III.

Compensation and Effort Reporting for Grants & Contracts

A. Overview

Federal regulations for compensation and effort reporting for grants and
contracts are complex. Therefore, compliance with the laws and regulations
effecting sponsored projects requires a thorough understanding of federal laws
and regulations, award terms and conditions, and University policies and
procedures related to compensation and effort reporting.

Objectives:

In this chapter you will learn about:

• how to allocate effort to sponsored projects

• the new hire process
• the summer salary process
• the hiring process for students employees
• other compensation-related topics
• compliance issues related to salaries and wages

B. Allocating Effort to Sponsored Projects

Effort is the time spent on professional activities by University employees

expressed as a percentage of each individual’s total effort. Total effort is
the professional activity for which an individual is compensated by the
University. When a project budget includes funding support for faculty,
staff, and students, each individual’s percentage of effort on the project
must be calculated in order to properly charge labor costs.

1. Employee Action Forms (EAF)

A new EAF must be completed each time there is a change in effort on

a sponsored project. The Salary Redistribution EAF is used to change
the percentage of effort for current employees. The New Hire EAF is
used for new employees hired to work on a sponsored project.

The Employee Action Forms are located on the HR website:

http://finweb.rit.edu/humanresources/forms.html

2. Salary Redistribution – Faculty and Staff

a. When the percentage of effort on a project changes, complete a

Salary Redistribution EAF and send to SPA for approval.

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 b. The effective end date of the EAF must correspond with the
earliest sponsored project end date.
c. The principal investigator is the first approver of the EAF. Obtain
all other required signatures before sending to SPA.
d. SPA will forward the completed EAF to Human Resources (HR)
for processing. The changes will be effective in the next payroll
period as long as the forms are received in HR by the cut-off date.

Refer to the Payroll Schedule on the Controller’s Office website for dates
that EAFs are due to HR:
http://finweb.rit.edu/controller/payroll/schedule.html

e. Note that the costs of administrative and clerical staff are generally
not allowed as direct expenses on sponsored projects unless
specifically approved in advance by the sponsor.
f. An exception may be made if: 1) there is EXTENSIVE use of such
expenses and the expenses have been properly justified and
documented in the grant/contract proposal and, 2) it has been
approved as a direct cost by the sponsor.

Refer to the Allowable and Unallowable Charges document on the SPA

website for more information about administrative costs:
http://finweb.rit.edu/controller/sponsored/docs/charges.pdf

3. Salaries Charged to Cost Share

a. When mandated by the sponsor or voluntarily committed, cost

sharing is a real commitment of University resources towards the
completion of the sponsored project.
b. Therefore, cost sharing represents actual expenditures that must be
properly tracked and funded in specific cost share project accounts.
An example of an account number to be used on an EAF for
faculty effort on a cost share project is:

01. 67953. 70150. 15. CXXXX. 00000

c. Each quarter, SPA funds cost share commitments via transfer
journal entry that will reduce the available funds in the funding
department (e.g. the operating account), and increases the available
funds in cost share account to offset the actual expenditures.

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 C. New Hire Process

1. When an award includes salary support for new hires, forward a

completed Faculty/Staff Requisition Form to SPA with a position
description. Note that salary offers must be approved in advance by
the appropriate divisional vice president or delegate.

Find the Faculty/Staff Requisition Form on the RIT Human Resources

website: http://finweb.rit.edu/humanresources/forms/staffrequisition.pdf

2. Complete the New Hire EAF with the principal investigator’s

approval.

3. Obtain all department /college signatures before forwarding to SPA for

processing. SPA will forward the completed form to HR.

The New Hire Employee Action Form is available on the RIT Human
Resources web site:
https://finweb.rit.edu/humanresources/forms/eafnewhire.pdf

D. Postdoctoral Professional

1. Postdoctoral professionals are full-time RIT employees, typically hired

for a 3-year period, who are entitled to standard benefits.

2. Post Docs receive an annual salary which is charged to object code 70350.

3. Complete a new hire EAF and forward it to SPA for processing.

E. Graduate Assistantships

1. Students who receive a graduate assistantship must be matriculated in

an RIT graduate degree program and enrolled in courses toward the
completion of a graduate degree during the assistantship period.

2. Five Graduate Assistant job classifications have been created to ensure

consistent treatment of students with similar job responsibilities and to
determine if the positions are subject to provisions of the U.S.
Department of Labor Fair Labor Standards Act (FLSA).

3. Tuition remission is applied consistently to all graduate assistants with

a 20-hour appointment at a rate not to exceed 50% of tuition on
sponsored projects when the cost has been approved in advance by the
sponsor. For appointments with fewer hours, the percentage of tuition

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 remission provided to the graduate assistant is pro-rated down
proportionately. For example, tuition remission for a graduate
assistant with a 10-hour appointment cannot exceed 25% of total
tuition.

4. For federally-funded projects, tuition remission and other payments

made to a graduate assistant are allowable when the graduate student is
enrolled in an advanced degree program; is conducting activities
necessary to the sponsored agreement; and, the tuition remission is
provided in accordance with established University policy.

5. Salary and wages for graduate assistant job classifications other than
Graduate Research Assistant may not be charged to federal and state
projects unless specifically approved by the sponsoring agency.

6. Tuition remission is subject to federal effort reporting requirements

(OMB Circular A-21, Section J.10. and J.45).
a. When tuition remission is charged to sponsored projects, the
amount must be consistent with University policy (i.e., no more
than 50% for a 20-hour appointment).
b. The tuition remission amount must be proportionate to the level
of effort (i.e., if 50% of the GRA’s stipend is charged to a
research project during the quarter, then ½ of the standard tuition
remission amount for the quarter may be charged to the project).

7. Typical assistantships are for one academic year and are not less than
10 hours per week. A separate appointment may be made for the
summer quarter. Occasionally, assistantships may be for one academic
quarter only.

F. Summer Salary Contracts

1. Beginning in academic year 2007-2008 faculty academic year

contracts are 9.5 months, beginning in the last week in August and
ending after the first week in June.

2. The summer salary contract period begins during the 2nd week in June
and ends the 3rd week in August. Faculty may be entitled to earn
summer salary for work on sponsored projects over the summer
months up to 26.3% of their base contract amount.

3. Most summer contracts are paid over 6 pay periods beginning June
15th and ending August 31st. Payments cannot be made in a lump sum
or paid in advance of the work actually being performed.

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 4. An example of an account number to be used on an EAF for faculty
summer contracts is:

01. 67953. 70550. 15. 3XXXX. 00000

5. Summer salary payments are assessed the part-time benefit rate.

6. To request summer salary, complete a Summer Salary Charged to

Grants & Contracts EAF and send the completed form to SPA for
approval.

7. Each EAF must be signed by the principal investigator. The PI’s EAF
must also be approved by the appropriate department head.

Summer Contract Calculations:

Example 1: 100% effort June – August

9 Base academic year contract = $50,000
9 Summer contract @ 100% effort
ƒ $50,000 * 26.3% = $13,150
9 Amount per pay period =
ƒ $13,150 / 6 pay periods = $2,192

Example 2: Less than 100% effort June – August

9 Base academic year contract = $50,000
9 Summer contract @ 50% effort
ƒ $50,000 * 26.3% = $13,150 * 50% = $6,575
9 Amount per pay period
ƒ $6,575 / 6 pay periods = $1,096

Example 3: Less than 100% effort – One month only

9 Base academic year contract = $50,000
9 Summer contract @ 40% effort (1 month / 2.5 months)
ƒ $50,000 * 26.3% = $13,150 * 40% = $5,260
9 Amount per pay period
ƒ $5,260 / 2 pay periods = $2,630

Example 4: Multiple Awards

The amount charged to each grant/contract reflects the actual effort
expended by the PI on each award. Total earned can not exceed
26.3% of the contract year base.
9 Base academic year contract = $50,000
9 Grant 1 summer contract @ 50%
ƒ $50,000 * 26.3% = $13,150 * 50% = $6,575
9 Grant 2 summer contract @ 25%
ƒ $50,000 * 26.3% = $13,150 * 25% = $3,288

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 9 Teaching Assignment of $3,000
9 Total amount earned from June – August = $12,863

Example 5: 11-month contracts

Faculty member is entitled to earn a maximum of 9.1% (1/11th) of
a full summer contract for 100% effort
9 Academic year contract = $50,000
9 Summer contract @ 100% effort:
ƒ $50,000 * 9.1% = $6,575
9 Amount per pay period:
ƒ $4,550 / 2 pay periods = $2,275

G. Other Salary-Related Charges

1. Benefits – Separate benefit rates have been negotiated and approved for
federal and state grants and contracts. The federal and state full time
benefit rate does not include dependent tuition waivers, an unallowable
expense per the Office of Management & Budget (OMB) Circular A-21,
Cost Principles for Educational Institutions.
a. Benefit expenses are charged to object code 72050. The calculation
is based upon salary expenses for the month.
• Total salaries for the period * Rate = Benefit Expense

Information about current benefit rates is available on the Controller’s

Office web page: http://finweb.rit.edu/controller/payroll/rates2009.html

2. ITS Charges – The ITS rate, which is adjusted annually, reflects the
centralized costs of supporting RIT computer systems and the network.
ITS charges are assessed monthly based upon FTE paid through payroll
and charged to object code 90230.

Information about the current ITS rate is available on the Controller’s

Office web page:
http://finweb.rit.edu/controller/accounting/itschargeback.html

H. Effort Reporting

1. OMB Circular A-21 provides cost principles for institutions of higher

education when charging salaries and wages to federally-funded projects.
a. A-21 requires that salaries and wages charged to federally-funded
projects be supported by activity reports signed and approved by the
employee, principal investigator, or other responsible official who is
in a position to know whether the work was performed.

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 b. The reports must reflect 100% of an individual’s activity.
c. The system must provide for after-the-fact confirmation or
determination that the reported effort reasonably represents the actual
effort expended on the project.

2. RIT follows the after-the-fact reporting method. SPA prepares and

distributes Quarterly Monitored Workload Reports (QMWR) for each
federal grant/contract to PI’s for certification.
a. QMWR’s provide details of salary charges to sponsored projects and
any related cost share project for the preceding quarter.
b. The PI (or an individual with direct knowledge of the grant/contract
activity) must sign the QMWR and return it to SPA to be filed in the
grant/contract file.
c. A separate QMWR’s for graduate student tuition remission charged
to sponsored projects will be generated to be certified by the PI.

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Chapter III: Compensation and Effort Reporting for Grants and Contracts
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