NEW BUDGET REQUIREMENTS HIVCS CAG 1/12/11

New Budget Requirements Annual budgets are required for all contracts including performance-based (PB) contracts. Contracts that request “Indirect Costs” on budgets must have a US Department of Health and Human Services (DHHS)- approved Negotiated Indirect Cost Rate Agreement (NICRA).

Reasons for new Budget Requirements Recent guidance from the Health Resources and Services Administration (HRSA) –Since the guidance from HRSA comes from the US Department of Health and Human Services (DHHS), which oversees both (Prevention) Center of Disease Control (CDC) and Ryan White (HRSA) funding, these requirements will apply to both Ryan White and CDC- funded HIV Prevention contracts.

DHHS-Approved NICRA – What has Changed? Indirect Costs may only be included in the budget if the agency has a current DHHS-approved NICRA.

DHHS Approved NICRA – How Does This Change Affect Contractors? Contractors who do not currently have a DHHS- approved NICRA must reallocate the funds previously under Indirect Cost to individual direct administrative cost budget line items.

DHHS Approved NICRA – How Does This Change Affect Contractors? In order to budget indirect costs, contractors without a DHHS- approved NICRA will have to apply for one. Contractors who successfully apply for a NICRA will be able to submit contract modifications retroactively to the beginning of the current fiscal year, allowing them to modify budgets and to reallocate funds to indirect cost (cost-based contracts). Modifications for performance-based contracts are not required, however, HIVCS will need a copy of the DHHS-approved NICRA in order to “allow” charges to Indirect Cost shown on the agency General Ledger during the Mid-year Cost Report review. For contractors who do not wish to obtain a DHHS-approved NICRA, the shift to direct administrative budget lines will be a permanent change.

Annual Updated Budgets – What has Changed? All contracts, including performance-based contracts, will be required to submit budgets annually.

Annual Updated Budgets – How Does This Change Affect Contractors? This is not a change for Ryan White or Prevention cost- based contracts since HIVCS already requires updated budgets from cost-based contracts annually. Affects Ryan White and Prevention performance-based contracts. In the past, Ryan White and Prevention performance-based contractors were not required to submit itemized budgets to HIVCS during the renewal process. Some contractors may have additional budgets changes because they are also affected by the new NICRA guidelines.

Annual Updated Budgets – How Does This Change Affect Contractors? For performance-based contracts, once the budget is approved, HIVCS will not be monitoring your contract adherence to your budget. To avoid delays in contract executions, HIVCS will implement a staggered approach for the budget submissions and approvals. For cost-based contracts and certain performance-based contracts, the budgets will be submitted along with renewal documents, and will be approved prior to contract execution. For the remaining performance-based contracts, the majority (75%) of our portfolio, an approved budget will not be required for contract execution. HIVCS will request budget submissions for these programs after the contract term begins (February for Prevention and April for Ryan White).

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