Extra Compensation for Externally Sponsored Projects Policy
Faculty and other exempt persons employed by Missouri State University are accountable for performance of regular duties and responsibilities assigned by the University. These professionals are capable of, and committed to, fulfilling the University's missions in a multitude of related activities including teaching, research, other creative efforts, administrative activities and service to the University and public. Faculty and other exempt persons are expected to perform their regular duties and responsibilities assigned by the University without limitations on the number of work hours, as compared to non-exempt employees for whom overtime pay is required.
Compensation for faculty and other exempt persons is based on performance of their regular duties and responsibilities assigned by the University. Compensation above and beyond an employee's annual base salary is not permitted for performance of the regular duties and responsibilities assigned by the University. In certain cases, compensation in excess of a faculty or other exempt person's annual base salary is permitted for activities performed under externally sponsored projects and other internally funded activities. Externally sponsored projects are defined as those for which the University administers funds under a contract, grant or other agreement from a federal, state or local government agency, not-for-profit entity or business. The University is responsible for specific activities and deliverables, and is accountable for expenditures of funds received for these projects.
In most cases, the University will accept funding from an external sponsor for projects that involve compensation to personnel within their base salary. This may result in adjustments to the regular duties and responsibilities assigned by the University. On those occasions where an individual's regular duties and responsibilities assigned by the University can not be reduced, extra compensation can be permitted in accordance with University policy and the sponsor's rules and regulations. Whenever there is a possibility that the regular duties and responsibilities assigned by the University is to be negatively impacted by performance of additional activities under an externally sponsored project, the former will be considered to be of primary importance and adjustments will be required in the additional activities.
The purpose of this policy is to define the conditions under which extra compensation is permitted for externally sponsored projects. This policy is viewed as consistent with existing policies specified in the Faculty and Employees' Handbook. Where any conflict is found to exist, policies specified in the handbooks will prevail.
- Submission of Proposal:
Faculty and other exempt persons who desire to seek extra compensation for an externally sponsored project must submit a proposal in a manner consistent with the procedure for approval of all proposals to external sponsors. The Internal Approval Form (PDF) must be completed and signed by the project director(s) (aka principal investigators) and all others who are seeking extra compensation. In addition to completing the budget section, information is to be provided on the individuals and amounts of extra compensation that are to be received under this proposal. The Internal Approval Form is to be submitted through appropriate administrative channels for review and approval.
It is the responsibility of the immediate and next higher level supervisor, e.g., for faculty--department chair and dean; for other exempt persons--unit supervisor and vice president, to review and, as appropriate, approve the proposal. If, in their judgment, performance of the additional activities are not likely to interfere with performance of an individual's regular duties and responsibilities assigned by the University, approval may be given for extra compensation. If, in their judgment, these additional activities are likely to interfere with performance of an individual's regular duties and responsibilities assigned by the University, these supervisors will be expected to deny the request. In the latter case, these proposals will be returned to the project director(s) for development of alternative approaches.
- Requests for Payments:
Once a project is funded, a Personnel Action Form is to be submitted for payment to faculty and other exempt persons who are to receive extra compensation from an externally sponsored project administered by the University. These forms will be handled in a fashion similar to those for which other forms of supplemental pay are requested.
- Accounting for Extra Compensation:
Faculty and other exempt persons will be responsible for filing Time/Effort Records stating the services performed and time expended for which extra compensation was received. This procedure is identical to the one used by faculty and other exempt persons who received compensation from an externally sponsored project within their base salary or for which their time is pledged as a portion of University matching funds.
- Sources of Funding:
Extra compensation on externally sponsored projects is permitted if it is in accordance with the sponsor's rules and regulations. Office of Management and Budget Circular A-21 applies to all federally funded projects including those for which funds received by the University are from another entity, e.g., from a state agency or other university that has received federal funds for the project in question. Section J.10.D(1) of OMB Circular A-21 states:
"In no event will charges to sponsored agreements, irrespective of the basis for computation, exceed the proportionate share of the base salary for that period. The principle applies to all members of the faculty at an institution. Since intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member of the same institution. However, in unusual cases where the consultation is across departmental lines or involves a separate or remote operation, and the work performed by the consultant is in addition to his regular departmental load, any charges for such work representing extra compensation above the base salary are allowable provided that such consulting arrangements are specifically provided for in the agreement or approved in writing by the sponsoring agency."
It is the responsibility of the projects director(s) to ensure that the proposal for extra compensation is in compliance with A-21. On occasion, this may require obtaining information from potential sponsors to ensure that the source of funds for the proposed project are not from a federal source either directly or indirectly. Additionally, the proposal budget and budget justification must specify that extra compensation is to be included in this project if this is required by the sponsor. For example, in accordance with A-21, this extra compensation "must be specifically provided for in the agreement, e.g., grant or contract, or approved separately in writing from the sponsoring agency." In many instances, proposals to non-federal sponsors also will need to specify in the budget and budget justification that compensation for certain individuals will be in excess of their base salary.
- Amount of Extra Compensation:
The University does not impose a limitation on the amount of extra compensation that faculty and other exempt persons can receive from externally sponsored projects. This is consistent with other forms of extra compensation for which faculty and exempt persons are eligible. The intent of this policy is to allow for this extra compensation as long as the additional activities do not interfere with an individual's regular duties and responsibilities assigned by the University.
Determination of the amount of extra compensation to be charged to an externally sponsored project should be based on the nature of the work the time required to complete the work, and a rate that is acceptable to the sponsor. For all federally funded projects, this rate is to be based on an hourly rate equivalent to the faculty or other exempt persons' annual salary. For faculty with a 9-month appointment, this hourly rate can be determined by dividing the annual salary by 1560 (the federal government's estimate of work hours in a 9-month period). For persons with a 12-month appointment, the hourly rate can be determined by dividing the annual salary by 2080 (the federal government's estimate of work hours in a year).
- Time Expended on Extra Compensation Based Activities:
It is the intent of this policy to permit faculty and other exempt persons to pursue professional interests and development. Consistent with Section 2.8.2 of the Faculty Handbook, these activities are permitted if they do not interfere with the regular duties and responsibilities assigned by the University, and do not involve, on average, more than the equivalent of one work day per week during periods when the University is employing the individual on a full-time basis.
In most cases, time spent on externally sponsored projects will be integrated into the individual's regular duties and responsibilities assigned by the University and will not require extra compensation. This may warrant a reduction in duties and responsibilities assigned by the University, e.g., a faculty member may receive a reassignment from one or more academic assignments to perform the project.
In the case of other exempt persons, the duties and responsibilities of the externally sponsored project also may warrant a reduction in the regular duties and responsibilities assigned by the University. In both cases, the reduction in regular duties and responsibilities assigned by the University should be equivalent to the time expected to be spent on the externally sponsored project.
On those occasions where extra compensation is warranted and approved, the dedication of time to this project will not be considered as warranting any reduction in the regular duties and responsibilities assigned by the University.
Faculty or other exempt persons receiving extra compensation are expected to perform their regular duties and responsibilities assigned by the University and, in cases where there is conflict between the two, the regular duties and responsibilities assigned by the University will have priority.