NIH Indirect Cost Rate Update (2/10/25)
Memo sent to RAC 2/10/25
Dear Colleagues,
NIH issued NOT-OD-25-068 Friday evening (2/7/25). This notice appears to reduce the F&A rate that NIH is willing to pay to 15%, effective today (2/10/25), and applies to both new and existing NIH awards. This guidance may change frequently in the coming days and weeks as we learn more. We expect a hearing to be scheduled very soon.
As you have no doubt seen, the Maryland Attorney General has filed a lawsuit on our behalf to enjoin enforcement of this notice.
While this process plays out, UMB is taking the following actions:
Proposal submissions. UMB has not agreed to waive F&A on NIH awards. Until such time as we receive further guidance from university leadership, all proposals must be submitted in accordance with UMB’s appropriate negotiated (full) F&A rate. Proposals may NOT be submitted at 15%. (Non-standard proposals such as fellowship grants can continue to be submitted in accordance with previously existing guidance). In the budget justification please add a statement that says: “UMB will comply with applicable law and guidance governing indirect cost rates.”
New awards. SPA and SPAC have not been authorized to accept NIH awards at 15%. If we receive new awards from NIH that reference the 15% F&A rate, such awards will be placed on hold until such time as this issue is resolved. The same is true of any NIH flow-through awards we receive from other institutions that reference the 15% rate.
Expenditures on new awards. PIs are not authorized to spend against any new award that references the 15% rate. That means no pre-award costs or temporary accounts. Please also note that PIs cannot spend against some other account while waiting for this issue to be resolved. “Parking” costs on one grant while waiting for another grant to come in is a form of fraud.
Rebudgeting existing awards. Please do not re-budget costs from indirect to direct in anticipation of an F&A rate reduction. Burdening will continue at our negotiated (full) F&A rate until further notice.
No-cost extensions. As many of you have noted, the automatic NCE link in eRA Commons has been deactivated. We have not yet received any official explanation from NIH regarding why this is the case. But there is a very real possibility that NIH will no longer allow us to take a one-time automatic no-cost extension at the end of our period of performance. PIs should not assume that no-cost extension requests will be approved.
Reimbursement. SPAC has not been authorized to draw down funds from NIH at the 15% rate. This may delay reimbursement of NIH grants until this issue is resolved.
Sincerely,
Jill A. Frankenfield
Associate Vice President, Sponsored Programs Administration