Guidance for Faculty Summer Appointments on Sponsored Projects (Funds 500 & 510)

Audit Disallowances

Payments of summer salary to faculty have received increasing federal audit attention in the last few years, and those audits have resulted in significant disallowances and penalties resulting in large settlements by our peer institutions to the federal government. The recent summer salary related audit disallowances at our peer institutions have centered on faculty who were paid 100% from sponsored award funds for a full summer month yet took vacation time or performed non-sponsored university activities during that same month. The audit findings disallowed a salary amount that was proportionate to the amount of vacation time taken or the amount of time spent on non-sponsored award activities, such as class preparations, proposal work, department committee meetings, etc.

NSF Policy Interpretation

Historically, NSF policy has been interpreted by many as restricting faculty salary funding of 9-month faculty appointments to two summer months. The interpretation assumed that no funding was allowed for academic year salaries. This past year, NSF changed and/or clarified its policy by stating that although there is a two-month funding restriction on faculty salaries (in any one year), the funding is not restricted as to what period, summer or academic year (AY), that effort and funding can be used. They also clarified that the proportion of the faculty salary charged to the award during any period be reasonable in light of the effort expended on individual sponsored awards and all other University activities.

Federal Regulations

As a recipient of federal funding, we are required to comply with the cost principles established in OMB Circular A-21. The underlying principles of A-21 require that all costs are reasonable, allocable and consistently treated. Compensation charges to sponsored projects must be for work that specifically contributes and is related to the work under the agreement.

For periods outside the academic year, A-21 (J10d(2)) stipulates that charges for work performed may be charged at a rate that does not exceed the base rate for the academic period. Salaries for teaching activities

during the summer months, applicable to faculty members also paid on sponsored agreements, should be “based on the normal policy of the institution”.

Guidelines

In consideration of federal regulations as well as recent audit events and NSF policy changes, the following summer salary guidelines apply when any part of faculty summer salary is funded by a sponsored award:

  • Faculty on academic year appointments should not normally charge 100% of 3 months of summer salary to sponsored project funding.
  • If faculty on academic year appointments charge 100% of 3 months of summer salary to sponsored project funding, the individual must agree that all activities during the summer will be directly related to the sponsored award that is funding the summer salary. Specifically, the faculty member would need to comply with the following:
    • No vacation during the summer.No participation in any University activities that are not specific to the grant funding the summer months, such as departmental administrative responsibilities, proposal writing for new or competing projects, student mentoring not related to the purpose of the project, etc.

Additionally, for any summer months that are 100% funded by sponsored project funding, 100% of that time should be devoted to the projects providing funding and the following stipulations would apply:

  • A full-time summer salary month appointment is equal to 1/9 of an individual’s 9 month academic year salary.Any business or conference travel must be restricted to travel related only to the sponsored awards activities.
  • Vacation may not be taken during the period that is being paid for by sponsored funds.
  • Departmental administrative responsibilities may not be carried out during any period that is exclusively charged to the grant.
  • All effort expended must be on the grant that is providing the salary.
  • Faculty supported by NSF are reminded that the total effort charged to all NSF activities during the summer months may not exceed 2/9ths of their normal academic year salary and other sponsors may have similar or alternate restrictions on summer salary.

Questions about these guidelines can be directed to Audra Haddy.

Last Updated: 4/22/10