Effort Training Part III Cost-Sharing, Salary Caps & Other Concerns

1. Effort Training Part IIICost-Sharing, Salary Caps & Other Concerns Office of Sponsored Programs July, 2011

2. Summer Salary / Calculating Ninths • Faculty appointments - Made at college level- Determine how many extra ninths they may earn- Determine if they can earn summer salary

3. COST SHARE • The portion of project costs not funded by the sponsor. The costs must be clearly defined and directly allocable to a specific sponsored project. • Expenditures that are necessary and reasonable to accomplish the program objective

4. What to call it? • COST SHARE • MATCH • INSTITUTIONAL SUPPORT

5. Types of Cost Share • Mandatory (required by sponsor) • Voluntary Committed (offered in proposal, becomes binding) • treat same as Mandatory • Voluntary Uncommitteed (not reported) • Memo 01-06 Clarification of OMB A-21 treatment of VUCS Voluntary Uncommitted(not reported) • Memo 01-06 Clarification of OMB A-21 treatment of VUCS

6. Sources: University, 3rd party, Subcontractors • Federal funds may not be used as match (some exceptions under unusual circumstances where authorized by Statute) • Most common cost shared items are salaries, fringe, tuition, and equipment

7. Requirements for Allowability • Verifiable from recipient’s records • Not included as cost share for any other project (cannot use twice) • Necessary and reasonable to accomplish project • Allowable under applicable cost principles • Not paid by Federal funding from another award • Included in the approved budget when manadatory • Expended during the performance period

8. Your Proposal and Cost Share • Cost share should not be included in the proposal unless it is required by the sponsor. • If required, do not exceed the amount/percentage identified in the RFP or solicitation. • Cost Share must be approved by the Chair/Dean

9. Other Proposal Considerations • Third Party cost share requires a signed commitment letter. • If submitting a revised budget to reduce sponsor funding, reduce cost share appropriately.

10. PI effort is required on a project and must be documented; if not funded directly by the sponsor, the effort must be Cost Shared (minimum 1%) – Exception: equipment & instrumentation grants, doctoral dissertations and student augmentation

11. Your Award and Cost Share • Once proposed and accepted, cost share becomes mandatory • All items cost shared must meet the Cost Accounting Standards (allowable and allocable) • Cost share purposes are established by the Treasurer’s Office (Ex: Equipment/UDRF Match)

12. PI & Dept Responsibilities • Keep records (use PROJECT ID to identify cost-shared expenses) • Meet your Cost Sharing Commitments • Alert your C&G Specialist if you foresee a Cost Share issue

13. Tracking Cost Share • LAM entries – accurate and timely will avoid JV’s later • Confirm cost share for each effort certification period • Tuition is not salary cost share, but IS tied to grad student effort; beware the student on sustaining status because tuition value is lower

14. Reporting Cost Share • Invoices or interim financial reports may require cost share reporting • Transactions for interim reports will be reported only thru the statement date of the reporting period • Transactions tagged with the project are easily retrieved with queries & reports

15. Reporting Cost Share • Cash from any source (UD departments or colleges, or outside funding) is not cost share until it is spent! • Cost share transactions will use fringe and F&A rates appropriate for the award • Automated Closeout Report may not show all required cost share

16. Closeout with Cost Share • PI’s/Dept. Administrators should not report cost share directly to the sponsor without RO input • Mandatory cost share will be reported by RO as part of financial reporting

17. Closeout with Cost Share • Voluntary committed cost share might be reported to sponsor, depending on reporting requirements • Cost share above the required amount will not generally be reported • Voluntary uncommitted cost share is not documented or reported

18. Consequences • If cost share is missing or short-funded in the LAM, process a JV right away • If effort certification is already approved, federal auditors frown on re-certification • May need a 90 Day JV; there is intense audit scrutiny in this area

19. Consequences • Sponsor funding may need to be returned if not enough cost share • Non-compliance with cost share requirements could jeopardize future funding

20. Questions: Fact or Fiction • Once I receive an award, I am not required to meet the proposed cost share • Cost share expenses must be documented • If the cost share is only mentioned in the Project Narrative, I am not required to document the expenses

21. Fact or Fiction: • Once I receive an award, I am not required to meet the proposed cost share - FICTION • Cost share expenses must be documented - FACT • If the cost share is only mentioned in the Project Narrative, I am not required to document the expenses - FICTION

22. Federal Salary CapWhat does it mean? • Federal Consolidated Appropriations Act limits the rate at which salaries can be directly charged to sponsored projects • Maximum annual rate of pay at which an individual’s full time effort can be charged • Excludes associated fringe benefits and indirect costs (except DOD) • Not intended to limit the actual salary paid by the institution

23. Agencies with Salary CapsFY2011 • National Institutes of Health • $199,700: Executive Level I of the Federal Executive Pay scale • Department of Defense (Benchmark Compensation Amount) • Applicable to contracts only • $693,951: All forms of remuneration for services, and related costs that would be considered fringe benefits • Department of Labor – Employment & Training division • $179,700: Executive Level II

24. Salary Cap Implementation • The effort valued above any salary cap must be tracked in the financial system by adding the award’s project to salary transactions paid by the University. • The mechanism is the same as it is for recording cost-share, but this pay is not considered cost-share because it is an unallowable cost to the award. • NIH’s salary limitation provision applies to subawards, but does not apply to consulting fees.

25. Internally Budgeting the Overage Dr. Einstein has a 9 month faculty appointment and is committing 1 month of paid academic effort on this NIH project. Dr. Einstein's contracted salary amount is $160,000 • Annualize salary $160,000/9 = $17,778 * 12 = $213,336 • Determine 1 month of pay ($213,336 /12 = $17,778) • NIH caps @ $199,700 /12= $16,642 • Determine cost share ($17,778 - $16,642 = $1,136) At the time of proposal, departments should ensure that adequate non-sponsored funding is available to cover the balance when a faculty's salary is over the cap. www.udel.edu/research/xls/salary_cap_worksheet.xlsx

26. Budgeting in PeopleSoft @ Proposal Two Salary Lines to total 1 month ($17,778): $16,642 SRPERS – Sponsor paid academic salary $1,136 SRPERS – Salary over the cap (not listed on NIH application) *Cost share link should be completed and approved via the webform.