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UCB Guidance for Furlough Exchange Program (FEP) Charges to Grants and Contracts

Full-time faculty in a Professorial or Lecturer Security of Employment title series who are Principal Investigators and are subject to the Furlough/Salary Reduction Program may choose to participate in the Furlough Exchange Program (FEP). Under the FEP a PI may charge one or more externally funded projects for time and effort equivalent to the percent of their furloughed time if this will contribute to the success of the project/s.

The FEP policy issued by the UC Office of the President requires that PIs charge their sponsored project/s for the percent of time they are furloughed either during the entire 2009-10 academic year or the spring semester of 2010. Under this policy, a funding agency may not be charged for a lesser percentage of effort or length of time. The sponsored project/s must therefore still be active during these applicable periods; have enough funding to cover the increased salary, fringe benefits, and associated indirect costs associated with the increase in PI time and effort; and be capable of benefiting from greater PI involvement.

The funding agency also must be willing to allow re-budgeting for these costs. Some agencies require prior agency approval for re-budgeting project funds. In such cases additional PI time may not be charged to the project unless the sponsor’s authorized official provides written approval to SPO. The sponsor’s award terms and conditions always govern what is and is not allowable in such cases.

Most federal agencies waive the prior approval requirement for re-budgeting unless the proposed budget change will affect the scope of work. For example, if an increase in PI time/salary results in fewer project support personnel to carry out project objectives or reduced travel to project research sites or delays in purchasing needed equipment, the scope of work could be affected. In such cases it would be necessary to inform the funding agency of the potential impact on the project and obtain agency approval prior to re-budgeting project funds to support greater PI time and effort.

Some funding agencies, such as the National Science Foundation, place limits on the amount of funding that can be paid as salary. In the case of NSF the individual investigator is limited to no more than two-ninths of their academic year salary. This limit includes summer salary received from all NSF-funded grants. PIs that already are charging summer salary to NSF grant/s may choose to charge a percentage (equivalent to their furloughed time) of their academic year salary instead. However PIs must remember that the fringe benefit rate during the academic year is higher than the rate that applies in the summer.

In no case should a PI’s additional effort on grants and contracts cause the PI’s time and effort across all university activities to exceed 1 FTE. Effort reports therefore must reflect any change in effort associated with the FEP. Furthermore, awards that included academic year salary as all or part of mandatory cost sharing commitments (including voluntary cost share on federal projects) may be used for FEP only if alternate sources of cost sharing are identified.

PIs should contact the SPO Research Analyst assigned to their department or research unit for additional guidance if they are unsure about a specific funding agency’s requirements relative to the FEP.


Resources

Memos from UC Interim Provost and Executive Vice President Pitts to Chancellors and Academic Senate Chair, dated August 26 and September 11, 2009
  August 26, 2009 memo: Furlough Exchange Program
  September 11, 2009 memo: Salary Exchange Program (FEP) Addendum, Partial-Year Participation Option

Q&A for Contract & Grant Officers Regarding the UC 2009-2010 Furlough Plan from UCOP Research Policy Analysis and Coordination (RPAC) unit (revised October 8, 2009)


NSF Clarification on the UC Furlough

The National Science Foundation provided the following guidance to the University of California on the furlough, sent to Bill Clark at UC Santa Cruz from Jean Feldman at NSF. This guidance was incorporated in the above Q&A for Contract & Grant Officers Regarding the UC 2009-2010 Furlough Plan.


From: Feldman, Jean I.
Sent: Thursday, September 17, 2009 3:07 PM
To: 'Bill Clark'; Nancy Lewis; Cora Diaz; Connie Feeley; Karen Hanson; Monica Dunne
Cc: Feldman, Jean I.; NSF Policy; Santonastasso, Mary F.; Cooley, Thomas N.; Lightbourne, James H.
Subject: RE: Two Months Compensation Policy

Bill:

I understand that there has been some confusion regarding the previous NSF response regarding the California system-wide furlough. We're happy to provide clarification and we also will be informing NSF staff of the official Foundation policy on this issue so that PIs will receive a consistent response from NSF.

In summary, should an awardee wish to charge additional time and compensation to an NSF grant, beyond the normal two month threshold for senior personnel, the awardee may do so through their normal rebudgeting authorities. The charges must meet OMB Circular A-21 criteria for being reasonable, allocable and necessary, and the additional time must not change the scope of the project. If the change meets the criteria mentioned above, prior approval from NSF would not be required.

If there are questions regarding the necessity of the additional time or whether it would constitute a change in scope, the cognizant NSF Program Officer (PO) for the award should be consulted. If the PO feels that the additional time is not necessary for successful completion of the project or if it causes a change in scope which the PO does not agree with, they may not approve the change. The Foundation anticipates that in most cases the changes will fall under the awardee's normal rebudgeting authority and therefore, prior approval from NSF will not be necessary.

In order to have a consolidated response that you can forward to your colleagues, I will re-state the information that we provided last week on this issue. With regard to post-award salary changes, the Foundation has not modified the existing terms and conditions or any of our post-award prior approval requirements. Therefore, under an awardee's normal rebudgeting authority, an institution may internally approve an increase in the time spent working on a project after an award is made.

No additional approval is necessary from NSF for such changes. Awardees are cautioned, however, that faculty support on awards is based on the time necessary to perform the research project and any increase in time must be reasonable, allocable and necessary for successful completion of the project.

An important caveat is, if the rebudgeting would result in a change in objective or scope of the project as originally awarded, then the awardee is required to submit an approval request to NSF via FastLane.

Since salary is generally the largest item on the budget, there may be a scope change with addition of salary, especially if, for example, it was decided not to hire a graduate student in order to have enough money to cover the additional salary. In addition, no budgetary reductions may be made to the participant support category without prior NSF approval.

I hope this provides the necessary clarification for you and the University of California system. As I noted above, we will be sending guidance out to NSF program staff so that they are aware of the Foundation's policy regarding this matter.

Best,

Jean

Jean Feldman
Head, Policy Office
Division of Institution & Award Support
National Science Foundation
4201 Wilson Boulevard
Arlington, VA 22230
voice: 703.292.8243
email: jfeldman@nsf.gov