# Presentation: 115021

## Briefing on NCI Budget and Policy Issues NCI Program Staff OrientationSponsored by theOffice of Grants AdministrationJanuary 29, 2007

- Briefing on NCI Budget and Policy Issues NCI Program Staff OrientationSponsored by theOffice of Grants AdministrationJanuary 29, 2007

**by**** ****Stephen M. Hazen****Chief,  Extramural Financial Data Branch, OBFM, OD, NCI****Executive Plaza South, Room 6087****Telephone: (301) 435-5204                                 ****Fax: (301) 480-6961**

## Briefing Topics

- Overall Budget Process – 2 min.
- Operating Budget Realities – 5 min.
- RPG Budget Allocation – 5 min.
- NIH Budget Policies (2007) – 3 min.
- Questions – 10 min.

## Orientation for Program Staff

- About the budget (process, past and FY 2007)

## Budget Submissions

**Dual NCI Budgets Travel on Parallel Tracks**

**Traditional Budget **-** **prepared within NIH and DHHS guidelines for submission to the President by Secretary, DHHS

**Professional Judgment or Bypass Budget** - separate budget document sent directly to the President by NCI Director reflecting NCI’s priorities

## Budget Players

**Budget Players**

**Bypass            Budget**

**Traditional            Budget**

**Appropriation**

## Phases of the Annual Budget

**Formulation – Office of Management    ****	****and Budget**

**Execution – NCI Divisions/****	****	****Offices**

**Presentation –  Congress**

**Annual NCI budget process covers 30 months**

## NCI Budget Levels

**(in millions)**

**FY 1998**

**FY 2003**

**FY 2004**

**FY 2006 Appropriation**

_**Funding**_

_**Change**_

**FY 2005**

**    ****President’s Budget**

**$2,547**

**4,592**

**80%**

**4,870**

**4,739**

**3.2%**

**2.8%**

**4,793**

**4,754**

**-0.8%**

**-1.6%**

**FY 2007:**

**    ****House**

**    ****Senate**

**4,754**

**-0.8%**

**4,799**

**0.0%**

**Currently on a Continuing Resolution until Feb. 15****th**

## FY 2007 Operating Budget Development 

**FY 2006 Budget w/o NIH Roadmap**

**$4,747,225**

**-0.8%**

**Plus NIH Roadmap**

**42,834**

**FY 2006 Budget with Roadmap**

**4,790,059**

**FY 2007 President’s Budget**

**4,753,609**

**Reduction from 2006 Appropriation**

**-36,450**

**Less Across the Board Reduction**

**?**

**-0.8%**

**Increase Available**

**-36,450**

**Percent**
** ****Change**

**Amount**
**in thousands**

**Notes:**
Now looking at how we allocate the 2006 budget...

## FY 2007 Operating Budget Development 

**-1.1%**

**NIH Taps/Assessments Increase**

**-20,000**

**Mandated Salary Increases**

**-7,000**

**Rent/Lease/Utilities Increase**

**-10,000**

**Increase Available**

**-73,450**

**NIH Roadmap contribution increase**

**-14,548**

**-1.5%**

**Increase Available**

**-87,998**

**-0.8%**

**Increase Available**

**-$36,450**

**Percent**
** ****Change**

**Amount**
**in thousands**

**FY 2007 Operating Budget Development **

**Notes:**
We have a placeholder for potential transfers by the NIH Directory or by the HHS Secretary.  We haven’t heard of any but they could happen.

Increase in Roadmap contribution to $43 million

Increase in taps and assessments.  Hopefully, $33 million is high but we won’t know all of them until this summer.  Last year increase was about $20 million 

## FY 2007 Operating Budget Development 

**-25,000**

**Pathways to Indep. Career Prgrm**

**Genes and the Environment**

**Increase Available**

**-1.8%**

**-$87,998**

**-7,800**

**-1,800**

**-97,598**

**-2.0%**

**-2.6%**

**Increase Available**

**-122,598**

**Increase  Available**

**NIH FY 2007 Initiatives: **

**FY 2007 Operating Budget Development **

**Percent**
** ****Change**

**Amount**
**in thousands**

## FY 2007 Operating Budget Development 

**Impact on RPGs**

**Phase-outs/Reductions to programs**

**Increase Available**

**-2.6%**

**-$122,598**

**+175,000**

**?**

**52,402**

**Amount available if Congress applies a 1% across the Board reduction**

**+4,866**

**Available for new projects or expansion**

**Potential Recoveries/Redeployments: **

**FY 2007 Operating Budget Development **

**Percent**
** ****Change**

**Amount**
**in thousands**

## NCI’s Process for Research Project Grant Allocation and Determining the Paylines

- The following example uses FY 2006 estimated final award levels to show how the Research Project Grant budget is allocated at the start of the fiscal year.
- The general process is the same for any component of the grant budget.
- We start with the money appropriated by Congress....

## NCI’s Decision Making Process for Research Project Grant Allocation

**	****	****	****	****	****	****	****	**_**% of total**_
**APPROPRIATION****	****                 ****	****$2,157,000,000****	****	**** 100%**
**SMALL BUSINESS SET-ASIDE****	****      -96,000,000****	****     ****	****     5%**
**NON-COMPETING COMMITMENTS     **_** -1,646,000,000**_**	****	****   76%****                                                                                                     **
**	****	****	****	****	****	****	**_**Number**_
**COMPETING AVAILABILITY                     415,000,000****	****1,280****	****   19%**
**SET-ASIDE FOR RFAs****	****	****      **_**-27,000,000**_**	****     66****	****     1%**
**REMAINING FOR R01, P01, R33, etc.      $388,000,000****	**** 1,214****	****    18%**

**Notes:**
Note Program Evaluation is $59 million of T-5 and T-3s are $51 million

## NCI’s Decision Making Process for Research Project Grant Allocation

**                                                        ****	****                  **_**Number**_**    ****	**_**% of total**_
**REMAINING FOR R01, P01, R21, etc. ****	****$388,000,000****	****1,214****	****     18%**
**ALLOCATION FOR R01, R37****	****     ****	****  225,000,000****	****   705****	****     10%      **
**ALLOCATION FOR P01****	****	****     61,000,000****	****     31****	****       3%**
**ALLOCATION FOR R21/R33****	****       ****	****     34,000,000****	****   188****	****       2%**
**ALLOCATION FOR R03, R15 etc.****	****     18,000,000****	****   144****	****       1%**
**RESERVE FOR ALL EXCEPTIONS****	****     50,000,000****	****   146****	****       2%**
**	**

**Notes:**
R01s are cut 21% from requested levels – with larger grants getting cut 8% more than smaller ones.  And T-2 s which conform to the 20% cap are cut 15% - which gives them 5% over current.
P01s T-1s get cut 21% while T-2s are restricted and get 5% over current – or a 15% cut.

## NCI’s Decision Making Process for Research Project Grant Allocation

**                                                                                                 ****	****	****	****	**_**Number**_**	**_** % of total**_
**RESERVE FOR ALL EXCEPTIONS****	****$50,000,000****	****146****	****      2%**
***R01 EXCEPTIONS****	****	****  18,000,000****	****  60****	****      1%**
**P01 etc. EXCEPTIONS****	****	****    8,000,000****	****    5****	****    <1%**
**R01, R21, etc. EXCEPTIONS****	****    ****	****  24,000,000****	****  81****	****      1%**

**Notes:**
Note that *R01 (First Time R01s) was the equivalent of 1 percentile point on the R01 payline

## Determine the Payline for R01s    With $225 million available for competing R01s			(FY 2006 level)

**Notes:**
Note that the requested average cost of R01s is $408 K, but with the policy cut the actual award is $331 K.  It would cost $293 Million to pay the R01s at requested levels and we only had $238 to allocate.

## FY 2007 NIH Budget Policy

**Current NIH Working Guidelines:**
**No inflationary adjustments on non-competing grants – approximately 3% decrease from commitments of record for all grants**
**NIH to award in total the same number of competing RPGs as awarded in FY 2005 (about 9600) with particular emphasis on new investigators**
**Average cost of competing RPGs same as FY 06**

## FY 2007 NIH Budget Policy

**1.5% increase for Research Management and Support**
**.5% decrease in all other mechanisms – ****Centers, Groups, Training*, Groups, Intramural, Contracts, Cancer Control****	**
*** Excluding the Pathways to Independence Program**

## FY 2007 NIH Budget Policy

- How are the NIH Policies created?
- Does the new NIH Authorization have any implications for grant funding?

## Orientation Briefing for NCI Program Staff

**Payline policies across NIH**

## IC Payline Policies for Competing Research Project Grants (Mainly R01s) as of June 2006

**Notes:**
Remember to check web sites from other ICs

## Percent Allocation of Total NCI Budget

**FY 2006**

**Cancer **
**Control 11%**

**Other* 14%**

**Training 4%**

**Groups 3%**

**Support  6%**

**Research  9%**

**SPOREs 3%**

**Cancer Centers 5%**

**RPGs 45%**

_**Intramural**_

*** Other includes R&D Contracts, RMS, MBRS, Other Rsch Grants, Resource Related (R/U24), Exploratory Coop Agreements (U56), Construction, B&F**

-   77% Research grants & contracts awarded across the nation (extramural)

-   4% Training and career development

**  ****Over 80% to Extramural **
**	****Community**

**  ****9% NCI employed scientists**
**	****(intramural)**

**  ****6% Support for NIH centrally **
**	****supplied services & **
**	****assessments**

**  ****4% Administrative****	**** ****	****Management**

**Percent Allocation of Total NCI Budget**

## Orientation Briefing for NCI Program Staff

- Questions

## Orientation Briefing for NCI Program Staff Handy Reference Sites

- NCI Funding Policies (EFDB Site):
-  http://camp.nci.nih.gov/admin/oem/efdb/
- Levels of Authority (RPG):
- http://camp.nci.nih.gov/admin/grants/loarpg.htm
- NCI Best Practices Document:
- http://best-practices.cancer.gov/funding/

**Notes:**
Finally, here are a couple handy web sites which are available to help extramural staff find the rules and business practices which NCI has established for grant funding.

## Orientation Briefing for NCI Program Staff

- The remaining slides are provided as reference
- The grant calendar (theory and practice)
- The exception process through the year
- The budget calendar (theory and practice)

## Grant Calendar in a Perfect Year

- Funding Policy and Paylines set – early November
- 1st Round Exceptions* later in November
- 2nd Round Exceptions* – Jan/Feb
- 3rd Round Exceptions* – May/June
- Late List Exceptions* – end of July
- Last List – September (early)
-   *Large exceptions are approved by the EC – regular-sized by Division

## Grant Calendar in FY 2006

**T-5 Funding Policy and temporary paylines – November 9**
**First round P01 selections – November 28**
**First Round RFA Funding Plans – December 20**
**Second Round P01 selections – January 17**
**2****nd**** Round Exceptions and RFAs – February 21**
**3****rd**** Round P01 selections – May 16**
**3****rd**** Round Exceptions and RFAs –  June 20**
**Late List Exceptions –  July 18**
**Last List Exceptions – September (early)**

## Exception Process (during the year)

- When the initial RPG policies are set (paylines and average cost), the EC decides how much to allocate to supplements and exceptions.
- Based on historical usage (which basically follows the size of each Division’s RPG portfolio), EFDB proposes an allocation to the Divisions.

## Exception Process (continued)

- The Division Director has authority to approve exception funding for competing applications within 10 points of the payline costing no more than $350 thousand per year DC...
- ...and supplements up to $50 thousand per year DC (no more than $150 thousand for the duration of the grant) – smaller supplements may be approved at the Branch Chief level at the discretion of the Division Director.

## Exception Process (continued)

- The money allocated to the Divisions is intended to permit selection of supplements and exceptions - including AER exceptions as well as R01 exceptions for pancreatic research, AIDS and other high priority research areas.
- Each Division has its own internal procedures for approving exception requests which Program Staff submit– usually prior to each EDD exception meeting for the three rounds and late list.

## Exception Process (continued)

- Each review round, NCI uses the EC meeting as a forum to approve large sized exception grants.
- Near the end of July, we have a final exception meeting, which we call the Late List Exception meeting.
- After the Late List meeting we move to the Last List process

## End of Year Grant Funding Process (Last List Process)

- We have established a process that permits us to approve a group of grants for payment in the event additional money becomes available.  We refer to this process as the “Last List.”
- The Last List may include Centers, SPORES, Manpower, Clinical Groups as well as RPG requests

## Last List Process

- The vetting process:
- Each Division collects their requests and the Division Director ranks them according to the Institute and Division priorities
- EFDB collects the Division requests and puts them on a consolidated NCI list with other NCI-wide needs of which EFDB is aware
- EFDB presents this consolidated list to the NCI Director who reviews the justifications and decides on an NCI rank order.

## Last List Process - Adjustments

- If/when a Division wants to add another grant (or more) to their Division list, the Division Director must determine where the new grant(s) should appear on the ranked Division list.
- The new grant(s) are taken to the Director for interpolation into the consolidated last list.
- We pay grants and the process continues until we run out of time and money around  September 20.

## Budget Calendar in a Perfect Year

**Congress and President Pass/Sign Annual Budget before October 1**
**No money is taken away through Congressional Rescission or Administrative Taps from DHHS or NIH**
**Appropriation covers all budget needs**
**Operating Budgets are allocated to NCI Programs and Divisions by the NCI Director by Mid-November**
**NCI Programs make grant awards starting in December**

## Budget Calendar in 2006

**Full Year Appropriation signed in January**
**Appropriation was a small increase over FY 2005 and came with rescissions and taps – effectively less money than in FY 2005**
**Initial budgets were allocated to Programs and Divisions by late March**
**Further adjustments to operating budgets were made in June - August**
**Programs started making funding decisions in March**
**Funding Decisions in a tight budget are difficult and take longer than in a generous budget period.**