Sec. 1 Purpose
The purpose of this Policy is to provide requirements and guidelines for Institutional Base Salary (IBS) for all sponsored programs, federal, state, and private, at The University of Texas System Administration ("System Administration").
Sec. 2 Principles
This policy is intended to provide consistency in compliance related to compensation for personal services within sponsored programs as it relates to applicable federal guidelines and regulations
Sec. 3 Policy Statement
IBS is the annual compensation System Administration pays for an individual's services, whether that individual's time is spent on research, teaching, patient care, administration, or other activities. IBS excludes any income that an individual may be permitted to earn outside of the duties for System Administration. To comply with the federal guidelines, salaries need to be managed consistently across System Administration, and IBS shall be used for purposes of salary requests on all sponsored projects.
Sec. 4 Federal Requirements
The federal government requires recipients of federal funding to establish an institutional policy that documents the budgeting and expensing of salaries on sponsored projects, and that sponsored project costs such as salaries be treated consistently. These federal requirements shall be consistently applied to all sponsored programs at System Administration.
Sec. 5 Limitations
Sponsors (federal or nonfederal) may have a salary rate cap that would limit the amount of IBS that could be used as a basis for charging salary to their projects. When such limitations apply, the requested salary support is determined by multiplying the proposed level of effort by the maximum IBS allowed. Terms and conditions of the award should be reviewed with caution. To comply with the Code of Federal Regulations, Title 2 Part 200, this Policy defines the components of IBS and establishes procedures for budgeting and expensing of salaries.
Sec. 6 Unallowable Cost
If a sponsored project has a salary rate cap, then an individual's salary in excess of the salary rate cap is considered an unallowable cost. The unallowable portion of salary over the cap may not be charged to a regular cost sharing cost center of the project/program. It must be charged to a non-sponsored, nonfederal fund cost center.
Sec. 7 IBS Overview
7.1 IBS shall be used for purposes of salary requests on all sponsored projects. The terms and conditions of the awards should be reviewed for salary rate caps prior to submitting any proposal. Awards with salary rate caps must be monitored regularly.
7.2 IBS in excess of a salary rate cap must be funded from non-sponsored cost centers. IBS will not be increased or decreased during a fiscal year as a result of receipt or loss of salary support from grants, contracts, and other revenues.
7.3 Salaries and wages should be budgeted commensurate with the proposed level of effort and can be paid only for time they are working on the project(s).
Sec. 8 Accounting for IBS
Limitations imposed by salary rate caps are not absolute. The amount must be prorated as described below.
8.1 Calculate the percentage of the employee's salary that can be charged to the award.
When an employee's rate of pay in a given period exceeds the salary rate cap, the amount of salary that can be charged to the award is calculated as follows:
[ (Salary rate cap x % of Effort)/Total Monthly Compensation ]
8.2 Salary in excess of a sponsor-imposed salary rate cap will be considered as an unallowable cost to the sponsored program. It must be charged to an unrestricted, non-sponsored program cost center. This differential may be considered a Voluntary Committed Cost Sharing. HOP 2.1.5, Cost Sharing Policy.
8.3 Identify the source(s) that will be used to fund any remaining percentages of salary.
8.4 Administrative stipends, honoraria, or supplemental compensation are not included in the rate-of-pay determination of salary rate cap and should not be charged to sponsored programs.
Definitions
Compensation - amount of remuneration, paid currently or accrued, that an employee earned for services rendered during the period of performance for a sponsored project, including but not necessarily limited to wages and salaries.
Effort - time spent on any activity by an individual, expressed as a percentage of the individuals' total effort. Total effort must always equal 100% even if the individual holds a less than 1.0 full-time equivalent appointment.
Effort Reporting - the method of certifying to the granting agencies that the effort required as a condition of the award has actually been completed.
Institutional Base Salary (IBS) - annual compensation paid by System Administration for an individual’s appointment, whether that individual’s time is spent on research, teaching, administration, or other activities. IBS does not include one-time supplements, temporary duties pay, incentive compensation, and/ or compensation for special programs and activities. Additionally, IBS does not include payments from other organizations or income that individuals are permitted to earn outside of their institutional responsibilities, such as consulting. IBS may not be increased as a result of replacing System Administration salary funds with Sponsored Program funds.
Salary Rate Cap - The maximum annual salary for the level of Effort that can be charged to a Sponsored Program. It does not limit the amount of compensation paid to an employee but does limit the amount that the funding agency will reimburse for that individual’s Effort on the Sponsored Program.
Sponsored Program/Sponsored Project - an externally-funded activity that is separately budgeted, accounted for, and governed by specific terms and conditions of the sponsoring organization. A sponsored program/sponsored project may be in the form of a grant, contract, or cooperative agreement for research, instruction, and public service activities.
Total Monthly Compensation - the amount for which an individual is compensated monthly by System Administration through payroll.
