Update to Salary Cap Notice

It is confirmed that all Health and Human Services (HHS) operating divisions (listed below) are subject to the new Executive Level II ($179,700) salary limitation. To date, only NIH has issued official guidance. We will continue to monitor the affected agencies and communicate additional information as it becomes available. In the meantime, please refer to the NIH notice and often-updated Salary Cap - FY2012 Frequently Asked Questions. In addition to NIH awards, OSPA will review other HHS awards requiring adjustments to budgets and cost-shared salary and will contact Department personnel on a project-by-project basis.

HHS Operating Divisions

Administration for Children and Families (ACF)

Administration on Children, Youth and Families (ACYF)

Administration on Aging (AoA)

Agency for Healthcare Research and Quality (AHRQ)

Agency for Toxic Substances and Disease Registry (ATSDR)

Centers for Disease Control and Prevention (CDC)

Centers for Medicare and Medicaid Services

Food and Drug Administration (FDA)

Health Resources and Services Administration (HRSA)

Indian Health Service (IHS)

National Institutes of Health (NIH)

National Cancer Institute (NCI)

Office of the Inspector General (OIG)

Substance Abuse and Mental Health Services Administration 

                                                                                                                                            

The National Institutes of Health (NIH) issued guidance on Friday, January 20, related to the new Executive Level II salary limitation (“salary cap”). With passage of H.R. 2055 into law, the NIH salary cap is reduced to $179,700 (Executive Level II) from $199,700 (Executive Level I), effective December 23, 2011.  

NOT-OD-12-035: Notice of Salary Limitation on Grants, Cooperative Agreements, and Contracts outlines the following:

·         For competing grant awards with an initial Issue Date on or before 12/22/2011: The salary cap remains at $199,700 for the FY2012 award period (no adjustment required). NIH will adjust future years for these awards to reflect a salary cap of $179,700.  

·         For competing grant awards with an initial Issue Date on or after 12/23/2011: A salary cap of $179,700 applies to current and all future years (adjustment required). NIH will revise the award.   

·         Non-competing grant awards with an initial Issue Date on or before 12/22/2011: Applicable salary cap is $199,700 (no adjustment required).

·         Non-competing grant awards with an initial Issue Date on or after 12/23/2011: Applicable salary cap is $179,700. Unless otherwise restricted, grantees may rebudget any funds freed as a result of the lower cap.   

Note that a lower salary cap raises the level of salary cost share required on a project. OSPA is currently reviewing NIH awards and will soon contact Department personnel regarding affected projects requiring adjustments to budgets and cost-shared salary.

Finally, our understanding is that all Health and Human Services (HHS) operating divisions are subject to the new Executive Level II salary limitation, whereas in the past only NIH, AHRQ, and SAMHSA were affected. Guidance from these agencies is not yet released; we are seeking clarification and will relay information as it becomes available.

Feel free to contact me with any questions as they arise. 

NIH Notice: Inflationary Increases for FY 2012 Grant Awards

On January 20, 2012, the National Institutes of Health (NIH) announced that inflationary increases for future-year commitments will be discontinued for all competing and non-competing research grant awards issued in FY 2012 (NOT-OD-12-036: NIH Fiscal Policy for Grant Awards – FY 2012).

As this policy pertains to awards issued in FY 2012 and thus implies a temporary limitation, MU OSPA advises continued inclusion of customary cost-of-living increases in proposal budgets, with the expectation that NIH may make adjustments at award. To demonstrate our attention to NIH policies as they roll out, please consider adding the following footnote to the Budget Justification:    

The budget includes annual increases for salaries and fringe benefits. However, we acknowledge that inflationary increases are discontinued for FY 2012 funding per NOT-OD-12-036. In the event of award, we expect NIH to make appropriate adjustments to the budget based on the policy in effect at that time.

Please feel free to contact me should you have questions.