In our concluding article on monitoring salary coverage, we will discuss factors that influence decisions regarding research salary shortfalls. In the most recent post in our four part series, we discussed how salary coverage reports can identify gaps in funding that create these shortfalls. We also presented the sample report shown in Figure 1 as an example and discussed how Dr. Jones was in a precarious position with respect to his salary coverage. As indicated in our prior blog, there are many options to resolving salary shortfalls, such as submitting proposals or collaborating. Today’s article will expand on other factors that affect salary coverage.
Assumptions and Factors to Consider When Managing Research Salary Shortfalls
A fundamental assumption in managing salary shortfalls is that projects and other funding sources currently obligated to cover an employee’s salary have adequate budgets to support these obligations. In the sample report shown in Figure 1, the rows and columns shown in the middle section of the report list the amounts expected to be paid by the projects and other funding sources shown in the first column of this section. In our current discussion, we assume these sources have the adequate budget for these obligations. It is a good practice to verify this assumption before considering other factors. If these assumptions prove to be false, the percent of salary and / or the end date of the funding source should be adjusted to correct the situation.
Likewise, the following discussions regarding managing research salary shortfalls require the administrator managing the budgets and/or personnel costs to have access to current and future budget information with respect to the existing funding sources covering the employee’s salary and / or other funding sources. Administrators frequently utilize a grant accounting software system to aid in budget verification.
Possible Solutions to Research Salary Shortfalls
There are three basic options when resolving research salary short falls: acquiring new sponsored funds, re-budgeting funds that are currently being used to cover the employee’s salary, and / or utilizing other funding sources from within the institution. Information regarding the first solution was presented in our previous discussion of salary coverage reports [link to previous blog]. This article discusses how to utilize one or both of the latter two options:
- No Cost Extensions: A no cost extension on a sponsored project may allow the end date of an existing salary distribution to be extended. If a no cost extension is applied to Figure 1, the salary distribution of project 67101-340314 could be extended from 8/31/15 to a later date. This would provide funding for an additional 7.5% of Dr. Jones’ salary through the new end date. The use of a no cost extension assumes 1) the research project has not been completed, 2) the sponsor will allow the extension, and 3) there is adequate remaining balance on the project to cover the extended obligation.
- Retroactive Salary Adjustments: A retroactive or after the fact salary adjustment reduces the amount of salary previously paid by a funding source in order to extend its coverage end date. An equal but opposite change is made to one or more other sources to make the employee’s total salary over the time period. While a retroactive salary adjustment may be a viable option, in some cases, they may cause problems with effort certification and reporting. Most institutions have a policy that defines how far back in time an adjustment can be made. Retroactive adjustments must also accurately account for the projects where the work was performed. For instance, a salary adjustment should not be made to another project just because another project is out of funding.
- Temporary Adjustment of Effort: A temporary adjustment of effort involves increasing the effort on a project until a new project becomes available, then reversing the increase with funding from the new project to realign the overall obligation.
- Bridge Funding: Another institutional funding source such as state funds, clinical income, endowments, hard money or other non-restricted funding source is used to replace the funding until another sponsored project can be acquired. This is usually the simplest option when other funding is available.
- Voluntary Cost Sharing: Voluntary cost sharing works like a combination of a no cost extension and bridge funding. A non-restricted funding source is used to cover part of a sponsored project’s obligation for an employee salary and thus allows the duration of the sponsored project to be extended. Most organizations limit voluntary cost sharing as much as possible in order to reduce restrictions on internal funds as much as possible.
The key to managing research salary shortfalls is proactive monitoring. With proper reporting tools, grant and research administrators can easily identify potential issues before they become major problems. At IT Works, our grant and financial software solutions provide reports that are designed specifically for this purpose. For more information on these and other research administration software needs, contact our sales team today.