Emory University. Working with the PHS Salary Cap. Josh Rosenberg, Director of Cost Studies August 2012

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1 Emory University Working with the PHS Salary Cap Josh Rosenberg, Director of Cost Studies August

2 High Level Summary Effective Dec. 23, 2011, the salary cap for individuals funded via Department of Health and Human Services (DHHS) grants and other extramural funding mechanisms has been reduced from Executive Level I of the Federal Executive Pay Scale to Executive Level II. 2

3 Salary Cap Change Old Salary Cap Executive Level I: $199,700 New Salary Cap Executive Level II: $179,700 3

4 History of the Cap (Agencies) Prior to Dec. 23, 2011, the salary cap only impacted the following HHS agencies: National Institutes of Health (NIH) Agency for Healthcare and Research Quality (AHRQ) Substance Abuse and Mental Health Services Administration (SAMHSA) 4

5 Dec. 23, 2011 going forward: Agencies Impacted National Institutes of Health (NIH) Agency for Healthcare and Research Quality (AHRQ) Centers for Disease Control and Prevention (CDC) Health Resources and Services Administration (HRSA) Substance Abuse and Mental Health Services Administration (SAMHSA) Administration for Children and Families (ACF) Administration on Children, Youth, and Families (ACYF) Administration on Aging (AoA) Agency for Toxic Substances and Disease Registry (ATSDR) Centers for Medicare and Medicaid Services Food and Drug Administration (FDA) Indian Health Service (IHS) 5

6 Application (Prime Awards) Award Issue Date on or before Dec. 22, 2011 (New, Competing, Non-competing) NIH, AHRQ, SAMHSA: Executive Level I Other HHS Agencies: No cap applicable 6

7 Application (Prime Awards) Award Issue Date on or after Dec. 23, 2011 (New, Competing, Non-competing) ALL PHS Agencies: Executive Level II (applicable per the project/budget start date) 7

8 Application (Sub Awards) Same rules that apply to prime awards. Award Issue Date dictates In the absence of this, Effective Date (if provided in the contract) Budget Start Date (if either award issue date or effective date is unavailable) 8

9 Detailed Application Competing (on or before Dec. 22, 2011) FY12 Award: Exec. Level I ($199,700) Future Years: Exec. Level II ($179,700) Detailed Budgets: Awards will be revised to adjust future year commitments only Modular Budgets: Awards will not be adjusted by NIH for the salary cap Grantees apply EL I for FY12 Grantees apply EL II for FY13; re-budgeting of excess in FY13 will be allowed. 9

10 Detailed Application Non-Competing (on or before Dec. 22, 2011) FY12 Award: Exec. Level I ($199,700) Future Years: Exec. Level II ($179,700) NIH will not adjust future year commitments for non-competing within this issue date range For FY13 and beyond, grantees will need to charge using EL II. Re-budgeting of excess is allowed. 10

11 Detailed Application Competing (on or after Dec. 23, 2011) FY12 Award: Exec. Level II Future Years: Exec. Level II Detailed Budgets: Awards will be issued using EL II for FY12 and all future years. Modular Budgets: Awards will not be adjusted by NIH for the salary cap Grantees apply EL II Re-budgeting of excess is allowed 11

12 Detailed Application Non-Competing (on or after Dec. 23, 2011) FY12 Award: Exec. Level II Future Years: Exec. Level II NIH will not adjust FY12 award or future year commitments for non-competing in this category. Grantees must charge at EL II; re-budgeting of excess is allowed. 12

13 Application No-Cost Extension For awards issued prior to Dec. 23, 2011, if a no cost extension is issued after Dec. 23, the old cap will still apply on the theory that no new funds are being awarded. 13

14 Application Carryover Assuming the carry over is used for salaries, EL I would be appropriate to charge for the carryover amount only. 14

15 Application (ERS, Effort) ERS has a CAP flag applied to any smartkey where faculty may have salaries over the cap and are paid from a DHHS project. There is no way to differentiate cap levels (where old and new may apply to same smartkey), so CAP means PI MAY be subject to the cap. Use salary cap calculators. 15

16 Salary Cap Calculator High Level Used to show the impact of the change in the cap and to calculate the amount that must be cost shared. Can be found on both the Cost Studies website AND on ERS. Annual Salary $ 250, Appointment (mts) Effort 20.00% Number of Months 3.00 Executive Level I Executive Level II Change Impact $ 199, $ 179, Monthly Total Monthly Salary $ 4, $ 4, Total Monthly Salary chargeable to Grants $ 3, $ 2, ($333.33) Total Monthly Salary that must be cost shared $ $ 1, $ Number of Months Total Salary over number of months $ 12, $ 12, Total Salary over number of months chargeable to grants $ 9, $ 8, ($1,000.00) Total Salary over number of months that must be cost shared $ 2, $ 3, $1,

17 Salary Cap Calculator - Detail SALARY DISTRIBUTION WORKSHEET - INCLUDES SALARY CAP CALCULATIONS RED PI: Dr. X Percentages (%) Annual Salary: $ 229, Annual Salary Cap Date Range: FY13 Distribution based on committed effort Monthly Cap Cost Share October-12 Distribution based on committed effort Monthly Cap Cost Share Select Cap Type Cap Amount (if any) SmartKey(s) subject to Salary Cap % Distribution Adjusted Distribution % % Distribution Adjusted Distribution % No Cap - 1st Smartkey 5.00% % 10.00% 1, , % Old Cap 199, nd Smartkey 19.70% 3, , % 10.00% 1, , % New Cap 179, rd Smartkey 4.69% % 5.00% % New Cap 179, th Smartkey 1.00% % 5.00% % No Cap - 5th Smartkey 1.00% % 5.00% % Old Cap 199, th Smartkey 1.00% % 5.00% % Old Cap 199, th Smartkey 1.00% % 5.00% % No Cap - 8th Smartkey 1.00% % 2.00% % Old Cap 199, th Smartkey 1.00% % 2.00% % Old Cap 199, th Smartkey 1.00% % 2.00% % No Cap - 11th Smartkey 5.00% % 2.00% % No Cap - 12th Smartkey 1.00% % 2.00% % New Cap 179, th Smartkey 4.00% % 5.00% % No Cap - 14th Smartkey 1.00% % 5.00% % No Cap - 15th Smartkey 1.00% % 5.00% % New Cap 179, th Smartkey 1.00% % 5.00% % Old Cap - 17th Smartkey 1.00% % 5.00% % New Cap 179, th Smartkey 2.00% % 5.00% % Old Cap 199, th Smartkey 1.00% % 5.00% % Old Cap 199, th Smartkey 1.00% % 5.00% % 1, , % Distribution based on committed effort September-12 LEGEND =required input should total 100% - based on issuance and effective dates Distribution based on committed effort SmartKey not Subject to Cap % Distribution Monthly Distribution Adjusted Distribution % % Distribution Monthly Distribution Adjusted Distribution % XXXXX 21.57% 4, , % 1.00% % XXXXX 9.38% 1, , % 0.00% % XXXXX 9.05% 1, , % 1.00% % XXXXX 5.61% 1, , % 1.00% % XXXXX 0.00% % 1.00% % XXXXX 0.00% % 0.00% % XXXXX 0.00% % 1.00% % XXXXX 0.00% % 0.00% % Cost Share SmartKey % 1, % Cost Share SmartKey 1, % % % 19, , % % 19, , % Cost Share Balance to be Distributed: 0.00 Cost Share Balance to be Distributed:

18 Example # 1 Annual PI salary: 250,000 Monthly PI salary: 20,833 Effort Level: 50% Award Issue Date: Dec. 1, 2011 NIH award Cap to use: Executive Level I (199,700) Monthly maximum salary (per CAP): 16,642 Salary to charge: 8,321 (50% of monthly max) Monthly cost share due to CAP: 2,096 18

19 Example # 2 Annual PI salary: 300,000 Monthly PI salary: 25,000 Effort Level: 25% Award Issue Date: Jan. 1, 2012 NSF award Cap to use: No Cap Monthly maximum salary (no CAP): 25,000 Salary to charge: 6,250 (25% of monthly max) Monthly cost share due to CAP: 0 19

20 Example # 3 Annual PI salary: 185,000 Monthly PI salary: 15,417 Effort Level: 5% Award Issue Date: Dec. 31, 2011 CDC award Cap to use: Executive Level II (179,700) Monthly maximum salary (per CAP): 14,975 Salary to charge: 749 (5% of monthly max) Monthly cost share due to CAP: 22 20

21 Example # 4 Salary: 190,000 Award Issue Date Effort Sponsor Applicable Cap Annual, Ignore CAP Annual, with CAP Monthly, with CAP Award 1 Feb. 1, % CDC ELII (179,700) 28, , , Award 2 Jan. 1, % NIH ELII (179,700) 19, , , Award 3 Dec. 1, % NIH ELI (199,700) 66, , , Award 4 Nov. 1, % AHRQ ELI (199,700) 19, , , Award 5 Oct. 1, % CDC No Cap 38, , , % 171, , , Non-Sponsored 19, , , Monthly Salary: $ 15,833 Not factoring in cap: Monthly charge on grants: 90.00% $ 14,250 Monthly salary on non-grants: 10.00% $ 1,583 CAP factored in: Monthly charge on grants: 88.64% $ 14,035 Monthly salary on non-grants: 11.36% $ 1,798 Additional cost share from over the cap salary $

22 Example # 5 Salary: 215,000 Award Issue Date Effort Sponsor Applicable Cap Annual, Ignore CAP Annual, with CAP Monthly, with CAP Award 1 Feb. 1, % CDC ELII (179,700) 32, , , Award 2 Jan. 1, % NIH ELII (179,700) 21, , , Award 3 Dec. 1, % NIH ELI (199,700) 53, , , Award 4 Nov. 1, % AHRQ ELI (199,700) 21, , , Award 5 Oct. 1, % CDC No Cap 43, , , % 172, , , Non-Sponsored 43, , , Monthly Salary: $ 17,917 Not factoring in cap: Monthly charge on grants: 80.00% $ 14,333 Monthly salary on non-grants: 20.00% $ 3,583 CAP factored in: Monthly charge on grants: 73.40% $ 13,152 Monthly salary on non-grants: 26.60% $ 4,765 Additional cost share from over the cap salary $ 1,182 22

23 Example # 6 Salary: 230,000 Award Issue Date Effort Sponsor Applicable Cap Annual, Ignore CAP Annual, with CAP Monthly, with CAP Award 1 Apr. 1, % DoD No Cap 23, , , Award 2 Dec. 31, % NSF No Cap 11, , Award 3 Feb. 1, % NIH ELII (179,700) 69, , , Award 4 Oct. 1, % HRSA No Cap 11, , Award 5 Dec. 31, % NIH ELI (199,700) 34, , , % 149, , , Non-Sponsored 80, , , Monthly Salary: $ 19,167 Not factoring in cap: Monthly charge on grants: 65.00% $ 12,458 Monthly salary on non-grants: 35.00% $ 6,708 CAP factored in: Monthly charge on grants: 56.46% $ 10,822 Monthly salary on non-grants: 43.54% $ 8,345 Additional cost share from over the cap salary $ 1,636 23

24 HHS Guidance Only NIH (and now, HRSA) have issued guidance on this. NIH Guidance: FY2012 NIH Guide Notice: Salary Cap FY12 FAQ: Salary Cap Summary Webpage: 24

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