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Inextricably Intermingled: Finding a Coherent Approach to Faculty Effort Reporting Issues NCURA Annual Meeting November 2008 Joe Gindhart – Asst. Vice Chancellor for Finance & Director, Sponsored Projects Accounting, Washington University

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inextricably intermingled finding a coherent approach to faculty effort reporting issues

Inextricably Intermingled: Finding a Coherent Approach to Faculty Effort Reporting Issues

NCURA Annual Meeting

November 2008

Joe Gindhart – Asst. Vice Chancellor for Finance & Director, Sponsored Projects Accounting, Washington University

Bruce Elliott - Director, Office for Sponsored Research, Chicago Campus, Northwestern University

Jennifer Wei - Effort Reporting Project Manager, Northwestern University

© NCURA 2008

  • IBS and Multiple Appointments
  • Summer Salary
  • New NSF Policy
  • VA Faculty
  • K-Awards
  • Research Effort Limits
  • Practice Plans & RVUs

© NCURA 2008

institutional base salary ibs full workload
Institutional Base Salary (IBS) & Full Workload

IBS: The annual compensation paid by an organization for an employee’s appointment, whether that individual’s time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual is permitted to earn outside of duties for the applicant/grantee organization (NIH Grants Policy Statement, December 2003)

© NCURA 2008


ibs full workload cont
IBS & Full Workload, cont.
  • Total activity for which the individual is compensated by the grantee institution
  • Full workload/IBS includes:
    • Instruction , Research, Administration (including appointments as dean, chair, and/or center director), & Clinical activity/Patient care

© NCURA 2008

what s not included
What’s Not Included?
  • Effort reporting may not include the following;
    • Supplemental pay / Incentive compensation
    • Outside professional activity such as consulting
    • VA
    • Study sections
    • Leadership in professional organizations
  • Institutional policies are strongly recommended to define additional pay, IBS, & full workload
  • Appropriate Approval process for supplemental pay

© NCURA 2008


multiple appointments ibs effort
Multiple appointments, IBS, & Effort
  • Consistent base salary rate for proposal submission and effort reporting
    • Dean/chair appointment & Clinical appointment?
  • Test of reasonableness for available time & effort: University compensated activities + clinical activities + VA?
  • Calculating base salary for multiple appointments with different contract periods
    • Example: 9-month faculty appointment + 12-month chair appointment
    • Use monthly rate to calculate base salary?

© NCURA 2008


limits on summer salary
Limits on Summer Salary
  • Total compensation cannot exceed annualized institutional salary
  • NSF 2/9th rule
  • If salary is charged for 3 full summer months, non-sponsored activities such as proposal writing, vacation, etc may not be allowed
  • Salary paid 9 over 12 for 9-month appointment faculty
    • Academic 9-over-12 salary may not be charged to sponsored projects during summer
    • Floating summer presents more challenges…
  • Summer effort policy

© NCURA 2008


9 over 12 pay summer effort
9-over-12 Pay & Summer Effort
  • Salary paid 9 over 12 months
    • Seen at PeopleSoft and Banner schools
  • Salary restated based on the 9-month appointment for summer salary request
  • Example of salary paid 9 over 12
    • Annual Salary: $108,000 with a 9-month appt
    • Paid 9 over 12: $9,000 per month
    • Summary Salary Rate: $12,000 per month
    • Total salary cannot exceed the annualized salary rate: $108,000 + $36,000 = $144,000

© NCURA 2008


summer research salary
Summer Research Salary
  • Compensation provided to faculty with 9 month academic appointments for summer effort on one or more sponsored projects.
  • Expectation for activity in summer period is consistent with activity in academic period.

© NCURA 2008

summer salary cont
Summer Salary, cont.
  • Effort expended during academic year does not satisfy commitment related to receipt of summer salary.
  • Effort performed on academic, administrative or other non-research activities during the summer period may not be charged to sponsored funds.

© NCURA 2008

summer research salary11
Summer Research Salary
  • Limited to three months of additional salary for that effort.
  • Rate of pay may not exceed base rate during academic year.
  • Subject to institutional policies and approvals.

© NCURA 2008

100 salary 100 activity
100% Salary = 100% Activity
  • Vacation / Time-Off
  • Conferences & Meetings with collaborators
  • Recruiting students or faculty
  • Teaching Summer Courses
  • Summer Hours vs. Academic Hours
  • Working from “off-campus” location

© NCURA 2008

other issues
Other Issues
  • Summer period vs. Reporting Period
  • Amounts Earned vs. Amounts Paid
  • NIH salary cap
  • Available funding vs. Monthly Pay

© NCURA 2008

new nsf summer salary policy
New - NSF Summer Salary Policy
  • Limits salary compensation for senior project personnel to no more than two months of their regular salary in any one year.
    • Broadens the concept of “two summer months” and allows senior project personnel to schedule work when appropriate throughout the year.

© NCURA 2008

new nsf policy cont
New NSF Policy, cont.
  • The limit includes salary compensation received from all NSF NSF-funded awards.
  • Compensation in excess of two months must be specifically justified in the proposal, and if approved by NSF, will be included in the award budget.

© NCURA 2008

nsf issues
NSF Issues
  • Salary funding limit or salary expense limit (i.e., rebudget for third month)
  • Academic Year Rebudgeting
  • Monitoring two month limit (local or central)
  • Subagreements
  • Joint appointments

© NCURA 2008

va appointments
VA Appointments

Faculty member performs activities at both the VA hospital and the university.

Clinical Care



Teaching / GME…

Constitutes 100 percent of his/her total professional responsibilities.

Defined in faculty member’s appointment letter.

© NCURA 2008

va mou

Memorandum of Understanding (MOU) must be established between VA and Univ.

MOU will document VA time commitment (X/8ths) and University time (% and/or hours).

Authorized organization official(s) must sign MOU.

MOU must be updated, as necessary.

© NCURA 2008

va and effort reporting
VA and Effort Reporting

University’s grant application may only request university portion of effort and salary.

No salary support may be requested for the VA portion of the joint appointment.

Certified University effort reports excludes VA activities (and salary).

IBS = “The annual compensation paid by an organization for the employee’s appointment,…”

© NCURA 2008

va challenges
VA Challenges

VA commitment is based on 40 hour workweek and defined in X/8ths.

VA salaries change in January.

VA salary increase may be offset by Univ.

History and integration of faculty and VA.

VA location and joint space.

VA Foundations.

Who monitors and maintains MOUs?

© NCURA 2008

overview of k awards
Overview of K Awards

Provides protected time for research / clinical career development

NIH ICs implement Ks in different ways; review specific provisions of individual award

General terms and conditions:

Generally require 75% effort commitment

Primarily support recipient’s salary & fringe

Limit salary recovery (so cost sharing often required)

Most prohibit recipients from simultaneously recovering salary on any other NIH award

Modest supply allowance (so supplementation often required)

Reimburse F&A costs at 8% MTDC

© NCURA 2008

k awards can be expensive for a department
K Awards Can Be Expensive for a Department

Require substantial effort commitment to research activities, limiting recipient’s ability to spend time elsewhere (e.g., patient care)

To meet 75% commitment, clinicians often have to reduce clinical schedule. This can reduce department income and cause scheduling problems

Salary is capped at a low amount and because many clinician recipients are highly compensated, substantial cost sharing can be required

© NCURA 2008

k awards can be expensive for a department cont
K Awards Can Be Expensive for a Department, cont.

Effort for research projects that don’t overlap the K award scope must be supported beyond the K effort and salary must come from non-federal sources

Clinicians with VA appointments have additional considerations

F&A recovery is limited to 8% MTDC, far below the university’s negotiated federal rate

© NCURA 2008

k awards can be expensive for a department cont24
K Awards Can Be Expensive for a Department, cont.
  • Non-standard nature of K terms and conditions mean administering and complying is complex
  • A cost-benefit analysis should be done before proposing on a K. The PI and Chair must understand “economics” of Ks and evaluate whether applying is appropriate

© NCURA 2008

relationship between k awards and other nih awards
Relationship between K Awards and Other NIH Awards

Effort supported by K award can be used to support other projects resulting from K award scope.

Salary support for these projects is also included in K if the related projects are NIH. Salary and NOA on related projects will be revised.

If they are not NIH, salary must come from the non-NIH award.

Effort on additional research support not related to K award cannot be included in the K effort and must be counted in addition to the K effort. Salary for unrelated projects must come from these respective projects.

This can complicate effort reports.

© NCURA 2008

relationship between k awards and other nih awards cont
Relationship between K Awards and Other NIH Awards, cont.
  • Individuals holding K Awards may perform clinical activities required by the research-related activities of the K Award as clinical research effort supported by the K Award. Other patient-care effort, not required to perform the research under the K Award, must be reported as clinical activities
  • Medicare cannot be billed for clinical research activities

© NCURA 2008

new definition of total professional effort
New Definition of Total Professional Effort

A grant application from a university may request the university’s share of an investigator’s salary in proportion to the effort devoted to the research project. The institutional base salary as contained in the individual’s university appointment determines the base for computing that request.

NIH previously defined this requirement as encompassing the entirety of the professional commitments of the investigator, both within and outside the applicant institution. This caused potential over-commitments.

© NCURA 2008

new definition of total professional effort cont
New Definition of Total Professional Effort, cont.
  • A career award recipient now meets the required commitment of total professional effort as long as: 1) the individual has a full-time appointment with the applicant organization; and 2) the minimum percentage of the candidate’s commitment required for the proposed career award experience is covered by that appointment.
  • AAMC Conference Call

© NCURA 2008

appointment disclosure
Appointment Disclosure
  • Dr. ___________ has an appointment with Northwestern University (NU) and with the affiliated Northwestern Medical Faculty Foundation clinical practice plan (NMFF), and with the Veterans Administration (VA). This arrangement is defined in a formal NU-VA Joint Appointment Memorandum of Understanding. The institutional base salary used in this application represents the combined salary from both NU and NMFF, which is paid by NU under a common paymaster system; it does not include salary from the VA appointment. The number of person months in this application represents NU effort on the proposed project in relation to professional effort for the dual NU and NMFF appointments.

© NCURA 2008

emerging topics
Emerging Topics

COGR working group discussion: management and technical considerations concerning compensation, effort reporting, AMC physician practice plans and the VA – University relationship

What constitutes 100% at academic medical centers (AMC)

K awards for faculty with VA appointments

Federal guidance applicable to compensation and effort reporting requirements

The concept of reasonableness and NIH policy

© NCURA 2008

research effort limits
Research Effort Limits
  • Max percentage of faculty salary charged to sponsored project.
  • Reserve time for:
    • Teaching or Mentoring
    • Patient Care (Clinic)
    • Proposal Writing
    • Committee Work
    • Student / Faculty Recruiting
    • Other department activities

© NCURA 2008

effort limit cont
Effort Limit, cont.
  • Formal Policy or Practice
  • Variation amount schools or departments
  • How was limit derived?
  • Is limit enforced or monitored?
  • Salary funding requirements

© NCURA 2008

effort limit cont33
Effort Limit, cont.
  • Available funding exceeds limit
  • Micro vs. Macro management style
  • Department / Division Heads
  • Institutional budget pressures

© NCURA 2008

practice plan structure
Practice Plan Structure

Internal – maintained and operated within the School of Medicine.

Affiliated Entity – separate entity (EIN), but controlled by School of Medicine (contained within corporate umbrella of University).

External PP – separate legal entity. School of Med does not control or manage.

© NCURA 2008

nih clarification 8 05
NIH Clarification (8/05)

Include clinical activities in IBS:

Practice plan compensation is set by institution

Clinical activity shown in academic appointment

Clinical practice comp paid by or at direction of institution (and included in payroll distribution system)

© NCURA 2008

clinical faculty compensation
Clinical Faculty Compensation

X + Y + Z = Total Comp

X = SOM faculty position (minimum)

Y = Dept/Specialty + Experience + Section/Division/Department position

Z = clinical activity comp based on productivity or other benchmarks

IBS = X + Y

Z component is excluded from IBS and effort report figures

© NCURA 2008


© NCURA 2008

clinical faculty rvus
Clinical Faculty & RVUs
  • Relative Value Unit (RVU)
  • X RVUs assigned to clinical procedures
  • Compare RVU activity to certified effort

© NCURA 2008

rvu issues
RVU Issues
  • Teaching hospital environment
  • Procedure based specialties
  • Severity of illness
  • Specialization of practice
  • Clinical service blocked time

© NCURA 2008

monitor rvus
Monitor RVUs
  • Determine benchmark for annual RVU via AAMC
  • Collaborate with physician billing groups
  • Review data on a scheduled basis
  • Contact and discuss results with department administrators and/or faculty

© NCURA 2008


Joe Gindhart

Bruce Elliott

Jennifer Wei

© NCURA 2008

discussion session 3 30 5 00
Discussion Session3:30 – 5:00
  • Independent System Monitoring
  • Length of Reporting Periods
  • COGR VA Workgroup
  • Effort Reporting Alternatives (FDP)
  • “Suitable Means of Verification”
  • Systems & Technology
  • Audits

© NCURA 2008