Home
Proposal
Information
Sponsor Forms
& Applications
eRA:
Electronic
Research Administration
Continuing
Education
& Training
Office of Research and Project Administration
The National Institutes of Health
(NIH) has recently announced the FY2007 salary limitation for NIH grants,
cooperative agreement awards and contracts. The new salary cap
level is $186,600, effective 1/1/07. The official notice is reproduced
below and may also be found at http://grants1.nih.gov/grants/guide/notice-files/NOT-OD-07-051.html
Donna Beyea - x5-8037
Marlene Boutet - x3-3960
Brenda Kavanaugh - x5-1504
Jane Tolbert - x5-4210
Cheryl Williams - x5-1503
*************************************************************
Jane Tolbert
Research
Administrator
Office of
Research & Project Administration
503 Hylan
Building
RC
Phone: 585-275-4210
Fax: 585-275-9492
Email: jtolbert@orpa.rochester.edu
Salary Limitation on Grants,
Cooperative Agreements, and Contracts
Notice Number: NOT-OD-07-051
Key
Dates
Release Date: February 22, 2007
Issued by
National Institutes of Health (NIH), (http://www.nih.gov)
This notice provides updated information
regarding the salary limitation for NIH grant and cooperative agreement
awards and extramural research and development contract awards (referred
to here as a grant). On January 12, 2006 NIH published Fiscal Year
(FY) 2006 information on the salary limitation in the NIH Guide for
Grants and Contracts (NOT-OD-06-031);
interim guidance for operating under a Continuing Resolution was published
on January 4, 2007 (see NOT
OD-07-033).
Every year since 1990 Congress has legislatively mandated a provision limiting
the direct salary that an individual may receive under an NIH grant. For
FY 2007, Public Law 110-005: Revised Continuing Appropriations Resolution, 2007 extends
the legislative provisions provided in the FY 2006 Appropriations Act (Public
Law 109-149) through the end of FY2007. Therefore the provision that restricts
the amount of direct salary to Executive Level I of the Federal Executive Pay
scale continues through FY2007. The Executive Level I annual salary rate was
$183,500 for the period January 1 through December 31, 2006. Effective
January 1, 2007, the Executive Level I salary level increased to $186,600.
For the purposes of the salary limitation, the terms "direct salary," "salary," and "institutional
base salary" have the same meaning and are exclusive of fringe benefits and
facilities and administrative (F&A) expenses, also referred to as indirect
costs. An individual's institutional base salary is the annual compensation
that the applicant organization pays for an individual's appointment, whether
that individual's time is spent on research, teaching, patient care, or other
activities. Base salary excludes any income that an individual may be permitted
to earn outside of the duties to the applicant organization.
NIH grant/contract awards for applications/proposals that request direct salaries
of individuals in excess of the applicable RATE per year will be adjusted in
accordance with the legislative salary limitation and will include a notification
such as the following: None of the funds in this award shall be
used to pay the salary of an individual at a rate in excess of the current
salary cap.
This is the seventh year that the limitation has been linked to Executive Level
I of the Federal Pay Scale. Please see the salary cap summary and the
time frames associated with salary caps at http://grants.nih.gov/grants/policy/salcap_summary.htm.
Implementation of new salary limitation:
- No adjustments
will be made to modular grant applications/awards or to previously
established commitment levels for non-competing grant awards issued
with FY 2007 funds.
- NIH competing
grant awards with categorical budgets reflecting salary levels at
or above the new cap(s) issued in FY 2007 will reflect adjustments
to the current and all future years so that no funds are awarded
or committed for salaries over the limitation.
- For awards
issued in those years restricted to Executive Level I (see Salary Cap Summary,
FY 1990 – FY 2007), if adequate funds are available
in active awards, and if the salary cap increase is consistent with
the institutional base salary, grantees may rebudget to accommodate
the current Executive Level I salary level and contractors may charge
at the higher level. However, no additional funds will be provided
to the prior year grant awards and the total estimated cost of the
contract will not be modified.
- An individual's
base salary, per se, is NOT constrained by the legislative provision
for a limitation of salary. The rate limitation simply limits the
amount that may be awarded and charged to NIH grants and contracts.
An institution may pay an individual's salary amount in excess of
the salary cap with non-federal funds.
- The salary
limitation does NOT apply to payments made to consultants under an
NIH grant or contract although, as with all costs, those payments
must meet the test of reasonableness and be consistent with institutional
policy.
- The salary
limitation provision DOES apply to subawards/subcontracts for substantive
work under an NIH grant or contract.
COMPETING grant applications
and contract proposals that include a categorical breakdown in the
budget figures/business proposal should continue to reflect the actual
institutional base salary of all individuals for whom reimbursement
is requested. In lieu of actual base salary, however, applicants/offerors
may elect to provide an explanation indicating that actual institutional
base salary exceeds the current salary limitation. When this information
is provided, NIH staff will make necessary adjustments to requested
salaries prior to award.
Questions & Answers
1. If a grant award (competing or non-competing) has already been issued in
FY 2007, will an adjustment be made? No adjustments will be made. However,
rebudgeting is allowable.
2. Can I rebudget grant funds or charge contracts issued in those years restricted
to Executive Level l (see Salary Cap Summary
(FY 1990 – FY 2007) funds to allow for the 2007 salary cap increase?
Yes, provided funds are available and the increase is warranted. Prorated figures
should be used for the applicable months, i.e., the $186,600 level is effective
beginning January 1, 2007.
3. If an application/proposal fails to provide needed salary information, will
an adjustment be made based on the new rates? No adjustment will be made if
an application fails to provide adequate information regarding the individual's
actual salary level.
4. Does the NIH appropriation language link the salary cap to a Federal Executive
Level or to a dollar level? The link is to the Federal Executive Level pay
scale (i.e., Executive Level III for FY 1999, Executive Level II for FY 2000,
and Executive Level I for FYs 2001-2007).
5. As the cap is linked to Federal Executive Levels, can grantees/contractors
with ongoing awards rebudget/charge up to the various salary caps, based on
the fiscal year of the award and the time the salary expense is incurred? Yes,
salary may be charged in accordance with the FY cap(s), as long as the levels
are consistent with the individual's institutional base pay. Please refer to
the salary cap summary with times frames for existing salary caps, at http://grants.nih.gov/grants/policy/salcap_summary.htm.
6. Will grantees be permitted to submit revised categorical budgets reflecting
higher base salaries? Not as a general rule. NIH policy for categorical budgets
states that grantees should always reflect actual base salaries in the requested
budgets or provide an explanation indicating that actual institutional base
salary exceeds the current salary limitation. As a general rule, NIH will use
the information available in the existing application and make adjustments
for the salary cap based on information available at the time of award.
The following are examples of the adjustments that NIH will make when salaries
exceed the current salary limitation:
Example 1. Individual with Full-Time Appointment (based
on grant award/contract issued after January 1, 2007 with salary limitation
of $186,600)
|
$ 195,000 |
|
|
Research effort requested in application/proposal
- 6 months (50%) |
|
|
|
Direct Salary requested |
$ 97,500 |
Fringe benefits requested (25%
of salary) |
$ 24,375 |
Subtotal |
$ 121,875 |
|
|
Applicant organization's F&A
(indirect) costs at a rate of 45% of subtotal |
$ 54,844 |
|
|
Amount requested - salary plus
fringe benefits plus associated F&A (indirect) costs |
$ 176,719 |
|
|
If a grant/contract is to be funded,
the amount included for the above individual will be calculated
as follows: |
|
|
|
Direct salary - restricted to
a RATE of |
$ 186,600 |
Divided by 12 months multiplied
by 6 months (50%) |
$ 93,300 |
Fringe benefits (25% of allowable
salary) |
$ 23,325 |
Subtotal |
$ 116,625 |
|
|
Associated F&A (indirect)
costs at 45% of subtotal |
$ 52,481 |
|
|
Total amount to be awarded due
to salary limitation |
$ 169,106 |
|
|
Amount of reduction due to salary
limitation |
|
($176,719 requested minus $169,106
awarded) |
$ 7,612 |
Example 2. Individual
with Half-Time Appointment (based on a grant
award/contract issued after January 1, 2007 with salary limitation
of $186,600)
|
$ 97,500 |
|
|
Research effort requested in application/proposal 1.8
months (30% of 6 months) |
|
|
|
Direct Salary requested |
$ 29,250 |
Fringe benefits requested (25%
of salary) |
$ 7,313 |
Subtotal |
$ 36,563 |
|
|
Applicant organization's F&A
(indirect) costs at a rate of 45% of subtotal |
$ 16,453 |
|
|
Amount requested - salary plus
fringe benefits |
|
plus associated F&A (indirect)
costs |
$ 53,016 |
|
|
If a grant/contract is to be funded,
the amount included in the award for the above individual will
be calculated as follows: |
|
|
|
Direct salary - restricted to
a RATE of |
$ 93,300 |
Divided by 6 months multiplied
by 1.8 months (30%) |
$ 27,990 |
Fringe benefits (25% of allowable
salary) |
$ 6,997 |
Subtotal |
$ 34,987 |
|
|
Associated F&A (indirect)
cost at 45% of subtotal |
$ 15,744 |
|
|
Total amount to be awarded due
to salary limitation |
$ 50,731 |
|
|
Amount of reduction due to salary
limitation |
|
($53,016 requested minus $50,731
awarded) |
$ 2285 |
Inquiries
Questions concerning this notice
or other policies relating to grants or contracts should be directed
to the grants management or contracts management office in the appropriate
NIH Institute or Center.
Weekly
TOC for this Announcement
NIH Funding Opportunities
and Notices