Implementation of New DHHS Executive Level II Salary Cap

1. Implementation of New DHHS Executive Level II Salary Cap Roles and responsibilities of pi/department; office of sponsored programs (osp); grant & contract accounting (GCA); management accounting & analysis (maa)

2. Issue - Implementation of New DHHS Executive Level II Salary Cap Department of Health & Human Services (DHHS) budget signed on December 23, 2011 includes a reduction in the salary cap from Executive Level I ($199,700) to Executive Level II ($179,700) for FY2012 awards where the initial Issue Date of the award is on/after 12/23/2011

3. Implementation of New DHHS Executive Level II Salary Cap • Agenda • Brief overview • What that means for the UW • Actions taken to date • Roles & responsibilities • Office of Sponsored Programs (OSP) • Grant & Contract Accounting (GCA) • Management Accounting & Analysis (MAA) • PI/Department

4. Implementation of New DHHS Executive Level II Salary Cap • Overview • "None of the funds appropriated in this title shall be used to pay the salary of an individual, through a grant or other extramural mechanism, at a rate in excess of Executive Level II.“ • Affects all ‘funding’ actions • Does not affect No Cost Extensions • Not based on grant start date • Requires institutions to be able to deal with concurrent caps

5. Implementation of New DHHS Executive Level II Salary Cap • Overview (cont’d) • Agencies impacted: • National Institutes of Health (NIH) • Substance Abuse and Mental Health Services Administration (SAMHSA) • Agency for Healthcare Research and Quality (AHRQ) • Health Resources and Services Administration (HRSA) • Centers for Disease Control (CDC) Note – CDC and HRSA not previously subject to salary cap

6. Implementation of New DHHS Executive Level II Salary Cap • What does this mean for the UW? • Need to absorb additional salary cap cost sharing • Need to identify ways to determine applicable cap by budget • Changing budget numbers under certain circumstances • Potential for multiple caps for faculty during an FEC cycle • Clear coordination among OSP, GCA, MAA, PI/Departments • Clearly defined roles and responsibilities for above organizations • Potential change to eFECS to accommodate multiple caps

7. Implementation of New DHHS Executive Level II Salary Cap • Actions taken to date • Identification of Grant Flag 08 to distinguish correct salary cap for qualifying budgets • Value of ‘1’ represents Executive Level I salary cap ($199,700) • Value of ‘2’ represents Executive Level II salary cap ($179,700) • Value of ‘7’ represents Other Salary Cap (agency specific not tied to Executive Level salary cap) • Value of ‘9’ represents No Salary Cap Applies (CDC and HRSA not previously subject to a salary cap but now subject to Executive Level II) • Initial upload for populating Grant Flag 08 (Based on Start Date of 1/1/2012. Let MAA/GCA know if incorrect) • Identified roles & responsibilities of units based on ‘least’ amount of administrative effort

8. Implementation of New DHHS Executive Level II Salary Cap • Roles and Responsibilities • PI/Administering Department are responsible for • Ensuring proper salary amounts and distributions are made to sponsored budgets. • Includes reviewing budgets to make sure the direct charged salary and cost shared salary, including salary cap cost sharing, is correct • Making the necessary adjustments if they are not • When adjustments required it is especially important to make them within each Faculty Effort Certification (FEC) cycle so each FEC captures correct level of effort averaged across the reporting period.

9. Implementation of New DHHS Executive Level II Salary Cap • Roles and Responsibilities (cont’d) • Management Accounting & Analysis will: • Continue to perform monthly batch processes to populate Grant Flag 08 for awards from these agencies which are subject to the Executive Level II salary cap, advising campus when complete. • Awards not included in the monthly batch process for populating Grant Flag 08: • DHHS awards subject to Executive Level I salary cap which require a value of ‘1’ • Awards from non-DHHS agencies which require a value of ‘7’ • CDC/HRSA awards not subject to salary cap which require a value of ‘9’

10. Implementation of New DHHS Salary Cap New Awards, Non-Competing Continuations • New Awards, Non-Competing Continuations (non SNAP) & Other Sponsor Awards (Issue Date on or after 12/23/2011): • Office of Sponsored Programs (OSP) • NIH/SAMHSA/AHRQ/HRSA/CDC – • Budget subject to former EL I salary cap (excludes CDC & HRSA), enter “Subject to the EL I salary cap” in Comments section of Funding Action (FA) form. • For CDC or HRSA budgets NOT subject to salary cap, enter “Not Subject to salary cap” in Comments section of Funding Action (FA) form. • For budget subject to new EL II salary cap, no comment is entered • Other Sponsor Awards, e.g., DoD, American Heart, with salary cap restrictions –Enter “Subject to salary cap (insert salary cap specifics)” in Comments section of Funding Action (FA) form. If agency policy tied to DHHS salary cap, cite appropriate EL I or II.

11. Implementation of New DHHS Salary CapNew Awards, Non-Competing Continuations (cont’d) • New Awards, Non-Competing Continuations (non SNAP) & Other Sponsor Awards (cont’d): • Grant & Contract Accounting (GCA) • NIH/SAMHSA/AHRQ/HRSA/CDC - • If Comments section of FA reflects “Subject to the EL I salary cap”, assign value of ‘1’ in Grant Flag 08 of the FAS Budget Index. • For CDC and HRSA, if Comments section of FA reflects “Not Subject to salary cap”, assign the value of ‘9’ in Grant Flag 08 of the FAS Budget Index. • Other Sponsor Awards, e.g., DoD, American Heart, with salary cap restrictions – When setting up new budget, if Comments section of A reflects “Subject to salary cap (insert salary cap specifics)”: • Assign value of ‘1’ in Grant Flag 08 of FAS Budget Index if salary cap is EL I, • Assign value of ‘2’ in Grant Flag 08 of FAS Budget Index if salary cap is EL II, • Assign value of ‘7’ in Grant Flag 08 of FAS Budget Index if salary cap is other than EL I or II

12. Implementation of New DHHS Salary CapRoles & Responsibilities (cont’d) • New Awards, Non-Competing Continuations (non SNAP) & Other Sponsor Awards (cont’d): • Management Accounting & Analysis (MAA) • MAA will perform monthly query to identify qualifying DHHS awards (NIH/SAMHSA/AHRQ/HRSA/CDC) which do not reflect a coded value for Grant Flag 08. • The Grant Flag 08 for these budgets will be coded as ‘2’ to classify them as “subject to Executive Level II salary cap”.

13. Implementation of New DHHS Salary CapSNAP Awards • SNAP Awards (Issue Date on or after 12/23/2011) - When new funds subject to EL II are received on a SNAP award previously subject to EL I: • They will be added to the existing budget and the Grant Flag 08 changed from a value of ‘1’ to a value of ‘2’ unless a new sub-budget is requested by the department beforethe FA is processed by OSP. • If a sub-budget is requested it will be used for the new dollars only.  Any remaining balance in the prior period will stay in the original budget to be expended down. • To avoid unnecessary use of sub-budgets requests should be limited to instances when the new funding is: • Associated with a project originally subject to the EL I salary cap • The new funds are subject to EL II salary cap • PI/department intends to pay individual(s) exceeding the EL II salary cap

14. Implementation of New DHHS Salary CapSNAP Awards • Sub-budget NOT requested: • OSP • For established budgets, Grant Flag 08 should already show ‘1’ because these budgets were coded as part of MAA’s original batch process. • If exception and the new funds are subject to the former EL I cap, OSP will reflect “Subject to the EL I salary cap” in the Comments section of the Funding Action (FA) form. • GCA • Change Grant Flag 08 to reflect a value of ‘2’ as a part of the process when adding new funds to the existing budget • MAA – No action required • PI/Department – Responsible for managing salary cap cost sharing within budget which now combines Executive Level I and Executive Level II salaries (note, FEC reports covering the period of change will reflect salary cap cost sharing based on Executive Level II for the entire FEC period regardless of the effective date of the new funding).

15. Implementation of New DHHS Salary CapSNAP Awards (Cont’d) • Sub-budget requested: • OSP • For established budgets, Grant Flag 08 should already show ‘1’ because these budgets were coded as part of MAA’s original batch process. • Continuation funding will default to EL II via the MAA upload process as noted in I.c. above. • If exception and new funds subject to the former EL I cap, OSP will reflect “Subject to the EL I salary cap” in the Comments section of the Funding Action (FA) form.

16. Implementation of New DHHS Salary CapSNAP Awards (Cont’d) • Sub-budget requested (cont’d): • GCA • Set up a new sub-budget for the new dollars only.  • Remaining balance for prior period will remain in the prior period budget and be expended from that budget. • No action required for Grant Flag 08 as this will be populated through the MAA process. • MAA - Populate Grant Flag 08 with the value of ‘2’ as part of the monthly batch process described earlier. • PI/Department - One month after budget has been established, verify Grant Flag 08 is accurately coded. If code is absent or incorrect, email efecs@uw.edu to request action. Do not use GrantTracker for this.

17. Implementation of New DHHS Salary CapSupplements (Issue Date on or after 12/23/2011) • Supplements awarded for a variety of purposes • Many may not involve payroll costs for above-cap personnel • Difficult for OSP to consistently determine whether supplement funds would benefit from a separate sub-budget to manage the new salary cap. • To avoid unnecessary use of sub-budgets where no above-cap payroll expenditures are involved • Departments should determine whether a sub-budget is appropriate, and communicate with OSP and GCA as needed. • Generally be limited to instances when the supplement • Is associated with a budget subject to the EL I salary cap • Supplement subject to EL II salary cap • PI/department intends to use supplemental funds to pay individual exceeding the EL II salary cap.

18. Implementation of New DHHS Salary CapSupplements (cont’d) • PI/Department • Determine if sub-budget is needed. • If needed notify OSP prior to FA is being processed. Specify that sub-budget is subject to EL II salary cap in communications with OSP. • If it is determined a sub-budget is needed after the FA has been processed complete a TRANSPASU Form and submit it to GCA. Specify to GCA that sub-budget is subject to EL II salary cap.

19. Implementation of New DHHS Salary CapSupplements (cont’d) • OSP • If department indicates sub-budget needed to address salary issues, note in Comments section at time FA is being processed for the supplemental funding and include “Subject to EL II salary cap” in the Comments Section of the FA. • If the department does not request sub-budget, the supplement should be treated in the usual manner. • GCA • Set up sub-budget if FA indicates it is required. • Set up sub-budget if department submits TRANSPASU Form. • MAA - Populate Grant Flag 08 with the value of ‘2’ in the same manner as described above.

20. Implementation of New DHHS Salary Cap Carry Forwards • If a carry forward of unobligated balances from a budget period subject to EL I into a budget period subject to EL II, and the department intends to use those funds to pay an individual whose salary exceeds the EL II salary cap, then • A sub-budget for the carryover funds must be established • If department does not notify GCA for need for a sub-budget, GCA will carry forward funds into new budget and all funds will be subject to the EL II cap. • To avoid unnecessary use of sub-budgets GCAwill NOT automatically set up sub-budgets.  • Departments responsible for determining if sub-budget is appropriate, i.e., when above salary cap payroll expenditures are anticipated to be funded with carry forward funds.  • When they are it is the department’s responsibility to communicate that to OSP and/or GCA and a sub-budget will be setup.

21. Implementation of New DHHS Salary CapCarry Forwards (cont’d) • PI/Department • Submit request to OSP if sponsor approval is required to carry forward funds. • When notified of approval contact OSP to advise sub-budget is needed at the time of the PAC setup to maintain EL I status for the carry forward funds. • If sponsor approval is not required and it is determined a sub-budget is needed, i.e., intent to use funds to pay an individual whose salary exceeds EL II, complete a TRANSPASU Form and submit it to GCA. Specify to GCA that sub-budget is subject to EL I salary cap.

22. Implementation of New DHHS Salary CapCarry Forwards (cont’d) • OSP • Request sponsor approval for carry forward.  • If carry forward approved, initiate PAC and note on the PAC “subject to EL I salary cap”. • GCA • Receive PAC from OSP and set up sub-budget, or • Receive TRANSPASU Form from department and set up sub-budget. • Assign Grant Flag 08 a value of ‘1’ • MAA Populate Grant Flag 08 with the value of ‘2’ through monthly batch process

23. Implementation of New DHHS Salary CapMulti-year Awards • Multi-year awards • If the initial issue date is prior to December 23, 2011, then Executive Level I cap is applicable to all years of the multi-year award. • If the initial issue date is on or after December 23rd, then Executive Level II salary cap will apply to all years of the multi-year award.

24. Implementation of New DHHS Salary CapNo Cost Extension • If there is a no cost extension • The original award terms and conditions remain unchanged for the period of extension • Award subject to the EL I salary cap for the original grant period will remain at EL I salary cap level for period of extension • No special action is required. • PI/Department • No formal action required • Recommended PI/Department verify Grant Flag 08 set at correct value, i.e., set at the value of ‘1’ if the award was funded under EL I salary cap rules, or the value of ‘2’ if the award was funded under EL II salary cap rules.