, such a transfer must be permitted by the funding agency and cannot jeopardize the successful pursuit of the project, or the support of other individuals on the grant; such as graduate assistants or research technicians. Nor may the transfer diminish the funds available for the purchase of supplies or equipment necessary for the successful completion of the project.

                Under no circumstances, may funds other than from the applicable external grant be used to pay retroactive summer salary adjustments. All adjustments for retroactive pay, on appropriately filled out and documented TRFs, must be initiated at the department level and must be approved by deans or directors in accordance with this policy.

FEB/SAC:p11/revised 7/29/99

cc: Francis L. Lawrence
T. Alexander Pond
Joseph P. Whiteside
(Distribution: Al, A2, Fl, F2)