Course Buyout and Salary Savings Return Policy

Background of Policy

Certain external granting agencies make available to faculty funds that can be used to support a faculty member's academic/fiscal year salary.When these funds are awarded as part of the grant funding and the faculty member charges his/her salary to the award account, salary savings is generated. If salary savings is sufficient, a teaching release is sometimes granted. The actual salary savings money has historically been used by the College to support replacement instruction, mandatory salary supplements for university fellowships & PRF research assistantships and other college-wide instruction and research needs.

Until July 2000, no financial incentives existed within the College of Liberal Arts to encourage faculty researchers to request funds to support their AY and/or FY salaries. At that time a “Research Incentive Program” was introduced that allowed faculty and departments to share in the distribution of the salary savings generated when their salaries were charged to externally sponsored research accounts.

Program Goals/Objectives
The goal of this program is to encourage and support research and scholarship in the College of Liberal Arts. In addition, this program is designed to accomplish the following:

Be consistent and equally applicable across all Liberal Arts Departments.
Provide sufficient resources for the College to cover the cost of replacement instruction.
Provide a source of financial support for the PI and/or department to assist with infrastructure costs associated with departmental research programs or general S&E and travel expenses.

Charging AY Salary to External Research Grants May Affect PIs Teaching Responsibilities

Faculty members in CLA have historically been permitted to reduce their standard teaching load (2-2) through salary support provided by research grants and fellowships. The CLA policy on receiving course releases through funds from external grants and fellowships within the College of Liberal Arts uses the following sliding scale of AY salary plus the coverage of the equivalent proportion of fringe benefits per course. The scale was revised on December 7, 2018. It is as follows:

12.5% of AY salary + Fringe for the first course buyout
15% of AY salary + Fringe for the second course buyout
17.5% of AY salary + Fringe for the third course buyout
25% of AY salary + Fringe for the fourth course buyout

Reductions are specific to faculty teaching and do not reduce other responsibilities, such as graduate student mentoring, participation in faculty meetings and departmental committees, and service to the College of Liberal Arts and Purdue University. This structure is highly competitive and it facilitates the pursuit of external grant funding by incentivizing the structure of course releases. The significant escalation in costs for the 4th course reduction emphasizes the importance of teaching within CLA. Full (four course) releases are to be used in rare circumstances and only with the prior approval of the department head. This provision should not, however, cover residential fellowships, which by definition require a full course release. Residential fellowships also require the prior approval of the department head.

When special circumstances warrant it, heads may request that the dean authorize a course release for lower course buyout thresholds. This policy applies to tenure-track and clinical professors as well.

Determining Salary Savings

Salary savings are generated when a faculty member charges a portion of his/her budgeted academic year or fiscal year salary to funds they have received from an external sponsor.

Return of Salary Savings

Most generally, one third (1/3) of the salary savings from external research grants is retained by the college and two thirds (2/3) is transferred to the department or school, where, after any expenses for replacement teaching have been subtracted, the remainder is shared equally between the department/school and the PI.

The program is reviewed and may be revised every two years. Based on a review in the fall of 2012, the program was revised with revisions taking effect at the start of the spring semester of 2013.

The portions of salary savings allocated to departments, and then by department heads to PIs, will be distributed bi-annually, after faculty have certified their effort on their Personnel Activity Reports for the fall and spring semesters. Funds will be allocated to special departmental general fund accounts (21010000 4017XXXYYY, where XXX = deptartment number and YYY designates PI).

Use of Returned Funds

Use of distributed salary savings will be in accordance with the same spending guidelines that apply to the University general fund. Some examples of allowable expenditures include the following:

Summer salary (may require prior approval -- see Business Manager for assistance)
Student support
Travel (including international meetings)
Honoraria
Equipment
Supplies
Phone and data network lines
All equipment and supplies purchased will be university property.

Additional Information

Specific questions about the program can be directed via e-mail to Sorin Adam Matei, Associate Dean, College of Liberal Arts or Kirke Willing, Director of Financial Affairs, College of Liberal Arts. Other questions can be directed to your Business Manager. Whether other external awards (such as fellowships) qualify for this program will be considered on a case-by-case basis. Please contact Kirke Willing if you have these types of awards.

Example
Professor Jones has an annual salary of $60,000. She receives a $300,000 award from NIH. Included in the budget are funds to support 10% of her academic year salary. The project period is July 1, 2019 through June 30, 2020. Professor Jones contacts the department head and they agree that Professor Jones will devote 10% effort to this project for the year.

At the end of the Fall and Spring Semesters Professor Jones completes her PARs and certifies the salary distribution at 10% organized research on the grant and 90% under instruction or departmental research on general funds.

Salary savings for the academic year is calculated - $60,000*.10 = $6,000

Annual Distribution (if the department policy is 50/50 split between department and PI)
PI: 33.3%, $2,000
Department: 33.3%, $2,000
College: 33.3%, $2,000
Total: 100.0%, $6,000

The funds for the PI and Department will be made available for expenditure in the special accounts.