Budget - Salaries and Wages - B05.01
Purpose
This procedure includes general guidelines regarding the costs of all salaries that will be paid to OHIO personnel (current personnel and those to be hired, including students) from sponsored projects. Always check the funding agency’s guidelines for requirements about appropriate salary charges. Salaries charged to federal grants is regulated under the OMB Uniform Guide 2 CFR §200.430 Compensation – personal services.
Scope
This procedure applies to all sponsored projects subject to OU Policy 19.045 Administering External Grants and Contracts set up as separate accounts in the OHIO Financial Management System (FMS).
Procedure
When considering whether to request external funds to support your salary or the salary of a graduate student, technician, etc., first consult the program guidelines for restrictions or salary caps. It is critical to determine what portion of the time (effort) is to be charged to the project. Total effort within the effort reporting period may not exceed 100%.
Sponsor requirements for tracking key personnel vary widely. Most federal sponsors require tracking effort for key personnel and notification when there is a significant reduction in effort (25% or more) and when one of the key people leave the project. Several federal and foundation sponsors require that key personnel keep current on conflict of interest disclosures of financial interest and conflict of interest training. Principal Investigators are discouraged from listing project participants that do not meet the definition, since named “Key Persons” incur additional burden and audit risk.
Institutional Base Salary (IBS): OU Policy 41.005 defines institutional base salary as the annual compensation paid by 91̽ for an individual's appointment (academic or calendar year), whether that individual's time is spent on research, instruction, service, administration, or other activities. Refer to the finance IBS quick reference guide for more information. Contact your business unit manager for assistance with determining your institutional base salary for the grant or contract proposal budget.
Faculty
| Appointment | Academic Year | Summer | Calendar Year |
|---|---|---|---|
| 9-Month | IBS x % effort | ((IBS/9) x 3) x %effort | N/A |
| 12-Month | N/A | Not eligible | IBS x %effort |
| Hybrid | IBS x % effort | ((IBS/9) x 3) x %effort | 12 mos contract x % effort |
Non-exempt Staff (hourly paid employees)
Administrative and Clerical Staff
Additional Compensation
Students
Escalation Due to Planned Pay Increases
Depending on the planned start-date and duration of your project, you may need to include pay raise estimates to ensure that your budget will have enough funds to cover personnel costs. If project activities will take place after the current fiscal or academic year ends, calculate a 3-5% raise per person for each year of the project. If you know the amount of next year’s raise at the time you are developing a budget, include the known raise for next year then budget a 3-5% pay increase for any subsequent years of the project. While raises have been lower than 3-5% in recent years, budgeting for that level of increase is prudent so the institution is able to cover any unexpected costs (e.g., promotions, fellowships, etc.).
Nepotism
Questions
Questions regarding this procedure can be sent to orsp@ohio.edu
Forms/Templates
Contact your Sponsored Programs Manager for the appropriate budget template
Roles and Responsibilities
OWNER: PI/PD
CONTRIBUTOR: CFAO/BUM, ORSP
APPROVER: Chair, Dean
References
OMB Circular 2 CFR 200.430 Compensation – Personal services
OU Policy 41.002 Additional Compensation
OU Policy 41.003 Institutional Base Salary
Procedure B10 - Direct Charge of Administrative and Clerical Staff
IBS Quick Reference Guide