Salaries in Sponsored Projects

Faculty Members

Salary rates on sponsored projects are subject to federal regulations.

The National Institutes of Health imposes limits on direct salary on grants and cooperative agreements. Check National Institutes of Health web for the latest information. Salary cap summary

Section J.8.d.(1) of OMB Circular A-21 provides the following guidelines for charging faculty salaries to sponsored research projects:

Salary rates for academic year

Charges for work performed on sponsored agreements by faculty members during the academic year will be based on the individual faculty member's regular compensation for the continuous period which, under the policy of the institution concerned, constitutes the basis of his salary. Charges for work performed on sponsored agreements during all or any portion of such period are allowable at the base salary rate. In no event will charges to sponsored agreements irrespective of the basis of computation, exceed the proportionate share of the base salary for that period.

This provision is generally interpreted to mean that a faculty member cannot receive additional compensation for his or her participation in a sponsored project over and above the appropriate portion of the base salary allocated to the project. If, for example, the base salary is $60,000 and faculty member is assigned 25% to a sponsored project, the salary charged to the project should be $15,000.

The following guidelines have been adopted to ensure compliance with the requirements of OMB Circular A-21:

If the external funding compensates a portion of an existing appointment (for example, where a faculty member is already on 50% Primary Research Scientist appointment and the new external funding is incorporated within that distribution), the "test" is met that the salary charged to the sponsored project is "based on the individual faculty member's regular compensation for the continuous period which, under the policy of the institution concerned, constitutes the basis of his salary."

Changes in a faculty member's appointment distribution (TAD) so that a greater portion of his or her effort is be charged at a higher salary base as a consequence of the externally sponsored project activities would not meet the test and should not be allowed.

To illustrate these points, a faculty member has a 50% General Fund appointment under an academic department (at a $25,000 salary base) and a 50% PRS appointment in a research unit (at a $32,500 salary base). If the proposed sponsored activities are to be undertaken within the 50% PRS appointment, the higher salary base would be appropriate for charging salary to the sponsored project. However, if the research is to be undertaken by releasing a portion of the General Fund appointment so that the faculty member is now, say, 30% General Fund and 70% funded from sponsored sources, then the additional 20% should be charged to the sponsored project at the lower salary base.

Administrative and Clerical Salaries

The salaries of administrative and clerical staff should be treated as indirect costs and should not appear in the proposed project budget.

Exceptions may be as justified under the following circumstances:

Large, complex, research programs, such as those conducted by engineering research centers, general clinical research centers, cancer research centers, and other grants and contracts that entail the coordination/management of a team of investigators from a number of units/departments or institutions.

Single investigator projects where the required support is significantly greater than the routine level of such services provided by academic departments or research units, including:
- Projects involving extensive data collection, entry, surveying, tabulation, cataloging, literature searches, analysis and reporting.
- Projects that require extensive travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
- Projects involving the preparation and production of large reports, manuals, books, and monographs (excluding routine progress and technical reports).
- Projects that are geographically inaccessible to normal departmental administrative services, such as seagoing research vessels, radio astronomy projects, and other research field sites that are remote from campus.
- Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human and animal protocol, IRB preparations and/ or other project-specific regulatory protocols; and project-related coordination and communications among multiple investigators.

These administrative costs should "be identified specifically with a particular sponsored project. . . relatively easily with a high degree of accuracy. . . ." Based on a job title alone, it may be very difficult to determine whether other individuals in the administrative and clerical job series are performing tasks integral to the research activity and necessary for the consummation of the research objectives. The special circumstances requiring direct charging of the services also must be justified in the grant application or contract proposal to the satisfaction of the awarding agency.

To avoid subsequent disallowance of such charges, sponsor approval of the proposed position should be secured at the outset when the budget is submitted for sponsor review and approval.

Agency approval will be assumed if the salary of administrative or clerical staff is budgeted and not specifically denied in the notice of grant award or in related correspondence from the agency to the University. Approval by the funding agency will be deemed to satisfy the federal criteria for direct charging of administrative and clerical salaries to grants and contracts.

If a specific justification cannot be clearly stated and documented, these administrative costs should not be included in the proposed budget submitted to the sponsor. In all likelihood, if such administrative costs are subsequently disallowed by the sponsor, the equivalent dollars will not be available to the Principal Investigator for re-budgeting.

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