Competing and non competing awards issued on or before 9/30/11 must utilize the Federal Fiscal Year 2011 Executive Level I rate ($199,700).

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1 Spnsred Prjects Accunting TO: FROM: Business Managers and Research Administratrs Jseph M. Gindhart, Assistant Vice Chancellr fr Finance & Directr DATE: SUBJECT: NIH Salary Cap fr Federal Fiscal Year 2012 Cngress has enacted substantial changes t the salary cap n NIH awards issued fr Federal Fiscal Year The cap amunt has been reduced t the Executive Level II rate f $179,700 fr new and nn cmpeting renewal awards issued n r after 12/23/11. Under prir legislatin, the cap applied nly t NIH, AHRQ and SAMHSA awards, hwever it has been expanded t all Department f Health and Human Services Agencies (DHHS) awards except fr FDA and the Indian Health Service. The new cap rate applies t DHHS awards issued n r after 12/23/11 (includes ACF, AHRQ, AA, ATDSDR, CDC, CMS, HRSA HIS, NIH, NIS and SAMHSA). Nted belw is the detailed guidance and implementatin strategy fr NIH, AHRQ and SAMHSA awards. Infrmatin related t the ther DHHS agencies will be prvided when it becmes available. The maximum cmpensatin level fr individuals wrking n grants and cntracts frm the Natinal Institutes f Health (NIH), the Agency fr Healthcare Research and Quality (AHRQ) and the Substance Abuse and Mental Health Services Administratin (SAMHSA) has been reduced fr Federal Fiscal Year (FFY) 2012 (per the NIH Guide Ntice NOT OD issued n 1/20/12). The Cnslidated Apprpriatins Act, 2012 (Public Law )restricts the amunt f direct salary f an individual under an NIH/SAMHSA/AHRQ grant, cperative agreement r applicable cntract t Executive Level II f the Federal Executive Pay Scale. Effective December 23, 2011, the Executive Level II salary level is set at $179,700. Direct salary is exclusive f fringe benefits and facilities and administrative (F&A) expenses, als referred t as indirect csts. The apprpriate salary cap rate must be applied t cmpeting and nn cmpeting awards based upn the award date n the Ntice f Award (NOA). Cmpeting and nn cmpeting awards issued n r befre 9/30/11 must utilize the Federal Fiscal Year 2011 Executive Level I rate ($199,700). Cmpeting and nn cmpeting awards issued during the 10/01/11 12/22/11 can cntinue t utilize the Federal Fiscal Year 2011 Executive Level I rate ($199,700) thrugh the end f the current budget. Cmpeting and nn cmpeting awards issued n r after 12/23/11 must use the Federal Fiscal Year 2012 Executive Level II rate ($179,700). The University s Payrll System (HRMS) will apply the Executive Level II rate f $179,700 fr applicable FFY 12 awards effective (NOA date n r after 12/23/11) fr February 2012 mnthly payrll. HRMS will cntinue t utilize the Executive Level I rate f $199,700 fr NIH grants currently funded frm Federal Fiscal Year 2009, 2010, 2011 and FY2012 (NOA dates 10/1/11 thrugh 12/22/11 nly) dllars. The University s plicies and prcedures regarding the salary cap have been updated and included with this mem. This infrmatin will als be presented n Spnsred Prjects Accunting s web page, see and click n Plicies & Guidelines sectin. The text f the FY12 guidelines issued by the NIH can be fund at OD html. This text includes additinal example calculatins and definitins.

2 NIH Salary Cap Plicies and Prcedures If yu have any questins r cncerns abut the NIH Salary Cap, please cntact Krystina Grss at / Iris Peper at / r me at / Plicies: The regulatins issued by the Natinal Institutes f Health (NIH), the Agency fr Healthcare Research and Quality (AHRQ) and the Substance Abuse and Mental Health Services Administratin (SAMHSA) include a sectin cvering direct salary limits fr individuals charged t grants, cperative agreements and cntracts. Direct salary is exclusive f fringe benefits and facilities and administrative (F&A) expenses, als referred t as indirect csts. Cmpensatin fr individuals under awards frm these three agencies cannt exceed a stipulated rate f pay per year r per academic appintment (see schedule nted belw). The term rate f pay can be further described as fllws: the rate f salary r wages that an individual earns fr services perfrmed (weekly, bi weekly, mnthly). The apprpriate salary cap rate must be applied t cmpeting and nn cmpeting awards based upn the federal fiscal year (FFY) (10/XX 9/YY) in which the Ntice f Grant Award was issued. Fr faculty members wh receive a salary that exceeds the applicable rate, the amunt f salary requested/charged t a NIH/AHRQ/SAMHSA award must be limited t their effrt percentage multiplied by the salary cap rate. Faculty and administrative staff in the academic departments are respnsible fr applying the apprpriate salary cap rate in all applicable prpsals and existing awards. FFY 2010 Awards: The award date n the NIH Ntice f Award (cmpeting and nn cmpeting) is n r after 10/01/09, Executive Level I rates apply. Budget Perid Max Salary Rate (ann.) Max Salary Rate (mnthly) 10/01/09 12/31/09 $196,700 $16, /01/10 12/31/10 $199,700 $16, /01/11 09/30/11 $199,700 $16, /01/11 and beynd $199,700 $16, FFY 2011 Awards: The award date n the NIH Ntice f Award (cmpeting and nn cmpeting) is n r after 10/01/10, Executive Level I rates apply. Budget Perid Max Salary Rate (ann.) Max Salary Rate (mnthly) 10/01/10 12/31/10 $199,700 $16, /01/11 09/30/11 $199,700 $16, /01/11 and beynd $199,700 $16, FFY 2012 Awards: The award date n the NIH Ntice f Award (cmpeting and nn cmpeting) is n r after 10/01/11 thrugh 12/22/11, Executive Level I and II rates apply. Budget Perid Max Salary Rate (ann.) Max Salary Rate (mnthly) Current $199,700 $16, Subsequent $179,700 $14,

3 NIH Salary Cap Plicies and Prcedures Example Year 03 (FFY 12) 11/1/11 10/31/12 Level I, $199,700 Year 04 (FFY 13) 11/1/12 10/31/13 Level II, $179,700 The award date n the NIH Ntice f Award (cmpeting and nn cmpeting) is n r after 12/23/11, Executive Level II rates apply. Budget Perid Max Salary Rate (ann.) Max Salary Rate (mnthly) 10/01/11 and beynd $179,700 $14, Detailed infrmatin regarding varius award types and NOA issued date is available via the Requirements Matrix and Award Scenari Matrix in Appendix A. Subawards: Subawards issued t WU by anther institutin/entity that has received an NIH prime grant, cperative agreement r cntact (i.e., incming subaward) cntinue t be subject t the salary cap guidelines. The applicatin f the Level I r Level II cap rates is based upn the initial NOA date f the Prime award. Subawards issued by WU t anther institutin/entity based upn an NIH prime grant, cperative agreement r cntract (i.e., utging subawards) cntinue t be subject t the salary cap guidelines. The applicatin f the Level I r Level II cap rates is based upn the initial NOA date f WU s Prime award. Annual (ann.) vs. Academic Appintments: The NIH guidelines state that the amunt charged t a grant cannt exceed a stipulated annual rate f pay. Since sme faculty have academic year (nine mnth) appintments, the applicable salary cap fr thse individuals calculates t 75% f the annual salary cap rate. Accrdingly, faculty members with annual (twelve mnth) appintments that are paid in excess f the applicable NIH rate and faculty members with academic appintment that are paid in excess 75% f the NIH annual rate per year must fllw the prcedures nted abve if they are cntributing effrt and charging salary t an NIH prject. Summer Salary: The summer salary charged t NIH prjects by faculty with academic appintments must als fllw the abve nted plicy and prcedures. Rebudgeting: The NIH will allw grantees t rebudget funds freed up as a result f the lwer cap, unless therwise restricted in the terms n the NOA. NIH rebugeting restrictins related t scpe f wrk still apply. See Appendix A fr details and scenaris. Adjustments t Awarded Amunts: The NIH is expected t issue revised NOAs fr sme FFY 12 cmpeting awards with categrical budgets. Current and future grant amunt fr nn cmpeting awards will nt be adjusted. See Appendix B fr details and scenaris. 3

4 NIH Salary Cap Plicies and Prcedures Carry ver Funding: The NIH has specifically stated that, Any grants awarded in previus fiscal years (e.g., FFY 2011, FFY 2010, etc.) are nt impacted by the FFY 2012 salary limitatin. Carrying ver previus years funds t supprt salaries will remain at the salary limitatin levels in effect at the time thse awards were issued. Accrdingly, funds frm a FFY 2011 (r ther prir year) award may be carried ver int the FY 2012 grant award and cntinue t utilize the salary cap rate f $199,700 until the funding has been exhausted. Supplements: If the NIH issues supplemental funding t an existing award (e.g., S1/S2 r an administrative increase ), the effective salary cap rate will be based upn the NOA date f that funding. In sme instances, the riginal award may utilize a Level 1 rate whereas the supplement wuld be required t use the Level 2 rate if awarded after 12/22/11. Please cntact SPA t cnfirm applicable rates fr supplemental funding. Frequently Ask Questins: The NIH has develped tw sets f Frequently Asked Questins (FAQs). Please review and reference this data as needed. The NIH Guide Ntice issued n 1/20/12 which annunced the 2012 cap rate cntains the standard annual FAQs abut the cap, see sectin entitled Questins and Answers at files/not OD html. Due t the implementatin cmplexities f the 2012 salary cap rate, the NIH has als develped a specific set f Frequently Asked Questins (FAQs) which were issued n n 2/14/12, see Prcedures: Payrll Edits: The HRMS Payrll System (HRMS) cntains a specific edit related t the NIH salary cap. During the prcess f surcing an emplyee t an accunt/fund in which the prime surce f funding is the NIH, the system will cmpare the individual s actual salary rate t the applicable cap rate, based upn the federal fiscal year in which the funds were awarded. The accunt/fund prfile cntains a field which indicates the federal fiscal year that the initial Ntice f Award (NOA) was issued based upn the schedule abve. The edit calculates the mandatry cst sharing (X accunt/allcatin) and limits the maximum allwable amunt charged t the grant. The HRMS edit message will als display the applicable cap rate that was utilized in the calculatin. Please Nte: HRMS will nly allw the mandatry cst sharing t be psted t an X accunt/allcatin. Payrll Cst Transfers: Cmpeting awards with an NOA date that is n r after 12/23/11 HRMS surcing edits applied the Level I rates t the 12/31/11 and 1/31/12 mnthly pay, therefre, fr the crrespnding budget s starting n r after 12/23/11, payrll cst transfers must be prcessed t reflect the applicable Level II rate f $179,700. Nn cmpeting awards with an NOA date that is n r after 12/23/11 The level II rate will be effective fr the start date f the next budget. If the salary surcing fr an applicable individual is nt adjusted t the new cap rate at the start f the budget, a PCT must be prcessed t adjust actual amunts paid under the ld rate t the applicable Level II rate f $179,700. See belw fr additinal inf abut a query in HRMS that will assist in identifying individuals requiring surcing changes in a timely manner. 4

5 NIH Salary Cap Plicies and Prcedures Grant / Cst Share Calculatin Methdlgy: HRMS will autmatically calculate the applicable grant and cst share amunts based upn the salary amunt figure entered n the jb surce page (earnings cde = REG). Initially, the system will calculate the allwable grant salary percentage and the crrespnding cst sharing percentage based n the applicable NIH Cap rate (Step #1). These percentages will then be applied t the applicable salary amunt fr the prject and the system will present the grant and cst share amunts (Step #2). Please refer t the example nted belw. Example HRMS Grant / Cst Share Calculatin Step #1: The PI has an annual salary f $222,000 and wrks full time n ne NIH grant. The NIH salary cap rate is $179,700 fr this prject. Actual Mnthly Salary = 18, NIH Cap Mnthly Limit (Level II) = 14, (= 222,000 / 12 m.) (= 179,700 / 12 m.) Allwable Grant Salary Percent (based n NIH Cap) = 80.95% (= (14, / 18,500.00) * 100) Cst Sharing Percentage = (= 100% 80.95%) Step #2: Mnthly Amunt f Grant Cst = 14, (= 18, * 80.95%) Mnthly Amunt f Cst Sharing = 3, (= 18, * 19.05%) A mre detailed explanatin f cst sharing methdlgy, allcatins and examples is prvided in Appendix C. Salary Surcing Issues: The salary cap limits implemented in HRMS will cntinue t effect existing and future payrll surcing. Salaries fr individuals currently paid frm NIH funded prjects will cntinue t pst t the accunt/fund and the cst sharing accunt/allcatin based upn the NIH Salary Cap rates in effect at that time he/she was riginally surced. Subsequent t the implementatin f the new rates in HRMS (2/9/12), initiating any surcing dcument fr an individual wh is currently paid n a grant which is funded frm FFY 2012 NIH dllars (date f initial award is n r after 12/23/11) will cause the system t recalculate the mandatry cst sharing amunt (X accunt/allcatin) and prmpt the user t adjust the surcing (even if there was n intentin f mdifying the grant surce). If sufficient funds are nt available n the grant t charge up t the apprpriate salary limit, then a V accunt/allcatin (vluntary cst sharing) must be used t charge the difference. Please Nte: HRMS will nt recgnize ther cst sharing allcatins (U, W ) fr the vluntary prtin. Due t the phased in implementatin f the Level II rates, HRMS will utilize bth the Level I and Level II rates, as applicable, ver a f time. Cnsequently, it is pssible fr the surcing f an individual wrking n multiple NIH funded prjects wuld invlve bth rates in a mnthly pay. 5

6 NIH Salary Cap Plicies and Prcedures It is als expected that a grup f individuals that had nt previusly been impacted by the salary cap (rate f pay was belw the Level I rate r the DHHS agency was nt subject t the cap (e.g., CDC, HRSA, FDA ) in prir federal fiscal years) wuld nw be required t cst share n FFY 12 awards based upn the new Level II rates. The department administratr shuld submit a Cst Sharing Accunt Request Frm t their Grant Analyst in OSRS t establish the applicable cst sharing allcatins (X/V) prir t mdifying salary surcing in HRMS. Nted belw are links t apprpriate frm: OSRS Danfrth Campus Cst Sharing Request Frm: OSRS Schl f Medicine, Cst Sharing Frm: : 09F?OpenDcument A page is available in HRMS t assist in identifying individuals wrking n grants with Salary Limit errrs (e.g., Level II cap is nw applicable). The errr messages that are viewable thrugh this page will include bth Level I & II cap funds. SPA suggests that each department review the messages n this page at the beginning f each calendar mnth t determine individuals that require adjustment t their surces due t the Level II cap rate requirements fr new budget s n nn cmpetitive renewal prjects. The page can be lcated by migrating t HRMS > Jb & Cmpensatin > Salary Cap Messages. Once there, please press search t view all individuals wh yu have security t and have salary cap errrs. There will als be a new query (WP_DP_FUND_SAL_LIMIT) available t reprt n the Salary Cap limit fr each f the active funds that yu have security access t. The limit fr a fund may change at sme pint during the year based upn the start date f new budget. The NIH Salary Cap limits must be incrprated fr all new surcing during the remainder f the University s FY 2012 and fr all grants surced in FY The hard edit in HRMS requires implementatin f the caps. If sufficient funds are nt available n the grant t charge up t the apprpriate salary limit, then a V (vluntary cst sharing) accunt/allcatin must be used t charge the difference. Please Nte: HRMS will nt recgnize ther cst sharing allcatins (U, W ) fr the vluntary prtin. Since the implementatin f HRMS (January 2003), the fllwing practice has been recmmended fr managing situatins when ne department (the PI s primary department) is paying fr the NIH salary cap cst sharing n grant activity perfrmed in anther (secndary) department. T recrd the effrt n the grant in the prper department, the cst sharing accunt/allcatin shuld be maintained by the department in which the grant activity is ccurring. That is, the X accunt/allcatin shuld be maintained in the same department as the regular grant accunt. Accrdingly, the crrespnding Debit accunt fr the X accunt/allcatin in the secndary department wuld be prvided by the primary department. Primary Department Fund Type # Grant Accunt/Fund #X Cst Sharing Allcatin #### Debit Accunt Secndary Department Fund Type # Grant Accunt/Fund #X Cst Sharing Allcatin #### Debit Accunt Under this accunt set up methd, the primary department wuld request a new X/V accunt/allcatin in 6

7 NIH Salary Cap Plicies and Prcedures the secndary department frm the Office f Spnsred Research Services (OSRS) via a Cst Sharing Accunt Request Frm (see links abve). The primary department must prvide the Debit accunt and sign/authrize the frm. Manual entry f a jurnal dcument (utilize BUOB 50) may be necessary if the charges t a single cst sharing (X) accunt shuld be spread t multiple debit accunts (which may be in different departments). The maintenance f the salary surces n bth accunts will be simplified under this methd. Additinally, the cmpensatin n the faculty member's jb in HRMS will represent the ttal effrt n the grant in that department. That cmpensatin will nt need t change if the salary cap changes (nly the split between the grant surces and the cst sharing surces will change). The utilizatin f dllar amunts rather than percentages is recmmended because it will simplify the entry f salary surces when cst sharing is necessary. The HRMS Team and SPA have develped a set f slides that prvide a mre detailed explanatin f the surcing issues. This data can be fund n the SPA website, Multiple Cst Share Funding Surces Issue: As nted abve, the cst sharing amunts assciated with the NIH salary cap are charged t the crrespnding X/V accunts/allcatins. In sme instances, there may be multiple faculty members within the same department/divisin wrking n a prject and the assciated cst sharing fr these individuals will all pst t the related X/V accunts/allcatins via the HRMS edits. Sme faculty members may chse t fund their cst sharing frm accunts/surces which are different frm the debit accunt(s) assigned t the department s X/V accunts/allcatins. In these situatins, the academic department is respnsible fr reallcating these amunts n the department s X/V accunts/allcatins t the individual faculty member s funding accunt/surce via jurnal entries (utilize BUOB 50). Carryver Funding Issues: In certain limited instances, a PI may chse t carry ver prir year funding int a FFY 12 award/budget fr use at the $199,700 salary cap rate. Under thse circumstances, a separate alpha allcatin fr the fund will be established and specific amunts will be budgeted fr salaries, benefits and F&A. The current HRMS salary cap edits cannt accmmdate multiple cap rates within an individual prject/fund, thus the prper cap amunts will be managed and maintained manually by the PI and/r their designee. The Level 2 rate will be applied t the distributin fr all dept/fund allcatins, and then PCTs will be prcessed t reallcate the distributin based n the Level 1 rate. The PI must submit a written request fr a salary cap carryver allcatin t Krystina Grss in SPA fr review and apprval. The request shuld address the fllwing issues: PI name, department and current fund number A detailed descriptin f the wrk t be perfrmed, and why that wrk was nt perfrmed during the prir grant. List the individuals that will be paid at Level I salary cap rate fr the abve nted wrk. Time assciated with wrk/individuals at Level I nted abve. Prvide prir fund number, ttal reprted carryver amunt frm prir budget/prject, and date that carryver was apprved by NIH. Prvide budget figures fr salary, fringe benefits and related F&A fr Level I wrk nted abve. Must cntain signature f PI and the applicable department administratr. 7

8 NIH Salary Cap Plicies and Prcedures Apprved requests will then be frwarded t OSRS and the alpha allcatin will be added/prfiled, per the data prvided. Subsequent t the allcatin being established, the PI must ntify SPA, in writing, if/when material changes t the initial data prvided ccur. Supplement Issues: A separate alpha allcatin fr the fund will be established fr the supplemental funding and the crrespnding amunts will be budgeted fr direct and F&A csts. The current HRMS salary cap edits cannt accmmdate multiple cap rates within an individual prject/fund, thus the prper cap amunts will be managed and maintained manually by the PI and/r their designee. 8

9 Spnsred Prjects Accunting NIH Salary Cap fr FFY 2012 Requirements Matrix Appendix A Initial Issue Date f NOA (current) Utilize fr Current Grant Perid Reductin t Award Funding & Rebudgeting On r Befre 9/30/11 On r Between 10/1/11 12/22/11 On r After 12/23/11 Exec. Level I ($199,900) Exec. Level II ($179,900) Current Award Funding (FFY 12) Current Award *Rebudget Excess Salary & Fringe Future Award Funding (FFY 13 and beynd) Future Award *Rebudget Excess Salary & Fringe Award Cmpeting Award with Categrical Budget (FFY 2011) Yes Yes N N/A N Yes Cmpeting Award with Categrical Budget (FFY 2012) Yes Yes N N/A Yes N/A Cmpeting Award with Categrical Budget (FFY 2012) Yes Yes Yes N/A N/A N/A Cmpeting Award (FFY 2011) Yes Yes N/A N/A N/A N/A Cmpeting Award (FFY 2012) Yes Yes N N/A N/A N/A Cmpeting Award (FFY 2012) Yes Yes N N/A N/A N/A with Categrical Budget (FFY 2011) Yes Yes N N/A N Yes with Categrical Budget (FFY 2012) Yes Yes N N/A N Yes with Categrical Budget (FFY 2012) Yes Yes N Yes N Yes (FFY 2011) Yes Yes N N/A N N/A (FFY 2012) Yes Yes N N/A N N/A (FFY 2012) Yes Yes N N/A N N/A FFY = Federal Fiscal Year (10/1/XX 9/30/YY) N/A = Nt applicable * Unless therwise restricted in the terms f the NOA, grantee may rebudget funds freed up as a result f utilizing the lwer cap rate (Level II). Amunts wuld include salary and applicable benefits awarded at the Level 1 rate minus the actual salary/fringe charged t the prject at the Level II rate. NIH Cap_FFY2012_v1.4.xlsx 4/2/2012

10 Spnsred Prjects Accunting NIH Salary Cap fr FFY 2012 Award Scenari Matrix Appendix A Examples Initial NOA Date Award Number Current Budget Perid Executive Salary Level Salary Cap Rate Award Cmpeting Award with Categrical Budget (FFY 2011) 8/22/ P01 XX /1/11 8/31/12 I $199,700 Cmpeting Award with Categrical Budget (FFY 2012) 11/15/ P01 VV /1/11 11/30/12 I $199,700 Cmpeting Award with Categrical Budget (FFY 2012) 12/28/ P01 ZZ /1/12 12/31/12 II $179,700 Cmpeting Award with Mdular Budget (FFY 2011) 9/1/ R01 DD /1/11 8/31/12 I $199,700 Cmpeting Award with Mdular Budget (FFY 2012) 11/7/ R01 CC /1/11 11/30/12 I $199,700 Cmpeting Award with Mdular Budget (FFY 2012) 12/30/ R01 BB /1/12 12/31/12 II $179,700 Subsequent Budget Perid(s) Level II rates apply fr 02 Level II rates apply fr 02 Level II rates apply t entire prject Level II rates apply fr 06 Level II rates apply fr 06 Level II rates apply t entire prject with Categrical Budget (FFY 2011) 7/29/ P01 XX /1/11 8/31/12 I $199,700 Level II rates fr 05 year and rest f prject with Categrical Budget (FFY 2012) 11/27/ P01 VV /1/11 11/30/12 I $199,700 Level II rates apply fr 04 with Categrical Budget (FFY 2012) 12/26/ P01 ZZ /1/12 12/31/12 II $179,700 (FFY 2011) 9/17/ R01 DD /1/11 8/31/12 I $199,700 (FFY 2012) 10/25/ R01 CC /1/11 11/30/12 I $199,700 (FFY 2012) 12/29/ R01 BB /1/12 12/31/12 II $179,700 Level II rates apply fr 03 Level II rates apply fr 05 Level II rates apply fr 04 Level II rates apply fr 03 NIH Cap_FFY2012_v1.4.xlsx 4/2/2012

11 Appendix B Adjustment t Award Amunts & Rebudgeting NIH cmpeting awards with categrical budgets with an initial NOA Issue Date n r befre September 30, 2011: N adjustments t current r future award amunts. Rebudgeting fr current award shuld nt be required, because amunts awarded at Level 1 and the Level 1 rate is still applicable. Rebudgeting fr future grant s fr funds freed up as a result f utilizing the Level II rate may be rebudgeted, unless therwise restricted in the terms f NOA. Amunts wuld include salary and applicable fringe benefits awarded at Level I rate minus the actual salary/fringe charged t the prject at the Level II rate. NIH cmpeting awards with categrical budgets with an initial NOA Issue Date n r between Octber 1, 2011 and December 22, 2011: N adjustment t current award amunt, hwever all future grants funding will be reduced based upn the new Level II rates. Rebudgeting fr current award shuld nt be required, because amunts awarded at Level 1 and the Level 1 rate is applicable. Rebudgeting fr future grant s shuld nt be required, because amunts awarded at Level II and the Level II rate is applicable. NIH cmpeting awards with categrical budgets with an initial NOA Issue Date n/after December 23, 2011: Current and future grant awards will be adjusted based upn the new Level II rates. Rebudgeting is nt applicable in this instance, since revised award amunts reflect the Level II rate. NIH cmpeting awards with mdular budgets with an initial NOA Issue Date n r befre September 30, 2011: Rebudgeting is nt applicable in this instance, since amunts awarded in mdular budget frmat. NIH cmpeting awards with mdular budgets with an initial NOA Issue Date n r between Octber 1, 2011 and December 22, 2011: Rebudgeting is nt applicable in this instance, since amunt awarded in mdular budget frmat. NIH cmpeting awards with mdular budgets with an initial NOA Issue Date n/after December 23, 2011: Rebudgeting is nt applicable in this instance, since amunt awarded in mdular budget frmat. NIH nn cmpeting award with categrical budget and an NOA Issue date n r befre September 30, 2011: Rebudgeting fr current award shuld nt be required, because amunts awarded at Level 1 and the Level 1 rate is applicable. Rebudgeting fr future grant s fr funds freed up as a result f utilizing the Level II rate may be rebudgeted, unless therwise restricted in the terms f NOA. Amunts wuld include salary and applicable fringe benefits awarded at Level I rate minus the actual salary/fringe charged t the prject at the Level II rate.

12 Adjustment t Award Amunts & Rebudgeting, cnt. NIH nn cmpeting award with categrical budget and an NOA Issue date n r between Octber 1, 2011 and December 22, 2011: Rebudgeting fr current award shuld nt be required, because amunts awarded at Level 1 and the Level 1 rate is applicable. Rebudgeting fr future grant s fr funds freed up as a result f utilizing the Level II rate may be rebudgeted, unless therwise restricted in the terms f NOA. Amunts wuld include salary and applicable fringe benefits awarded at Level I rate minus the actual salary/fringe charged t the prject at the Level II rate. NIH nn cmpeting award with categrical budget and an NOA Issue date n r after December 23, 2011: Rebudgeting fr current and future grant s fr funds freed up as a result f utilizing the Level II rate may be rebudgeted, unless therwise restricted in the terms f NOA. Amunts wuld include salary and applicable fringe benefits awarded at Level I rate minus the actual salary/fringe charged t the prject at the Level II rate. NIH nn cmpeting award with mdular budgets and an NOA Issue date n r befre September 30, 2011: Rebudgeting is nt applicable in this instance, since amunts awarded in mdular budget frmat. NIH nn cmpeting award with mdular budget and an NOA Issue date n r between Octber 1, 2011 and December 22, 2011: Rebudgeting is nt applicable in this instance, since amunts awarded in mdular budget frmat. NIH nn cmpeting award with mdular budget and an NOA Issue date n r after December 23, 2011: Rebudgeting is nt applicable in this instance, since amunts awarded in mdular budget frmat.

13 Appendix C Cst Sharing Methdlgy, Allcatins & Examples Mandatry Cst Sharing Accunt/Fund ( X ): Cst sharing bligatins mandated by the NIH Salary Cap plicy will be maintained and mnitred in allcatins that end in X. The first five digits f the fund number will crrespnd t the spnsred accunt/fund, but the sixth digit will be an X. The PI and/r their designee will surce the applicable amunts/percentages related t the effective Salary Cap Rate charge t this fund/allcatin. HRMS cntains edits that will autmatically calculate the applicable cst sharing figures. See Calculatin Methdlgy belw. Example: Spnsred Fund Mandatry Cst Sharing Fund 54321X Vluntary Cst Sharing Accunt/Fund ( V ): In sme instances, the NIH prject des nt cntain sufficient funds t charge up t the apprpriate NIH Salary Cap limit, s a V (vluntary cst sharing) accunt/allcatin can be used t charge the difference. Example: Spnsred Fund Mandatry Cst Sharing Fund 54321X Vluntary Cst Sharing Fund 54321V Cst Sharing Debit Accunt: The cst sharing Debit accunt is the actual surce f funds fr the bligatin. The PI and/r the department shuld prvide the Debit accunt number n the apprpriate OSRS frms (see abve). The Debit accunt shuld meet ne f the fllwing criteria: An unrestricted ledger class (LC) 12 accunt, excluding clinical practice accunts. An unrestricted LC 22 accunt, usually a gift r endwment accunt. A nn federal career develpment award (LC 22) The Debit accunt is entered in prfile field #258 and can be viewed n Accunt Inquiry. The Debit accunt number can be different fr the X and V accunts n the same prject. The department number n the Debit accunt can differ frm the department number utilized n the X and V funds. Mnth End Prcess: Althugh cst sharing expenditures (salaries and fringe benefits) assciated with the NIH Salary cap are psted directly t the X and/r V accunts, the academic department absrbs these csts via the crrespnding Debit accunt. As part f the mnthly general ledger clsing prcess, the FIS system autmatically calculates and psts transactins t the X, V and Debit accunts. These transactins are identified in BUOB 50 (salaries and fringe benefits). On a mnthly basis, the system will pst a credit (negative) entry t the X/V accunt in an amunt equal t the expenditures incurred that mnth. Similarly, the system will pst a debit (psitive) entry t the Debit accunt fr the same amunt. Accrdingly, the X/V accunt will have a net zer expenditure balance at mnth end and the Debit accunt s expenses will increase by the amunts incurred fr cst sharing bligatins. The PI and/r his designee shuld review their X/V accunts and cntact SPA if an accunt des nt have a net zer balance at mnth end.

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