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1. Purpose of Policy 

This policy defines Institutional Base Salary (IBS) and its use in estimating, accumulating, and reporting salary charges to sponsored projects at ÃÛÌÒÉçÇø Michigan University. 

2. Stakeholders Most Impacted by the Policy 

This policy applies to all university entities and all ÃÛÌÒÉçÇø employees involved in performing, directing, or administering research, training, or other sponsored projects (federal, state, and private).

3. Key Definitions 

3.1 Academic Year Appointment: A faculty member’s eight-month primary professional obligation.

3.2 IBS: The amount determined by the University to compensate an individual for their primary professional obligation based on grade, title, and experience.  IBS is based on full-time equivalents and will be adjusted proportionately for part-time effort. Thus, faculty who wish to be on a reduced-salary under Article 35.4 of the ÃÛÌÒÉçÇø AAUP Contract will retain a base salary for sponsored project purposes, but may be assigned part- time efforts by the Chair or the Dean. For academic year faculty, IBS is the salary paid for the 8-month academic year appointment, which may be paid out over 12 months.

3.3 Fiscal Year Appointment:  A faculty or staff member’s 12-month primary professional obligation. Additional salary from federal sponsored projects is not permitted.  IBS is the salary paid for the 12 month fiscal year.

3.4 Salary Cap: Limitation imposed by the Federal Government on the amount of salary that may be charged to federally funded grants or contracts.

3.5 Sponsor Limitation: Sponsor imposed limitation on the amount of salary that may be charged to sponsored program awards.

4. Full Policy Details 

4.1  Institutional Base Salary (IBS) is the annual salary paid to an individual for performance of all professional obligations required by the individual’s primary appointment at ÃÛÌÒÉçÇø Michigan University. These professional obligations may include research, teaching, and/or other service activities, are generally identified in the individual’s appointment letter, and are assigned by the Chair of the Department or its designee each semester or annually. Unless otherwise specified, the annual salary stated in the appointment letter fully compensates the individual for all professional obligations required by their primary ÃÛÌÒÉçÇø appointment. IBS excludes any income that an individual is permitted to earn outside of duties performed as part of  their primary ÃÛÌÒÉçÇø appointment.

4.2  IBS is set prospectively either for an indefinite period or for a specified term. IBS may not be increased or decreased based on availability of salary support from sponsored agreements or other revenue sources.

• 4.3  Components of IBS
• 4.3.1 Includes regular salary
• 4.3.2 Is guaranteed by ÃÛÌÒÉçÇø regardless of the source of funds
• 4.3.3 May not be increased as a result of replacing ÃÛÌÒÉçÇø salary funds with sponsored project funds
• 4.3.4 Excludes secondary assignments such as incidental work assignments
• 4.3.5 Excludes summer salary, merit, performance and lump sum bonus payments, honoraria, extra compensation, etc.

4.4  IBS is paid by ÃÛÌÒÉçÇø and is associated with and in proportion to the effort obligated by an individual’s appointment. An externally funded grant or contract administered by ÃÛÌÒÉçÇø may only be charged for work done outside the academic year at the rate of the IBS attributed to actual effort expended on that grant or contract. The academic year starts in the Fall semester and concludes at the end of the subsequent Spring semester.

4.5  Externally Sponsored Research

• 4.5.1 Salary costs included in a sponsored project proposal or charged to a sponsored project are calculated by multiplying the IBS times the percent of effort expended on the particular sponsored project. In cases where the IBS exceeds the applicable federal salary cap or sponsor limitation, the salary cap or limit amount is used instead of the IBS to calculate salary costs. The amount of IBS above the salary cap or limit may only be paid from non-sponsored sources. When preparing proposals for multiple years, future years’ IBS will be estimated based on salary increases in applicable collective bargaining agreements.
• 4.5.2 Charging a sponsored agreement for less than the committed effort is permitted, subject to the limitations in the Policy on Cost Sharing.
• 4.5.3 Summer salary may be paid to an individual on an academic year appointment for their research obligations performed during the summer months. Summer salary is calculated based on the IBS of the preceding academic year and can only be charged to a sponsored project in proportion to the effort expended on the particular project during the summer months.

5. Accountability 

5.1 Chairs, Deans, and Human Resources

• Ensure that ÃÛÌÒÉçÇø employees understand the terms of any increases outside of a contractual salary increase, and any changes in the professional obligation of that employee. The initial appointment letter documents the employee’s IBS and professional obligation.

5.2 Principal Investigator

• Ensure that all requests for salary support in sponsored projects proposals are based on the individual’s IBS, or in cases where the IBS exceeds the federal salary cap or any other sponsor limitation, the salary cap or limit amount is used instead of the IBS.

5.3 Office of the Research and Innovation

• Review and approve proposals (including the budgeted IBS) requesting funding from external sponsors. 

5.4 Department and the Dean’s Office

• All components of an employee’s IBS and professional obligation must be documented in an appointment letter furnished by the respective Department and the Dean’s Office at the time of initial appointment. A copy of the appointment or reappointment letter must be retained in their personnel file.  Proposal approval forms including the budgeted IBS are routed to, and approved by Department Chairs and Deans.

Failure to follow this Policy and associated procedures may also subject ÃÛÌÒÉçÇø employees to disciplinary action, up to and including dismissal from employment by the University.

6. Related Procedures and Guidelines

Summer Salary on Grants and Contracts Policy 

Summer Salary on Grants and Contracts Procedure