Compensation and Compensation Review for Federal Grants Policy

As a recipient of federal funds, Lewis & Clark College must comply with the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). For sponsored projects governed under 2 CFR Subpart E §200.430, all compensation charges must be reasonable for the work performed, necessary for the performance of the project, allowable per sponsor and institutional policy, and allocable to the project.

Compensation for personal services charged to and/or committed as cost sharing on federally funded projects must be based on a rate not in excess of an individual’s Institutional Base Salary (IBS), be adequately documented in accordance with 2 CFR 200 Subpart E Section 430 Compensation – personal services, and be in accordance with federal guidance, sponsor requirements, and institutional policy. This policy and related procedures are intended to meet these requirements.

Compensation Basis

Faculty and staff are encouraged to pursue external funding to support scholarly and creative endeavors; it is sometimes allowable to charge an external grant for an employee’s work on a sponsored project. Charges that may be allowable to a federally sponsored project include: 1) compensation for work on the sponsored project outside of an individual’s less than full-time appointment (full-time defined for these purposes as 12 months, 1.0 FTE); 2) release time to work on the sponsored project during the period of an employee’s appointment (e.g., a course release), and 3) compensation for the portion of a leave not paid by the College (e.g. sabbatical). All charges must be commensurate with effort on the sponsored project.  Federal funds (and related cost share) may not be used to augment an individual’s institutional base salary (IBS).  Charges to federal awards may not exceed the proportionate share of the IBS for that period or be used to compensate an individual in excess of a full-time appointment.

Compensation Review and Certification

To be compliant with OMB Guidance, compensation charged to federal grants will undergo after-the-fact review to confirm the charges reasonably reflect the work performed on the project.  Lewis & Clark’s system of internal controls helps ensure that compensation costs are charged in accordance with applicable policies governing the proper authorization of expenditures. Central to these internal controls is the federal guidance for after-the-fact review of interim charges that are based on budget estimates. In accordance with 2 CFR 200.430(h)(viii)(C), this process will confirm that the final amount charged to the federal award is accurate. Lewis & Clark reserves the right to charge departmental operating account(s) for cost disallowances on sponsored projects resulting from the Principal Investigator’s failure to comply with this Policy.

1. The Principal Investigator (PI) or the Project Director (PD) will certify Project Compensation Reports not less than annually, confirming that compensation of all individuals charged to or committed as cost sharing towards a project reasonably reflects the work performed.
2. In accordance with 2 CFR 200.430(h)(8)(x) “it is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting. When recording salaries and wages charged to Federal awards for IHEs [Institutions of Higher Education], a precise assessment of factors that contribute to costs is therefore not always feasible, nor is it expected.” As such, payroll expenses charged within +/- 5% variance are reasonably accurate, and need not be reallocated.
3. Project Compensation Reports documenting annual compensation certification shall be incorporated into the records of the College and retained in accordance with the sponsor requirements and/or the College’s Records Retention schedule and the Grants Records Retention Guidelines.
4. Lewis & Clark expects that PIs will complete compensation review in a timely manner. The consequences of not doing so may include, at the discretion of the administration, withholding submission of a new grant proposal and/or stopping work on the sponsored project.

Policy Exclusions

Compensation that is paid in the form of hourly wages is not covered under this policy because accuracy is confirmed through time entry and approval in the Human Resources Information System.

Compensation charged to institutional sources is not covered under this policy, except for compensation used in support of committed cost sharing requirements.

In all cases, the policies of the sponsor shall take precedence if/when they are more restrictive than those of the College.

Definitions

Cost Sharing: Cost Sharing or matching is the portion of project or program costs that are not borne by the sponsor. “Mandatory cost sharing” represents the portion of project costs not paid by the sponsor and required as a condition of the award. “Voluntary committed cost sharing” represents resources offered on a voluntary basis and specifically included in the proposal or award documents. Mandatory cost sharing and voluntary committed cost sharing must be pre-approved at the time of proposal submission, tracked and reported, and are subject to this Compensation Review Policy. “Voluntary uncommitted cost sharing” refers to effort or resources that are not required by the sponsor, are not included in the award budget, and are not tracked or reported; as such, voluntary uncommitted cost sharing is excluded from this policy.

Institutional Base Salary (IBS): IBS shall be the annual compensation paid by the College for an employee’s appointment. The IBS includes regular salary and may include any additional assignments, such as department chair. The IBS does not include bonuses or one-time payments. The amount of an employee’s IBS shall be described in their appointment letter, and thereafter in annual salary letters or amendments to such letters. (Approved by Executive Council 12/13/17)

Principal Investigator (PI) or Project Director (PD): The primary individual responsible and accountable for the proper design, conduct, administration, and reporting of a sponsored project.

Project Compensation Report: The report detailing all compensation charges to a federally sponsored project during the reporting period. This report should demonstrate that expenditures are accurate and reasonable in relation to the work performed by each individual receiving salary and/or non-hourly wages from the project.