Section C - Direct Costs

NIH Salary Cap (Effective Jan 1, 2024)

$221,900

For active awards, including awards that have been issued in FY 2024 (continuation and new) that were restricted to Executive Level II, if adequate funds are available, and if the salary cap increase is consistent with the institutional base salary, recipients may rebudget funds to accommodate the current Executive Level II salary level.

https://grants.nih.gov/grants/guide/notice-files/NOT-OD-24-057.html#:~:text=the%20salary%20cap%20for%20grant,January%201%2C%202024%2C%20is%20%24221%2C900

NIH Salary Cap - Definition

Limits the monthly pay rate that can be charged to an NIH grant for individuals working on grants, cooperative agreement awards, and extramural research and development contracts

PCORI Salary Cap

$200,000

NSF Salary Cap

As a general policy, NSF limits the salary compensation requested in the proposal budget for senior personnel to no more than two months of their regular salary in any one year. This limit includes salary compensation received from all NSF-funded grants.

If anticipated, compensation in excess of two months must be disclosed in the proposal budget and well justified in the budget justification. If more than two months of salary support is approved by NSF, it must be included on the award budget.

Direct Costs

Costs that can be specifically attributed to a particular sponsored project, a particular university-funded research project, an instructional activity (including departmental research), any other institutional activity, or that can be directly assigned to such activities relatively easily and with a high degree of accuracy, without exceptions or "unless" statements.

Effort - Definition

The time spent on an activity by an individual, expressed as a percentage of the individual's total institutional activities, such as work on sponsored programs, teaching and instruction, service, or other duties.

Effort cannot exceed one hundred percent (100%).

100% Effort

A 40 hour/week IS NOT the definition of 100% effort from which percentage of research effort is certified.

Under federal regulations on effort reporting, 100% effort is an employee’s total hours actually spent on work within the scope of his or her employment regardless of how many or how few hours an employee works and regardless of the percent FTE listed on the appointment. Effort certification must reflect actual work performed and cannot be budget driven.

https://research.mnsu.edu/globalassets/research/rasp/forms/time-and-effort-5-points.pdf

De Minimis Effort

Infrequent, irregular activity that would normally be considered “so small” that it cannot (and should not) be accounted for.

Activities can be considered de minimis in amount when, in the aggregate, they represent less than one percent of the individual’s total effort.

Fringe Benefits - Definition

Additional compensation given to employees in addition to their salary or hourly wage

Fringe Benefit Rate - Definition

The percent of an employee’s wages relative to the fringe benefits they receive

Fringe Benefits - Federal Rates

Negotiated with the institution’s or organization’s cognizant agency, which is typically the agency that provides the most direct federal funding (often the Department of Health and Human Services for medical institutions)

Applied to salaries charged to Federal awards

Fringe Benefits - Component Examples

• Health Insurance

• Retirement

• FICA/Medicare

• Tuition Remission

• Workman's Compensation

• Unemployment Insurance

• Childcare reimbursement

Fringe Benefits - Calculation Base

Pooled - Pooled cost of employee benefits divided by the total salaries in each employee class

Actual - An individual employee's total cost of all fringe benefits and payroll taxes divided by the annual salary

Modified Total Direct Costs (MTDC) - Inclusions

• All direct salaries

• Applicable fringe benefits

• Materials and supplies

• Services

• Travel

• Up to the first $25,000 of each subaward

Modified Total Direct Costs (MTDC) - Exclusions

• Equipment

• Capital expenditures

• Charges for patient care

• Rental costs

• Tuition

• Scholarships and fellowships

• Participant support costs

• Portion of each subaward in excess of $25,000

Travel Costs

Must benefit the proposed project and usually include travel associated with fieldwork and attendance at scientific meetings for the purpose of presenting project findings and/or results.

Domestic Travel

Unless otherwise stated by the sponsor, domestic travel is considered to be travel among any of the 50 United States, its possessions and territories, and Canada.

*The NSF includes Canada as a foreign country and therefore considers foreign travel

Foreign Travel

Travel outside of the 50 United States, its possessions and territories, and Canada.

*The NSF includes Canada as a foreign country and therefore considers foreign travel

Equipment - Definition

Tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost of $5,000 and greater

Equipment - Criteria

• Must be project specific

• Cost of $5,000 or more per unit

• Freestanding, complete in itself

• Does not become a component part of another piece of equipment when put into use

• Life expectancy of >1 year

• Non-expendable, tangible

Fabricated Equipment - Definition

Equipment that is built or assembled in its original form from individual parts by sponsored project personnel, an internal shop, or an external shop

Fabricated Equipment - Criteria & Features

• Aggregate cost of $5,000 or more

• Service life of >1 year

• Freestanding, complete in itself

• Does not become a component part of another piece of equipment when put into use

• Individual component costs are budgeted as equipment and excluded from the modified total direct costs (MTDC)

• Does not include routine maintenance or repair costs

Other Direct Costs - Definition

Direct costs that are not appropriate to include in any of the defined categories listed in the sponsor’s budget form

Other Direct Costs - Examples

• Advertising

• Animal per diem costs

• Books

• Car or property rental

• Computer services

• Consultants

• Equipment maintenance or warranties

• Freight

• Insurance

• Memberships and subscriptions

• Office Supplies

• Patient care costs

• Postage

• Printing and publication

• Subject participation fees or honoraria

• Subawards

• Telephone and other communication expenses

Participant Support Costs - NSF

Direct costs for items such as stipends or subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with meetings, conferences, symposia or training projects.

Subaward - Definition

A portion of an organization’s sponsored project is passed through to another entity in order to complete a portion of the sponsored project's scope of work.

It does not include payments to a contractor or payments to an individual that is a beneficiary of a program.

Subawards differ from procurement contracts used to acquire goods or services from vendors.

Subaward - SOW

A subaward must include a clearly defined, intellectually significant SOW to be performed by the subrecipient's personnel, using its own facilities and resources.

The subrecipient takes full responsibility for adhering to the terms and conditions of the subaward including those flowed down from the sponsor, and assumes creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling the subrecipient's SOW within the subrecipient's approved budget.

Subaward - Characteristics

The subrecipient:

• has responsibility for programmatic decision making

• contributes to the scholarly/scientific conduct of the project as described in the statement of work for the prime award

• uses the funding to carry out a program for a public purpose specified in the authorizing statute, as compared to providing goods or services for the benefit of the pass-through entity

• requires considerable discretionary judgment and the unique expertise of the subrecipient in the performance of the work

• investigator would be considered as a co-author of publications resulting from the work performed under the prime award

• performs work that involves human subjects or animal studies

Consultants or Independent Contractors - Definition

Individuals who will provide advice to the project or perform specific, defined activities that do not involve design or execution of the project

Consulting services and activities support the project but do not directly move the project toward its goals.

Consultants - Characteristics

• Neither a vendor nor a subawardee

• Usually an individual

• Provides own tools to complete task

• Specialized expertise

• Cost should be comparable to prior years

• On NIH applications, unpaid consultants may be listed as “Other Significant Contributors”

• Not subject to compliance requirements

• PI is typically responsible for monitoring the progress of the consultant