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FTE Enhancement

Over the last thirty years, state support to the University of Missouri as a percentage of expenses has been on a steady decline. In 1990, the state funded 70% of the University’s expenditures. By 2019, state support covered only 36% of expenditures.

Following this downward trend, MU Extension and Engagement’s (MU E&E) general revenue allocation (GRA) from the University has also declined. Since 2017, MU E&Es GRA from the University has declined by $7 million—a 27% reduction. These reductions in GRA are expected to be permanent.

In 2017, the MU campus began phasing out salary incentive, grant incentive and research incentive polices, and issued final incentive payments based on 2019 activity. Current policy does not allow for salary incentives but supports FTE enhancement to a maximum of 1.0 FTE as additional revenues become available.

The COVID-19 pandemic exacerbated existing budget pressures. To cut costs and preserve off-campus faculty positions across the state, MU E&E leadership announced that, effective September 1, 2020, all off-campus faculty were reduced to 0.9 FTE, and base salaries were adjusted down. These adjustments were designed to preserve statewide coverage through the projected budget situation in the coming years. Through FTE enhancement, off-campus faculty can increase compensation linearly by securing external funds such as contracts, fees, and grants to cover the remaining 0.1 FTE.

Current budget circumstances amplify MU E&E’s commitment to an entrepreneurial approach to offset losses in GRA over the last several years. Now, more than ever, MU E&E must be innovative in its efforts to diversify and grow resources through grants, contracts, fees, partnerships, and philanthropy. Securing additional funds helps MU E&E offer essential programming while meeting our land-grant mission to improve lives, communities and economies.

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    Policy

    To facilitate entrepreneurial work by off-campus faculty, MU E&E fiscal and administrative leadership is working to identify bottlenecks and minimize obstacles. These measures include increasing faculty training in grants and contracts, exploring the creation of a 501(c)(3) foundation to widen MU E&E’s eligibility for grants, and reviewing division- and campus-level fiscal policies. We are also working to improve communication about the administrative processes involved in securing external revenue.

    This FTE enhancement policy provides a framework for off-campus faculty to grow their FTE up to 1.0 by securing external revenue from grants, contracts, fees, or gifts that are not currently used for salary offset. FTE enhancement will not result in an increase in base salary. However, FTE enhancement will result in a linear increase in total compensation (10% increase in FTE, 10% increase in total compensation).

    Per University policy and federal law, 1.0 FTE is the maximum amount that a faculty member can achieve through this policy. If an off-campus faculty member secures external revenue exceeding the amount required to increase FTE by 0.1, the remainder will be used as salary offset.

    As FTE increases, so will efforts related to that particular project or funding source. By securing grants, contracts, fees, or gifts supporting MU E&E’s mission-critical work, off-campus faculty will strengthen the organization while increasing their total compensation.

    FTE enhancement is entirely voluntary. Off-campus faculty are not required to take advantage of the opportunity to enhance FTE, and their decision whether to do so will not be a part of a faculty member’s annual review.

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    Guidelines

    FTE enhancement can be funded through grants, contracts, fees, or gifts secured from an external source (see Appendix 3: Types of Revenue). To qualify for FTE enhancement:

    • Revenue must be new to MU E&E and received on or after September 1, 2020 (the operational date of this policy); and
    • Funds are expected to be available for six months or more, OR
    • Funds consist of monies accrued in an existing account that have not yet been used to offset salary (e.g., statewide program fees in a program account or other program savings in a program account). Funds accrued in a county account are not eligible for use in FTE enhancement.

    FTE enhancement cannot be made in flat dollar amounts and instead must be achieved in incremental increases of 0.03, 0.05, 0.08 or 0.1 FTE (see FTE increments in Appendix 1: Glossary of Terms; Appendix 2, Frequently Asked Questions).

    To receive FTE enhancement, off-campus faculty must identify/secure an amount of revenue covering at least 0.03 FTE of their total salary costs for at least six months, including base salary, fringe benefits, and applicable administrative expenses to administer the revenue. The FTE Enhancement Calculator in Appendix 5 can help faculty determine this amount.

    To ensure everyone is aware of proposed FTE changes, the program area (senior program director) and supervisors (primary and secondary) must be part of the FTE change discussion with faculty. Supervisors must approve the change. If supervisors cannot come to agreement, the senior program director and associate vice chancellor will become involved in the discussion. Change requests will only be addressed if they come from the senior program director with all appropriate directors copied on the email. Principal investigators on grants need to work with the appropriate directors to request this change.

    The effective date of the change will be the first of the next month - generally these cannot be backdated. Faculty need to be informed and be putting forth the required effort before we can make changes, therefore the email or letter should have the effective date of the following month.

    • Fees: Directors are working with off-campus faculty to determine where fees could be used to enhance FTE. Fee accounts must have a balance sufficient to sustain a minimum FTE enhancement of 0.03 FTE for six (6) months. MU E&E fiscal will charge the University account where fees are held. The expected variability of individual faculty fee revenue and constraints around county council/partner MOUs makes it difficult to invoice for fee revenue held in their accounts. Therefore, MU E&E will not invoice county councils or other partners for fee-based FTE enhancement. Fee revenue must accumulate to an amount equal to a minimum of 0.03 FTE for at least six (6) months of salary before it will be used to enhance FTE.
    • Grants, contracts and gifts: MU E&E fiscal will adjust faculty FTE to mirror the start date, amount and duration of the new revenue stream. To be used for FTE enhancement, faculty must be able to show a revenue stream within a grant, contract or gift to cover salary and benefits of 0.03, 0.05, 0.08 or 0.1 FTE for at least six (6) months. Senior program directors are working to identify new revenue and FTE enhancement opportunities at the program level. As faculty move further into the grant-seeking process, recognize that there is strength in partnering with colleagues who have successful grant-seeking experience. Senior program directors, education directors, and regional directors can help identify mentors for interested faculty (see Appendix 6: Gift vs. Grant Decision Tree; Appendix 7: Grant vs. Contract Decision Tree; Appendix 8: Council vs. University Decision Tree; Appendix 9: MU E&E Simple Contract; Appendix 10: MU E&E Simple Partnership Agreement).

    This policy is new, and some institutional learning will be required to implement it. It may be revised as lessons are learned during initial implementation.

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    Additional Information

    This FTE enhancement policy will continue to evolve to make FTE enhancement easier and more effective for those taking advantage of this opportunity.

    Central leadership continues to work with the MU campus fiscal and policy staff around:

    • 501(c)(3) availability for ease of local gifts and grants.
    • Contract vs. grant determinations.
    • Addressing administrative hurdles. Most of these hurdles involve policy put in place to mitigate risk. The vice chancellor for finance supports MU E&E administration having the space to try some new opportunities.

Resources

To help faculty better understand how revenue can be used to enhance FTE, appendices are provided

Appendices