Effort Training Part III Cost-Sharing, Salary Caps & Other Concerns Office of Sponsored Programs July, 2011

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

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

What to call it? COST SHARE MATCH INSTITUTIONAL SUPPORT

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

 Sources: University, 3 rd 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

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

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

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

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

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)

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

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

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

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

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

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

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

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

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

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

Federal Salary Cap What 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

Agencies with Salary Caps FY2011 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

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.

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 1.Annualize salary $160,000/9 = $17,778 * 12 = $213,336 2.Determine 1 month of pay ($213,336 /12 = $17,778) 3.NIH $199,700 /12= $16,642 4.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.

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