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Compensation from Grants, Contracts and Other Sponsored Agreements (E-74)

Original Implementation: April 17, 2012
Last Revision: None

I. Background and Purpose

This policy establishes guidelines for compensation paid to faculty and professional (exempt) staff from grants, contracts, and other sponsored agreements that are consistent with federal and state regulations.

Non-exempt staff members are not eligible for additional compensation from grants and must be paid overtime at the appropriate rate of pay.

For purposes of this policy, “compensated effort” is defined as all university-related activities included in the institutional base salary, including salary used for cost sharing, regardless of whether the activity takes place inside or outside of normal business hours. For higher education faculty, this “compensated effort” includes teaching, research, and service, which is consistent with SFA’s Faculty Compensation policy (E-71) and Faculty Workload policy (A-18). Institutional base salary refers to academic year faculty contracts (usually nine months).

In general, federal and state agencies discourage the use of funds from sponsored project agreements to provide pay above the institutional base salary. Many agencies strictly adhere to the language of Federal OMB circular A-21 and specifically prohibit additional compensation above base salary for some or all of their sponsored programs.

General requirements for payment of additional compensation are detailed in Stephen F. Austin State University (SFA) policy, Salary Supplements, Stipends, and Additional Compensation (E-9).


II. Compensation from Grants, Contracts, and Other Sponsored Agreements

If permitted by the grant, contract or other sponsored agreement, faculty and professional (exempt) staff may receive compensation for personal services related to grants, contracts, and other sponsored agreements in the form of salary (preferred) or additional compensation (strictly limited). The form and amount of compensation depends upon a number of factors, including:


  1. Salary Compensation (preferred)

    Compensation from grants, contracts, and other sponsored agreements should be in the form of salary for actual work performed on the project from which the salary is paid. Compensated services must be performed during the project period and are captured in effort certification reporting as part of total compensated effort (institutional base salary).

    1. Release Time - Whenever possible, sponsored agreement funds should be used to buy out teaching and/or scholarly activities (research, creative activities, and/or service) proportional to the level of effort on the project. This gives the faculty member adequate time to devote to the project.

      This approach is consistent with SFA’s faculty workload policy, which states “Any work that exceeds normal expectations in the categories of research/scholarly/creative accomplishment and service constitutes an opportunity to request a course load reassignment with the department chair.” For purposes of compensation from grants, contracts, and other sponsored agreements (paid or cost-shared), a normal three-credit hour course taught during the fall or spring semester is equivalent to 25% effort (or 0.25 FTE); 20% is normally devoted to instruction and 5% is normally devoted to institutional responsibilities outside of instruction.

    2. Faculty Summer Salary - If a faculty member’s institutional workload is less than 100% (1.0 FTE) during a summer term, the faculty member may also be paid from one or more grants proportional to the effort expended, subject to the summer salary calculations outlined in policy E-9. For purposes of compensation from grants, contracts, and other sponsored agreements (paid or cost-shared), a normal three-credit hour course in a summer part of term is prorated proportionally as described above. For example, a normal three-hour course taught during Summer I is equivalent to 50% effort (or 0.50 FTE) for the Summer I part of term; 40% is normally devoted to instruction and 10% to institutional responsibilities outside of instruction for the Summer I part of term.

      Sponsored project funding may not be used during the summer months to pay for work performed during the academic year, nor may these funds be used to supplement institutional compensation that may be paid at a lower than base salary rate.

    3. <1.0 FTE Professional (Exempt) Staff - A portion of a less-than-full-time individual’s salary may be paid from one or more sponsored project agreements proportional to the effort expended on each project agreement during the term such work is performed.

  2. Additional Compensation (strictly limited)

    Additional compensation means salary paid in excess of the institutional base salary. Additional compensation is not allowed for work that is considered “compensated effort;” therefore, a clear delineation of normal faculty workload activities is required in all requests for additional compensation.

    Additional compensation is accounted for separately and is not captured in effort certification and reporting procedures.

    If allowed by a sponsor for a specific sponsored project, additional compensation may be paid from sponsored agreement funds if the employee meets all requirements; however, all such requests for additional compensation must be routed by the employee's dean or primary administrator to the Office of Research and Sponsored Programs for verification of sponsor approval.

    Professional (exempt) staff with 12-month, full-time employment are not eligible for additional compensation for any function that is part of their job description and duties. However, the staff member may be eligible for additional compensation if the sponsored agreement-related activities: (1) can be defined as consulting or incidental work; (2) are clearly unrelated to their current duties; and (3) are performed outside the employee's regular work hours.

    Faculty may be eligible to receive additional compensation for intra-university consulting or incidental work pursuant to the conditions outlined below.

    1. Acceptable Forms of Additional Compensation

      Additional compensation from grants, contracts, and other sponsored agreements may be paid for work that is in excess of the normal workload and only for one-time or short-term activities as defined below.

      • Intra-university Consulting

        Intra-university consulting is: (1) limited to unusual circumstances; (2) for work in excess of a full workload; and (3) for faculty working across departmental lines or at a separate or remote location, such as outside of the Nacogdoches area. Examples include statistical consulting, foreign language assistance, project evaluations, and other highly specialized services or activities as applicable to a specific award. Intra-university consulting does not include routine consulting, which is considered to be a professional courtesy or normal university faculty obligation.

        In addition to the above conditions, it must be demonstrated that the services to be provided are essential and cannot be provided by persons receiving salary support from the sponsored agreement, or otherwise compensated for their services by the university.

      • Incidental Work (task assignments)

        If it can be demonstrated that it is crucial to the success of the project, on occasion, faculty or exempt staff may be paid from grants, contracts, or other sponsored agreements for incidental work. Incidental work should be based on completion of an assignment or task and is restricted to one-time services or jobs with a time commitment of one month or less.

        Federal OMB circular A-21 does not provide examples of incidental work because “in general, these assignments are not related to sponsored programs;” however, SFA has determined that some tasks related to grants are incidental. Therefore, for purposes of this policy, incidental work includes: (1) activities that are clearly defined in university policy as additional to the normal workload (e.g., development of online courses and delivery of off-campus instruction); (2) training institutes or workshops that are conducted outside the employee’s regular work hours (such as, evenings or weekends) for external entities and their employees or students; and (3) delivery of off-campus services to non-SFA employees or students as defined in the sponsored project agreement.

        Exceptions to these limitations must be pre-approved by the chair and dean and reviewed by ORSP to ensure compliance with institutional policy before ORSP submits the proposal or other request to the sponsor for approval.

    2. Rate of Pay

      The rate of pay for additional compensation shall be no more than the hourly equivalent of the individual’s regular institutional base rate of pay. This rate is calculated using a monthly basis of 173.33 hours. An exception may be provided for non-research, privately-funded contracts for services such as consulting and training.

    3. Specific Requirements

      To ensure equitable and consistent application of SFA’s faculty workload policy, these guidelines apply to all sponsored project agreements regardless of the source of funding (federal, state, local government, and/or private entities).

      For sponsors that allow additional compensation to be paid, the sponsor must be informed of the intent to charge salary as additional compensation in the original budget proposal. The budget and/or project narrative of the grant or contract should clearly state:

      1. that additional compensation above institutional base pay will be paid to university employees;
      2. the name or position of the individuals who will be receiving the
        additional compensation; and
      3. the work and services to be performed by these individuals.


      The amount of the additional compensation should be segregated from regular salary expenses and the budget justification should clearly indicate:

      1. the total dollar amount of additional compensation requested;
      2. the percent of additional effort committed to the project, or the
        hourly rate and number of hours committed to the project; and
      3. appropriate fringe benefits.

      The award document from the sponsoring agency must state that additional compensation is allowed, or the document must imply that the sponsor accepts the proposal with no alterations regarding the request for additional compensation.

      Since fixed-price contracts generally do not require a sponsor-approved budget, additional compensation from these projects requires adequate justification from the employee’s supervisor. Such requests should be included in the internal budget submitted as part of the proposal clearance process.

  3. Responsibility for Compliance

    Individuals requesting compensation are required to certify that they meet the eligibility requirements outlined in this policy by signing the ORSP Additional Compensation Verification form. They also must provide assurance to their immediate supervisor that the work to be performed will not interfere with performance of regular responsibilities.

    Principal Investigators (PI)/Project Directors (PD) are responsible for assessing and determining if additional compensation is appropriate, is allowed by the sponsor, and follows university policies and procedures. The PI/PD is responsible for initiating internal forms for employee eligibility certification, institutional approval, and payment of additional compensation. PIs/PDs are not eligible to receive additional compensation from their own projects.

    Department Chairs/Division Directors/Deans are responsible for carefully analyzing the total university commitments of the employee who requests additional compensation – to confirm that the work is outside of the employee’s contractual obligations to the university and that the department’s general functions will not be adversely affected. The dean routes the Authorization for Additional Compensation Services form to ORSP along with the ORSP Additional Compensation Verification form to verify eligibility and sponsor approval.

    Office of Research and Sponsored Program staff verify sponsor approval, either in the form of an approved grant application as submitted, or in the language of a contract or other sponsored agreement, by approved amendment, or from subsequent written correspondence from the sponsor’s contracting official.

    Human Resources staff confirm that the individual has not exceeded the maximum compensation limits as outlined in policy E-9.

  4. Remedies for Non-Compliance

    Consequences of non-compliance with the university’s additional compensation policies or those of the sponsor, specific program requirements, and/or federal and state rules and regulations may include:

    • loss of funding for current and future projects from a sponsor;
    • suspension of the privilege to submit future grants; and/or
    • repayment by the department, college, or employee of salary and fringe benefits paid over the institutional base salary rate.

    In the event that repayment of additional compensation paid from sponsored project funds is required by a sponsoring agency or other authorized entity, the department and/or college with managerial oversight of the sponsored agreement in question must identify funds within its department or college to repay the amounts in question. This includes instances where administrative and/or sponsor approvals were not obtained in advance.

    Employees who receive additional compensation in amounts greater than those approved by the sponsor, or that exceed the regular rate of pay as outlined in this policy, and/or exceed the cap as outlined in policy E-9 may be required to repay those amounts.

 

Cross Reference: Federal Circular OMB A-21; Uniform Grant Management Standards for Texas, UGMS; Council on Governmental Relations (March 1, 2007). Policies and Practices: Compensation, Effort Commitments, and Certification. Ch. 1c. Special Care for Supplemental Compensation (pp. 20-23); Tenure (E-50A); Distance Education Faculty Competencies and Compensation (A-58); Effort Reporting and Certification for Sponsored Activities (A-68); Faculty Workload (A-18); Outside Employment (E-35); Off-campus Credit Courses (A-34); Grants and Contracts Administration (A-56); Faculty Compensation (E-71); Summer Teaching Appointments (A-18A); Overload Assignments (A-37).

Responsible for Implementation: Provost and Vice President for Academic Affairs

Contact For Revision: Director, Office of Research and Sponsored Programs

Forms: Authorization for Additional Compensation Services and Authorization for Additional Compensation Payment (Human Resources website); Additional Compensation Verification (ORSP website).

Board Committee Assignment: Academic and Student Affairs