University of Massachusetts

                 Amherst

                     Controller’s Office                                                                               phone:   413.545.1675

                     405 Goodell Building                                                         fax:       413.545.6088

                     140 Hicks Way                                                                email: amangels@admin.umass.edu

                       Amherst, MA 01003-9334                                              

 

            Memorandum

 

 

TO:                  Deans, Directors, Department Heads and Principal Investigators

 

FROM:            Andrew P. Mangels, Controller

 

DATE:             May 2, 2006

 

SUBJECT:       Additional Compensation Charged to Sponsored Grants and Contracts

 

 

This memo provides clarification of the campus policy on charging additional compensation to sponsored grants and contracts.  Charging personnel costs to federal and many state and private grants and contacts is governed by OMB Circular A-21, which specifically addresses faculty salary rates allowable for the academic year and periods outside the academic year.  The Amherst campus engaged an external consultant to review additional compensation policies to ensure consistency and compliance with federal cost principles.

 

Faculty must receive prior approval by the Provost’s Office for participation in and payment of additional compensation to ensure compliance with all conditions and requirements of university policy, including conflict of interest, conflict of commitment and the policies described below.  Additional compensation must be charged to federal and state grants and contracts within 90 days of when the work was performed. 

 

 

Additional Compensation Charged to Federal and State Grants and Contracts

 

Federal and state grants and contracts, including federal flow-through awards from non-federal sources, require that compensation charged on sponsored agreements be based on the base salary rate of the faculty member.  Base salary should not increase or decrease based upon levels of grant funding.  Therefore, charging additional compensation on federal and state grants and contracts is prohibited for nine-month faculty during the academic year and for twelve-month faculty, including deans and department heads on twelve-month appointments, throughout the entire calendar year.  Exceptions can be made for instances of inter-departmental consultation provided such consultation is specifically provided for in the grant or approved by the sponsoring agency.

 

Nine-month faculty may charge additional compensation to federal and state grants during the summer at rates consistent with monthly base academic year salary.  Total additional compensation charged during the summer to federal and state grants and contracts must be equal to the percentage of total effort dedicated to the grant multiplied by the base salary rate during the time period earned.  Total additional compensation charged to federal and state sources can not exceed 33% of base academic year salary during the summer period.  Note that NSF limits summer additional compensation to 2/9ths of academic year base salary and NIH salary cap limits http://grants.nih.gov/grants/policy/salcap_summary.htm apply to the amounts that can be charged to federal grants and contracts. 

 

Additional Compensation Charged to Private Grants and Contracts

 

Nine-month and twelve-month faculty are permitted to earn and charge private grants and contracts at rates negotiated with the sponsor throughout both the academic year and summer period.  The negotiated rates must be specifically provided for in the grant or approved in writing by the sponsoring agency.  Additional compensation may not be charged to private grants and contracts during the same pay periods that effort is committed to federal or state grants or contracts.

 

Additional Compensation exceeding 33% of total base salary in a calendar year

 

The total of all additional compensation earned by a faculty member from all sources during a calendar year may exceed 33% of base salary if it complies with all provisions above and is approved by the Provost and Chancellor.  

 

 

Cc:       Joyce Hatch, Vice Chancellor for A&F

Susan Pearson, Associate Provost Faculty Relations and Budget

            Bruce McCandless, Director of Research Affairs

            Juan Jarrett, Asst. Vice Chancellor of Human Resources