NIH Salary Cap (Policy No. 400.0)

Effective Date:

October 1, 2011

Version # / Revision Date:

Version 1

Responsible Office(s):

Office of the Vice President for Research and Office of Sponsored Projects

Approval:

Office of the Vice President for Research

Policy Statement

As part of the budget appropriations of the National Institutes of Health (NIH), Substance Abuse and Mental Health Services Administration (SAMHSA), and Agency for Healthcare Research and Quality (AHRQ), the US Congress legislatively mandates a salary cap. The salary cap applies to grants, cooperative agreements and contracts (with the exception of those that are clearly defined to be exempt from the cap). Since 2001, the cap has been set at the Executive Level 1 of the Federal Executive Pay schedule.

Click HERE to view the salary cap for current and previous years.

The salary cap limits the rate of academic and summer salary that may be charged to NIH, SAMHSA, and AHRQ awards. Brown University considers academic or calendar year salary in excess of the imposed cap as mandatory cost sharing. The amount in excess of the cap cannot be used as matching funds. The University may pay an employee’s salary amount in excess of the salary cap from non-sponsored project funds.   

Brown University’s Position on Implementing – NIH Salary Cap


Brown will comply with all salary cap requirements of sponsors making awards to the University in support of research or other activities. Where an agency specifies a maximum rate at which an individual may be paid from that agency’s funds, Brown will ensure that any salary above that rate will not be charged against the grant, contract or cooperative agreement issued by that agency.  Salary in excess of the NIH Salary Cap is considered mandatory cost sharing and should be identified during the proposal phase of an award.   Refer to Cost Sharing on Sponsored Projects Policy (300.0).

*Note: NIH will fund the salary cap at the level in effect at the time the competitive award is issued. If, during the period of that award, the salary cap is increased, under applicable rebudgeting authority you may pay the salary at the higher level. NIH however will not award any additional funds for this purpose.

Award Stage

It is Brown’s Policy that documentation related to all awards from NIH, SAMHSA, and AHRQ with individuals, whose salary is above the NIH Salary Cap, include the NIH Salary Cap Worksheet.

Once an award has been made, the costing allocation is submitted through Workday and the salary reflected on the costing allocation must conform to the applicable NIH Salary Cap in effect.

  • When preparing the costing allocation, the monthly salary amount charged to a NIH award during the academic year and/or summer cannot exceed the NIH monthly cap rate multiplied by the percentage of effort.

  • The NIH Salary Cap Worksheet/Award Stage must be completed and attached to the costing allocation in Workday.  

Effort Certification Report


When completing effort reports, the reported percentage of effort for an individual over the NIH Salary Cap must represent a reasonable estimate of effort expended on the project, NOT the percentage of salary charged. This percentage must include the effort that could not be charged to the award because of the NIH Salary Cap.

Click HERE to view the NIH Salary Cap Procedure / Award Stage (Policy No. 400.3).

Definitions


Institutional Base Salary (IBS): Institutional Base Salary (IBS) is the total guaranteed annual compensation an individual receives from Brown University.  The IBS shall be used to compute salaries charged to National Institute of Health (NIH) Sponsored Programs. IBS include an individual’s academic-year salary as well as any stipend received from performing other administrative duties, whether as a center director, department chair, or program director.

NIH Salary Cap: A legislatively-mandated provision limiting the direct salary (also known as institutional base salary (IBS), but excluding any fringe benefits and F&A costs) for individuals working on NIH grants, cooperative agreements, and extramural research and development contracts.

Salary Cap Cost Sharing: Cost sharing that occurs when the University proposes or later assigns effort by individuals whose salary exceeds a sponsor-imposed salary cap.

Salary Limitation: Salary limitation is a legislative provision which changes annually in accordance with the appropriation. The Salary Rate Limitation stipulates that no appropriated funds shall be used to pay the salary of an individual over the capped rate.

 

Roles and Responsibilities


PRINCIPAL INVESTIGATORS

  • Manage project funds in compliance with sponsor requirements.

  • ​Ensure appropriateness and accuracy of effort expended on a sponsored project.

  • Responsible for ensuring compliance with any salary limitations imposed by sponsors.
     

DEPARTMENT ADMINISTRATORS

  • Establish effective policies and controls to ensure compliance with this policy.

  • Identify all individuals whose salary is over the cap.

  • Prepare proposals and applicable documents in accordance with policies and procedures.

  • Responsible for ensuring compliance with any salary limitations imposed by sponsors.
     

OFFICE OF SPONSORED PROJECTS

  • Maintain communications with funding agencies to assure understanding of agency requirements.

  • Develop and implement salary cap policies, procedures, and training sessions in accordance with sponsor regulations.

  • Review proposals, awards, and other associated documents to ensure compliance with policies and procedures.

  • Responsible for ensuring compliance with any salary limitations imposed by sponsors.
     

Contacts
 

Subject

Contact

Phone

Proposal Stage- Policy and Procedure Questions

Contract Administrator

401-863-2777

Award Stage – Policy and Procedure Questions

Grants/Contracts Accountant

401-863-2777

Revision History

  • Version 1 - New procedure – 10/1/11
     

The official version of this information will only be maintained in an on-line web format.  Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.