UNIVERSITY OF SOUTH FLORIDA
Office of Research
Policies, Procedures, and Guidelines


Guidelines
Additional Compensation on Contracts and Grants

I. INTRODUCTION

The purpose and intent of this policy is to provide specific guidelines for the payment of additional compensation from contract and grant accounts. This policy is based on general interpretation of OMB Circular A-21 and the Florida Administrative Code, Chapter 6C-5.

II. STATEMENT OF POLICY

The approval of additional compensation on contract and grant accounts will be provided only under the conditions established in this policy. It applies to all contract and grant accounts regardless of funding source (federal, state or local government, private funding, etc.) and whether the contract or grant is cost-reimbursable or fixed price. NOTE: Sponsored Research accounts (see definition) may not pay additional compensation under any circumstances.

A. In all cases, the Principal Investigator and all Co-principal Investigators are ineligible to receive additional compensation. Faculty and A&P personnel who otherwise meet the criteria of this policy may be eligible for overload but are not eligible for dual compensation.

B. Additional compensation may be paid only where there is clearly no relation to the normal workload of that individual and where it can be shown that he/she is the best individual available to perform the work and services. These activities must meet the following criteria:

1. Training and/or instruction of university personnel and/or students; or,

2. Performance of a specific task (not collaborative research or training) by an individual (faculty, A&P, USPS, OPS, non-university personnel) outside of the academic discipline and expertise of the principal investigator(s). The task must be clearly shown as distinct and separate from the individual's normal workload; or,

3. Consulting, if performed by an employee of another state agency or institution.

C. By nature, work and services performed for additional compensation must be short-term in duration (less than six months). Faculty members making long-term commitments to sponsored projects should seek release time from their Department Chairperson and Dean and be directly appointed to the contract or grant.

D. The amount of additional compensation must not be excessive. (Large payments are considered questionable by the Bureau of State Payrolls and the State Comptroller's Office.)

E. Faculty members who have pledged to a sponsoring agency that a certain percentage of their effort would be devoted to a specific contract or grant (required cost-sharing) must assure that secondary employment does not reduce that required effort. (Note: Personnel Activity Reports (PAR forms) reduce all effort to percentages.)

F. The sponsoring agency must allow additional compensation to be paid. The award document from the sponsoring agency must state that additional compensation is allowed or imply that the proposal was accepted with no alterations regarding the request for additional compensation.

G. All additional compensation requests on contract and grant accounts must have the prior approval of the Vice-President for Research via the attachment to the "Proposal Review and Certification" form.

H. All additional compensation paid to any university employee during the academic fiscal year comes under the 20% limit rule. This includes payments made through Contract & Grant dual compensated employment, College Workload Adjustment, Extended Studies Overload, and Contract & Grant Overload. (See "Definitions" for a more detailed explanation of the "20% Limit.")

III. PROCEDURES

A. Proposal Stage

1. The Project Director/Principal Investigator should review the Additional Compensation Policies and Procedures for Contracts and Grants to assure that any additional compensation being requested in a proposal to a Sponsoring Agency is in compliance with State and Federal regulations and University Policies and Procedures. In addition, the Principal Investigator should determine the appropriate payment mechanism and add the associated fringe benefits to the cost of the additional compensation. (Grants Specialists in the Division of Sponsored Research maintain current fringe benefit rates.)

2. The Principal Investigator should submit a request for additional compensation in writing to the Vice President for Research (the required form may be obtained from DSR). The Principal Investigator should provide the following information:

a) The name of the individual (or positions) for whom additional compensation is being sought;

b) The amount of additional compensation that will be paid to each individual;

c) The time period that each individual will be employed on the Contract or Grant;

d) The justification for payment of additional compensation;

e) The justification for the specific individuals (i.e., highly specialized skills and/or experience);

f) The name of the sponsoring agency to which the proposal is submitted;

g) The due date for proposal submission;

h) The type of additional compensation requested.

3. After approval from the Vice President for Research or his designee is obtained, the proposal should include the following statement: "If additional compensation is to be paid from awarded funds, payment will be made in accordance with OMB Circular A-21, Section J.6.e., Florida Administrative Code, Chapter 6C-5, and USF Policies and Procedures concerning said compensation." It should also clearly state:

a) That additional compensation will be paid to University employees;

b) The individuals (by name or position) who will be receiving additional compensation and the amount of that compensation;

c) The work and services to be performed by these individuals.

4. The approved additional compensation request should be attached to the "Proposal Review and Certification" form when the proposal is delivered to DSR for submission.

B. Award Stage

1. The award document from the sponsoring agency must state that additional compensation is allowed or imply that the proposal was accepted with no alterations regarding the request for additional compensation.

2. The Grants Specialist, by signing the "Grant Budget Release Form," will document that additional compensation is allowed.

3. The DSR Administrative Secretary, upon notification from the Grants Specialist, will send the Principal Investigator overload contract forms and a calendar of payroll deadlines and payment schedules.

4. Prior to work beginning, the Principal Investigator should contact all individuals to be paid additional compensation and complete the appropriate paperwork.

a. Overload Contracts - Items 1 through 10 of the overload contract form should be completed and the signatures of the employee, his/her Chairperson, his/her Dean and the Accountable Officer should be obtained.

b. Dual Compensated Appointment - Request for Dual Compensation form and appointment paper should be completed and appropriate signatures obtained (see above).

5. Overload contracts should immediately be sent to the appropriate Grants Specialist in the Division of Sponsored Research. Dual Compensated Appointment forms should be sent immediately to the Division of Personnel Services.

6. All additional compensation requests, whether overload (Faculty, A&P) or dual compensation (USPS, OPS, non-USF OPS), are reviewed by Grants Specialists in the Division of Sponsored Research to assure that agency approval and approval of the Vice President for Research have been obtained.

7. Dual Compensated Appointments will be put directly on the University payroll; overload contracts will be held by the Division of Sponsored Research until the Principal Investigator notifies the Administrative Secretary in writing that the work has been completed. The Administrative Secretary will, in turn, notify the Principal Investigator of the expected pay date.

8. Upon receipt of the overload payroll in the Division of Sponsored Research, the Administrative Secretary will notify the Principal Investigator or her/his designate that the checks are available for pick-up.

IV. DEFINITIONS

ADDITIONAL COMPENSATION - the receipt of additional funds in excess of an employee's normal contracted salary by a faculty member (T&R), Administrative & Professional employee (A&P), University Systems Personnel Service (USPS), or OPS employee of any agency of the State of Florida or from any external funds administered through an agency of the State of Florida, for duties which are not considered a part of their normal contracted workload. These additional duties should meet one of the following criteria (Florida Administrative Code, Chapter 6C-5):

1. The immediate and untimely vacating of a position assigned duties that are essential to the university's operations;

2. Special skills possessed by an employee that are needed to perform a critical assignment; or

3. The inability to fill a critical position where recruitment efforts have been unsuccessful.

Additional compensation may be paid through the mechanisms of an overload contract, workload adjustment or dual compensation.

NOTE: All additional compensation is reported to the Internal Revenue Service and is considered taxable income (effective April 1, 1989).

WORKLOAD ADJUSTMENT - a mechanism by which a 100% (1.00 FTE) line-item faculty or A&P employee assigned to one campus of the University may receive additional compensation for teaching credit courses at another campus of the University (or, at the discretion of the Provost, for teaching a credit course on the same campus). These teaching activities are unrelated to the faculty member's normal courseload and contracted workload at their home campus and must meet one of the three criteria outlined under "Additional Compensation." Workload adjustment activities are assigned by the employee's College, Department, or Division. Payment is administered through the School of Extended Studies.

OVERLOAD - a mechanism by which a 100% (1.00) FTE line-item faculty or A&P employee may receive compensation for non-credit course instruction conducted through the School of Extended Studies or Contract and Grant related work when this work can be shown as distinct and separate from their normal work assignment. These additional duties must meet one of the three criteria outlined under "Additional Compensation."

DUAL COMPENSATION - a mechanism by which any state employee may receive compensation for work performed over and above their normal workload and assigned duties. These additional duties must meet one of the three criteria outlined under "Additional Compensation." On Contract and Grant accounts, only OPS, USPS and non-USF state employees may be paid using dual compensation.

RELEASE TIME - full-time faculty or A&P employees who wish to make a long-term commitment (in excess of six months) to a Secondary Employer which is a contract or grant account should request release time from her/his Chairperson or Dean and be directly appointed on the contract or grant for the percentage of time that she/he has been released from her/his regular responsibilities.

PRIMARY EMPLOYER - the department, division, center, contract, or grant through which the individual has her/his primary assignment(s).

SECONDARY EMPLOYER - the department, division, center, contract, or grant that has requested an individual's services above and beyond that individual's primary workload and responsibilities. These services may be related to the individual's skills as required by the Primary Employer but cannot involve any of those activities for which the individual is already receiving compensation from the Primary Employer. Employment by the Secondary Employer is always of a temporary nature.

CONTRACT OR GRANT - any funds received from an external source to perform research, training or other sponsored activities. These contracts or grants may be cost-reimbursable (i.e., the costs of the project are covered up to the amount of the award with any unused funds or unauthorized expenditures reimbursed to the agency at the end of the contract/grant period) or fixed price (i.e., the costs of the project are covered up to the amount of the award conditional upon the project or service being successfully completed. Any unused funds are retained by the University under the direction of the principal investigator.) Contract and grant accounts are given individual account numbers with the eighth digit of the nine digit account number being a "K" (training), "L" (research), or "P" (other sponsored activities.)

SPONSORED RESEARCH ACCOUNTS - accounts which are funded from indirect cost earnings (Administrative operating accounts, overhead rebates, faculty awards, etc.) or close-outs of fixed price grants or contracts. These accounts may be identified by an "R" in the eighth position of the nine digit account number.

20% LIMIT - a limit on the amount of additional compensation allowed to any University employee annually beginning with the fall appointment date. Twelve-month faculty may receive up to 20% of their academic year salary in additional compensation. Nine-month faculty may receive up to 20% of their annualized academic year salary in additional compensation (9 month salary x 1.33). The 20% limit applies to College Workload Adjustment, Extended Studies Overload, Contract and Grant Dual Compensation and Contract and Grant Overload. The University voluntarily complies with this limit.

ATTACHMENT A

DETERMINATION OF APPROPRIATE PAYMENT MECHANISM FOR CONTRACT AND GRANT ADDITIONAL COMPENSATION

SECONDARY EMPLOYMENT MECHANISM

NOTE:

1) Nine-month faculty planning to work on a Contract or Grant during the Summer should schedule this work during a period when they are not 100% employed and should be directly appointed to the contract or grant.

2) T&R/A&P full-time (1.00 FTE) line item employees must be paid through the Overload Contract mechanism to assure that they receive the full fringe benefits to which they are entitled.

3) All additional compensation is reported to the Internal Revenue Service and is considered taxable income.

ATTACHMENT B

Florida Administrative Code, Chapter 6C-5, Part VIII:

6C-5.825 Additional State Compensation for State University System Employees

1. PURPOSE

a. The purpose of this rule is to establish policies relating to approval of additional state compensation for State University System employees and procedures to be followed by each chief administrative officer in requesting or granting approval of such compensation.

b. Requests involving a non-State University System agency shall be submitted to the Department of Administration for approval in accordance with Rule 22K-8.

c. The provisions of this rule do not apply to activities performed during an interval in the year in which the employee is not employed within the State University System.

d. This rule shall not be used for the purpose of avoiding payment of overtime as required by the Fair Labor Standards Act (FLSA).

2. AUTHORITY Section 240.283, Florida Statutes provides that the chief administrative officer is authorized to approve additional compensation for State University System employees, notwithstanding the provisions of Section 216.262(1)(d), F.S.

3. POLICY

a. The circumstances under which additional state compensation may be approved are as follows:

1. Compensation of a State University System employee for employment in excess of one full-time equivalent established position (1.0 FTE).

a. For Faculty or Administrative and Professional employees, this means employment in the same university in one or more established position(s) where the total employment exceeds what is normally considered or contracted as full-time employment by the appropriate authority for the pay plan under which the position is established.

b. These requests will be approved only under extraordinary circumstances involving situations such as:

1. The immediate and untimely vacating of a position assigned duties that are essential to the university's operations.

2. Special skills possessed by an employee that are needed to perform a critical assignment.

3. The inability to fill a critical position where recruitment efforts have been unsuccessful.

c. Where employment is in excess of one full-time equivalent established position, those employees engaged in continuing education or extension activities, who are otherwise employed on a full-time basis by the university, may be compensated from funds generated from such activities at a level not to exceed 20% of their contracted rate. Such compensation may be in addition to that provided within the total approved salary rate for the university and is not considered to be additional state compensation for purposes of this rule.

2. Compensation of a State University System employee simultaneously from any appropriation other than appropriations for salaries - These requests will be approved only under extraordinary circumstances involving situations such as:

a. Performing additional (secondary) duties such as conducting workshops not associated with the employee's regularly assigned duties.

b. Teaching continuing education courses.

c. Serving as an adjunct instructor.

3. Compensation of a State University System employee simultaneously employed by more than one university - These requests will be approved when the secondary employer has a need for that employee's skills and none of its employees is available to perform the function at the necessary level of expertise. The primary employing university shall provide written certification to the secondary employing university that the additional duties will not interfere with or constitute a conflict of interest with the employee's regularly assigned duties in the primary university, and will not involve use of State space, personnel, equipment, or supplies furnished by the primary university, unless arrangements are made by the secondary university to adequately compensate the primary university for the use of same.

b. Additional state compensation for one of the employment circumstances described in Rule 6C-5.825(3)(a), above, shall be commensurate with the duties to be performed.

c. It is the responsibility of the university initiating the action to insure that the requested actions are justified as being in the best interests of the State University System and the State, and are in compliance with applicable federal and state law.

d. The responsibility of employees is the full and competent performance of all duties pertinent to their employment with the university. Additional employment within or outside of the State University System that interferes or conflicts with the employee's primary obligations is prohibited.

e. In any case where additional state compensation will result in the payment of overtime as required by the FLSA, such overtime must qualify as a necessary situation as defined in Rule 6C-5.740.

4. PROCEDURES

a. The appropriate university administrator and the employee must agree in advance in writing to the hours and rate of pay for the secondary job or job with extended hours.

b. When practicable, the chief administrative officer must grant approval before the employee may begin providing the service.

c. Approval must be obtained from the chief administrative officer for each fiscal year during which the employee is to receive additional state compensation.

ATTACHMENT C

Office of Management and Budget: Circular No. A-21, Revised Subject: Cost principles for educational institutions

Section J.6.e. Salary rates for faculty members.

1. Salary rates for academic year. Charges for work performed on sponsored projects by faculty members during the academic year will be based on the individual faculty member's regular compensation for the continuous period which, under the policy of the institution concerned, constitutes the basis of his salary. Charges for work performed on sponsored agreements during all or any portion of such period are allowable at the base salary rate. In no event will charges to sponsored agreements, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. This principle applies to all members of the faculty at an institution. Since intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time base salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member of the same institution. However, in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the consultant is in addition to his regular departmental load, any charges for such work representing extra compensation above the base salary are allowable provided that such consulting arrangements are specifically provided for in the agreement or approved in writing by the sponsoring agency.

2. Periods outside the academic year.

(a) Except as otherwise specified for teaching activity in (b) below, charges for work performed by faculty members on sponsored agreements during the summer months or other periods not included in the base salary period will be determined for each faculty member at a rate not in excess of the base salary divided by the period to which the base salary relates, and will be limited to charges made in accordance with other parts of this section. The base salary period used in computing charges for work performed during the summer months will be the number of months covered by the faculty member's official academic year appointment.

(b) Charges for teaching activities performed by faculty members on sponsored agreements during the summer months or other periods not included in the base salary period will be based on the normal policy of the institution governing compensation to faculty members for teaching assignments during such periods.