Budget Development

Loyola adheres to Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and agency guidelines that prohibit providing compensation to faculty members in excess of their base salary rate. However, extra compensation is permitted in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed is in addition to one’s regular departmental load. These charges must be clearly and specifically identified in the budget that is submitted to the external agency. Because many state and local grants are federal source funds, this requirement applies to all government grants.

Loyola faculty are on a 10-month calendar, thus, summer compensation from grants should be budgeted at the rate of 10% of academic year salary for one month full-time effort on a project. The maximum amount of summer compensation from grants is 20% of academic year salary. Faculty members who request two months of summer support at 100% effort may not engage in other activities such as teaching, other Loyola-sponsored research efforts, administrative duties, etc.

Twelve-month full-time exempt employees may not earn excess compensation from sponsored programs with one exception. If an employee engages in an activity for which any other staff member would receive extra compensation, the equivalent stipend may be paid so long as it is clearly delineated in the budget submitted to and approved by the grantor. For example, it would be permissible to request the stipend that is regularly paid to an administrator who co-teaches a new section of a Messina course so long as the request was clearly explained in the proposal budget, was not supplanting existing funding, and was approved by the sponsor.

Grant-funded compensation that increases the work schedule for a part-time employee must be paid at the same rate as any Loyola-funded compensation. The PI should work with the ORSP during the budgeting phase to ensure that administrative approvals are obtained if it is necessary to increase a part-time employee’s hours. Additionally, the increased hours may change benefits eligibility and must be approved by institutional authorities and budgeted for accordingly. The PI is responsible for ensuring that the part-time employee understands that the increased hours will not be continued beyond the grant period.

The standard benefit rate should be applied to salary calculations for all non-student personnel during the academic year. Check with the ORSP office for the most up-to-date benefits rate. FICA (7.65%) is applied to all stipends paid to faculty or staff during the academic year or summer months. FICA is applied to any compensation paid to a student during the summer months. During the academic year, FICA is not applied to undergraduate student compensation.

Faculty who are dedicating significant time to a project sometimes require a course release. Each course is presumed to require 10% of a faculty member’s academic year effort. Thus the budget request for a course release should be calculated at the rate of 10% of academic year salary plus benefits. Faculty members who require a course release should discuss this with their chair in the early stages of proposal preparation to be sure that the department can accommodate the request. The number of course releases required for a project must be indicated on the routing form. During the routing process the chair, dean, and, if more than one course release annually is requested, the Vice President for Academic Affairs confirm that the necessary course releases (which have been indicated on the routing form) will be granted if the project is funded.

The federal government defines equipment as tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. Purchases that do not meet this definition should be budgeted as supplies rather than as equipment.

Government funds may not be used to pay for alcohol.

Government funds may not be used to pay for entertainment.

Business related meeting costs are allowable when the primary purpose is to disseminate technical information. Costs for meetings should be discussed with the ORSP when the budget is being developed.

The Director of Resource Management negotiates a Facilities and Administrative Costs or Indirect Cost rate with the federal government every four years. Loyola’s rate is negotiated with the U.S. Department of Health and Human Services. The current rate is 45% for on-campus activities. All proposals to federal agencies should use the federally negotiated rate unless restricted by the federal agency. Because state, local, and foundational grants generally provide less than the federal rate, it is Loyola’s policy to request the maximum allowable amount.

The indirect cost sharing policy shares indirect costs (also known as Facilities & Administrative Costs) received through grants or contracts with the dean and department of the principal investigator/project director that originated the grant. The dean and department each receive 20% of the indirect costs generated through the grant.

Through sharing these resources, the policy seeks to encourage faculty members to seek external funding by supporting research activities of their departments and curricular areas. The departments and deans have discretion in the use of these funds, though they should be utilized to support research. In some cases, departments have chosen to allow the principal investigator on the grant to determine how the department's share would be used. Indirect costs are shared according to the following formula:

• 20% Department of principal investigator
• 20% Principal investigator's dean
• 60% General fund

Some awards require the University to allocate additional resources to achieve the grant objectives. This cost sharing could be Matching Funds, where the University agrees to provide cash resources to support the grant, or In-kind Contributions, where the University would allow non-cash resources, such as faculty time, to be used to support the grant.

Generally, a match or in-kind contribution should not be committed unless required. A match or in-kind contribution committed to a project must be approved during the routing process. Quantified contributions must be tracked upon award. This includes those committed by Loyola and any partners participating in a project.

A match or in-kind contribution may only be obligated against one grant. For example, if Loyola demonstrates that it has spent $5,000 in supplies as part of the required match for one grant it cannot use these same $5,000 to fulfill an obligation of matching funds to another organization that is supporting the same project.

The ORSP works with PIs to facilitate approval of any contribution that may be required by a sponsor. While this occurs formally through the routing process, it is important to discuss this early in order to allow sufficient time for the contribution to be approved. If a contribution has not been requested and formally approved during the routing process, it will not be available when the award is received. In such cases, and particularly if the contribution is substantial, the University may choose to decline the award.