For FY 2012, the Consolidated Appropriations Action, 2012 (Public Law 112-74) signed into law on December 23, 2011 lowered the salary limitation on NIH Grants from Executive Level I ($199,700) to Executive Level II ($179,700). This change is effective with grant awards with an Initial Issue Date on/After 12/23/2011. See NIH Guide Notice NOT- OD-12-035 for additional details. The Summary Table and Questions and Answers are provided here as resources to help navigate implementation of this change.
This table summarizes the applicable Executive Level salary limitation for the 2 cohorts of FY2012 grants: 1) Awards with an Initial Issue Date On/Before 12/22/2011; and, 2) Awards with an Initial Issue Date On/After 12/23/2011. Some explanatory notes are provided for each cohort.
Summary Table
Initial Award Issue Date
Award Type
Exec Level (EL) for FY 2012
Notes
On/Before 12/22/2011*
Competing
EL I
FY2012 Award = Executive Level I ($199,700)
Future Years** = Executive Level II ($179,700)
Detailed Budgets: Awards will be revised to adjust future year commitments only
Modular Budgets:
Awards will not be adjusted for salary cap
Grantees apply EL I for FY2012
Grantees apply EL II for FY2013, unless otherwise amended by legislation; rebudgeting of excess in FY2013 will be allowed
Non-Competing
EL I
FY2012 Award = Executive Level I ($199,700)
Future Years** = Executive Level II ($179,700)
NIH will not adjust future year commitments for non-competing within this issue date range
For FY2013 and beyond, grantees will need to charge using EL II**; rebudgeting of excess is allowed
On/After 12/23/2011
Competing
EL II
FY2012 Award = Executive Level II
Future Years** = Executive Level II
Detailed Budgets: Awards will be issued using EL II for FY2012 and all future years
Modular Budgets:
Awards will not be adjusted for salary cap
Grantees apply EL II
Rebudgeting of excess is allowed
Non-Competing
EL II
FY2012 Award = Executive Level II
Future Years** = Executive Level II
NIH will not adjust FY2012 award or future year commitments for non-competing in this category
Grantees must charge at EL II; rebudgeting of excess is allowed
*A list of awards issued on/before 12/22/2011 subject to EL 1 when a salary limit is applicable is found at: http://report.nih.gov/FileLink.aspx?rid=824
**References to future years are contingent upon legislation that supports this provision or provides otherwise.
Posting: February 14, 2012
Revised: February 14, 2012
The link is to the Federal Executive Level pay scale; i.e., Executive Level I for FYs 2001-2011, Executive Level I for FY2012 awards with an initial Issue Date on/before 12/22/2011, and Executive Level II for FY 2012 awards with an initial Issue Date on/after 12/23/2011.
In previous years the salary level remained constant at Executive Level I, although the amount of Executive Level I routinely increased on/about January 1st . Grantees adjusted the rate charged based on the date of the expenditure and the Level I salary in effect on the date of the charge. However, for FY2012 the actual Executive level changed effective the date the Appropriation was signed into law, 12/23/2011. Therefore, the applicable level is based on when the FY2012 award was initially issued, not when the actual salary cost is charged.
It depends on the type of award. If the award is a non-competing award, NIH will not adjust the award; grantees must apply Executive level II and may rebudget funds in excess of the new salary limit. If the grant is a competing award based on a detailed budget, the NIH IC will revise the award when an adjustment for the lower salary limit is needed. Competing modular awards will not be adjusted for salary cap; however, grantees must apply Executive Level II. Rebudgeting of any excess funds is allowed.
For competing awards (non-modular) issued on/before 12/22/2011, future year commitments will be adjusted when applicable to reflect Executive Level II. However, no adjustment will be made to the FY2012 award level for salary cap. Non-competing awards will not be adjusted to reflect Executive Level II for either the FY2012 award or any future year commitments; however grantees must still apply the appropriate rate.
The Issue Date is in the Header information of every Notice of Award (NoA). When an award is revised; the NoA shows “REVISED” next to the Grant Number field and the Issue Date reflects the date of that revision; therefore the “initial Issue Date” is the date on the FY2012 NoA that has no reference to “REVISED”. Examples are provided below:
Example 1: Award with “initial Issue Date”—no reference to “REVISED” is shown as part of the Grant Number Field:
Example 2: Revised Award: 1) “REVISED” shows next to Grant Number Field; and, 2) Issue Date is new. This Issue Date is not the “initial Issue Date” because the NoA shows “REVISED”.
The Fiscal Year is a data field on the award located in SECTION I – AWARD DATA, in the Fiscal Information section as well as in the chart immediately below. See the following example:
Generally, a Continuing Resolution extends the provisions of the previous fiscal year Appropriation. Therefore, unless there is language in the Continuing Resolution to state otherwise, Executive Level II ($179,700) would be the applicable cap for the FY2013 award since Executive Level II is the level provided in the Consolidated Appropriations Act, 2012. This would be regardless of what the applicable level is for the FY2012 award.
The salary limit is a yearly rate applied to an individual’s institutional base salary rate. Since the institutional base salary rate for the individual remains constant, reducing effort would only help to minimize the impact to a particular grant. Further, some programs have minimum effort required; some grants may specifically restrict percent effort of an individual; and significant changes in effort could trigger a change in scope requiring NIH prior approval. All of these issues must be considered before reducing effort based solely on the lower salary cap.
Apply Executive Level I for FY2012. The salary limit is tied to the limit in effect when the grant was initially funded, regardless when the individual’s employment became effective.
Assuming the carryover will be used for salaries, Executive Level I ($199,700) would be the appropriate level to charge for the carryover amount only. Accordingly, institutions will need to ensure adequate separation of accounts as necessary to demonstrate compliance.
Executive level I ($199,700). The key date is the initial Issue Date on the Notice of Award to the Prime grantee; it is not the date of the consortium agreement. Prime grantees hold the responsibility for ensuring the appropriate salary limit flows to subrecipients.
No adjustment will be made if an application fails to provide adequate information regarding the individual's actual salary level. However, grantees must charge the grant based on the applicable salary limit in effect when the initial FY2012 award was issued.
Assuming that the administrative supplement will be issued for the first time after 12/23/2011, then the applicable salary limit is Executive Level II ($179,700). This would apply to competitive revision applications funded on/after 12/23/2011 as well.
Since the timing of the applicable cap is tied to the date the FY2012 Appropriation was signed into law, the administrative supplement issued on/after 12/23/2011 would still be subject to Executive Level II ($179,700) regardless of what level the parent grant is subject to for FY2012. This is another area where institutions will need to ensure adequate separation of accounts as necessary to demonstrate compliance.
NIH application instructions remain unchanged. Applications with a detailed budget should continue to reflect the actual institutional base salary of individuals for whom reimbursement is requested. NIH will make any adjustment necessary using the applicable salary limit in effect at the time of award. In lieu of actual base salary, institutions may elect to provide an explanation in the budget justification narrative indicating that the actual institutional exceeds the current salary limitation. When this information is provided, NIH staff will make necessary adjustments to requested salaries prior to award.
When preparing an application using the modular budget format, applicants should use the current salary limit when estimating the number of modules requested.
For progress reports (non-SNAP), requested salary may not proportionally exceed any imposed salary limit.
Previously the salary limitation provision applied to only a few HHS agencies. The language in Public Law 112-10 extends the salary limitation provision to most other HHS agencies as well. Grantees will need to contact specific HHS agencies for guidance.
Since the increase is in response to a discrete request for additional funds, and the decision to support the request is made on/after 12/23/2011, Executive level II would apply. When a salary cap is involved in such a request, NIH ICs are strongly encouraged to award such increases as a separate supplement (T-3) award to help manage this requirement. If an IC awards such an increase through a revised FY2012 award instead of a separate T-3 award, an award term will be included that specifically references that the additional funds are subject to Executive Level II. Note this does not apply to revised awards to restore funds to awards initially issued under a Continuing Resolution. This only applies when the revision is to provide additional funds in response to a discrete prior approval request.
Since the transfer award is the initial award to the new institution, Executive Level II would be the applicable level for the new institution. NIH will not make any adjustment for salary cap in the transfer award; however, the new grantee must apply Executive Level II.
No, revised budgets to adjust for the lower salary cap will not be accepted. This is the case even if the original budget was submitted in response to a Funding Opportunity Announcement with direct or total costs limits.
No, NIH will not adjust any non-competing award (SNAP or non-SNAP) for salary cap. In this situation, the grantee must apply Executive level II once the award is issued.