Defining institutional base salary
Institutional base salary is the annual compensation a faculty member receives for their work at a university. It is set in the annual appointment letter and is used as the basis for the salary to be charged on federal awards.
A faculty member may have more than one appointment letter, each reflecting a different position. One letter might cover the responsibilities and pay for regular daily work, and another might cover the person’s duties as a department director or member of a committee (for example, an IRB, IACUC, or IBC committee). The total institutional base salary is the sum of all the figures in the person’s various appointment letters.
Typically the only time a base salary will change is at the beginning of a fiscal year or if there is a substantial development, such as a faculty member changing from part- to full-time, or taking on a new role such as department director.
What’s included in institutional base salary?
The institutional base salary encompasses the earnings from research, teaching, administration, and guaranteed clinical pay. This “regular” salary component can operate on a 12-month track (the calendar year) or a 9-month track (the academic year). The 9-month cycle is harder to regulate and may lead to a summer salary being included in the institutional base salary rate. Just one of the reasons proper effort reporting and tracking are so important.
What’s not included in institutional base salary?
Many universities allow faculty to spend part of their work week on projects separate from their institution. These activities are not covered by an institutional base salary. However, the salaries are based on 100% effort. Thus, even if the faculty member spends 10% of their week on projects under another organization, this time is not part of the 100% effort attributed to the institutional base salary. (You can see why the industry is shifting gradually from time-based to project-based effort certification.)
Additionally, a faculty member must ensure they don’t perform over 100% institutional effort, as this would cause compensation to exceed the predetermined salary rate. (Kind of like unauthorized overtime.)
Certain things are explicitly excluded from the institutional base salary:
- Bonuses
- One-time payments
- Incentives, particularly the incentive portion of clinical hours
- Payments from outside organizations for work that does not factor into the 100% effort (for example, institutions such as a veterans’ hospital or a medical institution)
If it’s unclear whether a particular payment is included in a base salary, the latest Uniform Guidance documentation can often help clarify.
A few years ago at NCURA, Sarah T. Axelrod, the Assistant Vice President for Harvard’s Office for Sponsored Programs, gave a presentation explaining institutional base salary:
The more you know
Establishing, tracking, and fulfilling salaries involves a wide range of people–including those in sponsored programs offices, departments, and faculty affairs–so it’s important that research offices know what is and isn’t included.
Once an institution’s staff has an understanding of how the base salary is defined and tracked, they can differentiate between what’s covered and what’s not. Ensuring everyone has a clear understanding of base salaries and establishing a user-friendly effort certification system will enable better financial and grant management practices across the institution.
To accurately monitor and report all of these factors and salaries, it is crucial that an institution invests in effort certification software. (A homegrown effort tracking system takes more work and money than you think!) This software can produce required reports, such as Faculty Effort Certifications, that are often requested by the appropriate federal auditing agency. A robust software system (like Cayuse’s) will interface with your ERP and payroll systems and be accessible to all departments and staff members. Learn more about Project Effort here.
