University of California Office of the President
Senior Vice President—Business and Finance
Research Administration Office
Memo
Operating Guidance
No. 00-09
October 31, 2000
CONTRACT AND GRANT OFFICERS (CAMPUS AND LAB)*
VICE CHANCELLORS--ADMINISTRATION
Subject: General Principles Governing Payroll Charges to Extramural and University Funds
This memo incorporates in the Contract and Grant Information System a letter previously issued to campuses.
The enclosed memo issued in December, 1992 provides guidance on payroll charges to extramural and university funds.
This memo and enclosure are available electronically at the Research Administration Office website at http://www.ucop.edu/raohome/cgmemos/00-09.html.
Refer: Barbara Yoder
Barbara.Yoder@ucop.edu
510-987-9848
Subj Index: 07, 01, 06
Org Index: U-115
Sincerely,
David Mears
Director, Research Administration Office
Cc: Assistant Vice President Plotts
Manager Ohy
J.W. PELTASON OFFICE OF THE PRESIDENT
President 300 Lakeside Drive
Oakland, California 94612-3550
RONALD W. BRADY
Senior Vice President- December 14, 1992
Administration
VICE CHANCELLORS--ACADEMIC AFFAIRS
VICE CHANCELLORS--BUSINESS AND FINANCE
VICE CHANCELLORS--BUDGET
SUBJECT: General Principles Governing Payroll Charges to Extramural and University Funds
To ensure an accurate accounting trail and the reasonableness of salary charges to extramural fund sources, campuses
are required to implement procedures in accordance with the following general principles.
1. Effort on Sponsored Activities Must be Reasonable in Relation to Total University Duties:
a. Extramural Funds and Instructional Duties: During the course of each academic year, faculty are required to
devote effort to department duties, teaching, and departmental research, unless the faculty member has been specifically
relieved of his/her teaching and departmental duties. Each campus shall develop local policies governing the maximum
amount of effort that can be charged to extramural sponsored projects, consistent with a reasonable level of effort
for instruction and departmental duties.
b. Extramural Funds and Clinical Duties: Many faculty members participating in the Health Sciences Compensation
Plans generate additional clinical fee income from their patient care duties. Each campus with Health Science Compensation
Plans should develop local policies and procedures to ensure that the total amount of salary charged to extramural
sponsored projects is reasonable in light of the individual's effort on patient care, in addition to teaching and
other departmental duties as specified in I.a. above.
2. The Total Payroll Charges to All Sources Shall Not Exceed the Actual Compensation Paid to the Faculty Member:
There should be no negative pay lines on a Personnel Action Form (PAF). Transfer of payroll expense procedures
must be used if the source initially charged is to be relieved of the expense and the resulting credit must be
made to the fund Source receiving the original charge and may not exceed the amount of the original charge. The
only exception to this principle is for salaries paid directly to a faculty member by an affiliated hospital (i.e.,
salary disclosure). The PAF transaction entry for salary disclosure must be an offset to the fund(s) initially
charged the salary.
3. General Funds Salary Savings Must be Spent as General Funds and Cannot be Transferred to Other Funds: General
Funds budgeted for academic salaries not needed to pay individual faculty salaries because of salary reimbursements
from sponsored projects or direct payments to the faculty member from affiliated hospitals should be accounted
for in accordance with the Planning and Budget Manual, Chapter 4010. At the discretion of the Chancellor, such
savings may be transferred to other sub-budgets to be used for academic personnel-related costs. With approval
by the Office of the President, such academic salary funds may also be transferred to other sub-budgets to cover
expenses of other activities but must be expended as General Funds.
4. No Negative Effort on Personnel Activity Report: The Personnel Activity Report (PAR) should report the charges
to each sponsored agreement and the percent of effort devoted to each agreement. In the case of Health Sciences
Compensation Plan members, the percent of effort should be computed in terms of the total negotiated salary. The
percent of effort devoted to clinical fee income generating duties as well as teaching and departmental duties
must also be reflected on the PAR. All activities requiring effort for which the employee is compensated, including
sponsored projects, teaching, patient care, and departmental duties, should be reported as a percent of total effort
on the PAR. The PAR reported effort should add up to but not exceed 100% and there should be no negative effort
reflected for any fund on the PAR.
5. Accurately Estimate Percent of Effort to be Devoted to the Project and Use Correct Rate of Pay in Project Budgets:
The principles of good faith and fair dealing require that proposals present a realistic estimate of the amount
of time to be devoted to the project by University faculty and staff. When the University seeks reimbursement for
academic effort to be devoted to the project, or wishes to document voluntary or mandatory cost sharing, proposals
to extramural sponsors should reflect the planned percent of effort at the approved academic year salary, giving
due consideration to any pending personnel actions, anticipated range adjustments, and merit increases. In the
case of health sciences compensation plan faculty, the approved academic year salary is the total negotiated salary.
Calvin C. Moore Lawrence C. Hershman Joseph Pastrone
Associate Vice President Associate Vice President University Controller
Academic Affairs and Director of the Budget
cc: Senior Vice President Brady
Senior Vice President Frazer
Vice President Hopper
Director Alter
Director Mears
bcc: Director Young
Principal Administrative Analyst Capell
Principal Accountant Lester
Principal Administrative Analyst Yoder
Manager Ohy
J.W. PELTASON
President