salary cap with new implications james trotter, nancy duncan & amber roberts, sponsored projects...

Salary Cap with New Implicati ons

James Trotter, Nancy Duncan & Amber Roberts, Sponsored Projects Administration

DHHS Salary Cap

2

COURSE OVERVIEW

Salary Cap Overview

Institutional Base Salary

Cost Sharing/Labor Distributions

PART 1

PART 2

Short Break

Case Studies

More Case Studies

Effort Statements & Salary Cap

Salary Cap and Carry Forward Calculation Tool

Research Administration Training & Education

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SALARY CAP OVERVIEW



DHHS SALARY CAP

HISTORY

Since 1990 Congress has legislatively mandated a provision that limits the direct salary than an individual may receive under an NIH/AHRQ/SAMHSA grant/contract.

• Applied to only NIH/AHRQ/SAMHSA

• Salary Limitation was Executive Level I of the Federal Executive Pay Scale ($199,700)

Overview

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DHHS SALARY CAP

New Implications

Effective 12/23/2011 the Consolidated Appropriations Act of 2012 was signed into law.

• Reduced amount of allowable Direct Salary to Executive Level II of the Federal Executive Pay Scale ($179,700)

• Expanded to include ALL DHHS AWARDS

• Effective on Federal FY 2012 awards with issue dates on/after 12/23/11.

http://grants.nih.gov/grants/guide/notice-files/NOT-OD-12-035.html

http://grants.nih.gov/grants/policy/fy2012_salary_cap_faqs.htm

Overview

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http://grants.nih.gov/grants/guide/notice-files/NOT-OD-12-035.html

http://grants.nih.gov/grants/policy/fy2012_salary_cap_faqs.htm


DHHS SALARY CAP

BACKGROUND

•The salary cap is updated annually

http://grants.nih.gov/grants/policy/salcap_summary.htm

• Dec 23, 2011-Sep 30, 2012 $ 179,700• Oct 1, 2011-Dec 22, 2011 $ 199,700• 2011 - $ 199,700• 2010 - $ 199,700• 2009 - $ 196,700• 2008 - $ 191,300

Overview

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http://grants.nih.gov/grants/policy/salcap_summary.htm

DHHS SALARY CAP

New ImplicationsOverview

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DHHS SALARY CAP

New ImplicationsOverview

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DHHS SALARY CAP

New Implications

Overview

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DHHS SALARY CAP

BACKGROUND

• Other NIH award resources available!

• NIH has query available on RePORT (Research Portfolio Online Reporting Tools) that shows awards made in FY 2012 with issue dates prior to 12/23/2011.http://report.nih.gov/index.aspx

• Also OHSU awards are posted on SPA’s websitehttp://www.ohsu.edu/xd/research/administration/sponsored-projects-administration/

Overview

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http://report.nih.gov/index.aspx

http://www.ohsu.edu/xd/research/administration/sponsored-projects-administration/

http://www.ohsu.edu/xd/research/administration/sponsored-projects-administration/


DECISION TREE

Overview

Award Issue Date Before 12/23/2011

Award Issue Date After

12/22/2011

Use $199,700 Use $179,700

DHHS AWARD NO

Salary Cap Does Not Apply

YES

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DHHS SALARY CAP

Overview

BUDGET IMPLICATIONS

• Competitive Awards issued on or after 12/23/11 may be reduced if:

• Principal Investigator/Staff over salary cap were included

• Grant requires a categorical/detailed budget (NIH modular budgets should not be affected)

• Reduction is for current and all future years

• Competitive Awards, with categorical/detailed budgets issued before 12/23/11 will not be reduced for FY 2012. However, reductions will occur in all future years.

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DHHS SALARY CAP

Overview

BUDGET IMPLICATIONS

•Non-Competing Awards will not be reduced. • If savings are generated it is allowable to re-budget

those funds

•Administrative Supplements Supplements issued on/after 12/23 would be subject to

Executive Level II regardless of the level the parent grant is subject to

•Budgets cannot be submitted to pending grant applications to reflect the lower salary cap and subsequent rebudgeting of ‘freed-up’ funds.

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DHHS SALARY CAP

Overview

BUDGET IMPLICATIONS

FY2012 Non-Competing AwardsIssue date of 10/1/11 through 12/22/11 Issue date of 12/23/11 and later

Non-Competing - Modular Budget

Exec Level I ($199,700) applies for FY 12 ONLY. Future years are capped at Exec Level II ($179,700). Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

Exec Level II ($179,700) applies. Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

Non-Competing - Categorical Budget

Exec Level I ($199,700) applies for FY 12 ONLY. Future years are capped at Exec Level II ($179,700).

Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

Exec Level II ($179,700) applies. Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

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DHHS SALARY CAP

Overview

BUDGET IMPLICATIONS

FY2012 Competing Awards

Issue date of 10/1/11 through 12/22/11 Issue date of 12/23/11 and laterCompeting - Modular Budget

Exec Level I ($199,700) applies for FY 12 ONLY. Future years are capped at Exec Level II ($179,700). Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

Exec Level II ($179,700) applies. No reduction in budget will occur. Awards will not be reduced. Grantees may rebudget any funds freed as a result of the lower cap.

Competing - Categorical Budget

Exec Level I ($199,700) applies for FY 12 ONLY. Future years are capped at Exec Level II ($179,700) No budget reductions will be enacted for current year. However, future years for these awards will be adjusted to reflect Executive Level II.

Exec Level II ($179,700) applies. Awards will be reduced for current and all future years based on the reduced salary cap.

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DHHS SALARY CAP

Overview

BUDGET IMPLICATIONS

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•Funds carried forward from previous years remain at the salary limitation levels in effect at the time those awards were issued.

• As a result, companion accounts will be set up in OGA for the 2011 carry forward dollars for awards with staff affected by the salary cap

• Example >>> GCDRC0119BCF• Companion accounts can only be utilized for staff salary/OPE to

whom salary cap applies

• Dept supplies budget to load into OGA to assigned Sponsored Projects Analyst at the time of receipt of FSR concurrence memo

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INSTITUTIONAL BASE SALARY



DHHS SALARY CAP

Institutional base salary

Institutional Base Salary

• Institutional Base Salary (IBS) is the annual compensation an institution pays on an employee’s appointment, whether that individual’s time is spent on research, teaching, patient care, or other activities.

• Excludes any income earned outside of the institution• Cannot be increased as a result of replacing institutional

salary support with grant funding • Base Salary is NOT limited by the Federal salary cap

legislation• An institution can pay an individual’s salary amount in

excess of the salary cap with Non-Federal Funds (COST SHARING)

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DHHS SALARY CAP

Institutional base salary

Institutional Base Salary- What to put on

application

• On detailed budget pages, list salary cap as the IBS• Add asterisk notation stating IBS exceeds the cap• Indicate in budget narrative that IBS is greater than salary

cap• For specific questions contact your Grants and Contracts

Administrator (GCA)

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CASE STUDIES



DHHS SALARY CAP

Case Studies

Case Study 1

Dr. LaFleur• Joint Appointment OHSU & VA• VA Salary is $105,000• OHSU Salary is $97,500• OHSU Appointment is 1.0 FTE• Assume appropriate salary cap is $199,700

Would her salary be limited on a her OHSU awarded DHHS grant?

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DHHS SALARY CAP

Case Studies

Case Study 2

Dr. Ramirez • 0.5 FTE• Institutional Base Salary @ 0.5 FTE = $ 100,000

• HRSA Grant- Award Issue Date in January 1, 2012

Would he need to be concerned about the salary cap?

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DHHS SALARY CAP

Case Studies

SALARY CAP-HOW

MUCH?

• The salary cap is based on an annualized rate for full time appointment

Annualized salary cap of $179,700 by FTE:

1.0 FTE = $179,700 ($179,700 X 1.0 FTE) 0.75 FTE = $134,775 ($179,700 X 0.75 FTE) 0.5 FTE = $89,850 ($179,700 X 0.50 FTE)

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DHHS SALARY CAP

Case Studies

SALARY CAP-HOW

MUCH? •The salary cap is not a set dollar limitation

•For 1.0 FTE, annualized salary cap of $199,700 by % effort:

100%= $199,700 ($199,700 X 100%) 75%= $149,775 ($199,700 X 75%) 50%= $99,850 ($199,700 X 50%) 25%= $49,925 ($199,700 X 25%) 10%= $19,970 ($199,700 X 10%)

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DHHS SALARY CAP

Case Studies

SALARY CAP-HOW

MUCH?

• The salary cap is calculated on a per grant basis, not aggregate basis

• Every payment each pay period should meet the salary cap requirement (averaging is not appropriate)

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DHHS SALARY CAP

Case Studies

Case

Study 3

Dr. Jones•Institutional Base Salary = $230,000•10 % Effort NIH Grant•20 % Effort NSF Grant•Both grants – Award Issue Date Jan 1, 2012

What is the maximum amount of salary allowable for each grant based on his effort?

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DHHS SALARY CAP

Case Studies

Case

Study 3

Dr. Jones

NIH Grant 10% x Salary Cap ($179,700) = $17,970

NSF Grant20% x IBS ($230,000)= $46,000

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DHHS SALARY CAP

Case Studies

Case

Study 4Dr. Smith• 0.5 FTE Appointment• $250,000 per year• 10% Effort NIH Grant (Award Issue Date- 6/1/11)• 10% Effort HRSA Grant (Award Issue Date- 1/1/12)

What is the maximum allowable salary on her twoawards?

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DHHS SALARY CAP

Case Studies

Case

Study 4

Dr. SmithNIH Grant

0.5 FTE x 10% x Salary Cap ($199,700) = $9,985

HRSA Grant0.5 FTE x 10% x Salary Cap ($179,700)= $8,985

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DHHS SALARY CAP

Case Studies

Case Study 5

Dr. Jay

• IBS of $225,000• % Labor Distribution = % Effort • He is only charging $168,750 (75% of his IBS) to his

grants

Is this appropriate because in total he is charging lessThan the cap of $179,700?

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DHHS SALARY CAP

Case Studies

Case

Study 5

Dr. Jay• 75% x $179,700 = $134,775

Remember: % Effort x Salary Cap= Allowable Salary

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Break

Research Administration Training & Education32

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COST SHARING/LABOR DISTRIBUTIONS



DHHS SALARY CAP


COST SHARING/LABOR DISTRIBUTION

• When a department agrees to pay personnel over the salary cap they are agreeing to Mandatory, Committed Cost Sharing

• For Cost Sharing related to Salary Cap, Labor Distribution schedules in Oracle should be set up with the cost sharing mission code (24)

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DHHS SALARY CAP



• The difference between the allowable direct charged salary and the institutional base salary must be cost shared from non-federal funds.

Salary Cap x % Effort = % Labor Distribution IBS

% Effort - % Labor Distribution = % Cost Sharing

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DHHS SALARY CAP


Calculating The Salary Cap Dollar Method

2012 Salary Cap $179,700% Effort x 25%

Allowable Salary Support $ 44,925IBS $ 250,000

% Labor Distribution 17.97%

% Cost Sharing (%Effort-%Labor Distribution) 7.03%

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DHHS SALARY CAP



• Another Way to Do the Math !

Salary Cap x % Effort = % Labor Distribution IBS

% Effort - % Labor Distribution = % Cost Sharing

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DHHS SALARY CAP

Cost sharing/labor distributions

Calculating The Salary Cap Percentage Method

2012 Salary Cap $179,700IBS $ 250,000

% of IBS 71.88%% Effort x 25%

% Labor Distribution 17.97%

% Cost Sharing (%Effort-%Labor Distribution) 7.03%

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MORE CASE STUDIES



DHHS SALARY CAP

More Case Studies

Case Study 6

Dr. Uberstern• 1.0 FTE• IBS of $300,000• 100% of Effort on DHHS grants- award issue date 1/1/2012

What is the maximum percentage of his IBS that can besupported by his grants?

What percentage of his IBS must be cost shared by department?

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DHHS SALARY CAP

More Case Studies

Case Study 6

Dr. Uberstern

Salary Cap $ 179,700% Effort x 100%

Allowable Salary Support $179,700IBS $ 300,000

% IBS that can be grant supported 59.90 %

% Department Cost Share (100%-59.90%) 40.10%

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DHHS SALARY CAP

More Case Studies

Case Study 7

Dr. Zhang

• NIH GRANT0001A 20 % Effort (9/30/11 award issue date)• HRSA GRANT0002A 10% Effort (1/01/12 award issue date)• NSF GRANT0003A 30% Effort (12/23/11 award issue date)• Department Chair 20% Effort• Teaching 20% Effort• IBS is $250,000

What’s the total % of Labor Distribution that can becharged to her grants and non-sponsored accounts? How would her Effort Statement be completed?

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DHHS SALARY CAP

More Case Studies

Case Study 7 Dollar Method

NIH GRANT0001A (9/30/11 start date)

Salary Cap Exec Level I $ 199,700% Effort x 20%


% Labor Distribution on GRANT0001A 15.98%

% Cost Sharing (% Effort- % Labor Distribution) 4.02%43


DHHS SALARY CAP

More Case Studies

Case Study 7 Dollar Method

HRSA GRANT0002A (01/01/2012 start date)

Salary Cap Exec Level II $ 179,700% Effort x 10%





DHHS SALARY CAP

More Case Studies

Case

Study 7

NSF GRANT0003A (12/01/2011 start date)

• Not a DHHS Award• Salary Cap Does NOT apply• Effort = Labor Distribution

• 10% Labor Distribution on GRANT0003A

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DHHS SALARY CAP

More Case Studies

Case Study 7

Percentage Method

NIH GRANT0001A (9/30/11 start date)

Salary Cap Exec Level I $ 199,700IBS $ 250,000

% of Allowable IBS 79.88%% Effort x 20.00 %




DHHS SALARY CAP

More Case Studies

Case Study 7 Percentage Method

HRSA GRANT0002A (01/01/2012 start date)

Salary Cap Exec Level II $ 179,700IBS $ 250,000

% Allowable IBS 71.88%% Effort x 10.00%




DHHS SALARY CAP

More Case Studies

Case Study 7

Dr. Zhang

What’s the total % of Labor Distribution that can be charged to her grants?

GRANT0001A 15.98% GRANT0002A 7.19% GRANT0003A 30.00%

53.17% = Total LD on Grants

Dept Chair 20.00%Teaching 20.00%Cost Sharing 6.83%

46.83% = Total LD on Non-Sponsored Accounts

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EFFORT STATEMENT AND SALARY CAP



DHHS SALARY CAP

Effort Statement and Salary Cap

Case Study

7

How do we reflect cost sharing related to the salary cap for Dr. Zhang on her effort statement?

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DHHS SALARY CAP


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Employee Effort Certification Form Page 1 of 1

For The Period of Date 16-Feb-12

Employee Name: Zhang, Xinxia Primary Organization: AA.Academic Affairs

Employee Number: 12345

Committed Actual

Project Number / GL Account Award Number Project Desciption Award Name Effort % Cost Share % LD Effort % Cost Share % Total Effort %

Assignment Number Effort Category GL Related Activities

0151-69999-24-5111-000-0000-000 0.00 0.00 6.83%

0151-69999-11-5111-000-0000-000 0.00 0.00 20.00%

0151-69999-79-5111-000-0000-000 0.00 0.00 20.00%

Effort Category Sponsored Activities

GRANT0001A AWARD0001 NIH Grant 0.00 0.00 15.98%

GRANT0002A AWARD0002 HRSA Grant 0.00 0.00 7.19%

GRANT0003A AWARD0003 NSF Grant 0.00 0.00 30.00%

Total Effort For Assignment 100.00% 0.00% 0.00%

Note on Suspense Activity

Suspense activity must be cleared before certifying the statement. When returning the statement please write neatly, in ink, what the funding sources should have

been and attach a copy of all appropriate back-up documentation.

Note on Cost Sharing

Please enter the amount of cost sharing the Cost Share % Column. When the cost share column is completed correctly it should sum to zero.

Note on Federal Salary Cap

It is the department's responsibility to ensure salary charges on NIH, SAMSHA, and AHRQ awards are not distributed at a rate in excess of the salary cap for those

sponsors. If the covered individual's total salary is in excess of the cap then the LD % cannot be certified equal to Total Effort % on each applicable project. The

difference between allowable salary distribution and actual effort should be reflected in the Cost Share% column or captured in a Cost Share companion account.

Certification Statement

I certify that I have reasonable means of verifying the activities performed by the above mentioned employee and that the distribution of effort represents a reasonable estimate of the actual work performed by the employee during the period covered by this report.

Or Covered Individual Date Responsible Person Title Date

The Responsible Person's relationship to the Covered Invidividual must be Principal

Investigator or Supervisor.

Responsible Person's Printed Name


DHHS SALARY CAP


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Employee Effort Certification Form Page 1 of 1

For The Period of Date 16-Feb-12

Employee Name: Zhang, Xinxia Primary Organization: AA.Academic AffairsEmployee Number: 12345

Committed Actual

Project Number / GL Account Award Number Project Desciption Award Name Effort % Cost Share % LD Effort % Cost Share % Total Effort %

Assignment Number

Effort Category GL Related Activities

0151-69999-24-5111-000-0000-000 0.00 0.00 6.83% -6.83% 0.00%

0151-69999-11-5111-000-0000-000 0.00 0.00 20.00% 20.00%

0151-69999-79-5111-000-0000-000 0.00 0.00 20.00% 20.00%

Effort Category Sponsored Activities

GRANT0001A AWARD0001 NIH Grant 0.00 0.00 15.98% 4.02% 20.00%

GRANT0002A AWARD0002 HRSA Grant 0.00 0.00 7.19% 2.81% 10.00%

GRANT0003A AWARD0003 NSF Grant 0.00 0.00 30.00% 30.00%

Total Effort For Assignment 100.00% 0.00% 100.00%

Note on Suspense Activity

Suspense activity must be cleared before certifying the statement. When returning the statement please write neatly, in ink, what the funding sources should have

been and attach a copy of all appropriate back-up documentation.

Note on Cost Sharing

Please enter the amount of cost sharing the Cost Share % Column. When the cost share column is completed correctly it should sum to zero.

Note on Federal Salary Cap

It is the department's responsibility to ensure salary charges on NIH, SAMSHA, and AHRQ awards are not distributed at a rate in excess of the salary cap for those

sponsors. If the covered individual's total salary is in excess of the cap then the LD % cannot be certified equal to Total Effort % on each applicable project. The

difference between allowable salary distribution and actual effort should be reflected in the Cost Share% column or captured in a Cost Share companion account.

Certification Statement

I certify that I have reasonable means of verifying the activities performed by the above mentioned employee and that the distribution of effort represents a reasonable estimate of the actual work performed by the employee during the period covered by this report.

Or Covered Individual Date Responsible Person Title Date

The Responsible Person's relationship to the Covered Invidividual must be Principal

Investigator or Supervisor.

Responsible Person's Printed Name

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SALARY CAP CALCULATION TOOL

http://www.ohsu.edu/xd/research/administration/rda-forms.cfm




DHHS SALARY CAP

Salary Cap Calculation Tool

One More Thing!

• OHSU Internal Audit recommended a salary cap calculation tool be provided to departments

• “DHHS Salary Cap Cost Sharing Calculation Tool” is on the RDA forms page

• A print out of the completed tool must be sent in with each certified, Effort Certification Statement, where salary cap applies

• http://www.ohsu.edu/xd/research/administration/rda-forms.cfm

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CARRY FORWARD CALCULATION TOOL



DHHS SALARY CAP

DHHS SALARY CAP

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Total Carry Forward (CF)-Direct Cost $10,000Estimated OPE @ 30% -$2,308CF Salary Dollars Available $7,692

% Effort CAP Direct SalaryAllowable Salary per Executive Level I 10.00% $ 199,700 $19,970

CF Salary Dollars Available $7,692Allowable Salary per Executive Level I $19,970 ($12,278)

Use calculation below for LD allocation

1.0 Salary Cap Rate -CF $199,700Total Effort 3.85%CF Salary Dollars Available $7,692 Base Salary $250,000% LD allowed on Project 3.08%% Cost Sharing to GL 0.78%

1.0 Salary Cap Rate-Main Account $179,700Effort (Total -CF Account) 6.15%Allowable Salary Support $11,048 Base Salary $250,000% LD allowed on Project 4.42%% Cost Sharing to GL 1.73%


DHHS SALARY CAP

DHHS SALARY CAP

Question and Answer Time!

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DHHS SALARY CAP

DHHS SALARY CAP

James Trotter

Director-Sponsored Projects [email protected]

503-494-3211

Amber RobertsInstitutional Effort Coordinator

[email protected]

Nancy DuncanSPA Education Coordinator

[email protected]

mailto:[email protected]



salary cap with new implications james trotter, nancy duncan & amber roberts, sponsored projects...

Documents

dhhs salary cap background

dhhs salary cap history

allowable direct salary

dhhs awards effective

ohsu awards

new implications james

executive level

federal fy