The large majority of sponsored project funds are expended in support of personnel. Personnel support is of two major types

Employees are understood to engage in defined project related tasks and have job titles and job descriptions for which they receive salaries and wages (and are issued W2 forms summarizing their earnings at the end of each calendar year). In accordance with their titles and levels of effort, they may be eligible for Fringe Benefits. The Research Foundation manages its fringe benefits through a pool. The pool recognizes defined major classes of employees with associated fringe benefit rates. The rates are subject to negotiation and approval by the U.S. Department of Health and Human Services as part of the process by which indirect cost rates are determined. The rates are re-evaluated each RF fiscal year (RF fiscal years run from July 1 to June 30).

Fringe benefit costs are extracted from sponsored projects at the appropriate rate applied to salaries paid independent of an employee's eligibility to receive them.

Fellows are not employees. While fellows may contribute significantly to sponsored projects, they are understood to be trainees and their support is not for services rendered. They receive stipends as opposed to salaries and wages. Fellows are issued 1099 forms rather than W2 forms at the end of the calendar year. The taxability of their stipends is governed by a complex collection of principles and rulings by the IRS. Fellows receive no fringe benefits by virtue of their appointment, and no fringe benefits are extracted from the sponsored projects which provide their stipends.

Another way in which individuals may be paid for services to sponsored projects in through the consultant vehicle. Consultants are neither employees nor fellows. They are paid through contractual agreements in which the services they provide are detailed. Since their relationship to a project is contractual, the selection of specific consultants is governed by processes more like the purchase of goods and services than the process by which employees are hired or fellows appointed.

Consultants are assumed to be independent contractors with defined tasks and benchmarks. They may not have a continuing involvement in a project and should not require significant supervision.

The IRS uses a series of "20 Common Law questions" to determine whether an individual or group of individuals meets the legal requirement to be considered a consultant.

The salary offset mechanism is characteristic of universities in which sponsored projects are fully administered by a different organization (corporation) than the University itself. In SUNY, the University is a State agency while the Research Foundation is a private non-profit corporation operating under a contract with SUNY.

That contract provides for the Research Foundation to be able to collect salaries paid from sponsored projects on behalf of the State and to reimburse the State for salaries of State salaried employees (typically, faculty) for effort on a sponsored project. This permits the relevant State employee to continue to receive his/her salary from the State alone rather than to receive salary from two separate organizations.

Campus units differ in their implementation of the salary offset mechanism. This depends to some extent on whether the State employee is paid on an annual or academic year basis.

When faculty are paid on an academic year basis, the two corporation situation takes on a special role. During the time in which faculty have no academic obligation (typically a defined three month period during the summer), they are eligible to receive their entire salary from sponsored projects (subject to sponsor constraints - e.g., NSF limits summer salary from its grants to a total of 2/9ths of the academic year salary). Since they receive no State Salary during that period, the Salary Offset mechanism does not apply.

During the summer, academic year faculty become direct employees of the Research Foundation. The result is that they become employees of two separate organizations, each of which has all of the obligations of an employer. This includes the extraction of taxes such as Social Security and Medicare from all salaries paid. At the end of the calendar year, such individuals receive W2 forms from both the State and the Research Foundation. For some individuals, the combined Social Security payments will exceed the social security maximum. The excess beyond that maximum can be applied to Federal Income taxes.

The purchase of goods and services in support of sponsored projects comprises the second largest activity. The two major procurement categories are supplies and equipment.

Purchase requisitions are the normal vehicle for such project needs. Requisitions are reviewed by the Grants Management Office for consistency with general regulations and sponsor specific regulations. An example of general regulations governing such acquisitions is the Cost Accounting Standards (CAS). Each institution is required to file a disclosure of its practices with regard to the implementation of the Cost Principles enunciated in OMB's Circular A-21. This disclosure, which is subject to audit by DHHS, describes, among other items, which cost elements the institution includes among the direct costs of sponsored projects and which are assumed to be indirect costs.

Stony Brook's CAS disclosure and its policy on office supplies are available on this web site.

Each institution must also specify its definition of equipment. For the Research Foundation, equipment includes items with acquisition costs of $5,000 or more and an expected useful lifetime of of 2 years or more. The identification of an item as equipment subjects the item to an inventory requirement. Equipment inventory is managed by Property Control and is subject to Federal audit. The Research Foundation provides casualty and theft insurance on research equipment, the costs of which are allowed on most sponsored projects.

The Research Foundation has a procurement card program, but the acquisition of certain items (e.g., animals, radiological materials, hazardous materials etc.) through that program is prohibited. [See Credit Card Programs on the Procurement Office Website.]

Travel associated with sponsored projects is governed by the Research Foundation's Travel Policy. That policy incorporates the broad Federal regulations that govern travel. Sponsors may impose additional constraints on travel. Investigators must be aware of the constraints imposed by the Fly America Act which requires the use of American carriers except under very strict circumstances.

The research community can take advantage of the American Express Business Travel Account (BTA). [See Credit Card Programs on the Procurement Office Website.]