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A recent NCURA training focused on the questions and intricacies research administrators face each time they work with institutional base salary. Sarah T. Axelrod, the Assistant Vice President for Harvard’s Office for Sponsored Programs, gave a presentation that outlined the elements essential for understanding an institutional base salary. Since the establishment, tracking, and fulfillment of salaries involves a wide range of people including those in sponsored programs offices, departments, and faculty affairs, it is important that everyone involved be competent on the topic.institutional base salary

Institutional Base Salary: Defining and Tracking

Institutional base salary is the annual compensation a faculty member receives for his or her 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 may relate to the duties performed as a department director, while the other outlines the responsibilities and salary components for the faculty member’s regular daily work. The total institutional base salary is comprised of the sum of all the figures expressed throughout an individual’s various appointment letters.

Therefore, proper effort reporting and tracking becomes imperative.  Many universities allow their faculty members to spend part of their work week on projects separate from their institution. These activities are not covered on an institutional base salary. However, the salaries are based on 100% effort. Thus, even if the faculty spends 20% of his or her week on projects under another organization, this time is not part of the 100% effort attributed to the institutional base salary. Additionally, a faculty member must ensure he or she does not perform over 100% institutional effort, as this would cause compensation to exceed the predetermined salary rate.  To accurately monitor and report all of these factors and salaries it is crucial that an institution invests in an effort certification software. 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 will interface with an organization’s ERP and payroll systems and be accessible to all departments and staff members.

Institutional Base Salary: What’s Included

Once an institution’s staff has an understanding of how the base salary is defined and tracked they can begin to differentiate between which elements are covered and which are not. The institutional base salary encompasses the earnings from research, teaching, administration, and guaranteed clinical pay. This “regular” salary component can operate on a twelve month track or a nine month track. The nine month cycle tends to be more difficult to regulate, and may lead to a summer salary piece being included in the institutional base salary rate. 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.

Institutional Base Salary: What’s Excluded

While the institutional base salary compensates quite a few responsibilities, there are certain fields that are explicitly excluded. Bonuses and one time payments are not included in institutional base salary. Neither are incentives, particularly the incentive portion of clinical hours. Payments from outside organizations for work that does not factor into the 100% effort are separate from the base salary. This can include institutions such as a veterans’ hospital or a medical institution. If there is a question as to whether a particular payment is included in a base salary the latest Uniform Guidance documentation can often provide clear direction.

Ensuring everyone has a clear understanding of base salaries and installing a user friendly effort certification system will allow for better financial and grant management practices across the institution. For more information on how to find the software system that best fits an organization’s needs, contact the IT Works team today.