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NSF Two-Month Rule

All faculty members who are being paid salary from NSF grants must be aware of the following NSF rules:

  • As a general policy, NSF limits the salary compensation requested in the proposal budget for senior personnel to no more than two months of their regular salary in any one year. This limit includes salary compensation received from all NSF-funded grants. This effort must be documented in accordance with 2 CFR § 200, Subpart E.
  • Faculty paid from multiple NSF grants should not re-budget to pay themselves additional salary. The total amount of salary paid from all NSF grant sources should not exceed two months unless explicitly approved by NSF.

The Office of the Inspector General (OIG) at the NSF is stating explicitly that including salary in the list of current and pending support is insufficient to document program officer approval of additional pay. The request to exceed two months must be included in the budget support documentation and specifically approved by NSF in the award notice. The OIG is also stating that the FAQ on re-budgeting is not relevant where salary is concerned. The FAQ is not considered to be authoritative guidance and so does not overrule the NSF Award and Administrative Guidelines.

CU-Boulder’s procedures for pay should continue to follow the audit guidelines. Any questions related to NSF’s two-month maximum for salary should be directed to Denitta Ward, Director, Office of Contracts and Grants, at Denitta.Ward@colorado.edu or 303.735.6624. 

Background

Effective January 2009 NSF revised this to limit salary to two months over the course of the year, it isn’t limited to summer salary anymore.

Chapter II – Section C.2g(i), Salaries and Wages, has undergone a major revision of NSF’s salary reimbursement policy. In general, the Foundation will now limit salary compensation for senior project personnel to no more than two months of their regular salary in any one year. This limit includes salary compensation received from all NSF-funded grants. This change moves away from the concept of summer salary and allows for reimbursement of two months of salary per year whenever appropriate during the year.

View the complete NSF Proposal and Award Policies and Procedures Guide.