The Council on Governmental Relations (COGR) and the Association of Independent Research Institutes (AIRI), collectively representing over 300 research institutions, formally express concerns regarding a potential policy change that would extend the Executive Level II federal salary limitation to indirect salaries funded by institutions themselves. The organizations argue that, for the past 30 years, the salary cap has only applied to direct federal salary charges, as established through statutory language and agency policy, notably reiterated in NIH Notice NOT-OD-24-057 and annual HHS appropriations bills. They contend that expanding the limitation to indirect salaries would represent a significant and unwarranted shift in policy, carrying potentially damaging financial implications for research institutions, particularly nonprofits and emerging organizations that rely heavily on Facilities and Administrative (F&A) cost recovery.
The letter also criticizes the lack of transparency and stakeholder engagement in the policy consideration process, highlighting that the proposed change stems from an HHS Office of Inspector General (OIG) report with which both COGR and Cost Allocation Services (CAS) have disagreed. The authors underscore that any such substantive regulatory change should be subject to public notice and comment. Potential unintended consequences cited include increased administrative burden, the necessity for multiple F&A cost rates for different funding agencies, delays in establishing rates, and, most critically, the endangerment of financial stability for smaller institutions, potentially leading to reductions in research activity or institutional closures. The organizations request urgent intervention and a meeting with relevant federal officials to address these concerns collaboratively.
