FAQ: Faculty Member Remuneration from Sponsored Research Grants
Institutional Base Salary
Institutional base salary is the annual compensation paid by an institute of higher education (IHE) for an employee’s appointment, whether that individual's time is spent on research, instruction, administration, or service. Institutional base salary excludes any income that an individual may be permitted to earn outside of his/her duties for the IHE, and may fluctuate according to organizational policies related to special circumstances, such as Leaves of Absence, Sabbaticals, etc.
At Western University, Articles related to compensation and benefits for Probationary, Tenured and Limited-Term faculty members are laid-out in the UWOFA Collective Agreement [Compensation and Benefits, pp. 70-85; Reduced Workload, pp. 224-226; Sabbatical Leave, pp. 233-239].
Institutional base salary is your base salary as noted in the Compensation History table in My Human Resources. Resulting Base Salary is comprised of individual base salary plus any annual increases, adjustments and performance-linked funding, as defined in the UWOFA Collective Agreement 2018-2022 [Compensation and Benefits, pp. 70-85].
Yes. The IBS used to calculate salary requests on external research grant applications must reflect income reductions outlined in the UWOFA Collective Agreement 2018-2022 associated with Sabbatical, Pregnancy or Parental/Adoption Leaves that will occur during the research project’s period of performance.
A Paid Professional Activity is an activity funded by sources other than the University which arises from the member’s academic position and expertise and which confers a financial benefit [UWOFA Collective Agreement 2018 – 2022, page 89].
Sponsored research grants are held by the University, and as such cannot be considered a Paid Professional Activity.
Contract Research is a unique funded research activity that arises when an industry or government sponsor requests a faculty member to engage in a directed research project. In most cases, a Contract Research opportunity does not result from open calls for research proposals.
Time Release, Course Release or ‘Buy-out’, is a reduction in a faculty member’s contractual teaching load. To request Release Time in conjunction with a sponsored research application, the faculty member must make a formal request to their Chair, Director, and/or Dean, and receive approval for that request, prior to submission of the funding application.
Additional to department/faculty approval, ROLA Proposals (required to obtain institutional approval for the submission of research applications) contain a ‘yes/no’ detail to capture Time Release requests. Therefore, approval of the time release conditional on grant success should be received before grant submission. After receiving the grant, the arrangement needs to be documented as an “Alternative Workload Agreement” so that the faculty member’s arrangements are properly recorded.
Budget Development – Research Grant Applications
The requested salary reflects your IBS at time of implementation of the project and is in proportion to your effort to be expended on that project (see FAQ ‘Effort in Person Months’). The salary request must not exceed sponsor salary caps.
A salary cap is the maximum amount or rate of compensation for salary that a sponsor will reimburse a grantee on a sponsored program. Where a granting agency specifies a maximum rate at which an individual may be paid from agency funds, Western University will ensure that any salary above that rate will not be charged to the agency.
Salary caps are used by the U.S. Department of Health and Human Services (DHHS) agencies, such as NIH, AHRQ, CDC, HRSA, etc., and are set by the United States Congress. Refer to NIH Central Resource for Grant and Funding Information Salary Cap Summary (FY 1990 – Present) for current and historical salary limits.
The U.S. CDMRP/DOD, Army, NSF, and NASA agencies do not have salary caps on grant funding; however, Western Research recommends consulting each agency for specific guidelines and restrictions. The National Science Foundation (NSF), for example, imposes a limit of two months’ salary per year from all NSF sources for senior personnel, unless specifically budgeted and approved by NSF.
Person months is the metric for expressing the effort (amount of time) investigators, faculty and other senior personnel devote to a specific project. The effort is based on the type of appointment the individual holds with the organization; e.g., calendar year (CY), academic year (AY), and/or summer term (SM); and the organization's definition of such. For instance, some institutions define the academic year as a 9-month appointment, and the remaining 4 months are the summer term.
Western University faculty members hold 12-month calendar (CY) appointments. Therefore, Person Months is calculated by multiplying the percentage of faculty member effort associated with the research project times 12 months.
Example: 10% of a 12 month calendar appointment equals 1.2 (CY) person months (12 x 0.10 = 1.2)
Faculty members cannot commit more than a cumulative 100% (12 CY) effort across their research projects.
Refer to NIH FAQ on Usage of Person Months.
Regulations Influencing the Use of Grant Funds for Compensation
If the Research Sponsor Allows Investigators to Budget for Their Salary, Why Won’t Western Allow the Investigator to Receive it as Supplemental Income?
Western policies, sponsor policies, and in many cases government funding principles and directives, determine the compliant administration of allowable costs on a research grant.
Research grant sponsors provide funding for the direct costs to complete and translate research projects. Due to the origins of sponsor operating funds, such as (but not limited to) charitable donations, endowments, or taxpayer funds, allowable research costs seldom permit direct or indirect investigator financial gain. Sponsor policies to prohibit investigator financial gain can be directly stated (as in Example A, below), or can be embedded in financial principles and regulations that allow administrative flexibility at the recipient institution but none-the-less prohibit the use of grants funds to compensate an investigator over-and-above the expected IBS for their employment duties (as in Example B, below).
Example A: Canadian Tri-agency Research Grants
Canadian federally-funded research grants are administered according to the Tri-Agency Guide on Financial Administration. Part 2: Use of grant funds, subsection Employment and compensation expenditures, states that Agency grant funds must not be used to pay compensation to:
- grant recipients or individuals who conduct research independently as part of the terms and conditions of their employment, including but not limited to researchers in academia, hospitals and research institutes
- individuals expected to work on the funded research/activities free of charge as a collaboration as per the program and funding opportunity literature and any relevant agency agreements
Faculty remuneration is clearly not an allowable expense on Canadian federally-sponsored research grants.
Example B: United States Government Agency Research Grants
U.S. federally sponsored research grants allow requests for faculty remuneration provided the funds are administered according to the Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200. 2 CFR § 200.430, including Compensation – personal services:
- Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees:
- Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities;
- Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and
- Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.
Further guidance is provided in 2 CFR § 200.430 paragraph (h) Institutes of higher education (IHEs), (2) Salary basis:
- Charges for work performed on Federal awards by faculty members during the academic year are allowable at the IBS rate. Except as noted in paragraph (h)(1)(ii) of this section, in no event will charges to Federal awards, irrespective of the basis of computation, exceed the proportionate share of the IBS for that period. This principle applies to all members of faculty at an institution.
And further states,
- Unless there is prior approval by the Federal awarding agency, charges of a faculty member's salary to a Federal award must not exceed the proportionate share of the IBS for the period during which the faculty member worked on the award.
Based on the above regulatory excerpts, salary compensation for effort expended on a U.S. Federal grant is allowable, but can not result in faculty remuneration above their institutional base salary (IBS) during the period of performance. Western research-eligible faculty are paid their IBS for 12 month periods, leaving no income gap for US grant funds to fill.
Faculty Researchers at U.S. Universities Have Their Salaries Paid by Research Grants, Why Can’t Western Faculty Members?
Western faculty are provided an institutional base salary for a 12 month period. Operational funds allocated to a faculty member’s salary can be substituted with eligible grant funds, but the resulting income remains the expected institutional base salary for the period of performance. Grant funds cannot directly supplement/increase faculty incomes above IBS.
U.S. Faculty can have appointments where the university pays their salary on a 9 month basis during the academic year (for research, instruction, administration, or other duties), and grants and other revenue sources pays their salary during the summer months. The summer additional compensation is typically computed using an annual rate equivalent to the member’s regular annual base salary for the summer months for which they are allowed compensation. Under this income structure, U.S. researchers are, like Canadian faculty, bound by the U.S. Uniform Guidance IBS limits.
The U.S. Uniform Guidance Allows Federal Grant Funds to be Allocated to Extra Service Pay. Can I Receive Compensation from my Research Grant for Work Over-and-Above What I am Currently Employed to do?
Additional salary compensation above and beyond IBS is considered to be extra service pay. To allocate grant funds as extra service pay, the institute of higher education (IHE) must have consistent written overload compensation policies applicable to all faculty members, not just those working on U.S. Federal awards, outlining how work beyond that covered by IBS is defined, conclusively determined, compensated and accurately documented.
Instead of an extra service pay approach that is restricted to faculty members holding eligible grant funding only, Western University upholds a comprehensive, uniformly applied and transparent performance-based approach to faculty compensation, as outlined in the Compensation and Benefits Article of the Faculty Collective Agreement between The University of Western Ontario and The University of Western Ontario Faculty Association, July 1, 2018 to June 30, 2022.