Subject: Section 400 - Research and Public Service
Policy: Academic Year Course Buyout and Incentive Compensation
Policy Number: 420
Revised: January 30, 2026
Effective date: August 1, 2026
Review date: January 5, 2029
Responsible Party:
Research Office
Introduction and Purpose:
Montana Technological University supports research and external grant funding as essential to its academic and financial vitality. To encourage continued pursuit of externally funded projects, this policy establishes course buyout procedures with an incentive compensation structure for faculty engaged in such activities.
This policy defines Institutional Base Salary (IBS) in compliance with CFR 200.430 and outlines procedures for research incentive compensation, commonly known as Research Buyout. Other forms of overload compensation (e.g., per Section 10.4 of the CBA) are not addressed in this policy.
Policy:
Institutional Base Salary (IBS)
Definition
IBS is the annual compensation paid by the University for an employee’s appointment, covering all duties including research, teaching, service, and administration.
IBS Guidelines
- Established Annually: Defined in the annual contract per the CBA or MUS Staff Compensation Plan.
- No Substitution: IBS may not increase as a result of replacing University salary with sponsored project funds.
Faculty may use funding from sponsored projects to buy out of teaching duties with prior approval of the Department Head, and Dean. Approval must be obtained and the buyout documented BEFORE the start of the academic term involved. Such buyouts are budgeted and conducted on the basis of a course load of 15 credits per semester (30 credits per academic year). The number of credits to be bought out should be divided by 15 for a semester to determine the percentage FTE of the buyout for the semester. The buyout percentage will be multiplied by the faculty member’s IBS for the period to determine the salary budget required for the buyout. The faculty member will receive the calculated percentage(s) of salary from the grant(s), and the remaining percentage of salary (adding to 100%) from the faculty member’s academic position.
The grant budget(s) must include the buyout salary amount along with the appropriate additional percentage of benefits. The Office of Sponsored Programs will prepare a spreadsheet documenting the buyout and the associated allocations.
Incentive Compensation for Externally Funded Research
Montana Tech offers incentive compensation for faculty who secure external funding for Research Buyouts during the Fall and Spring semesters only. Summer compensation is based on IBS and not eligible for incentives.
Eligibility and Purpose
- Incentive compensation applies only to externally funded Research Buyouts (internal funds such as IDC are excluded).
- Buyouts are calculated based on IBS, assuming a 15-credit full-time workload.
- The program incentivizes faculty to pursue and sustain sponsored research.
Compensation Structure
- Research Buyouts replace a portion of faculty salary typically funded by the University with grant funds.
- Salary savings to the University are distributed as follows:
- 60% retained by Montana Tech for adjunct hiring and administrative costs
- 40% paid to the faculty member as an incentive
- Incentive payments will be issued prior to the Summer Semester following the academic year.
Sponsored Projects and Effort Reporting
When requesting salary support from a sponsored project—or reporting committed effort—the amount must be calculated using the employee’s IBS. The proportion of effort multiplied by IBS determines the salary to be charged or cost-shared.
Procedures:
Faculty must submit a written request for a Research Buyout before the start of the semester. The request must include:
- Number of course hours for Buyout
- Funding source (grant or sponsored project)
- Summary of proposed research activities and timeline
The request must be approved by the Department Head and Dean.
The Assistant VCR of the Office of Sponsored Programs will:
- Verify the availability of funds from the specified grant or sponsored source
Internal control considerations, if applicable:
Faculty compensation for Federal Awards will be at the Institutional Base Salary (IBS), as defined by the relevant statute governing cost principles on federal awards (CFR 200, Part 200.430, paragraph (h)(2)). Specifically, "IBS is defined as the annual compensation paid by an Institution of Higher Education for an individual's appointment, whether that individual's time is spent on research, instruction, administration, or other activities. IBS excludes any income that an individual earns outside of duties performed for the IHE.
This policy is compliant with Extra Service Pay Considerations of the same above federal statute (CFR 200, Part 200.430, paragraph (h)(4)).