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Policy No: 2048
Responsible Office: Grants and Contracts Accounting
Last Review Date: 09/29/2022
Next Required Review: 09/29/2027

Institutional Base Salary

1. Purpose

The purpose of this policy is to establish the University of South Alabama’s (USA) definition of Institutional Base Salary (IBS), the basis for calculating compensation costs, and to facilitate compliance with the requirements of OMB Uniform Guidance 200.430 (h)(2), which states:

"Charges for work performed on Federal awards by faculty members during the academic year are allowable at the IBS rate ... in no event will charges to Federal awards, irrespective of the basis of computation, exceed the proportionate share of the IBS for that period. This principle applies to all members of faculty at an institution. IBS is defined as the annual compensation paid by an institution for an individual's appointment, whether that individual's time is spent on research, instruction, administration, or other activities. IBS excludes any income that an individual earns outside of duties performed for the [institution]. Unless there is prior approval by the Federal awarding agency, charges of a faculty member's salary to a Federal award must not exceed the proportionate share of the IBS for the period during which the faculty member worked on the award."

2. Applicability

This policy applies to faculty charging any portion of their effort to sponsored projects.

3. Definitions

Academic Year: As defined by the USA Faculty Handbook.

Administrative Supplements: Compensation paid to a faculty member for an administrative appointment, above and beyond the faculty member's primary appointment. An example would be serving as department chair or director, including serving in an interim capacity.

Base Pay: Fixed compensation given in exchange for performing determined job responsibilities. Base pay is the rate of pay approved for an employee in his/her position exclusive of any additional pay, such as supplements, temporary salary adjustments, shift differential pay, or special assignment pay.

Bonus Pay:  Payments made on a one-time basis and not guaranteed as part of any individual's annual compensation.

Endowed Supplement: Additional compensation paid to a faculty member for an endowed appointment, above and beyond the faculty member's primary appointment. An example would be serving as an endowed chair or professorship.

Exceptional Performance Stipends: Payments made on a one-time basis and not guaranteed as part of an individual's annual compensation

FTE: Full-time equivalent.

Full Workload: The total activity for which the individual is compensated by the University, regardless of the number of hours expended on those activities. Full workload includes research, teaching, administration or service (including appointments as dean or chair).

Incidental Work: That in excess of normal for the individual for which supplemental compensation is paid by the University under institutional policy.

Institutional Base Salary (IBS): The annual compensation paid by USA for the duties associated with an individual's appointment(s), whether that individual's time is spent on research, teaching, administration or service, and whether the individual is appointed full or part-time.

Maymester/Summer Salary: Maymester/Summer salary includes compensation for work performed by faculty members with nine-month appointments during the Maymester/summer session (as defined in the USA Faculty Handbook). Maymester/Summer salary includes pay for teaching Maymester/summer school and/or performing research or other types of extra duties. Per 2 CFR 200.430 of the Uniform Guidance, charges for teaching activities performed by faculty members on Federal awards during periods not included in the IBS period will be based on the normal written policy of the institution of higher education governing compensation to faculty members for teaching assignments during such periods.

Additionally, the Uniform guidance also defines charges for work performed by faculty members on Federal awards during periods not included in the base salary period will be at a rate not in excess of the IBS. A full workload in the May/summer is 33 1/3% of the 9- month institutional base salary. IBS cannot be annualized. The Maymester/Summer Salary cap applies only to wages paid by USA for Maymester/summer activities and does not include overload pay, which is only available during the academic year, nor outside consulting, which is not paid by USA.

Outside Consulting: Payments for consulting services external to USA. Not considered in IBS. Not part of Maymester/Summer Salary.

Overload Pay: Compensation for additional teaching responsibilities that significantly surpasses their established teaching load. Not part of Maymester/Summer Salary.

Proportionate Share: The share of Institutional Base Salary that corresponds to the proportion of total effort expended on the sponsored agreement. For example, if an individual's regular salary for an annual period is $100,000 and they spend 25 percent of total effort during the period on the sponsored agreement, the proportionate share of Institutional Base Salary allocable to the sponsored agreement is $25,000 ($100,000 * 25%)

Temporary Supplement: Additional compensation paid to an individual for duties above and beyond the individual's primary job requirements. Temporary supplements are non-recurring and expected to last less than a year. An example would be providing backup during a regular staff position vacancy.

"100% Effort": The activities associated with an individual's appointment at USA. This is not based on a set number of hours per week and may vary from individual to individual. Also, for individuals with less than full-time appointments, effort still totals 100% of the appointment.

4. Policy Guidelines

4.1  Background

The federal government requires recipients of federal funding to establish institutional standards that document the budgeting and expensing of compensation for personal services to federally sponsored projects. These federal requirements (specifically, those in the Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements, 2 CFR 200.430, hereafter referred to as “Uniform Guidance”) shall be consistently applied to all sponsored programs at the University of South Alabama.

It is the policy of USA that salary charges to sponsored programs are based on the Institutional Base Salary (IBS) and, where applicable, any salary caps or other limitations imposed by external sponsors. Institutional Base Salary may not be increased by allocation of effort to sponsored projects funds.

Charges for work performed on sponsored agreements will be based on the individual's IBS 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.

4.2  Institutional Base Salary (IBS) 

IBS does not include Maymester/summer salary for 9 month faculty, payment for work above and beyond the workload of the individual's appointment(s), defined in the USA Faculty Handbook in general terms, (e.g. temporary supplements for incidental work, and overload pay), and payments for duties performed external to USA. In general, the following types of pay are included or excluded from IBS as outlined below:

4.2.1  Included

      • Regular Annual Salary;
      • Administrative Supplements;
      • Endowed Supplements;
      • Exceptional Performance Stipends.

4.2.2  Excluded

      • Temporary Supplements (Incidental work and one time supplements);
      • Maymester/Summer Salary – (for nine-month faculty appointments);
      • Bonus Pay;
      • Overload Pay;
      • Salary paid from other organizations;
      • Outside consulting;
      • Bonuses that are not automatically renewed each year.

The initial IBS is derived from the employee signed offer letter, or in absence of a signed letter the salary rate of pay noted on appointment personnel action form, at the time of employment. Changes to IBS due to changes in appointment or workload are maintained within department and/or college records.

4.3  Full workload and IBS

Maximum effort relates to an employee's full workload, which may include: research, teaching, administration or service. The cumulative effort of these activities shall constitute the employee's 100% effort regardless of the time required to accomplish those activities.

4.4  Supplemental Compensation and IBS

Supplemental compensation is pay for activities performed in excess of the responsibilities of an individual's primary position or appointment. Where a supplement is deemed to be recurring (lasting more than one year), and is aligned with the employee's appointment, it is included in IBS. For example, an individual receiving an administrative supplement for serving as a department chair, program coordinator or director, including when such appointment is in an interim capacity. Where a supplement is deemed to be for incidental work, non-recurring (less than a year) and not part of an employee's primary appointment, it is excluded from IBS. Overload pay and Maymester/summer salary are additional forms of supplemental compensation at USA and are also excluded from IBS for nine-month faculty appointments.

4.5  Roles and Responsibilities

4.5.1  Department Chairs/Directors and Deans
Recommend appointment terms, compensation and activities associated with the faculty member's full workload.

4.5.2  Academic Affairs / College of Medicine / USA Health
Ensure that all requests for salary support in sponsored projects proposals are based on the individual's correct IBS in relation to the proposed effort. Maintain faculty appointment documentation.
4.5.3  Sponsored Projects Administration
Provide additional assistance with determining IBS and effort as appropriate for proposals and charges to sponsored projects.  

4.5.4  Office of Grants and Contracts Administration
Ensures that the effort reporting process is including the proper elements for certifying IBS.  Provide training to PIs and other individuals to ensure understanding of IBS.

4.5.5  College Research Office/College Business Officers
Ensures that the correct salary distribution is used when setting payroll for a project and the institutional base salary is not exceeded. Ensures accuracy and appropriateness of pay and proper FOAPALs and amounts.

4.5.6  Office of Human Resources
Responsible for maintaining employee data in Banner.

4.5.7  Payroll Office
Responsible for processing compensation using correct earnings and salary account codes.

5. Procedures

Not Applicable.

6. Enforcement

The Office of Grants and Contracts Accounting is responsible for enforcement of this policy. Financial penalties, expenditure disallowances, and harm to the University's reputation could result from the failure to accurately propose, charge, and/or document salaries to sponsored projects.

7. Related Documents

Not Applicable.