Finance & Administration

Externally Funded Research Buy-outs

Overview

The purpose of this policy is to create a mechanism for faculty members to self fund a central bridge/discretionary spending reserve account by charging academic year salary plus fringe to external grants. The academic year salary plus fringe savings will be divided at the end of the fiscal year, with 50% being returned to the faculty member for their immediate use in a faculty discretionary account, which may be used for summer salary. The remaining 50% will be booked to the faculty member’s name in a central bridge/discretionary reserve account. Such funds may then be dispersed for use as either bridge funding or as discretionary funding upon request and approval from the divisional dean.  

This policy is intended primarily to encourage faculty to create bridge-funding reserves in order to keep research labs running smoothly during fluctuations in federal funding. Faculty may accrue money over several years. In the absence of a self-funded bridge funding reserve, faculty may request bridge loan assistance through the Bridge Funding Policy (http://trinity.duke.edu/finance/regular-rank/bridge-funding). A faculty member’s past use of their discretionary funding will influence eligibility for bridge funding support.

Central bridge/discretionary funds established through a research buy-out may not to be used to support summer salary for the faculty member, unless the funds are to be used in support of summer salary that exceeds the NIH (National Institutes of Health) salary cap.

If a faculty member leaves Duke University, any discretionary funds booked in their name will revert to Arts & Sciences, effective on the date of termination of employment.

Policy

Faculty may, with the prior approval of their department chair and divisional dean, buy out up to up to 50% of their academic year salary plus fringe for research using external funding they have obtained through grants

NOTE: Faculty in departments on formula budgets (Economics, Math or Computer Science) should contact the departmental business office for details on your department’s research buyout policy (which may or may not parallel this buyout policy for non-formula departments).

Establishing a Bridge/Discretionary Spending Reserve Account

Faculty Member Actions

  1. To establish a central bridge funding/discretionary spending reserve account, submit a completed request form to your department chair and divisional dean. Specify the grant code(s), salary plus fringe % (for the buyout) and the time period that salary plus fringe will be charged to grant(s).  For example, if the research buyout is from January through April at 10%, the specific grant code, plus 10% of the faculty member’s salary and fringe benefit for the specified time period should be included in the email request.  In addition, the Grant Manager should acknowledge that sufficient resources are available in the grant.

DOWNLOAD: Request Form & Year End Report (xls)

  1. When the request is approved by the chair and the divisional dean, notify your business manager or grant manager and request initiation of a Cost Distribution iForm. A&S will only use those iForms identified as Research Buyouts to calculate the amount of salary plus fringe benefits that are charged to grants. 
  2. You and/or the departmental business manager can request a statement of the balance of these funds through the Office of Finance & Administration.

Divisional Dean Actions

  1. Review faculty member’s request and chair’s approval to establish a central bridge funding/discretionary spending account. Clarify any details as needed with the faculty member in order to revise the request, if appropriate.
  2. Send formal approval to the faculty member, department chair and the Office of Finance & Administration.

Business/Grant Manager Actions

  1. Please notify the Office of Finance and Administration when a faculty member implements a research buyout by entering “Research Buyout” in the ‘Comments’ section on the Cost Distribution Change iForm. If more than one grant code is a part of the distribution, the grant code(s) used for the research buyout should be specified, as well as the percentages.

Requesting Disbursement of Central Bridge/Discretionary Reserve Funds

Faculty Member Actions

  1. To obtain access to the 50% of the salary and fringe that was designated Central Bridge/Discretionary Reserve Funds, send an email request to your divisional dean that you need access to your funds and supply information about their use. e.g., “We need funds to cover the cost of a graduate student for 3 months.”
  2. If the funds are needed for bridge funding, please work with your business manager to optimize use of the funds for bridging purposes. A brief paragraph describing those strategies will be used to evaluate best practices for bridging strategies.
  3. When approved, notify your department business manager/grant manager, and request that funds be transferred from the central account to faculty member’s personal fund code.
  4. You must request disbursement of funds each year. However, you don’t need approval to carry over existing funds.

Divisional Dean Actions

  1. Review faculty member’s request to withdraw central bridge funding/discretionary reserve funds and verify that they are being used according to the official policies specified in GAP 200.410, Faculty Discretionary Accounts Policy. Clarify any details as needed with the faculty member, in consultation with the department chair, and identify any needed revision, if appropriate.
  2. Send formal approval to the faculty member, department chair and the Office of Finance & Administration.

Business/Grant Manager Actions

  1. When notified that a spending plan has been approved, contact the Office of Finance and Administration to arrange for the transfer of funds from the central account into the faculty member’s fund code.

Frequently Asked Questions

Question: Can my self-funded discretionary account be used to pay me summer salary?

Your faculty discretionary account can be used to support summer salary. If you are working on a NIH grant, and your salary exceeds the NIH salary cap, you may use your central, self-funded bridge/discretionary account to top up the summer salary (not charged to the grant) that must be cost shared. Other circumstances may also be considered but require approval of the chair and the divisional dean.

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Question: Do balances in discretionary accounts accrue F&A (facilities & administration) overhead?
 
No. Academic salary charged to grants will be charged F&As as is standard practice and those F&As are used to support the research enterprise. Like funds in Startup accounts, funds in the discretionary account do not accrue any F&As.

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Question: How do I get access to the funds?

When you need to use the funds, send a request to your Divisional Dean including a brief description of the purpose(s) for which the funds will be used.  After the Dean approves your request, the funds will be transferred to your designated fund code. Please note that NO allowable request will be turned down.

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Question: Is approval of the Cost Distribution Change iForm mean the Dean has approved my request for a Research Buyout?

No.  Direct communication with your Divisional Dean is necessary to get approval for the Research Buyout. This should be done before the iForm is initiated. 

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Question: What if I did the Cost Distribution Change iForm to charge some of my salary to my grant and failed to get the Dean’s approval for the Research Buyout?

You created a salary savings in the department budget, but it won't be transferred to the central fund or be available for you to use.  Prior approval by the Chair and Dean is a requirement.

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Question: I plan on paying part of my salary on grants during the academic year to use for both summer supplements and a research buyout. How do I distinguish the part of my grant funded salary that will go towards the summer supplement and the part that will go towards the research buyout?

Tell your business manager or grant manager and they will note the proportion of each in the ‘Comments’ section of the Cost Distribution Change iForm. 

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Question: Will my salary savings automatically be credited to my fund code?

Fifty percent of the total salary savings will be credited to your faculty discretionary account at the end of the fiscal year. The remaining 50% of saving will be booked in your name to a central bridge/discretionary account and held as your spending reserve.

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Question: Can I spend the money from the central fund?

No. However, the funds will be transferred to your fund code after the Divisional Dean approves your spending plan and then you will have access to them.

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Question: Is there a time limit to claim the money from the central fund?

There is no time limit, the money will be available when it’s needed for as long as the faculty member remains at Duke.

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Question: Can I accumulate salary and fringe savings over several years in the central fund to use as a bridge fund when I have a funding gap? 

Yes, you can accumulate the funds over several years.     

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Question: Do I need to get the Dean’s approval every year?

Yes, for every year you want to add funds.  However, you don’t need approval to carryover existing funds.

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Question: How do I find out how much money I have in the central fund?

The best way is to go through your Department Business Manager.  The Trinity Office of Finance and Administration will maintain the records of the central fund and can provide the balance. 

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Question: Can I claim the salary savings from a previous fiscal year if I did not get prior approval from the Dean?

No you cannot. Funds can be designated for use in a central bridge/discretionary spending reserve account only in a given fiscal year. Savings must be captured and transferred to the central account before the fiscal year closes.

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Question: How will this work for faculty who have joint appointments in other schools?

The amount of the buyout is limited to the amount of your salary and fringes that is saved by Arts & Sciences.  Salary savings by other schools cannot be counted. 

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