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Office of the Provost and Executive Vice Chancellor Summer Salary Limitation for the Boulder Campus

Office of the Provost and Executive Vice Chancellor Summer Salary Limitation for the Boulder Campus. Compliance and Technical Implementation of the 3/9 ths Rule. Agenda. Introduction and Goals Overview AY Research vs Summer Research Effort, Time Off, Salary & Budget, Planning

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Office of the Provost and Executive Vice Chancellor Summer Salary Limitation for the Boulder Campus

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  1. Office of the Provost and Executive Vice Chancellor Summer Salary Limitation for the Boulder Campus

  2. Compliance and TechnicalImplementation of the 3/9ths Rule

  3. Agenda Introduction and Goals Overview AY Research vs Summer Research Effort, Time Off, Salary & Budget, Planning Calculating Summer Pay 3/9thsand1/9thLimits August and May Proration Administrative Stipends Summer Missing Week Examples Implementing in HRMS
  4. Introduction Original document created in FY 2003 by A&S HR Center Collaboration between A&S, Faculty Affairs, OCG, and Controller Jud Hurd Revised in FY 2012 due to Internal Audit of Faculty Summer Pay Approved by Provost for all units on campus Applies to all faculty members paid on an academic year contract 12-month faculty members cannot earn additional salary over the summer months
  5. Goals Compliance with Federal and University policies Federal Polices Office of Management and Budget Circular A-21 – Cost Principles for Educational Institutions National Science Foundation Proposal and Award Policies and Procedure Guide University Polices Additional Pay to Regular and Research Faculty (July 2001) Boulder Campus Policy on Compensation for Faculty Member Serving as Chairs, Faculty Directors, Associate and Assistant Chairs. Associate Faculty Directors, Associate and Assistant Deans, and Institute Directors Ensure faculty member is paid maximum allowable summer salary
  6. AY Research vs Summer Research AY research is part of teaching faculty workload: teaching, research and service Inappropriate for faculty to “bank” time during AY and be paid in summer Only9 month faculty can have paid summer research –– but only for work performed during that summer Can earn up to additional 3/9ths summer salary Summer salary is governed by federal guideline standards (not just by university policy)
  7. OMB Circular A-21 Establishes principles for determining costs to grants Section J.10.d.(2) address periods outside the academic year Limits the amount of salary a faculty member can charge to a grant Permits salary to be charged as longs as: Total compensation confirms to established university polices, and Consistently applied
  8. Budget and Salary Expenses Boulder policy: Charge salary to grant where effort is expended and Paid effort must be supported by proposed salary budget and available funding In other words Effort devoted to grant should be consistent with plan proposed and agreed to at the time of the award Effort on grant with insufficient budget cannot be paid by different grant
  9. Planned Time Off Boulder policy: Teaching Faculty members do not accrue paid leave Cannot take significant time off while paid from grant Can adjust work schedule to allow for insignificant time off as long as total effort remains the same Effort for month’s summer salary must be equivalent to month’s AY effort
  10. Most Important Thing to Remember Summer is all about EFFORT While charging 100% of his/her salary to grant in any given month, a faculty member cannot: Expend efforts towards non-grant related activities Writing new grant proposals Develop new course curriculum UNLESS: effort requirement in the summer has been met, meaning -- paid effort matches AY level and this other activity is over and above that expectation
  11. Additional Limits HOWEVER: Need to keep in mind – NSF and NIH have their own limitations
  12. Specific Agency Limitations NSF Policy Change Effective January 2009 Limit of 2/9ths changed Old policy - allowable during the non-academic year period New policy – allowable in any one year Includes salary received from ALL NSF funded grants NSF Proposal and Award Policies and Procedure Guide, Part II - Award & Administration Guide, Chapter V.B.1.a.(ii).(a)
  13. Specific Agency Limitations NIH Salary Cap Was capped at $199,700 for AY11 Cap reduced to $179,700/year as of 12/23/11 for FY12 Limits how much monthly salary NIH will support If faculty 1/9th salary > a month’s capped amount, can charge only the capped amount to NIH Even though < full dollar amount, it represents 100% effort Fortunately – only affects a few faculty Is the exception, not the rule for Boulder campus
  14. Specific Agency Limitations NIH Salary Cap
  15. Base for 3/9ths Calculation Use the base academic year salary Not included in calculation Overload appointments Continuing Education appointments All administrative stipends Monetary awards Endowed professorships
  16. Example A: Professor X’s total compensation AY salary = $72,000 Taught one Fall overload class = $5,000 Associate Chair stipend = $1,800 Max Summer Salary (3/9ths) = $24,000 $72,000 / 9 months = $8,000 $8,000 x 3 months = $24,000 Compensation from overload class and Assoc. chair stipend not included
  17. Summer Compensation Earned What counts towards the 3/9ths limit Maymester teaching Summer session teaching Summer research LEAP or other training sessions All compensation that requires expending effort except administrative stipends What is NOT counted Compensation earned outside the University Endowed professorship with no required effort Administrative stipends
  18. Timeframe of 3/9ths Calculation Fiscal Year: July 1 – June 30 NOT the calendar summer months (May – Aug) For FY 2012 Compensation earned in July 2011 and August 2011 PLUS, compensation earned May 2012 and June 2012 No compensation changes during this timeframe
  19. August and May Split between the academic year and summer Summer begins Monday after Commencement Summer ends the last day of the Summer Session Prorate based on number of working days in each month
  20. August (typical fiscal year)
  21. May (typical fiscal year)
  22. Administrative Stipends Beginning July 1, 2012 Do not count towards either 3/9ths or 1/9th limit Consistent with how academic year stipends are counted
  23. Rate of Pay New AY rates become effective July 1 Recalculate research appointments based on the new rate Summer Appt Effective mid-May – June 30: AY rate from previous fall and spring semester Effective July 1 – mid-August: new AY rate effective July 1
  24. Missing Week One week in August not designated as part of summer or academic year Faculty member CAN earn entire 3/9ths Except leap years, August and May (in same fiscal year) have same number of workdays 2012 is a leap year Define workdays as Monday – Friday Summer portion of August plus summer portion of May equals 1/9th
  25. Typical Fiscal Year August 12 – 16 not designated part of summer or the academic year
  26. 1/9th Limit No more than 1/9th of AY salary may be charged to grant in a given month Driven by OMB Circular A-21 Limited to faculty earning summer compensation from grants Compensation earned solely from teaching may slightly exceed 1/9th limit Must remain in compliance with 3/9ths
  27. May, August and the 1/9th Limit Faculty member cannot earn 1/9th of AY salary in August or May Months are split between AY and summer Not possible to expend 100% effort on research AY teaching responsibility begins mid-August Calculate daily rate then multiply by number of workdays in summer session portion of month
  28. Example D Professor X’s AY salary = $72,000 3/9ths limit = $24,000 1/9th limit = $8,000 Prorate August and May Both months have 22 workdays (non-leap year) Daily rate = $8,000 / 22 = $363.64 August 20xx: 7 workdays ($363.64 x 7 = $2,545) May 20xy: 15 workdays ($363.64 x 15 = $5,455) $2,545 + $5,455 = $8,000
  29. Fiscal Year 20xx – 20xy AY xx-xy salary = $72,000; 3/9ths limit = $24,000; 1/9th limit = $8,000 July xx max salary $8,000 August xx max salary $2,545 May xy max salary $5,455 June xy max salary $8.000 Total Summer Comp $24,000
  30. Summer Research Funding Worksheet Required beginning July 1, 2012 Requires faculty member to acknowledge the following: Services provided are in direct support of projects Read and understand the 3/9ths rules Cannot take ‘paid’ leave – cannot take vacation while being paid 100% from a grant Will not perform any non-grant related work while paid from a grant Requires signature of faculty member and chair or grant PI
  31. More Examples #1: Professor B’s AY salary = $54,000 3/9ths limit = $18,000 1/9th limit = $6,000 No research funds Plans to teach 2 classes in June @ $4k each for total of $8,000 100% of her summer salary from teaching Not subject to 1/9th limit in month of June Still subject to 3/9ths limit
  32. Examples - continued #2: Professor C’s AY salary = $54,000 3/9ths limit = $18,000 1/9th limit = $6,000 Dept chair: stipend 21% of AY salary paid over 12 months or $945 per month Has grant and plans to pay herself summer research How much can she earn from grant and stay in compliance with both 3/9ths and 1/9th
  33. Examples - continued
  34. Example - continued #3: Professor E’s AY salary = $63,000 3/9ths limit = $21,000 1/9th limit = $7,000 Taught class July 20xx – paid $4,000 August xx – charged $2,739 to research grant Maymester – wants to teach and be paid $4,000 Wants to pay herself remainder of 3/9ths in June How much can she earn and be in compliance
  35. Examples - continued
  36. Examples - continued Illustrates need for planning to ensure faculty member can entire 3/9ths Cannot go back and pay herself retro pay for last July
  37. PeopleSoft HRMS Contract method: pays entire amount over the contract days using a weighted average Monthly method: calculates a daily rate and pays number of days worked In most cases, will not get same results using these methods Has ability to enter more than one speedtype in funding distribution panels
  38. Contract vs Monthly
  39. Multiple Appointments Faculty often have multiple appointments in different units No central location for payroll process Not all appointments are processed by same person Or at the same time Increases chance of non-compliance Faculty members rostered home is final decision maker if multiple appointments violate 1/9th or 3/9ths limits
  40. Summer 2011 - 2012 Due to leap year, need to adjust August 2011 date for end of summer to August 11, 2011 August 2011 and May 2012 both have 23 working days August 2011 extend summer to 8/11/11 allows for 9 working days May 2012 working days assigned to summer is 14 days August 9 working day + May 14 working days = 23 days
  41. Peers University of Missouri & Texas Tech performs post summer audit Rochester University Requires pre-approval Limits faculty with admin appts to max of 95% salary to grant Prohibits vacations while paid from grant No more than 2.5 months of salary can be charged to grant Vanderbilt University Limits appointments to 85% of AY To be paid 100%, must sign form acknowledging no time off or no time spent to write proposals
  42. Peers continued Emory University Requires form approved by chair/director before faculty member can be paid Requires Dean’s approval for more than 2/9ths salary University of Texas – Austin Limits the 1/6th of AY salary Can only be charged during one of two six-week period in summer (not both) Texas A&M does not permit time off during appointments
  43. Resources Information related to the summer faculty salaries or the summer session can be found at: http://www.colorado.edu/AcademicAffairs/resources.html

  44. Questions

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