As stated in our interim Financial Management Plan, NIAID will fund competing and noncompeting grants at 90 percent of approved and committed funding levels, respectively. NIAID will reconsider final funding levels for awards following the enactment of fiscal year (FY) 2024 appropriations, which may result in upward adjustments for some awards.
NIAID has not reduced competing or noncompeting awards in some time, but we do so now in light of budget uncertainty. Here, we’ll run through the practical implications using a questions and answers format.
What is a competing grant? What is a noncompeting grant?
A competing grant represents a new award, for which the application was evaluated in competition against other applications before being funded with current fiscal year dollars. A noncompeting grant is an ongoing award, for which NIAID assesses scientific progress and then provides funding for the next budget period using current fiscal year dollars.
As an example, we consider an R01 with a 5-year project period to be a competing award in its first year of funding and a noncompeting award in years 2 through 5. Were that grant to be successfully renewed, we would again consider it competing for the year of initial award of the renewal and then noncompeting in subsequent years.
So, the funding reduction applies to all awards?
No, there are exceptions within those two broad categories of competing and noncompeting. The following types of awards will not be impacted by the 10 percent reduction:
- Small business innovation research and small business technology transfer grants, e.g., R41, R43, U44
- Training (T), fellowship (F), and career development (K) awards, e.g., T32, F31, K22, K99/R00
- Research supplements, e.g., diversity, re-entry, continuity, primary caregiver, childcare, business commercialization
- Awards funded with non-direct appropriations (e.g., emergency supplemental COVID appropriations)
Funds available in the solicited portfolio for each of NIAID’s extramural program divisions will be reduced by 30 percent overall. This may involve a reduction in the number of awards or a reduction in the award amounts for any notices of funding opportunities (NOFOs) with set-aside funding, e.g., a request for applications.
Multiyear funded awards will be funded at 90 percent of the approved funding level of the FY 2024 award (i.e., reducing all years of the award).
The two most common types of awards, investigator-initiated R01 and R21 grants, are subject to the 10 percent reduction, whether competing or noncompeting.
When is the reduction applied?
For competing awards, we will calculate and apply the reduction during the preaward process before issuing the award. For noncompeting awards, we will calculate and apply the reduction before issuing the next budget period, i.e., after assessing the annual progress report.
Note that NIAID policy caps renewal budgets for R01 grants at 20 percent over the direct costs of the last noncompeting award, not including equipment or alterations and renovations costs. For a competing renewal grant, the 10 percent reduction is calculated after we apply the renewal budget cap.
How is the reduction applied?
For competing awards, we calculate the “approved” funding level then reduce the direct cost (and associated indirect costs) for the first budget segment by 10 percent. The approved funding level is an application’s budget request less any reductions made at the recommendation of peer reviewers, modifications due to overlap, or programmatic reductions. We refer to the actual funding level, following a 10 percent reduction, as the “current” funding level.
For noncompeting awards, we check the “committed” funding level for the next budget period as listed in the Notice of Award, and then reduce the direct costs (and associated indirect costs) for that budget period by 10 percent.
NIAID will update each Notice of Award to reflect the current funding level.
Finally, NIAID will reset the start date for most competing awards that are reduced by 10 percent such that the first budget period end date will be 1 month earlier. Thus, future anniversary dates will be 1 month earlier as well. This redistribution of grant start dates will better allow NIAID to address unanticipated, future public health needs.
Will the budgeted amounts for the outyears of my award be kept the same?
Yes. At this time, we are reducing only the FY 2024 budget period.
For multiyear funded awards, keep in mind, the funding reduction will be to all years of the award. For example, a research enhancement (R15) award with an approved funding level of $300,000 direct costs in FY 2024 to span a 3-year project period will instead receive $270,000 for the project period.
Can I request an administrative supplement to make up the difference?
No, administrative supplements are meant to support unanticipated increases in approved direct costs (refer to Administrative Supplements to Grants and Cooperative Agreements SOP). NIAID applying a temporary reduction to its assistance mechanisms does not qualify, as the awards’ approved direct costs haven’t increased.
Remember, all grant funding is subject to future year appropriations.
For my award, do I need NIAID’s prior approval to rebudget funds in response to the funding reduction?
It depends on your specific situation. Refer to our Prior Approvals for Post Award Grant Actions SOP. Those actions that necessitate prior approval (e.g., change of key personnel, a reduction of a principal investigator’s level of effort by 25 percent or more) still require prior approval.
We expect that most recipients will not adjust their research projects such that NIAID would need to approve the changes before they are made.
Should I anticipate that my grant’s budget period will be fully funded before the end of the fiscal year?
No, for two separate reasons. First, we do not know what NIAID’s final appropriations and budget for the fiscal year will be, so we cannot forecast that the Institute will be able to provide upward adjustments to awards. Second, any restoration of funds would be based on the final NIAID fiscal year budget—NIAID may only be able to restore, say, 6 percent of approved and committed funding levels, rather than the full 10 percent.
If the Institute is able to restore funds, we will revise each grant’s Notice of Award in accordance with NIAID’s final Financial Management Plan for FY 2024.
I am preparing an application now. Should I pad the budget to counteract this reduction?
No! Your budget request must reflect the actual needs of your proposed project.
For a competing grant application, could I include escalation in my budget request?
NIAID does not allow for escalatory costs. Applicants must request costs, including salaries, without increases due to anticipated inflation.
Any increase in budget level from year to year must be well justified by your research strategy, e.g., a phase of recruiting human subjects that leads to a phase of collecting tissue samples, conducting lab work, and analyzing results.
Are all of NIH’s institutes and centers taking this same action?
If your grant is not administered by NIAID, it may or may not be subject to a similar reduction.
Why is NIAID taking this action now?
Unfortunately, given our current budgetary outlook, this is a prudent action to take. We initially set conservative interim paylines at the start of each fiscal year for similar reasons.
We hope to maintain success rates for competing applications in FY 2024, but to that end and without knowledge of our ultimate appropriation, we need to make sensible reductions—ideally with minimal disruption and equitably applied—but reductions all the same.