University of California

Office of the President


Senior Vice President—

Business and Finance


Operating Requirement


Research Administration Office

No. 90-06, Supplement 6

February 28, 2003



Subject:  National Institutes of Health Salary Limitation on Grants, Cooperative Agreements, and Contracts under the Current Continuing Resolution 


The National Institutes of Health (NIH) has published the new salary limitation for its grants, cooperative agreements, and contracts funded under its current continuing resolution.  (Copy attached.)


The fiscal year 2002 Department of Health and Human Services (DHHS) Appropriation Act restricted the amount of direct salary of an individual under an NIH agreement to that of the federal Executive Level I pay scale.  NIH funding under its continuing resolution for FY 2003 is still covered by the terms of its FY 2002 Appropriation Act.


For calendar year January 1, 2002 to December 31, 2002, the federal Executive Level I annual salary rate was $166,700.  For calendar year January 1, 2003 to December 31, 2003, the new federal Executive Level I level of $171,900 per year is effective as of January 1, 2003.


Office of the President Research Administration Office guidance on how to implement and administer the NIH salary cap is set forth in Operating Guidance Memo 90-06, Supplement 4, dated February 17, 2000, and Supplement 5, dated January 22, 2001.


Campuses should be aware that, in their audits of the University’s Cost Accounting Standards Board Disclosure Statements, the DHHS Office of the Inspector General has found instances of non-compliance with the NIH salary limitation.  Subsequent internal reviews have also identified instances of non-compliance, requiring refunds to the federal government.  DHHS has indicated that follow-up reviews of this issue are likely in the near future.  It is important that campuses follow policy set forth in the above referenced memos to properly implement this salary cap.



Refer:  Samuela A. Evans   

Subject:  07

(510) 987-9849   

Organization:  F-375    
    David F. Mears
    Director, Research Administration





See Salary Limitation Table below.

Cc:  Academic Personnel Directors

       Accounting Officers


       Extramural Funds Managers

       Federal Audit Coordinators




RELEASE DATE: February 10, 2003 NOTICE: NOT-OD-03-027

National Institutes of Health (NIH) The Department of Health and Human Services (HHS) Appropriation Act for FY 2002, Public Law 107-116, restricts the amount of direct salary of an individual under an NIH grant or cooperative agreement (hereafter referred to as a grant) or applicable contract to Executive Level I of the Federal Executive Pay scale. HHS continues to operate on a continuing resolution (CR) through February 20, 2003. The CR applies the terms of the FY 2002 appropriations into the period covered by the CR. The Executive Level I annual salary rate is $166,700 for the period January 1 through December 31, 2002. Effective January 1, 2003, the Executive Level I salary level increased to $171,900. When the final FY 2003 Appropriation is enacted, we will publish our annual NIH Guide Notice on the legislative mandates included therein with additional information on the salary cap.