Hi all,
I'm not sure why NIH made a big deal with the notice about discontinuing funding of the inflationary increase; it seems to me that for over 5 years now they have routinely cut the funding of pretty much every award we have received--from the outset (before the first NoA), then each year thereafter.  We are not a University, but a private, non-profit research institute, so maybe it's different for us...we haven't seen an inflationary increase funded a long time.  Quite the opposite...

That having been said, if NIH wanted grantees to flat-line salaries (for either the salary cap or inflationary escalation) it might be a good idea for them to change their application instructions which recommend using "actual" salaries and following the applicant/grantee's own "institutional policy" for estimating costs in the "out years."  We have received inconsistent instructions from different agencies and from other clients who subcontract to us about how to handle this budgeting issue.  This makes it difficult to establish procedure that will be universally accepted and implemented throughout our institution.

Our Contracts & Grants Department, with concurrence from senior management, has advised those who prepare grant application budgets to continue using actual salaries and nominal (3%) escalations, but to also include various "disclaimers" in the budget narrative that assure compliance with NIH policies.  We understand by doing this (in accordance with NIH instructions, mind you) we may raise a red flag and invite budget cuts.  The fact is, NIH is going to reduce funding anyway, just as they have in the past.

My main concern is that, by implementing these restrictive budgeting policies, NIH is just prompting some folks to find new and creative ways to 'pad' their (otherwise realistic) budgets in anticipation of these cuts.  That makes my job, as the person who reviews budgets for accuracy, allocability, reasonableness, etc., that much more challenging.

Thanks for the opportunity to rant.

Diane McKnight
Director of Contracts & Grants
PIRE
301-755-2721
xxxxxx@pire.org

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Jackie Frederick
Sent: Tuesday, May 29, 2012 11:01 AM
To: xxxxxx@lists.healthresearch.org
Subject: [RESADM-L] NIH Inflationary Increase

Based on the statement in the NIH Fiscal Policy for Grant Awards - FY 2012, Notice Number NOT-OD-12-036 that reads "Inflationary increases for future year commitments will be discontinued for all competing and non-competing research grant awards issued in FY 2012," can you tell me if your institution is flat-lining the salaries for all years of the award based on the year one salary for each individual or how you are handling this requirement?

Thank you

--
Jackie Frederick
Director, PreAward
Research and Sponsored Programs
Wright State University
201J University Hall
Dayton, OH  45435-0001
937-775-2664
xxxxxx@wright.edu

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