eFECS Application of New
Salary Cap
MRAM - March 13, 2014
Michael Anthony
Management Accounting & Analysis
University of Washington
eFECS Application of New Salary Cap
 Effective January 12, 2014, the Executive Level II NIH
salary cap changed to $181,500 annually
 Annual increase of $1,800 from the previous cap of
$179,700
 Change permits more salary to be charged directly to
grants thereby reducing the amount of salary cap
cost sharing required
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 Official notification for change found in NIH Notice of
Salary Limitations on Grants, Cooperative Agreements
and Contracts Notice Number: Not-OD-14-052.
 Notice states this applies to “FY 2014 Awards Issued”
 Further language clarifies ability to “re-budget/charge
up to the new salary cap based on the fiscal year of
the award and the time the salary expense is incurred
providing the budgets have funds available to cover
the increased salary charges.
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 The Notice states that awards issued in years that
were restricted to Executive Level II, including
competing awards already issued in FY2014, if
adequate funds are available and if the salary cap
increase is consistent with the institutional base
salary, grantees may re-budget to accommodate the
current Executive Level II salary level
 However, no additional funds will be provided to
these grant awards and the total estimated cost of
the contract will not be modified.”
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 Maximum impact on a grant is $1,800 per year ($181,500
minus $179,700) which equates to $150 per pay period.
 Considering this, the change will be made effective in
eFECS January 1, 2014 rather than January 12, 2014.
 The impact by starting January 1, 2014 is slightly less than
one pay period.
 Decision will be left to departments to adjust the salary cap
cost sharing on the FEC should they wish to do so given
the minimal impact on the majority of grants.
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 When one factors in the percent effort devoted to
most grants by faculty exceeding the salary cap, the
impact may be incidental.
 For example, a faculty member with an IBS at or
above the new salary cap providing 10% effort on a
grant will impact the salary cap cost sharing and
salary charged to the grant by approximately $15 for
this 12 day period.
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 To assist academic departments in this transition (i.e.,
9/16/2013 – 3/15/2014 FEC cycle) eFECS will average the
two salary caps in effect during the autumn/winter
FEC cycle.
 This will eliminate the need for departments to
correct the salary cap cost sharing unless
 The grant does not cover the full FEC cycle so the salary
caps are not equally weighted and/or
 Decision is made not to increase the salary charges to
the grant.
University of Washington
Management Accounting & Analysis
eFECS Application of New Salary Cap
 In those cases adjustments will need to be made to
the salary cap cost sharing amounts calculated by
eFECS.
 Detailed guidance for making adjustments to the
salary cap cost sharing amounts on the FEC will be
provided closer to the time the FEC reports are to be
released.
University of Washington
Management Accounting & Analysis
Example FEC Adjustment When New
Salary Cap Not Desired
Assumes $200,000 annual salary & 20% grant effort
Adjustment Required When Previous Salary Cap is Retained
Desired FEC Calculation
Effort
Salary
Sal Cap Amount
Dir Chg Cst Shr
Annual
20% 200,000 179,700
40,000 35,940
4,060
6 Months
20% 100,000 89,850
20,000 17,970
2,030
18%
2%
Actual eFECS Calculation
Salary
ELI Sal Sal as % % Dist from Min C/S
from FEC
Cap
of Cap
FEC
Req
C/S Adj
From FEC
17,970 90,750
19.8%
18.0%
1.8%
0.2%
University of Washington
Management Accounting & Analysis
Recharge Center Updates
 Capital lease payments must be charged to reserve
budgets, not operating budgets. Rates should include
depreciation of these assets not the lease payment.
 New accrual section on quarterly reports
 Variance analysis will be required annually
 MAA will begin sending out reminder emails that
recharge rate proposals are due
 Other emails, e.g., escalation emails, will be
forthcoming
University of Washington
Management Accounting & Analysis