Institutional Base Salary (IBS) for Externally Funded Projects

Op4.02-3 Institutional Base Salary (IBS) Policy for Externally Funded Projects


This policy sets forth the university’s definition of Institutional Base Salary (IBS) for externally funded projects. It establishes the university’s policies and procedures for compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, issued by the Federal Office of Management and Budget (2 CFR 200). Federal regulations require recipients of federal funding establish institutional policy that documents the budgeting and expensing of salaries on sponsored projects. In addition, government regulations require that sponsored project costs, such as salaries, be treated consistently.


This policy applies to all employees whose salary is charged to an externally funded project, in whole or in part, and to all employees who have committed effort to a sponsor but are not receiving salary support from the sponsor, also known as cost sharing.


Charges for work performed on Federal awards and other sponsored projects by employees during the academic year are allowable at the IBS rate. Any extra compensation above IBS will be in accordance with Op4.02-4 Extra Compensation for Externally Sponsored Projects Policy.

Definition of Institutional Base Salary (IBS)

  1. For purposes of this Policy, institutional base salary means the annual compensation paid by the university for an individual’s appointment, whether that individual’s time is spent on research, instruction, administration, or other activities, and regardless of funding source.
  2. IBS is established by the university by appointment/promotion letter, personnel action form, or other written document and does not include any income that an individual is permitted to earn outside of his or her duties for extra compensation/extra service pay. Examples of the types of compensation that are not included in IBS are:
    1. Periods Outside the Academic Year/Summer Salary Stipends;
    2. Salary Supplements;
    3. Awards and Honorariums;
    4. Internal Overloads; and
    5. Any type of additional compensation received from outside sources (Consulting and Extra Compensation).
  3. IBS shall not be increased/decreased as a result of replacing institutional salary funds with grant funds.
  4. For employees in positions outlined below, the following additional rules apply when calculating IBS:
    1. Administrative Positions
      All supplemental compensation paid to faculty or staff for an administrative position, such as a dean, associate dean, assistant dean, chair, vice chair, division chief, director of a center or institute, director of a graduate or undergraduate unit is considered part of the IBS.
    2. Endowed Chair, Endowed Professor
      All compensation paid to faculty as an endowed chair/professor (any rank) is considered part of the IBS, except in such cases where the dean/department chair determines that certain duties associated with the endowed chair/professorship position should not be included (e.g., the holder of the endowed position is receiving additional compensation as an honor or as a form of recognition and not because of the duties being performed for purposes of promotion and tenure decisions).
    3. Part-time Employees
      Charges for work performed on Federal awards and other sponsored projects by employees having only part-time appointments will be determined at a rate not in excess of that regularly paid for part-time assignment.