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Research, Grants and Export Control

Review of Compensation Charged to Sponsored Projects - 1M11

Southern Illinois University Edwardsville's system of internal controls helps ensure that compensation costs are charged in accordance with applicable policies governing the proper authorization of expenditures. Central to, but not exclusive among these internal controls, is the federal guidance for the after-the-fact review of charges to help ensure that compensation charged to a sponsored project and/or committed as cost sharing reasonably reflects the work performed on the project. In accordance with 2 CFR 200.430(h)(viii)(C), this policy addresses the after-the-fact review requirements so that the final amount charged to all sponsored projects governed under CFR 200.430 is accurate.

All compensation costs charged to a sponsored project must be reasonable for the work performed, necessary for the performance of the project, allowable per sponsor and institutional policy, and allocable to the project.

For federally-funded projects, compensation charges must be based on a rate not in excess of an individual's institutional base salary (IBS), adequately documented in accordance with 2 CFR 200 Subpart E Section 430 Compensation - Personal Services, and be in accordance with applicable governing authoritative guidance, including sponsor requirements and institutional policy. Additional or supplemental activities outside IBS cannot be charged to externally-funded projects without prior approval of the funding agency and specifically provided for in the approved federal award budget.

In accordance with 2 CFR 200.430(h)(8)(x) "it is recognized that teaching, research, service and administration are often inextricably intermingled in an academic setting. When recording salaries and wages charged to federal awards for [institutions of higher education], a precise assessment of factors that contribute to costs is therefore not always feasible, nor is it expected." Therefore, a variance of +/-5% is acceptable.

The after-the-fact review of project compensation is performed annually and at the close of the grant by the principal investigator (PI) or an appropriate individual assigned by the PI. This review helps ensure that the compensation of individuals charged to or committed as cost sharing towards a project reasonably reflects the work performed.

Compensation charged to institutional sources is not covered under this policy, except for compensation used in support of committed cost sharing requirements. The accounting of voluntary uncommitted cost sharing for a specific project (including faculty, staff, and student project time that is not compensated or committed as cost sharing towards the project) is excluded from this policy.


  • Reasonable: A cost is reasonable, if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
  • Necessary: A cost is necessary if the objectives of the project cannot be met without incurrence of the cost.
  • Allowable: A cost is allowable if it is in conformity with governing laws and the policies and procedures of the institution.
  • Allocable: A cost is allocable if it is assignable to a specific cost objective in reasonable proportion to the benefit provided to the project to which it is charged. If a cost benefits two or more projects in proportions that cannot be determined because of the interrelationship of the work involved, the cost may be allocated or transferred to the benefited projects on any reasonable documented basis (200.405 (d)).
  • Principal Investigator: Typically, a faculty or staff member named in the award who has primary responsibility for technical compliance, completion of programmatic work, and fiscal stewardship of sponsor funds.
  • Committed Cost Share: The portion of project or program costs not borne by the sponsor that has been quantified in the proposal and made as a condition of award. Committed cost share can be mandatory or voluntarily committed. See Cost Sharing on Sponsored Projects - 1M8.
  • Institutional Base Salary (IBS): The base annual compensation set by the institution for an individual's appointment, whether that individual's professional activities are spent on instruction, research, public service, administration, or on other areas of focus, and whether that employee is appointed full-time or part-time. IBS excludes income that an individual may be permitted to earn outside of duties to the institution. See Overload Compensation Policy - 1M1 and Policy Governing Externally Sponsored Industry Projects at SIUE - 1M2.
  • Project Compensation Reports: Data of the compensation expenditures charged to a sponsored project are distributed to the principal investigator or designee. The purpose is to help ensure that expenditures are accurate and reasonable in relation to the work performed by each individual.

Approved by Chancellor effective 7/13/21
This policy was issued on July 15, 2021, replacing the March 15, 2021 version.
Document Reference: 1M11
Origin: GR 16/17-13; GR 20/21-11; GR 20/21-16

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