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1. Why is the College modifying these guidelines? icon-olus-circle

The College’s guidelines are being modified for two principal reasons:

  • To increase the flexibility for faculty to allocate effort as best needed to achieve their research goals
  • To promote consistency in the manner in which continuing discretionary resources (time and money) are made available across the College
2. Who is modifying these guidelines? icon-olus-circle

The process was initiated by the Dean’s Office and has been crafted with ongoing input from the College Executive Committee. 

3. Why are guidelines for effort allocation (including summer research effort) needed? icon-olus-circle

Institutions that receive federal research funding are required by law to track, and periodically report, all the effort of faculty receiving any federal research funding.  Most Universities, including Penn State, extend this requirement to all faculty (see RA64).   The federal government does this to assure that public dollars allocated to salaries (the single largest expenditure on federal research) are being spent appropriately.  In recent years, several major universities have been assessed large penalties and/or agreed to settlements due in part to effort reporting violations: Northwestern University for $5.5 million; University of Southern Florida, for $4.1 million; Johns Hopkins for $2.6 million; Harvard University for $3.3 million; and University of Alabama Birmingham for $3.39 million.  Our College’s fundamental guiding principle here therefore is to allocate salary support to the period in which it actually is being expended on research effort.

4. Why are guidelines for salary release needed? icon-olus-circle

For more than 50 years, research universities have depended on the support that research active tenure track faculty bring in from sponsored projects (including the components budgeted to support salary) as an important revenue source.   

It is untrue that at Penn State University, or most other research universities, sufficient funds exist in the operating budget to cover salary expenditures of all standing positions (including tenure track faculty) and also allow the University to accomplish all else it needs to.  Therefore, additional sources of revenue are needed and academic year sponsored program support, including the academic year salary release it creates, is one important source.  For example, in the most recent HHD budget more than 46% of the non-salary expenses of our academic Departments are funded by salary release.    

It is also untrue that at Penn State University, or most other research Universities, funds are apportioned to colleges via a formula that includes a component for 100% of each standing position’s salary (i.e., the idea that there is a fully “hard funded line”).  The University, and the comprising colleges to varying degrees, expect that each year a significant proportion of tenure track faculty will cover portions of academic year salary with sponsored project funding.     

The term “salary release” is in some ways a misnomer because there are not separate “accounts” with the full allocation of an individual faculty member’s salary held to then be redistributed when salary support comes in from sponsored projects.   While we still use the “salary release” term in practice, it is best thought of as a mechanism (essentially these guidelines) used to allocate this particular revenue source in a manner that best forwards the goals of the University, the various operating units, and the faculty. 

5. Does the 3:1 “rule” still exist? icon-olus-circle

However, if you have truly flexible effort on a project (i.e., effort where the project work plan does not dictate when it needs to occur over the course of the year) and you want to put time into the project throughout the academic year and then increase your effort over the summer when you have fewer competing responsibilities, you can use the logic of the old 3:1 rule to plan how you will budget this flexible effort over the entire year.  Under that approach you would allocate the same absolute amount of effort over the much longer academic year as that allocated to the much shorter summer period.   So, for example, a project that includes one month of truly flexible effort over the course of project year, you could budget half a month (or 6% effort) in the academic year period and half a month (or 17% effort) in the summer period.  Of course, you would need to be confident that you can actually follow the resulting effort distribution over the course of the year or make corrections following the guidance given in FAQ 10. 

6. How should I build a proposal budget under the new guidelines? icon-olus-circle

Simply put – budget your effort when you will actually perform the work.  

The calendar year distribution of sponsored project effort must accurately reflect the actual calendar year distribution of effort spent on externally funded activities.  In other words, college employee effort on sponsored project activities that span the academic year and the summer must be distributed according to the relative degree of engagement in these time periods.  University employees (to include faculty members) are mandated by University policy (RA64), in accordance with federal regulations, to accurately confirm each year that their monthly effort distribution on all sponsored projects matches the monthly distribution of salary charged to a particular account and is appropriate given effort expended and the specific terms and conditions of the award and funder policies.  

When budgeting, the scope of work and project timetable will commonly dictate when effort for many project activities needs to be allocated.  If there are project activities for which it is unclear at the time of proposal budget building when during the calendar year effort should be allocated, you can use your best judgement to initially apportion the effort for those activities.  It may be reasonable, for example, to believe that you will spend three times as much effort in the summer than in the academic year.  In this case, summer effort will be budgeted for three times the amount of academic year effort.

As the project progresses and it becomes apparent when these activities will actually occur, effort allocations will need to be adjusted to reflect the true effort distribution.  This adjustment or effort reallocation can be done by working with your budget unit to adjust your salary schedule distribution.  

Most changes will likely be minor enough to be done locally and with review from the Research and Finance offices.  However, if your proposed reallocation will increase your previously approved summer effort greater than 3 weeks, additional approvals from your Department Head/School Director/Associate Dean for Research will be necessary.   
 

7. Can I budget all my effort during the summer, with no academic effort? icon-olus-circle

Yes, if all your project effort will truly be conducted over the summer months and no work will be performed over the academic months.  Keep in mind, work performed over the academic months must be charged as such and not paid in the summer.  The project scope should match the effort distribution.  Projects with non-key personnel (such as students and technicians) supported throughout the calendar year will need to have some appropriate level of effort (e.g. 5%) from key personnel distributed over the course of the academic year to provide supervision, mentoring, and oversight.

Any allocation of sponsored project effort to the summer must be approved by the Department Head/School Director (the Associate Dean for Research approves the summer effort of Center Directors and the Dean approves summer effort of Department Heads).  At the time of proposal submission, approval of the Internal Approval Form (IAF) for a project including summer effort constitutes approval of that effort.   No additional approvals are needed.  If there is a change in summer effort from the amount allocated at the time of submission then the following guidelines should be followed, see FAQ Question 10.
 

8. What is cost share effort in a proposal application? icon-olus-circle

Cost share effort in a proposal or award is additional time contributed toward a specific project that is not reimbursed by the sponsor.  There are two types of cost share effort:  COMMITTED and UNCOMMITTED.  

Committed Cost Share Effort:  Is tracked and reported to the sponsor.  These contributions are detailed in the proposal application and often incorporated as part of the award terms.  

Uncommitted Cost Share Effort:  Is tracked and not reported to the sponsor.  These contributions are mentioned in the proposal application but not quantified and are often not part of the award terms.  

Proposal applications including cost share effort (committed or uncommitted) must be approved by the Department Head/School Director and included on the Internal Approval Form (IAF).   Awards received that include cost share effort will be set up and tracked accordingly. 
 

9. How will my existing grants and approved budgets be affected by this guideline change? icon-olus-circle

Existing grants and previously submitted budgets may or may not be affected by the new guidelines.  You can continue to follow your current budget estimate if the budgeted effort accurately reflects the actual calendar year effort distribution on your projects.  However, if effort shifts are needed, these can be made and generally approved by your home unit budget administrator.  

Increases to previously approved summer effort greater than an increase of three weeks must also be approved by the Department Head/School Director/Associate Dean for Research via an email or memo that will accompany the submitted salary distribution change.  Please work with your unit budget assistant to initiate these requests. 

10. What do I do if I want to change my budgeted summer effort under an existing project? icon-olus-circle

If shifts in effort are needed after the initial approval, these can be made and approved by your home unit budget administrator.  Increases to previously approved summer effort greater than an increase of three weeks must be approved by the Department Head/School Director/Associate Dean for Research via an email or memo that will accompany the submitted salary distribution change. 

For changes or effort reallocations LESS THAN 3 ADDITIONAL SUMMER WEEKS, please contact your unit budget assistant to initiate the salary schedule update.  A justification for the effort redistribution will be needed and should be included on the salary schedule.  Unit budget assistants will complete the initial review of the current budget, award terms, and minimum calendar effort for the project. If appropriate, the updated salary sheet will be forwarded to the Research and Finance Offices for final review, approval, and processing.  

For changes of effort reallocations GREATER THAN AN INCREASE OF 3 SUMMER WEEKS, please contact your unit budget assistant to initiate the salary schedule update.  A justification for the effort redistribution will be needed and should be included on the salary schedule.  Unit budget assistants will review the current budget, award terms, and minimum calendar effort for the project before forwarding the reallocation request to the appropriate Department Head/School Director/Associate Dean for Research for approval.  Once the unit approvals have been obtained, the updated salary sheet and copy of the approval will be forwarded to the Research and Finance Offices for final review, approval, and processing.  
 

11. What is the difference between salary release and salary release return? icon-olus-circle

Salary Release occurs when a standing position supported by the Department/School direct charges a portion of their academic time/effort to an externally funded project.  This release or savings of salary dollars is held by the Department and generates two allowable uses:  academic year course buy-out or salary release return.

Salary Release Return is the portion of an individual’s salary release that is not used or saved for academic year course buy-outs.  Distribution of these funds back to the faculty member will occur annually after the end of the fiscal year.  The faculty member’s share will be deposited for unrestricted use (subject to University policy and procedure) in a discretionary fund that is under the faculty member’s primary control.  
 

12. What is the College salary release return distribution practice? icon-olus-circle

Salary release not directed to course buy-outs (either realized or saved) will be returned - 15% to the College, 55% to the local units, and 30% to the faculty member.  In most instances the only “local unit” is the Department.  However, for faculty with a portion of their salary partially distributed to a research center, the 55% share will be split according to that salary distribution or position schedule.  For faculty whose position is budgeted to the Dean’s office, the local unit share will go to the College.

Relinquished saved salary release (for potential buy-outs) will be returned 65% to the local units and 35% to the faculty member, as the 15% contribution to the College was already “returned” or recovered. 

13. What can I spend my salary release return funds on? icon-olus-circle

Generally speaking, salary release return can be used for any general funds expenditures permissible under existing University policies. It is also important to note that you are permitted to utilize these funds to pay summer salary for research and/or to cover summer salary cap costs, provided that these uses conform with all aspects of this, or other, College or University guidelines.

14. How do I qualify for a course release or buy-out? icon-olus-circle

On most sponsored projects, the “cost” for a buy-out of 1 course (3 credit hours) in any semester is 15% of the faculty member’s institutional base effort (or the capped effort in the event a faculty member is above a sponsor’s salary cap).  Another way to think about is:

    15% Academic (AY) effort = 1 course buy-out
    30% Academic (AY) effort = 2 course buy-out
    45% Academic (AY) effort = 3 course buy-out

If a faculty member has the ability to save salary release funds over a 2 year period to accumulate effort toward the 15%, 30%, or 45% goals, this is permitted.  This saved effort is tracked at the unit level, and reported to you on no less than an annual basis.

15. If I choose to save salary release for future buy-outs, will my cost be calculated on previous year institutional base salary (IBS) or my current? icon-olus-circle

Saved salary release from sponsored projects will be based on percent effort.  Salaries do change from year to year, but the percent effort saved from a given year will remain consistent.

Example:

Dr. Want A. Buyout has 10% funded AY effort in each year of a sponsored grant.  In year 1 of the grant, she saves it instead of taking it as salary release return.  In year 2 of the grant, she combines the previous 10% with 5% funded AY effort for a course buyout (15% AY total), and then chooses to receive the remaining 5% in salary release return (see College salary release return distribution policy).
 

16. Does effort approved as cost share in a proposal count toward a course reduction or buy-out? icon-olus-circle

There are certain exceptions when a faculty member may reduce their course load without 15% salary coverage on sponsored projects.  One such example is cost-share effort (at least 15% AY effort) explicitly approved by the Department Head or School Director to allow a reduce course load.

17. Can I move all my salary on an existing project to summer? icon-olus-circle

Any allocation of sponsored project effort to the summer must be approved by the Department Head/School Director (the Associate Dean for Research approves the summer effort of Center Directors).  At the time of proposal, approval of the Internal Approval Form (IAF) for a project with summer effort constitutes approval of that effort.  Increases to previously approved summer effort greater than an increase of three weeks must also be approved by the Department Head/School Director via an email or memo that will accompany the submitted salary distribution change. 

Please keep in mind, work performed over the academic months should be charged as such and not paid in the summer.  The project scope should match the effort distribution.  Projects with non-key personnel (such as students and technicians) supported throughout the calendar year will need to have some appropriate level of effort (e.g. 5%) from key personnel distributed over the course of the academic year to provide supervision, mentoring, and oversight.

If there is a change in summer effort from the amount allocated at the time of submission then the following guidelines should be followed, see FAQ Question 10.

18. What is the purpose of the Summer Research Work Plan Form (WPF)? icon-olus-circle

All summer salary supplements have to be documented and approved.   This work plan provides high-level documentation of the nature of research work occurring over the summer that will generate summer salary funded by any source other than sponsored-project funds.  This includes summer salary funded by salary release, start-up funds, gift accounts, RIF, MGR, and endowment monies.  Remember, summer research effort funded by sponsored research is also documented and approved, but that is done via the typical IAF approval).

WHERE DO I SUBMIT /WHO APPROVES?

The work plan also documents approval of the proposed effort by the Department Head/School Director/ Associate Dean for Research as appropriate.

WHEN DO I SUBMIT?

A faculty member requesting summer salary not covered by sponsored-projects should submit a work plan at least a minimum of 4 weeks before the start of the period for which summer salary support is being requested.  This allow proper review and approval by the Department Head/School Director/Associate Dean for Research.  

HOW DETAILED IS THE INFORMATION REQUIRED ON A WPF?  

The project purpose and anticipated outcomes section of the WPF is not meant to be labor intensive.  Only a few short bullets for each are requested.  

Some examples are:

Purpose of Work:

  • Preliminary data analysis of XYZ data sets to prepare for a new proposal application.
  • Work on publications and journal articles to Nature.
  • Generate additional data needed for preliminary studies section of upcoming grant application.
  • Create new conceptual model for stress vulnerability and health outcomes in women.
  • Develop scoping review of adverse childhood experiences and TBI in adulthood.

Anticipated Outcomes:

  • Estimate reference curves and complete untargeted metabolomics on 100 urine samples.
  • Review relevant literature and create directed acyclic graph.
  • Produce first draft of publication, article, or grant application and circulate to co-authors.
19. Do I need to do a Summer Research Work Plan Form (WPF) to use my start-up funds to provide summer salary for research activities? icon-olus-circle

Yes.  If the terms of your start up provide designated funds for summer salary, you still need to submit a WPF for the work as it occurs each summer.   If your start-up provides discretionary funds for any use, and you decide to use these to cover salary for research over the summer, you also need to provide a WPF. 

20. Do I need to do a Summer Research Work Plan Form (WPF) to use general funds to pay my summer salary cap for effort unallowable under my sponsored project? icon-olus-circle

No. This effort is related to the grant activities and tracked as such.  A WPF is only needed to provide a high level purpose and for summer salary/effort that is not associated with a sponsored project.

21. If I’m using my salary release account to pay for additional summer salary, the fringe for this salary was already recovered when it was charged to the external project. Aren’t you double charging the fringe if I pay it again? icon-olus-circle

No, the University does not consider this a double charge.  Academic and summer salary and fringe are two separate functions within the payroll system:

  • The salary and fringe charged to an external project over the regular academic year (i.e., releasing a portion of your base salary); and
  • The salary and fringe charged to pay your summer salary supplement (a payment over and above your regular contract).

The University utilizes a percentage-based fringe rate to cover the cost of associated benefits. University-wide, fringe is applied whenever compensation occurs (e.g., academic year salary, summer supplement, Supplemental II pay, travel reimbursements, etc.).  While it is true that University faculty on 9-month appointments receive benefits throughout the entire year, it is incorrect to assume that the fringe rate applied to 9-month salary generates an amount sufficient to cover all associated benefit costs for an individual employee on a 9- month appointment.  If you are paying yourself summer supplemental salary out of your discretionary funds, a slightly reduced fringe rate will apply to the supplemental salary and need to be covered by the relevant discretionary funds.

22. Are faculty also eligible for Supplemental II pay? icon-olus-circle

Yes, under certain circumstances; for example, teaching an overload during the academic year, providing course development, administrative roles, or other services.

During the academic year, faculty on a 36-week contract are eligible for, but not guaranteed, up to 20% extra compensation from all sources processed through Penn State, as per PSU Policy HR06.
Any exceptions must be recommended by the Department Head/School Director.    

Supplementary II appointments are similar to overtime, and are not considered part of Institutional Base Salary (IBS).  Supplementary II appointments are considered extra service pay and not normally paid on sponsored research.  Exceptions should be processed through the unit’s Financial Officer and the Corporate Controller’s Office and would need to meet the exceptions outlined in the Uniform Guidance 2 CFR 200.430 (h)(4) and per PSU Policy RA64.  

Please note, PSU Policy RA64, states “Additional Duties payments are not included in effort confirmation and do not qualify as an allowable cost on sponsored awards.

23. How does the College charge my effort across the academic year and the summer months if my salary is above the NIH salary cap? icon-olus-circle

NIH Salary cap is a legislatively mandated provision limiting the direct salary that an individual may receive from an NIH sponsored award. Current salary cap amounts can be found at www.grants.nih.gov/grants/policy/salcap_summary.htm

As an example, if the salary cap amount is $183,300 ($15,275 monthly) for annualized compensation, a PI with a 36-week appointment base salary of $180,000 has an annualized salary of $240,000 ($20,000 monthly) and would be over the cap amount. 

Per RAG64, when an effort confirmation for a grant includes an employee who earns at a rate in excess of a reimbursement salary cap, a notation must be listed at the bottom of the effort confirmation. When confirming effort, the following must be noted on the bottom of the effort confirmation statement when the reimbursement salary cap limitation has been applied:

Example:
_______ (Dr. Over Cap) _______ spent __ (25) __% of his/her time on the grant from the period of _1/1/2018_______ through _12/31/2018___, but is only permitted to charge __ (20) __% due to the cap.
Over the academic months, salary cap is not additional money provided to the faculty member or Department/School; it is really just the acknowledgement that the effort must be tracked by the unit and the effort must be available in the faculty member’s overall portfolio. 
 

During the three summer months, the HHD Dean’s Office has historically subsidized the differences between the salary cap and the actual salary charged. However, no other college within the University has this practice, and it is no longer sustainable. Therefore, the summer salary cap subsidization is being phased out on the following timeline:

  • Summer 2019: the Dean’s Office will pay 100% (salary and fringe) of the summer salary cap cost incurred during the summer months. 
  • Summer 2020: the Dean’s Office will pay 50% (salary and fringe) of the summer salary cap cost incurred during the summer months; the remaining 50% can either be paid by the faculty member via the use of discretionary funds available to them or remain unpaid. 
  • Summer 2021 (and on): faculty members with external funding that are over the salary cap must plan to cover the gap themselves (salary and fringe), either through not making up the difference, or through the use of discretionary funds available to them. 

Faculty with external funding that are over the salary cap and who take a sabbatical must also make arrangements for how the gap will be covered during the sabbatical leave.  Salary release return can be used to cover summer salary cap costs. 
 

Version 1 (September 2019)