1. Salary Cap with New Implications James Trotter, Nancy Duncan & Amber Roberts, Sponsored Projects Administration DHHS Salary Cap

2. C OURSE O VERVIEW 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 & Education2

3. SALARY CAP OVERVIEW Research Administration Training & Education3

4. 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 Research Administration Training & Education4

5. 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 Research Administration Training & Education5

6. 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 Research Administration Training & Education6

7. DHHS SALARY CAP New Implications Overview Research Administration Training & Education7

8. DHHS SALARY CAP New Implications Overview Research Administration Training & Education8

9. DHHS SALARY CAP New Implications Overview Research Administration Training & Education9

10. 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 website http://www.ohsu.edu/xd/research/administration/spon sored-projects-administration/ Overview Research Administration Training & Education10

11. D ECISION 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 Research Administration Training & Education11

12. 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. Research Administration Training & Education12

13. 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. Research Administration Training & Education13

14. DHHS SALARY CAP Overview BUDGET IMPLICATIONS FY2012 Non-Competing Awards Issue date of 10/1/11 through 12/22/11Issue 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. Research Administration Training & Education14

15. DHHS SALARY CAP Overview BUDGET IMPLICATIONS FY2012 Competing Awards Issue date of 10/1/11 through 12/22/11Issue date of 12/23/11 and later 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. 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. Research Administration Training & Education15

16. DHHS SALARY CAP Overview BUDGET IMPLICATIONS Research Administration Training & Education16 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

17. INSTITUTIONAL BASE SALARY Research Administration Training & Education17

18. 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) Research Administration Training & Education18

19. 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) Research Administration Training & Education19

20. CASE STUDIES Research Administration Training & Education20

21. 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? Research Administration Training & Education21

22. 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? Research Administration Training & Education22

23. 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 ) Research Administration Training & Education23

24. 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%) Research Administration Training & Education24

25. 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) Research Administration Training & Education25

26. 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? Research Administration Training & Education26

27. DHHS SALARY CAP Case Studies Case Study 3 Dr. Jones NIH Grant 10% x Salary Cap ($179,700) = $17,970 NSF Grant 20% x IBS ($230,000)= $46,000 Research Administration Training & Education27

28. DHHS SALARY CAP Case Studies Case Study 4 Dr. 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 two awards? Research Administration Training & Education28

29. DHHS SALARY CAP Case Studies Case Study 4 Dr. Smith NIH Grant 0.5 FTE x 10% x Salary Cap ($199,700) = $9,985 HRSA Grant 0.5 FTE x 10% x Salary Cap ($179,700)= $8,985 Research Administration Training & Education29

30. 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 less Than the cap of $179,700? Research Administration Training & Education30

31. DHHS SALARY CAP Case Studies Case Study 5 Dr. Jay 75% x $179,700 = $134,775 Remember: % Effort x Salary Cap= Allowable Salary Research Administration Training & Education31

32. Break Research Administration Training & Education32

33. COST SHARING/LABOR DISTRIBUTIONS Research Administration Training & Education33

34. DHHS SALARY CAP Cost Sharing/Labor Distributions 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) Research Administration Training & Education34

35. DHHS SALARY CAP Cost Sharing/Labor Distributions COST SHARING/LABOR DISTRIBUTION 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 Research Administration Training & Education35

36. DHHS SALARY CAP Cost Sharing/Labor Distributions Calculating The Salary Cap Dollar Method 2012 Salary Cap$179,700 % Effortx 25% Allowable Salary Support$ 44,925 IBS$ 250,000 % Labor Distribution 17.97% % Cost Sharing(%Effort-%Labor Distribution) 7.03% Research Administration Training & Education36

37. DHHS SALARY CAP Cost Sharing/Labor Distributions COST SHARING/LABOR DISTRIBUTION Another Way to Do the Math ! Salary Cap x % Effort = % Labor Distribution IBS % Effort - % Labor Distribution = % Cost Sharing Research Administration Training & Education37

38. DHHS SALARY CAP Cost sharing/labor distributions Calculating The Salary Cap Percentage Method 2012 Salary Cap $179,700 IBS $ 250,000 % of IBS 71.88% % Effort x 25% % Labor Distribution 17.97% % Cost Sharing (%Effort-%Labor Distribution) 7.03% Research Administration Training & Education38

39. MORE CASE STUDIES Research Administration Training & Education39

40. 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 be supported by his grants? What percentage of his IBS must be cost shared by department? Research Administration Training & Education40

41. DHHS SALARY CAP More Case Studies Case Study 6 Dr. Uberstern Salary Cap $ 179,700 % Effort x 100% Allowable Salary Support$179,700 IBS$ 300,000 % IBS that can be grant supported 59.90 % % Department Cost Share (100%-59.90%) 40.10% Research Administration Training & Education41

42. 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 be charged to her grants and non-sponsored accounts? How would her Effort Statement be completed? Research Administration Training & Education42

43. 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% Allowable Salary Support$ 39,940 IBS$ 250,000 % Labor Distribution on GRANT0001A 15.98% % Cost Sharing (% Effort- % Labor Distribution) 4.02% Research Administration Training & Education43

44. 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% Allowable Salary Support$ 17,970 IBS$ 250,000 % Labor Distribution on GRANT0002A 7.19% % Cost Sharing (% Effort- % Labor Distribution) 2.81% Research Administration Training & Education44

45. 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 Research Administration Training & Education45

46. DHHS SALARY CAP More Case Studies Case Study 7 Percentage Method NIH GRANT0001A (9/30/11 start date) Salary Cap Exec Level I $ 199,700 IBS $ 250,000 % of Allowable IBS 79.88% % Effort x 20.00 % % Labor Distribution on GRANT0001A 15.98% % Cost Sharing (% Effort- % Labor Distribution) 4.02% Research Administration Training & Education46

47. DHHS SALARY CAP More Case Studies Case Study 7 Percentage Method HRSA GRANT0002A (01/01/2012 start date) Salary Cap Exec Level II$ 179,700 IBS $ 250,000 % Allowable IBS 71.88% % Effort x 10.00% % Labor Distribution on GRANT0002A 7.19% % Cost Sharing (% Effort- % Labor Distribution) 2.81% Research Administration Training & Education47

48. 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 Research Administration Training & Education48

49. EFFORT STATEMENT AND SALARY CAP Research Administration Training & Education49

50. 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? Research Administration Training & Education50

51. DHHS SALARY CAP Effort Statement and Salary Cap Research Administration Training & Education51 Employee Effort Certification Form Page1 of 1 For The Period ofDate16-Feb-12 Employee Name: Zhang, XinxiaPrimary Organization: AA.Academic Affairs Employee Number: 12345 CommittedActual Project Number / GL AccountAward NumberProject DesciptionAward NameEffort %Cost Share %LD Effort %Cost Share %Total Effort % Assignment Number Effort Category GL Related Activities 0151-69999-24-5111-000-0000-0000.00 6.83% 0151-69999-11-5111-000-0000-0000.00 20.00% 0151-69999-79-5111-000-0000-0000.00 20.00% Effort Category Sponsored Activities GRANT0001AAWARD0001NIH Grant0.00 15.98% GRANT0002AAWARD0002HRSA Grant0.00 7.19% GRANT0003AAWARD0003NSF Grant0.00 30.00% Total Effort For Assignment 100.00%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 IndividualDateResponsible PersonTitleDate The Responsible Person's relationship to the Covered Invidividual must be Principal Investigator or Supervisor. Responsible Person's Printed Name

52. DHHS SALARY CAP Effort Statement and Salary Cap Research Administration Training & Education52 Employee Effort Certification Form Page1 of 1 For The Period ofDate16-Feb-12 Employee Name: Zhang, XinxiaPrimary Organization: AA.Academic Affairs Employee Number: 12345 CommittedActual Project Number / GL AccountAward NumberProject DesciptionAward NameEffort %Cost Share %LD Effort %Cost Share %Total Effort % Assignment Number Effort Category GL Related Activities 0151-69999-24-5111-000-0000-0000.00 6.83% -6.83%0.00% 0151-69999-11-5111-000-0000-0000.00 20.00% 0151-69999-79-5111-000-0000-0000.00 20.00% Effort Category Sponsored Activities GRANT0001AAWARD0001NIH Grant0.00 15.98% 4.02%20.00% GRANT0002AAWARD0002HRSA Grant0.00 7.19% 2.81%10.00% GRANT0003AAWARD0003NSF Grant0.00 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 IndividualDateResponsible PersonTitleDate The Responsible Person's relationship to the Covered Invidividual must be Principal Investigator or Supervisor. Responsible Person's Printed Name

53. SALARY CAP CALCULATION TOOL http://www.ohsu.edu/xd/research/administration/rda-forms.cfm Research Administration Training & Education53

54. 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.cfmhttp://www.ohsu.edu/xd/research/administration/rda- forms.cfm Research Administration Training & Education54

55. CARRY FORWARD CALCULATION TOOL Research Administration Training & Education55

56. DHHS SALARY CAP Research Administration Training & Education56 Total Carry Forward (CF)-Direct Cost$10,000 Estimated OPE @ 30%-$2,308 CF Salary Dollars Available$7,692 % EffortCAPDirect Salary Allowable Salary per Executive Level I10.00% $ 199,700$19,970 CF Salary Dollars Available$7,692 Allowable Salary per Executive Level I$19,970 ($12,278) Use calculation below for LD allocation 1.0 Salary Cap Rate -CF$199,700 Total Effort3.85% CF Salary Dollars Available$7,692 Base Salary$250,000 % LD allowed on Project3.08% % Cost Sharing to GL0.78% 1.0 Salary Cap Rate-Main Account$179,700 Effort (Total -CF Account)6.15% Allowable Salary Support$11,048 Base Salary$250,000 % LD allowed on Project4.42% % Cost Sharing to GL1.73%

57. DHHS SALARY CAP Question and Answer Time! Research Administration Training & Education57

58. DHHS SALARY CAP James Trotter Director-Sponsored Projects Administration trotterj@ohsu.edu 503-494-3211 Amber Roberts Institutional Effort Coordinator roberamb@ohsu.edu 503-494-6984 Nancy Duncan SPA Education Coordinator duncanna@ohsu.edu 503-494-3715 Research Administration Training & Education58