Honoraria or fees for the services of a faculty member are acceptable charges to grants-in-aid or contracts to compensate for extraordinary time and effort spent on a sponsor's behalf, to reimburse the University for salary paid during time devoted to a sponsor, to release the faculty member from other University duties, and/or to compensate for preferential rights to results granted to the sponsor.

Conditions/Approvals:

The decision to charge an honorarium or fee and its amount are determined on a sponsor-by-sponsor and project-by-project basis by the faculty member, the department head and/or faculty dean, and the University. Relevant considerations include any applicable sponsor regulations or arrangements with the University, the nature of the work, the time and effort required to meet sponsor expectations and requirements, the sponsor's terms, especially those related to intellectual property rights, and the effect of the project upon the other duties and responsibilities of the faculty member, as well as upon the activities of the academic unit concerned.

Grants-In-Aid:

Only honoraria or release time can be charged to grants-in-aid. Not only must the sponsor give explicit consent to the payment, but the department head and dean must be satisfied that the honorarium is warranted. Release-time costs may be based upon either the relevant proportion of the individual's salary and benefits or actual replacement cost, whichever is acceptable to the department head and dean.

Contracts:

Cost Recovery - full or partial salary cost recovery for time expended can be charged to contracts. Full recovery is expected when the sponsor receives preferential rights to the commercial use of the research results; partial or no recovery is acceptable when the work is of significant intellectual value and immediately publishable, or alternately when the University will receive valuable compensating benefits.

Charges - may be salary or replacement cost-related, or "market" based: * Salary-related Charges - are prorated according to the faculty member's annual salary and benefits. Daily rates are calculated as 1/225 of the individual's total annual salary plus benefits.

• Replacement Charges - are the costs to the University of replacing the faculty member with a comparably qualified and experienced substitute.
• Market Fees - are based upon the costs of comparable expertise and services available in the private sector.
• Unfair Competition - Charges must not be established that compete unfairly with professionals in the private sector. Research performed in the University should not be less expensive than equivalent work elsewhere, unless the University's price advantage offered is justified by such considerations as demonstrable public service or academic program needs.
• Overhead/Indirect Costs - When salary or actual replacement costs are charged, overhead is added at the appropriate rate. When market fees are charged, they include overhead which is deducted before payment is made to the recipient.

Procedures:

Approvals - It is the responsibility of the faculty member to inform and consult with the department head, and to obtain advance approval of any proposed honorarium or fee for service.

Proposals - Anticipated honoraria or fees for services must be indicated in grant or contract proposals/offers.

Revenues:

Revenues may be paid to the individual as supplementary income, used to offset regular salary or provide release time, or, in some circumstances, directed to the support of research or scholarly activities.

Honoraria - are provided in a single payment or in a series of installments upon submission of a Casual Payroll Requisition approved by the department head and faculty dean. The approvals reconfirm the justification for the honoraria.

Supplementary Income - is paid upon receipt of a Casual Payroll Requisition approved by the department head and faculty dean. The requisition must indicate the time worked and the agreed rate. Payment is made only to the individual concerned, and not to another researcher or company on the individual's behalf.

Salary Recovery - Revenues are credited to the academic salary account of the department concerned.

Release Time - Revenues are credited to the academic salary account of the department concerned. Amounts based on a fixed proportion of the faculty member's annual salary are transferred monthly; amounts based on actual time worked are transferred on receipt of a claim from the department head for the number of days worked to the date of the claim.

Research Support - Research accounts in lieu of honoraria can be established for supplementary income from contract research. See document "Research Accounts in Lieu of Honoraria - Procedures and Regulations."

Tax Liability:

Faculty members are responsible for any income tax liability arising from any honorarium, salary, grant, or taxable allowance or benefit received in accordance with these guidelines.