Cost of Living Adjustment (COLA)
Cost of Living Adjustments (or Allowances) must be budgeted in order to cover cost increases ranging from union mandated raises for salaries and generic inflationary forces for other direct costs.
Budget 3% to 5% COLA’s for future years on multiple year projects. Some sponsors set limits on COLA's: NIH limits them to 2%.
If the budgeted rate of pay exceeds the employee's current rate of pay by more than 5%, or is otherwise out of line with bargaining unit agreements, please provide an explanation. Are there any pending personnel actions? Since OGCA is required to assess reasonableness of cost, provide detail either in a note to OGCA or in the text of the proposal.
The PI should be prepared with supporting documentation when sponsor award negotiation occurs in case any questions arise.
For the latest bargaining unit contracts and information on COLA's and merit raises, visit the Human Resources website.
The COLA for the Curriculum fee must be set at 5%, regardless of potential limits set by sponsors.
Non-salary inflation factor
Anywhere from 3 to 5% is also recommended. Some sponsors place limits on the rate of inflation built into the proposal – check sponsor guidelines for any restrictions.
Cost of living increases should not be applied to indirect cost (F&A) rates: use current (predetermined) rates or provisional rates as applicable – see the Fact Sheet.