Understanding the Layers of Federal Regulations: A Case Study
Posted in: Post-Award, Pre-Award, Sponsored Programs Central
Read the terms and conditions of your award carefully. These are words that every researcher has heard before from their colleagues in the Office of Sponsored Programs. The terms and conditions found in federal and non-federal award documents typically outline necessary financial and programmatic reporting requirements. They can also provide guidelines for navigating common issues during the lifetime of the award, like how to request a no-cost extension (additional time to complete the project at no additional cost to the sponsor). However, federal terms and conditions are not limited to what is found in the fine print of an award document. There are several levels of regulations that determine award procedures and practices. Abiding by these regulations begins long before award documents arrive – at the proposal stage!
Uniform Guidance is a federal code of broad regulations that all grantors and grantees must follow. It defines basic administrative requirements, cost principles, and audit requirements for federal awards. Uniform Guidance is the framework that federal agencies like NSF use to define their agency-specific regulations. These rules typically inform what actions require prior approval (special permission from the sponsor) and how to request it. Beyond this, individual funding opportunities at these agencies may contain their own program specifications relating to individual program matters, such as the amount of funds allowed to be charged for participant support or travel. If there is a subaward on the project, the subawardees may have to comply with subaward terms and conditions imposed by the pass-through entity, in addition to all the federal and sponsor regulations that “flow down.” At the grantee level, institutional policies dictate how grant activities are implemented or charged on a day-to-day basis. Finally, federal, state, and local laws serve as the foundation for Uniform Guidance and minimize risk to individuals and communities.
Agency-specific regulations and program specifications can be found in grant documents in plain text or be incorporated by reference. Many federal agencies post their agency-specific regulations on their website, like the National Science Foundation does with their NSF Proposal & Award Policies & Procedures Guide (PAPPG). However, it is also critical to read through the funding opportunity announcement, since these can contain important information and restrictions on the project as well. Agency regulations and program specifications should not conflict with Uniform Guidance, but they may impose narrower requirements that need to be followed. With so many levels of regulations, the most specific regulation takes precedence.
To explain how these regulations can overlap, let’s take a hypothetical case study:
Dr. Ben Windlass is a biology professor at Montclair who wants to apply for an NSF MRI (Major Research Instrumentation Program) grant to purchase equipment. He plans to buy a DNA sequencer for $50,000, and he will budget an additional $5,000 for a technician to come in and perform routine washes and calibrations for the equipment every month for the first year. He is a co-Principal Investigator on another NSF grant where he is contributing one month on researching migration patterns of the invasive spotted lanternfly. He asks the Pre-Award Specialist in OSP if he can budget for one additional month of effort on the NSF MRI grant in order to test out the DNA sequencer and run some preliminary analysis on specimens already in his lab to form a basis for his future research. Can he do this?
There are several layers of terms and conditions to examine before making a final determination, and several questions that we have to ask. Can Principal Investigators charge salary to a grant? If so, how much? Does this particular agency have any limits on who can charge effort to grants, how much, and why? How about the program, or the institution? Finally, if it is allowable, is there money in the budget to support this?
Please see the table below for the full analysis.
| Term Framework | Guidance | Interpretation |
| Uniform Guidance § 200.430. Compensation-personal services. | “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part and that the total compensation for individual employees…[is] reasonable for the services rendered and conforms to the established written policy of the recipient…not exceeding 100 percent of compensated activities….” | A PI/PD’s salary can be charged to a grant, so long as it follows the other principles of allowability in Uniform Guidance and any subsequent award terms (reasonable, necessary, allocable). They cannot be paid for more than 100% of their time. |
| NSF Proposal & Award Policies & Procedures Guide (PAPPG) (NSF 24-1), Section 2.f.i.a. Budget and Budget Justification | “As a general policy, NSF limits the salary compensation requested in the proposal budget for senior personnel to no more than two months of their regular salary in any one year….If anticipated, any compensation for such personnel in excess of two months must be disclosed in the proposal budget, justified in the budget justification, and must be specifically approved by NSF in the award notice budget.” | PI/PDs and other senior personnel cannot charge more than two months of their regular salary to any NSF grant in a given year, unless specifically requested in the proposal and approved by NSF. |
| NSF Program Announcement 23-519: Major Research Instrumentation (MRI) Program | “Salary support, including fringe benefits and indirect costs, is considered an eligible cost only for personnel directly involved in maintaining the instrument or providing appropriate technical support to operate the instrument.” | Because this is an equipment grant, a PI/PD cannot charge any of their salary to the grant unless it is to provide maintenance or necessary training on using the equipment. A PI/PD cannot charge the grant for their time using the equipment for research purposes. |
On the broadest level, Uniform Guidance does allow investigators to charge salary to their grants for work performed. More narrowly, the agency-specific regulations of the National Science Foundation limit senior personnel from requesting over two months of effort on all NSF grants combined (with few exceptions requiring detailed justification). Dr. Windlass has committed one month on another NSF grant, so requesting one additional month here would so far be allowable, since that would equate to two months of the year.
However, this particular NSF MRI program listing puts yet another restriction on budgeting for salary. For this funding opportunity, the only allowable salary and fringe costs are for individuals providing maintenance or training for the equipment, not doing research. Because Dr. Windlass would be using his effort for research, this is considered unallowable as per the program specifications, so he cannot be paid from the grant for this purpose. Although it does not conflict with the broader federal and agency regulations and he has money in his budget for it, the narrower regulation takes precedence. The technician’s salary is still supported, as per the funding opportunity guidelines.
It can be complicated to pinpoint what is considered allowable for federal awards because there are so many layers of regulations. These directives intersect with federal, state, and local laws, as well as institutional policies, to prevent research misconduct, ensure legal compliance, and help the institution maintain a strong reputation as grantee. Oversights early in the process can lead to additional complications later on, for Principal Investigators and for the central offices. If these terms are not followed, grantees may face increased scrutiny from grant officials, termination of the award, or an institutional label of “high-risk grantee,” leading to more difficulty securing funding or collaborations. The pre-award specialists and post-award officers in the Office of Sponsored Programs have the administrative and regulatory expertise to navigate the many layers of administrative policy involved in federal funding work to ensure that all grants remain in compliance–and to allow researchers the time and freedom to focus on the heart of their projects.