Salary Planning & Effort Reporting

1. Salary Planning & Effort Reporting January 24, 2012

2. What you will expect today • Part I – Salary Planning and Distribution • Introduction and principles • Planning for 12-month appointments • Planning for 9-month appointments • Part II – Effort Reporting • Introduction and principles • Effort Certification and commitment

3. Part I Presentation Overview • Introduction and Principles Eric Boberg • Putting Principles to Practice • in 12-month appointments Michelle Grana • Planning for 9-month appointments • and Impact of Practice Marsha McClellan

4. Principals of Salary Planning Eric Boberg, PhD Executive Director for Research

5. Get it right the first time‘Cause that's the main thingCan't afford to let it passGet it right the next timeThat's not the same thing • It’s much, MUCH Harder! • With apologies to Billy Joel

6. Measure Twice, Cut Once… • Planning begins with pre-award budget • Adjust/finalize plan with awarded budget • When planning well, effort reporting is simple and seamless

7. Principles & Policies From NIH Grants Policy Statement (10/10): Salary and wage amounts charged to grant-supported projects for personal services must be based on an adequate payroll distribution system that documents such distribution in accordance with applicable Federal Cost Principles and consistently applied institutional policy and practices.

8. Key Principles • Salary tracks with effort, but is not always equivalent • Institutional base salary (and effort) includes both NU and NMFF • Cost sharing (including over the cap salary) must come from non-sponsored source • Identify cost-sharing sources early

9. Key Principles • A PI’s career is NOT all one big project; effort must be allocated to specific projects/activities • Not all faculty activities can come from extramural funding: • Instruction • Administration • Grant writing (usually…) • No PI should ever be 100% funded

10. Key Principles • When things go wrong… • You can’t just use up the money • Salary changes need scientific justification • Review systems may be frustrating, but they are there to ensure compliance

11. Putting Principles to Practice Michelle Grana Buehler Center on Aging, Health and Society

12. Putting Principles to Practice • Pre-award planning • Post-award planning • Dual appointments • Cost sharing • Practical solutions

13. Putting Principles to Practice • Pre-award Planning: Consider proposed commitment • Other support • Other commitments • clinical, teaching, administrative, external commitments (VA)

14. Putting Principles to Practice • Post-award Planning: • Consider proposed commitment (again) • Consider any changes from pre-award budget • Reduced award? • Change in personnel? • Change in start date? • Change in salary?

15. A PI is funded for a new award from the NIH. Through routine budget cutbacks, the NIH has reduced the award by 30%. The PI has insisted he can still meet the all of the study aims within the reduced award budget. • Do you need to do anything? • What is the research administrator’s role in advising PI’s of appropriate steps?

16. Dual (NU+NMFF) appointments Cost Sharing Further complications…

17. NU + NMFF = Base Salary Institutional base salary represents the combined salary from both NU and NMFF Paid by NU under common paymaster Number of person months represents NU effort in relation to professional effort encompassed by the dual NU and NMFF appointments NU & NMFF Appointments

18. NU & NMFF Appointments % NMFF appointment is based on clinical commitment Faculty appointment letter; other documentation of clinical commitment (clinic notes, clinical billing) 2 half-days clinic = 20% NMFF appointment 18

19. NU appointment represents total % effort available for research, teaching, administrative duties NMFF salary represents compensation for clinical activities and may NOT be used in payroll distribution to support cost sharing on grants NU & NMFF Appointments

20. Cost sharing occurs when a cost specifically benefits a sponsored project but is not charged to that project. Can be mandatory (matching funds) or voluntary (NIH cap gap) Most common type of cost sharing on the Chicago campus is the NIH statutory cap and the salary limitation on NIH career (K) awards Cost Sharing

21. NIH statutory cap - tied to Executive Level II of the Federal Executive Pay scale K-award salary cap - typically limited to only $75K allowable salary recovery (for min. 75% effort) Commitments must be met and tracked for sponsor verification in the University's records. (Use your 192’s!) Voluntary Committed Cost Sharing: Cap Gap

22. Practical Solutions • Worksheets for 12-month and 9-month appointments available at ASRSP website • Plan faculty salary distribution among grant and non-grant chart strings • Track cost sharing commitments • Track effort commitments on sponsored projects

23. 12-Month Tool • Includes instruction sheet • Unprotected Excel worksheet – edit to fit needs • Summarizes effort @ end of each quarter • Provides guidance on NU % salary based on % NMFF appointment

24. Instructions - Use 24 • Complete specific instructions available in excel file • Organized by three chart string categories: • Sponsored projects • Non-sponsored chart strings • Associated cost sharing chart strings

25. Features of the Tool 25 • Worksheet auto-calculates monthly NMFF salary • Worksheet auto-calculates monthly % NU salary based on % committed effort • Worksheet auto-calculates and tracks effort reporting and cost sharing • Math checks built in (“TRUE”) track monthly totals and also to confirm % base salary + % cost share = % committed effort

26. 12-Month Tool

27. 12-Month Tool

28. 12-Month Tool

29. 12-Month Tool

30. 12-Month Tool

31. Summary Pages 31 • Provides for both quarterly and annual summaries • Tracks annualized effort based on number of award months in fiscal year • Use for department budget projections • Use for projecting future sponsored awards • Auto-calculates difference between annualized effort and committed effort

32. Year-end summary 32

33. Sample Questions • PI’s often add effort/salary for employees if they see there is money left. Is this just a matter of continually informing them that they are not to escalate expenses near the end of a grant or is there something else we can use to encourage them not to follow this practice? Also, this is often retroactive which involves 90-day letters.

34. Locating the answers… • COME TO THE EXPENSE MONITORING SESSION ON TUESDAY, FEBRUARY 7TH FROM 1PM-4PM • Meet with PI’s regularly regarding budget balance and projections • Monitor funds so that there is not a large balance or deficit at the end of the project • Know what the non-salary funds are planned to be used for • If the budget changes from what was planned pre-award, alert your PI that you need to revise the planned projections for the account (ie. S/he decides not to hire a support staff or it doesn’t happen until 6 months into the project. Is this rebudgeting allowable? How will it be accomplished?

35. 12-Month Planning Summary… • When? • Pre-award • Post-award • Special considerations? • Dual appointments • Cost sharing • How? • Practical solutions

36. Planning for 9-month appointments and Impact of Planning Marsha McClellan Director of Financial Management

37. 9-month Faculty • Appointment –Ph.Ds • Investigator track/Tenure eligible • 9-month base salary • Salary cap • Research quarter

38. 9-month Base • 9-month base is guaranteed • Faculty monthly earnings is 1/9th of base • Faculty monthly pay is 1/12th of base

39. 9-month Base • To determine salary charged to grants, two pieces of information are needed: • Academic year effort (AY) • Summer month effort (SM) • 9-month base charged directly in FASIS • FASIS will allow up to 75% of monthly earnings to be directly charged in a given month. • Effort in excess of 75% is charged outside of FASIS via a salary distribution adjustment (SDA).

40. 9-month Base • To calculate the dollar amount charged to grants each month, two pieces of data are used. • Monthly earnings (1/9th) • Academic year effort (AY) • To calculate the percent entered in FASIS deployment, two pieces of data are used. • The dollar amount calculated above • Monthly pay (1/12th)

41. Salary Cap • NIH Cap limits the amount of salary that can be charged to federal awards ($179,700 or $14,975 per month). • To calculate the dollar amount charged to grants when Cap is in play, two pieces of data are used. • Monthly cap ($14,975) • Academic year effort (AY)

42. Salary Cap • To calculate the percent entered in FASIS deployment when Cap is in play, two pieces of data are used. • The dollar amount calculated above • Monthly pay (1/12th) • Salary in excess of NIH Cap is cost shared on a 192 fund. Some non-federal sponsors also use the NIH Cap to limit the amount of salary charged (e.g. JDRF) • Other salary restrictions may apply to non-federal awards. For example, a sponsor may require a minimum of 15% effort to charge salary. Effort less than 15% must be cost shared.

43. 9 Month Salary Calculation Template References and Templates www.northwestern.edu/coststudies/effort.htmlClick here to proceed (Northwestern Net Id and Password are required to access this page).

44. Research Quarter • Research quarter payments are made using the Summer/Research Quarter Salary Request Form. • To calculate the dollar amount charged to grants, two pieces of data are used. • Monthly earnings (1/9th) or monthly cap • Summer month effort (SM)

45. Forms-Where Do I get Them? • Summer Salary Forms –Found under Human Resources- Payroll-Administrator’s Payroll Payment forms website http://www.northwestern.edu/hr/payroll/administratorpayments.html. • Also under Med Finance’s website • SDA Forms-Salary Direct Charging form for 9 month faculty- HR website http://www.northwestern.edu/hr/payroll/administratorinfo.html, under Forms

46. “Pseudo” 12 Month Appts. • Faculty with 9-month appointments can be treated as if they have 12-month appointments in FASIS and grant applications if the department GUARANTEES full 12-month salary for a defined period of time. • Allows you to use 12-month salary in grant applications. • Simplifies Effort Reporting. • Can be done with both tenured and tenure-eligible faculty. • Must pay full 12-month salary regardless of grant funding.

47. Cost Transfers • What is a cost transfer? • A cost transfer is the assignment of an expense or expenditure (charge) to a federally or non-federally funded account that was initially recorded in another account. • A-21 regulations: “…any costs allocable to a particular sponsored agreement under the standards provided in this Circular may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.”

48. Transfers That Increase Audit Risk • **Red Flags** • Transfers in the last month of the award or after the award has ended • Transfers of costs in round numbers • Transfers without a full detailed explanation • Transfer to or between sponsored projects

49. Cost Transfers Policies & Procedures • Cost transfers over 1 year from the original transaction date will not be accepted unless it benefits the sponsor (credits the sponsored projects). • Cost transfers must be supported by timely certified effort reports. If the certification is over 6 months delinquent past the last date of the reporting period, the cost transfer may not be accepted. • 3. Certified effort must be greater than or equal to the salary charged to the same sponsored project per effort reporting period. To review the certified but not charged (cost sharing) amounts, refer to the Cost Sharing report via ERS -> CERT -> Reporting.

50. Cost Transfers Policies & Procedures-Cont. • Submit the 90-day justification memo with complete responses to the questions and appropriate signatures. Copies of certified effort reports need to be attached to the 90-day justification for the Dean’s office review. • 5. Complete the SDA or 90-day journal with appropriate signatures.