The office of Grants & Contracts Accounting (G&C) conducts post-award compliance reviews to ensure good stewardship of the contracts and grants awarded to the university.
A salary cap is the maximum compensation rate a sponsor will reimburse for a sponsored project. Amounts exceeding the salary cap should be designated as cost-sharing. At VCU, our Effort Reporting Team conducts periodic reviews to ensure compliance with Federal, state, and local sponsor guidelines and limitations.
To calculate the salary cap, it is important to review the salary in proportion to the established cap. Below is an example of calculating the NIH Salary Cap.
Cap as of June 1, 2020 = $199,300
- Smith has an annual salary of $300,000
- NIH supports 20% of his salary (committed effort)
- Salary Cap for Dr. Smith:
- $199,300 * 0.20 = $39,860
- $300,000 * 0.20 = $60,000
- The difference between the two becomes cost shared effort ($60,000- $39,860 = $20,140)
- Direct Effort = 39,860/300,000 = 13.2%
- Cost-Shared Effort = 20,140/300,000 = 6.8%
The two agencies with established salary caps are the National Institutes of Health (NIH) and the Department of Defense (DOD) as of January 2022. The DOD salary cap, "Benchmark Compensation Amount”, is applicable to contracts only, and is currently set at a total compensation rate of $952,308 (all forms of remuneration for services, and related costs that would be considered fringe benefits) per federal fiscal year. These limits are updated periodically.
Highly Sponsored Faculty
In accordance with our policy, the Effort Reporting Team periodically reviews effort statements with sponsored research to ensure a faculty member does not have more than 95% effort assigned to sponsored activities. When submitting proposals for new projects, it is imperative to consider non-sponsored activities such as proposal writing, teaching, office hours, and departmental duties when allocating effort. If a faculty member has or approaching more than 95% effort assigned to sponsored activities, it is important to reach out to the Division of Sponsored Programs (DSP) for assistance with proposals.
Faculty members with 95% or more effort assigned to sponsored activities must provide justification using the Highly Sponsored Faculty Memo. Please contact the Effort Reporting Team with any questions.