To: Stanford Principal Investigators
From:
Geoffrey Grant, Associate Vice President for Research Administration
Charles Kruger, Vice Provost and Dean of Research and Graduate Policy
Date: March 9, 2001
Subject: Salary charges for Principal Investigators on research projects
cc: Research administrators

 

The Office of Management and Budget has issued a long-awaited clarification of Circular A-21 on the proper treatment of salary and effort [pdf file]. We're pleased to report to you that the clarification fully supports Stanford University's policies on salary charging and cost sharing. It confirms that effort COMMITTED in a project proposal, AWARDED by the sponsor and then EXPENDED by the researcher must be reflected by corresponding salary charged to the project OR to a cost sharing account. Effort above and beyond that which was committed to the sponsor, e.g., "donated" academic effort, does not have to be accounted for as cost sharing.

NOTE: The School of Medicine's requirement in this regard is unchanged. Any level of effort committed to a project must be matched by a corresponding direct salary charge to the project. The Medical School does not allow the cost sharing of salaries.

The clarification also contains other important distinctions. It establishes the expectation that faculty members and senior researchers on sponsored research projects WILL make a commitment of their effort to the project. Stanford interprets this to mean that, except in specified cases, it is not acceptable for a Principal Investigator to submit a research proposal without a commitment of PI effort to the proposed project.

Effective immediately, on each research proposal Stanford University will require a commitment of at least 1%FTE on the part of the Principal Investigator during the period in which effort is devoted. This effort may be expended during the Academic Year, Summer Quarter only, or both. This requirement does NOT extend to:

  • equipment grants
  • dissertation support, training grants or other awards intended as "student augmentation"
  • limited-purpose awards characterized by Stanford as Other Sponsored Activities, including, for example, travel grants, conference support, etc. (See RPH 3.2 for definition and further examples of Other Sponsored Activities.)

For all other research proposals, some level of effort on the part of the PI must be committed to the project. The Office of Sponsored Research (or the School office submitting the proposal) may allow exceptions to this rule only with an acceptable written explanation by the Principal Investigator. Upon award of the project, when the committed effort is expended and NOT charged to the project, a corresponding amount of salary must be treated as cost sharing

The underlying principle here is that the allocation of effort and salary should reasonably correlate to one another. Proposals should accurately represent the amount of time that key personnel are committing to the project. Once the project is underway, the PI must certify quarterly that, to the best of his or her knowledge, actual salaries are appropriate in relation to work performed.

Salaries constitute the single largest category of costs paid by research sponsors. The proper handling of this funding rests on the PI's thoughtful allocation of effort and monitoring of project performance. This is one of the concepts presented in the required briefing for all Principal Investigators, and, as a review, you may wish to revisit the web site discussing this topic:

http://www.stanford.edu/dept/DoR/PIship/effort.html

Further clarification is provided in the table on the reverse of this memo.