Effort Reporting:Total Professional Activity vs.

Institutional Activity

Salary and Wage CostsWhat NIH Expects

Charges for salaries and wages will reflect actual effort expended--not necessarily the proposed or budgeted effort

Charges for salaries and wages, whether treated as direct costs or indirect costs, will be based on documented payrolls/effort reports approved by a responsible official of the organization

Significant changes in actual effort vs. budgeted effort will be adjusted

What is a Significant Change?

No precise definition

Determination should be made by the employee or the individual who certifies the effort report

Any changes made by the individual or certifying official should be considered significant

Significant Change

General Rule: A change applicable to a given project or activity of 5% or more of an employee’s TOTAL effort would require an adjustment to the effort report

Salary and Wage Costs- Cost Transfers

Used to correct errors or changes in effort certified vs. budgeted effort

Must be well documented

Must be made in a timely manner

Personnel - Prior Approval Required for change in a key person

specified on Notice of Grant Award (NGA) Always Principal Investigator (PI)

Key Person: an individual identified in the application who contributes to the scientific development or execution of the project in a substantive way, whether or not salary is requested

Personnel - Prior Approval

Required if PI or other key personnel named on the NGA will:

Withdraw from the project completely

Be absent 3 months or more Reduce time devoted to project by

25% or more

Prior Approval

Required for: Change in scope or objective of a project

Change in Scope is a change in direction or other area that constitutes a significant change from the aims, objective, or purpose of the originally approved project (significant change in effort by key personnel could indicate potential change in scope)

Institutional Base Salary (IBS)

The annual compensation that the applicant organization pays for an employee’s appointment whether that individual’s time is spent on research, teaching, patient care or other activities.

Excludes any income that an individual may be permitted to earn outside of duties to the applicant organization.

May NOT be increased as a result of replacing institutional salary funds with grant funds

Revised NIH Grants Policy Statement

NIH Grants Policy Statement – A Closer Look

Closely related work: NIH eliminated the option for grantees

to pursue prior approval to account for multiple projects under a single cost objective

NIH applies the relatedness provision of A-21 to all NIH recipients, which is consistent with the FDP Terms and Conditions

Key Personnel: Expanded definition to:

describe contribution of key personnel as “measurable” whether or not salaries are requested.

Clinical Practice Plan (IBS): Clinical practice plan appointments

compensation may be considered in the base salary as long as criteria are met.

NIH Grants Policy Statement – A Closer Look

Clinical Practice Compensation (IBS):Clinical Practice Compensation (CPC) appointments

compensation may be considered in the IBS, provided:

1. CPC must be guaranteed by the university/Institution

2. Clinical practice effort must be shown on the appointment form and must be paid through the university/institution

3. Clinical practice effort must be included and accounted for on the university/institution effort report

Revised Grants Policy Statement

Total Professional Activities – Other Support

NIH requires complete and up-to-date other support information before an award can be made Complete means all sources of research support

(including outside the applicant organization – Total Professional Activities)

Grantees must report changes in other support as part of the annual progress report

NIH Guide, February 13, 2003http://grants.nih.gov/grants/guide/notice-files/NOT-OD-03-029.html

Total Professional Activities -Career Awards

Most Career Awards require a minimum commitment of total professional effort to research. Previously defined total professional effort as all sources of

research support (including appointments outside the applicant organization, exclusive of consulting activity within institution's limits.)

Effective for all applications submitted after 10/1/04 investigators will meet the required commitment of total professional effort as long as: 1) the individual has a full-time appointment with the applicant organization; and 2) the minimum percentage of the candidate’s commitment required for the proposed Career award experience is covered by that appointment.

NIH Guide, August 3, 2004http://grants.nih.gov/grants/guide/notice-files/NOT-OD-04-056.html

Support/Commitment Overlap

Overlap of support (scientific or budgetary) is unallowable

Over commitment of an individual’s effort is unallowable

Salary Cap Restricts the amount of direct salary under a grant

or contract to Executive Level I of the Federal Executive Pay Scale

Executive Level I increase effective January 1, 2005

170,000

175,000

180,000

185,000

2004 2005

$175,700

$180,100

January 7, 2005 NIH Guide Noticehttp://grants.nih.gov/grants/guide/notice-files/NOT-OD-05-024.html

Top 10 Issues on Salary Costs to NIH Grants?

Certifying official does not have first-hand knowledge of effort performed

Effort reports not certified and returned in a timely manner

Certifying the budgeted effort vs. actual effort Salary cap not treated correctly with respect

to effort and charging NIH grants/contracts Corrections for significant changes in

budgeted vs. actual effort are not made OR not made in a timely manner

Top 10 Issues on Salary Costs to NIH Grants?

Transferring costs from one project to another to avoid a cost overrun

Failure to get prior approval for change in key personnel, i.e., withdraw from project completely, be absent for 3 months or more or reduces time by 25% or more

Overlap of support (scientific or budgetary) Overlap of commitment Use of incorrect IBS, especially when CPC

is involved

What’s at Risk?

Audit Findings/Cost Disallowances Designation as High Risk Organization Special Terms and Conditions on NGAs Requirement for Corrective Action Plan Special Monitoring by NIH Temporary Withholding of Payments Withholding of Future Awards

Questions?

Joe EllisActing Director, Office of Policy for Extramural

Research Administration

301-435-0938Ellisj1@mail.nih.gov