Process for Confirming and Reviewing Compensation Charged to Federally Sponsored Projects
Version: September 2020
The process and responsibilities below are intended to ensure compliance with Lewis & Clark’s Compensation and Compensation Review for Federal Grants Policy. This policy should be familiar to the Principal Investigator/Project Director (PI/PD) of an external grant supported by federal funds, and appropriate personnel in the Sponsored Projects and Research Compliance (SPARC) office, Human Resources (HR), the Dean’s offices, and the Business Office (BO).
- Prior to submission of an external proposal, SPARC will work with the PI/PD to develop an accurate personnel budget for the project. This includes the following:
- Confirm that the proposed effort for each individual that will work on the project is feasible considering the terms of their appointment and their other anticipated activities (e.g., other externally funded projects, course releases, scheduled sabbatical, department chair position, etc.)
- Help the PI/PD obtain approval for any requested course release or leave prior to routing the Grant Proposal Clearance Form.
- Obtain the correct compensation basis from HR (e.g., IBS or wage rate and FTE/months of appointment per year).
- Confirm the proposed effort complies with any sponsor restrictions and College guidelines.
- If the proposal budget requests funding for a new position, the PI/PD may be required to prepare a Position Description Questionnaire so that HR can provide an estimated compensation rate. SPARC will retain supporting documentation.
Allocating pay to a sponsored project
- After an award is received, the approved project budget guides salary allocations. The PI will confer with SPARC to review projected allocations for all employees receiving compensation from a sponsored project at least once a year and prior to making necessary adjustments. SPARC will retain documentation supporting the distribution of the salary or wages with the grant file.
- For any new grant-funded positions, the PI/PD will work HR to get the proper classification for the position. SPARC will review and approve new hires based on the award terms and conditions and the available funds.
- SPARC will follow HR processes for updating the Human Resources Information System (HRIS) with pay allocation changes. This may require directly entering into the HRIS any non-IBS Activity Pay (e.g., summer salary) where it will route for approval, or requesting that the HRIS administrator change the pay allocation for base salary and wages.
- HR will update the approval queues as needed in the HRIS to allow SPARC to review and approve new hires and compensation charged to federal sponsored projects.
- HR provides a detailed payroll report (All Accounts – Grant Admin Payroll) to SPARC on a monthly basis.
- SPARC reconciles the payroll report with the actual charges posted to the general ledger and includes the information in the Budget Status Report prepared for each sponsored project and any related cost sharing account. Budget Status Reports are provided to the PI/PD for review at least quarterly.
- PI/PD reviews Budget Status Reports to verify that personnel charges are reasonable in relation to the work performed. PI/PD contacts SPARC if an error is suspected or a pay allocation should be adjusted.
- SPARC requests an Exempt Payroll Compensation Report from HR annually based on each federal grant’s project year. The request should be made within the 45-day period following personnel expenses posting to the general ledger for that project year.
- HR will generate the Exempt Payroll Compensation Report for each federally sponsored project from the HRIS. That report will include the reporting period, the total compensation in salary and non-hourly wages paid to each employee, and the percentage of the employee’s IBS that the grant compensation represents for that period. The percent of IBS will be omitted for types of personnel to which it does not apply.
- SPARC will review each report for accuracy and resolve any errors before distributing the report to the PI/PD. If an error is identified on the report, the subsequent correction may post outside of the report period (i.e., retroactive payroll corrections post in the current payroll month). In such cases, SPARC should wait until the correct charges have posted to the account then clearly document the correction via handwritten or digital note on the Exempt Payroll Compensation Report before distributing the report to the PI/PD for review and certification. The certification process timeline may be extended as necessary to accommodate required payroll corrections. Retroactive payroll corrections are subject to the Cost Transfer Guidelines.
- The PI/PD will certify reports within 30 days of receipt. Only the PI/PD may approve and certify Exempt Payroll Compensation Reports. If a discrepancy or error is suspected, the PI/PD should contact SPARC immediately. Reports should not be certified until all discrepancies are resolved.
- The PI/PD will return certified Exempt Payroll Compensation Reports to SPARC. SPARC will retain the documentation with the grant file. Once reports are certified, retroactive payroll adjustments within the certification period that are detrimental to the federal sponsor will not be allowed. Payroll Compensation Reports must be approved within 90 days of the end of a project period and before final financial reports are submitted.
Roles and Responsibilities
Principal Investigator/Project Director
- Provide realistic estimates of projected effort at the proposal stage
- Work with SPARC to confirm and adjust pay allocations throughout the project period
- Contact SPARC if changes in effort on a project are expected
- Ensure that all compensation charges to the project are reasonably accurate given the work performed
- Contact SPARC if the payroll allocation needs to be modified based on the work performed after-the-fact
- Contact SPARC immediately if an error or discrepancy is suspected on the Exempt Payroll Compensation Report
- Certify accurate annual Exempt Payroll Compensation Report within 30 days of receipt
Sponsored Projects and Research Compliance (SPARC)
- Consult with PI/PD to confirm they have time and capacity to work on the project if funded, and confirm approval of any proposed course release or leave before routing the Grant Proposal Clearance Form
- Consult with PI on appropriate pay allocation and initiate changes with HR
- Collaborate with Dean’s Office/HR before annual salary letters are prepared when any portion of academic year salary is to be paid from a grant (e.g., approved course release or sabbatical funding)
- Retain documents showing confirmation of compensation allocation with the grant file
- Provide accurate Budget Status Reports to the PI
- Investigate suspected errors and coordinate payroll corrections as needed, subject to the Cost Transfer Guidelines
- Request annual Exempt Payroll Compensation Reports from HR, review for accuracy, distribute to PI for certification, and retain approved reports with the grant file
Human Resources will meet these objectives following their own procedures:
- Provide accurate compensation rates to SPARC for proposal budget development
- Before payroll is completed, run the following Workday reports and contact SPARC if they are not blank:
- “Pay Component Review for Restricted Accounts – Includes in Progress” to confirm none of the following posted to funds 12,22,32 funds: Bonus, Severance, Severance Stipend, Non-Account Plan Reimbursements.
- “Pay Results Using Inactive Cost Center” to look for charges going to an inactive cost center.
- Distribute detailed payroll report, All Accounts - Grant Admin Payroll, to SPARC monthly and as needed upon request
- Perform pay allocation adjustments, including retroactive changes, at SPARC’s request
- Monitor and administer effective processes and controls within the HRIS, including accurate documentation of Institutional Base Salary (IBS) for each employee
- Compile accurate Exempt Payroll Compensation Reports upon request in a timely manner
- Perform periodic audits to ensure IBS and compensation paid are accurate (e.g., Audit for More than 100% IBS Report)
- Overall administration of maintaining accurate payroll information and security and business process in the HRIS
Dean’s Offices/Human Resources
- Prepare salary letters and/or work plans that include, at a minimum, the following information: Institutional Base Salary (IBS); FTE; any special appointment terms; any course releases and/or expected paid or unpaid leave; grant funded compensation percentage; and appropriate account/budget numbers.
- Adjust salary letters during the year as needed to reflect any relevant updates.
- Confirm with SPARC if academic year salary is to be paid from a federal grant
- Approve and make adjustments via journal entry as needed when fringe charges related to a retroactive pay adjustment do not post correctly, subject to the Cost Transfer Guidelines
- Communicate with SPARC to confirm that Payroll Compensation Reports are certified before submitting final financial reports