Office of the Provost
and
Executive Vice
Chancellor
Summer Salary Limitation
for the Boulder Campus
Compliance and Technical
Implementation of the 3/9ths Rule
Agenda
• Introduction and Goals
• Overview
– AY Research vs Summer Research
– Effort, Time Off, Salary & Budget, Planning
• Calculating Summer Pay
–
–
–
–
–
3/9ths and 1/9th Limits
August and May Proration
Administrative Stipends
Summer
Missing Week
• Examples
• Implementing in HRMS
Introduction
• Original document created in FY 2003 by A&S HR
Center
• Collaboration between A&S, Faculty Affairs, OCG, and
Controller Jud Hurd
• Revised in FY 2012 due to Internal Audit of Faculty
Summer Pay
• Approved by Provost for all units on campus
• Applies to all faculty members paid on an academic year
contract
• 12-month faculty members cannot earn additional salary
over the summer months
Goals
• Compliance with Federal and University policies
– Federal Polices
• Office of Management and Budget Circular A-21 – Cost
Principles for Educational Institutions
• National Science Foundation Proposal and Award Policies and
Procedure Guide
– University Polices
• Additional Pay to Regular and Research Faculty (July 2001)
• Boulder Campus Policy on Compensation for Faculty Member
Serving as Chairs, Faculty Directors, Associate and Assistant
Chairs. Associate Faculty Directors, Associate and Assistant
Deans, and Institute Directors
• Ensure faculty member is paid maximum allowable
summer salary
AY Research vs Summer Research
• AY research is part of teaching faculty workload:
teaching, research and service
• Inappropriate for faculty to “bank” time during AY and be
paid in summer
• Only 9 month faculty can have paid summer research ––
but only for work performed during that summer
• Can earn up to additional 3/9ths summer salary
• Summer salary is governed by federal guideline
standards (not just by university policy)
OMB Circular A-21
• Establishes principles for determining costs to grants
• Section J.10.d.(2) address periods outside the academic
year
• Limits the amount of salary a faculty member can charge
to a grant
• Permits salary to be charged as longs as:
– Total compensation confirms to established university
polices, and
– Consistently applied
Budget and Salary Expenses
Boulder policy:
• Charge salary to grant where effort is expended
– and
• Paid effort must be supported by proposed salary budget
and available funding
• In other words
– Effort devoted to grant should be consistent with plan
proposed and agreed to at the time of the award
• Effort on grant with insufficient budget cannot be paid by
different grant
Planned Time Off
Boulder policy:
• Teaching Faculty members do not accrue paid leave
• Cannot take significant time off while paid from grant
• Can adjust work schedule to allow for insignificant time
off as long as total effort remains the same
• Effort for month’s summer salary must be equivalent to
month’s AY effort
Most Important Thing to Remember
Summer is all about EFFORT
• While charging 100% of his/her salary to grant
in any given month, a faculty member cannot:
– Expend efforts towards non-grant related activities
– Writing new grant proposals
– Develop new course curriculum
effort requirement in the summer has been
met, meaning --
UNLESS:
— paid effort matches AY level and this other activity is
over and above that expectation
Additional Limits
HOWEVER:
Need to keep in mind –
NSF and NIH have their own limitations
Specific Agency Limitations
NSF Policy Change
• Effective January 2009
• Limit of 2/9ths changed
– Old policy - allowable during the non-academic year
period
– New policy – allowable in any one year
• Includes salary received from ALL NSF
funded grants
•
NSF Proposal and Award Policies and Procedure Guide, Part II - Award & Administration Guide,
Chapter V.B.1.a.(ii).(a)
Specific Agency Limitations
NIH Salary Cap
• Was capped at $199,700 for AY11
• Cap reduced to $179,700/year as of 12/23/11 for FY12
• Limits how much monthly salary NIH will support
– If faculty 1/9th salary > a month’s capped amount, can
charge only the capped amount to NIH
– Even though < full dollar amount, it represents 100%
effort
• Fortunately – only affects a few faculty
– Is the exception, not the rule for Boulder campus
Specific Agency Limitations
NIH Salary Cap
A
AY Base
Salary
B
C
1/9th of AY
base salary
9 month
capped
salary
D
E
1/9th of NIH What can be
capped
charged to
salary
NIH?
F
Reduced
salary
amount
$135,100.00
$15,011.11 $134,775.00
$14,975.00
$14,975.00
$36.11
$98,265.00
$10,918.33 $134,775.00
$14,975.00
$10,918.33
$0.00
$144,700.00
$16,077.78 $134,775.00
$14,975.00
$14,975.00
$1,102.78
Base for 3/9ths Calculation
• Use the base academic year salary
• Not included in calculation
– Overload appointments
– Continuing Education appointments
– All administrative stipends
– Monetary awards
– Endowed professorships
Example A:
• Professor X’s total compensation
– AY salary = $72,000
– Taught one Fall overload class = $5,000
– Associate Chair stipend = $1,800
• Max Summer Salary (3/9ths) = $24,000
– $72,000 / 9 months = $8,000
– $8,000 x 3 months = $24,000
• Compensation from overload class and Assoc.
chair stipend not included
Summer Compensation Earned
• What counts towards the 3/9ths limit
–
–
–
–
–
Maymester teaching
Summer session teaching
Summer research
LEAP or other training sessions
All compensation that requires expending effort
except administrative stipends
• What is NOT counted
– Compensation earned outside the University
– Endowed professorship with no required effort
– Administrative stipends
Timeframe of 3/9ths Calculation
• Fiscal Year: July 1 – June 30
• NOT the calendar summer months (May – Aug)
• For FY 2012
– Compensation earned in July 2011 and August 2011
– PLUS, compensation earned May 2012 and June
2012
• No compensation changes during this timeframe
August and May
• Split between the academic year and summer
• Summer begins Monday after Commencement
• Summer ends the last day of the Summer
Session
• Prorate based on number of working days in
each month
August (typical fiscal year)
August 20xx
Sun
Mon
Tues
Wed
Thur
Fri
Sat
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Summer Session ends: Aug 9th (7 days)
Academic Year begins: Aug 19th
May (typical fiscal year)
May 20xy
Sun
Mon
Tues
Wed
Thur
Fri
Sat
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Academic Year ends: May 9th (7 days)
Summer Session begins: May 12th (15 days)
Administrative Stipends
• Beginning July 1, 2012
• Do not count towards either 3/9ths or 1/9th limit
• Consistent with how academic year stipends are
counted
Rate of Pay
• New AY rates become effective July 1
• Recalculate research appointments based on
the new rate
• Summer Appt
– Effective mid-May – June 30: AY rate from previous
fall and spring semester
– Effective July 1 – mid-August: new AY rate effective
July 1
Missing Week
• One week in August not designated as part of
summer or academic year
• Faculty member CAN earn entire 3/9ths
• Except leap years, August and May (in same
fiscal year) have same number of workdays
– 2012 is a leap year
• Define workdays as Monday – Friday
• Summer portion of August plus summer portion
of May equals 1/9th
Jun
May
5/12 - 5/31
5/1 - 5/9
Apr
Mar
Feb
Jan
Dec
Nov
Sept
8/19 - 8/31
8/12 - 8/16
8/1 - 8/09
FY 20xx - 20xy
Aug
July
Table 1
Oct
Typical Fiscal Year
Sum m er Ses s ion
Academ ic Year
Academ ic Year payroll
12-month Administrative Stipend
considered AY
considered Summer
• August 12 – 16 not designated part of summer or the
academic year
1/9th Limit
• No more than 1/9th of AY salary may be charged
to grant in a given month
• Driven by OMB Circular A-21
• Limited to faculty earning summer compensation
from grants
• Compensation earned solely from teaching may
slightly exceed 1/9th limit
– Must remain in compliance with 3/9ths
May, August and the 1/9th Limit
• Faculty member cannot earn 1/9th of AY salary in
August or May
• Months are split between AY and summer
– Not possible to expend 100% effort on research
– AY teaching responsibility begins mid-August
• Calculate daily rate then multiply by number of
workdays in summer session portion of month
Example D
• Professor X’s AY salary = $72,000
– 3/9ths limit = $24,000
– 1/9th limit = $8,000
• Prorate August and May
–
–
–
–
–
Both months have 22 workdays (non-leap year)
Daily rate = $8,000 / 22 = $363.64
August 20xx: 7 workdays ($363.64 x 7 = $2,545)
May 20xy: 15 workdays ($363.64 x 15 = $5,455)
$2,545 + $5,455 = $8,000
Fiscal Year 20xx – 20xy
• AY xx-xy salary = $72,000; 3/9ths limit = $24,000;
1/9th limit = $8,000
– July xx max salary
– August xx max salary
– May xy max salary
– June xy max salary
– Total Summer Comp
$8,000
$2,545
$5,455
$8.000
$24,000
Summer Research Funding Worksheet
• Required beginning July 1, 2012
• Requires faculty member to acknowledge the following:
– Services provided are in direct support of projects
– Read and understand the 3/9ths rules
– Cannot take ‘paid’ leave – cannot take vacation while
being paid 100% from a grant
– Will not perform any non-grant related work while paid
from a grant
• Requires signature of faculty member and chair or grant
PI
FY12 & FY13 Faculty Summer Funding Worksheet
Name:
Rostered Department:
Academic Year Salary:
Employee ID:
1/9th Salary Limit:
$
-
3/9ths Salary Limit:
$
-
Proposed Summer Salary:
Month
Begin
End
Teaching
Research
Project Speedtype
% Time
Project Speedtype
% Time
Project Speedtype
% Time
Total Salary
Salary Limit
May-12
5/14/2012
5/31/2012
$
-
$
-
Jun-12
6/1/2012
6/30/2012
$
-
$
-
Jul-12
7/1/2012
7/31/2012
$
-
$
-
Aug-12
8/1/2012
8/10/2012
$
-
$
-
I understand and agree that only my activities directly related to my respective sponsored project(s) will be charged to those projects. Such activities
include research and other activities included in the project statement of work, writing progress reports, attending project-related conferences and/or
holding research meetings or training (including working with participating students).
I understand that non-related activities including, but not limited to, preparing competitive sponsored projects proposals, non-sponsor-related research/activities,
vacation, attending department/school/college faculty meetings, non-project teaching, teaching preparation, administrative work, university service, and
attending non-sponsor-related conferences will not be charged to sponsored projects.
I also understand that NSF limits salary compensation to senior project personnel to no more that two months of their regular academic year salary in any one
year unless additonal compensation is approved by NSF. This limit includes salary compensation received from all NSF-funded grants.
If my proposed summer salary allocation of effort is not consistent with the actual allocated effort then I will request that the charging of the sponsored accounts
be changed to reflect the actual allocation of efforts, including moving some of my time to non-sponsored funding sources or unpaid time if appropriate.
I also understand that I will need to follow normal procedures and complete an effort report (PERS) following the summer term.
I have read and understand the Guide to CU Boulder's Policies Regarding Summer Pay for Faculty on 9-month Appointments located on the first tab of this
worksheet.
If a vacation is planned during the summer months, are the dates of the vacation in a month you are being paid from a sponsored project? Yes No (circle answer).
Faculty Member signature:
Date:
Department Chair signature
Date:
Over Salary Limit
More Examples
• #1: Professor B’s AY salary = $54,000
– 3/9ths limit = $18,000
– 1/9th limit = $6,000
• No research funds
• Plans to teach 2 classes in June @ $4k each for
total of $8,000
• 100% of her summer salary from teaching
• Not subject to 1/9th limit in month of June
• Still subject to 3/9ths limit
Examples - continued
• #2: Professor C’s AY salary = $54,000
– 3/9ths limit = $18,000
– 1/9th limit = $6,000
• Dept chair: stipend 21% of AY salary paid over
12 months or $945 per month
• Has grant and plans to pay herself summer
research
• How much can she earn from grant and stay in
compliance with both 3/9ths and 1/9th
Examples - continued
1/9th
Limit
Chair
Stipend
Paid
from
Grant
July
6,000
945
6,000
6,945
August: 7 workdays
1,909
301
1,909
2,202
May: 15 workdays
4,091
644
4,091
4,735
June
6,000
945
6,000
6,945
$2,835
$18,000
$20,835
Month
Total $18,000
Total Comp in
Summer
Example - continued
• #3: Professor E’s AY salary = $63,000
– 3/9ths limit = $21,000
– 1/9th limit = $7,000
•
•
•
•
•
Taught class July 20xx – paid $4,000
August xx – charged $2,739 to research grant
Maymester – wants to teach and be paid $4,000
Wants to pay herself remainder of 3/9ths in June
How much can she earn and be in compliance
Examples - continued
Month
1/9th
Limit
Teaching
July 20xx
7,000
4,000
August 20xx
2,227
May 20xy
4,773
June 20xy
7,000
Total $21,000
Paid
from
Grant
Max
Still
Allowed
4,000
2,227
4,000
$8,000
Total
earned
$2,227
2,227
773
4,773
7,000
7,000
$7,773
$18,000
Examples - continued
• Illustrates need for planning to ensure faculty
member can entire 3/9ths
• Cannot go back and pay herself retro pay for last
July
PeopleSoft HRMS
• Contract method: pays entire amount over the
contract days using a weighted average
• Monthly method: calculates a daily rate and pays
number of days worked
• In most cases, will not get same results using
these methods
• Has ability to enter more than one speedtype in
funding distribution panels
Contract vs Monthly
Contract Amount : $4,000
Table 5
a
Month
Jul-08
Aug-08
Total
b
a/b=c
monthly c / total c = d
Total
%
Begin
Days
Workdays Worked
Weighted
Date
End Date Worked in month in Month
Avg
7/8/2008
18
23
0.783
0.733
8/8/2008
6
21
0.286
0.267
1.068
1.00
Monthly Amount : $4,000
Table 6
a
Month
Jul-08
Aug-08
Total
b
a/b=c
Total
%
Begin
Days
Workdays Worked
Date
End Date Worked in month in Month
7/8/2008
18
23
0.783
8/8/2008
6
21
0.286
1.068
c x monthly rate
$Due in
Month
3,130.43
1,142.86
4,273.29
d x cont amt
$Due in
Month
2,930.23
1,069.77
4,000.00
Multiple Appointments
• Faculty often have multiple appointments in
different units
• No central location for payroll process
– Not all appointments are processed by same person
– Or at the same time
– Increases chance of non-compliance
• Faculty members rostered home is final decision maker
if multiple appointments violate 1/9th or 3/9ths limits
Summer 2011 - 2012
• Due to leap year, need to adjust August 2011
date for end of summer to August 11, 2011
• August 2011 and May 2012 both have 23
working days
• August 2011 extend summer to 8/11/11 allows
for 9 working days
• May 2012 working days assigned to summer is
14 days
• August 9 working day + May 14 working days =
23 days
Peers
• University of Missouri & Texas Tech performs post
summer audit
• Rochester University
–
–
–
–
Requires pre-approval
Limits faculty with admin appts to max of 95% salary to grant
Prohibits vacations while paid from grant
No more than 2.5 months of salary can be charged to grant
• Vanderbilt University
– Limits appointments to 85% of AY
– To be paid 100%, must sign form acknowledging no time off or
no time spent to write proposals
Peers continued
• Emory University
– Requires form approved by chair/director before faculty member
can be paid
– Requires Dean’s approval for more than 2/9ths salary
• University of Texas – Austin
– Limits the 1/6th of AY salary
– Can only be charged during one of two six-week period in
summer (not both)
• Texas A&M does not permit time off during
appointments
Resources
Information related to the summer faculty salaries
or the summer session can be found at:
http://www.colorado.edu/AcademicAffairs/resources.html
Questions