Policy Applicability and Scope

The federal government establishes   guidelines governing compensation for recipients of federal funding (here, Norwich University). This policy applies to all employees of Norwich University, including faculty and staff, receiving extramural funds from sponsored projects. These federal requirements shall be consistently applied to all sponsored awards at Norwich University, whether federal or nonfederal, in the interest of consistency of practices and equity of rules surrounding compensation.  

Policy Statement and Purpose

The purpose of this policy is to provide guidance, clarity, and transparency on how compensation from extramural awards is applied at Norwich University and to ensure compliance with the requirements of 2 CFR 200.430 Compensation (Uniform Guidance) for the purposes of sponsored projects (extramural grants, contracts, and cooperative agreements). 

Failure to accurately propose, charge, and/or document salaries to sponsored awards or to comply with the requirements set forth in 2 CFR 200.430 of the Uniform Guidance could result in financial penalties, expenditure disallowances, disallowing federal awards in the future, and/or harming the University’s reputation. 

Specific details are provided in Office of Management and Budget (OMB) Uniform Guidance, 2 CFR Part 200- “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”, §200.430, Compensation-personal services. 

Definitions

Administrative Stipend – The payment for performing administrative duties such as chairing a department or directing a program (e.g. Honors Program, Undergraduate Research Program, Faculty Development Program, Research Center, etc.). 

Contract – A legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in the OMB Uniform Grants Guidance does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward (see § 200.92 Subaward of the OMB Uniform Grant Guidance).

Contract Period – Period of time, from start date to end date, identified in any employee contract for which the duties outlined in the contract are performed.  

Cooperative Agreement – A legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302–6305:

a. Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal government or pass-through entity's direct benefit or use;

b. Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.

c. The term does not include: (1) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or (2) An agreement that provides only: (i) Direct United States Government cash assistance to an individual; (ii) A subsidy; (iii) A loan; (iv) A loan guarantee; or (v) Insurance.

Extramural Award – Federal or non-federal monies from a source outside of the institution.  

Grant: Federal –

A legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302, 6304:

1. Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or passthrough entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal awarding agency or passthrough entity's direct benefit or use.
2. Is distinguished from a cooperative agreement in that it does not provide for substantial involvement between the Federal awarding agency or passthrough entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.
3. Does not include an agreement that provides only: (1) Direct United States Government cash assistance to an individual; (2) A subsidy; (3) A loan; (4) A loan guarantee; or (5) Insurance.

Grant: Non-federal–

A gift, grant, or sponsored contract from a non-federal private organization or agency such as a foundation, charity, state or local organization, whether forprofit or not-for-profit. These awards are subject to the regulations of the funding organization which sometimes differ from federal guidelines. However, except under special circumstances approved by the Associate Provost for Research, non-federal awards are subject to the same guidelines used for federal awards and as outlined in this policy in the interest of consistency of practices and equity of rules surrounding compensation.    

Incentive Component – 

A bonus or incentive payment for exceeding performance goals or satisfying other criteria established by and approved by the University. Examples include but are not limited to: 

• Category I Dana Grants;
• Dana Professor stipends;
• Homer L. Dodge Teaching Awards;
• Excellence in Scholarship Awards;
• IITL Teaching Fellow stipends;
• other honoraria and monetary awards based on merit;
• stipends for mentoring undergraduates in the Honors Program or Undergraduate Research Program.

Institutional Base Salary – The annual compensation paid by the University to a full-time or part-time faculty or staff member for an individual’s professional services. Duties included in institutional base salary include teaching, scholarship, service, and/or other activities listed in an individual’s job description and contract and as required by their supervisor.

Norwich Grants Checklist – Checklist required of any Norwich employee listed as personnel on any grant proposal before the proposal is submitted. The Checklist identifies time and effort associated with a sponsored project and requires acknowledgement of the IBS Policy (as well as other policies relevant to sponsored projects). It is signed by the employee, their supervisor(s), the Associate Provost for Research, and when relevant, the CIO; the dynamic form is submitted to and housed by the Director of Sponsored Programs.   

Sponsored Project – An activity that is funded by an external organization, such as a federal, state, or private organization or agency. Sponsored projects include grants, cooperative agreements, and contracts; they include both federal and nonfederal awards.  

Temporary Extra Compensation – Compensation approved for a temporary period for assuming additional responsibilities, such as teaching an extra class, advising additional students, etc.

 Procedures

1. Communication and Training
   1. The Policy on Compensation from Extramural Awards is housed on the NU Policies Sharepoint Site as it pertains to all employees (including staff and faculty) receiving extramural awards.
   2. Pre-Award: The “Norwich Grants Checklist” must be completed by any employee with time and effort budgeted on a sponsored project. It includes acknowledgement of and agreement with this policy by the employee and is digitally signed by the employee, their supervisor(s), the Associate Provost for Research, and when relevant, the CIO. The digitally signed file is submitted to and housed by the Director of Sponsored Programs. The link to the Norwich Grants Checklist is available on the Office of Academic Research Sharepoint Site and is also disseminated by the Director of Sponsored Programs to any employee listed as personnel on sponsored project proposals.
   3. Post-Award: If a proposal is successful and extramural funding is awarded, the Director of Sponsored Programs will send the names of any Norwich employees with time and effort budgeted in the proposal to the following entities at the start of each new fiscal year in the funding cycle to ensure that Temporary Extra Compensation (e.g. teaching contracts/overloads) shall not be issued during the contract period for that funded fiscal year:
      1. Supervisor(s) of the employee (e.g. Chair/Director and Dean for faculty, supervisor and Cabinet member for employee)
      2. HR representative in charge of issuing contracts
      3. College administrators (CoSM, CoPS, CoLA, and CGCS) who issue part-time contracts

b. Consideration of Institutional Base Salary (IBS) when budgeting for and receiving funds associated with salaries and wages for time and effort devoted to sponsored projects

1. When budgeting salary expenses to be charged to a sponsored project (performed in the pre-award stages in collaboration with the Director of Sponsored Programs), the expense is calculated by multiplying the faculty or staff member’s IBS with the percent of effort expended on the particular sponsored project. In cases where the IBS exceeds an applicable federal salary cap or sponsor limitation, the salary cap or limit amount is used instead of the IBS to calculate salary expenses. This applies to both academic year and summer month employment.

Example for a 9-month contracted employee (e.g. faculty member) budgeting for workload reallocation during the 9-month contract period and summer salary outside of the contract period^*: 

• Established IBS for a 9-month faculty contract period: $60,000
• Calculation of one person month based on IBS: $60,000/9 = $6666.67/month
• Budgeted expense for 20% effort (e.g. workload reallocation from teaching ~2 courses/year) devoted to sponsored project during the faculty contract period:

                                       $60,000 x 0.2 = $12,000^ 

^Faculty member receives no additional salary over IBS; 20% of duties (e.g. teaching two courses over the faculty contract period) are reallocated to sponsored project

• Budgeted expense for 100% effort devoted to sponsored project for three person months in summer outside of faculty contract period:

                                        $6666.67/month x 3 = $20,000.01^$

^$Faculty member receives 3 months additional salary over IBS as this effort is outside of the faculty contract period 

Example for a 12-month contracted employee (e.g. staff member) budgeting for workload reallocation during the 12-month contract period^*: 

• Established IBS for a 12-month staff contract period: $60,000
• Calculation of one person month based on IBS: $60,000/12 = $5000/month
• Budgeted expense for 20% effort (e.g. workload reallocation from duties outlined in job description) devoted to sponsored project during the staff contract period:

                                       $60,000 x 0.2 = $12,000^# 

^#Staff member receives no additional salary over IBS; 20% of duties are reallocated to sponsored project

^*These example calculations for 9- and 12-month employees do not include fringe or indirect costs but are used simply to describe how the calculations for compensation to the individual are budgeted. 

2. When an employee is receiving any portion of their salary from a sponsored project during their University contracted period, it is unallowable to exceed the IBS except in the cases noted below in (3).

Example: For a faculty member with a 9-month contract who receives extramural funding during the 9-month contracted period (e.g. workload reallocation from teaching), no additional compensation (Temporary Extra Compensation) from Norwich University during the 9-month contract period and in excess of the IBS is allowed [except for those items listed in (3) below] including adjunct contracts for teaching (CGCS or on-campus overloads), advising contracts, special assignments, etc. 

Example: For a staff member with a 12-month contract who receives extramural funding during the 12-month contracted period, no additional compensation from Norwich University during the 12-month contract period is allowed [except for those items listed in (3) below] including adjunct contracts for teaching (CGCS or on-campus overloads), advising contracts, special assignments, etc. 

3. Additional compensation allowed in excess of IBS when receiving extramural funding:
   • effort on a sponsored project performed outside of the contracted period (e.g. 1-3 summer months for a faculty member with a 9-month contract period);
   • Administrative Stipends for performing administrative duties such as chairing a department or directing a program (e.g. Honors Program, Undergraduate Research Program, Faculty Development Program, Research Center, etc.).
   • Incentive Payments for exceeding performance goals or satisfying other criteria established by and approved by the University. Examples include but are not limited to:
   • Category I Dana Grants;
   • Dana Professor stipends; o Homer L. Dodge Teaching Awards; o Excellence in Scholarship Awards; o IITL Teaching Fellow stipends;
   • other honoraria and monetary awards based on merit; o stipends for mentoring undergraduates in the Honors Program or Undergraduate Research Program.

• other compensation for professional work outside of Norwich University including service on scientific advisory boards, consulting, etc.;
• volunteer, community or public service;
• service on peer-review panels, and;

leadership in professional organizations.