

Division of Grants Compliance and Oversight
Office of Policy for Extramural Research Administration, OER
National Institutes of Health, DHHS
NIH SBIR/STTR Conference, Albuquerque, NM – October 2014
Kathy Hancock, Assistant Grants Compliance Officer
• Compliance
Basics
• Compliance
Requirements
• SBIR/STTR
Program
Requirements
• Cost Information
• Grant Award Basics
• Prior Approval
Requirements
• Grantee Authorities
• NIH Reporting
Requirements
• Enforcement
Actions
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Michelle Bulls
Director, OPERA
Diane Dean
Director, Division of Grants
Compliance and Oversight
John Burke, Kathy Hancock,
Sahar Rais, and Joel Snyderman
Assistant Grants Compliance Officers
This Division was established on August 28, 2001 and is responsible for managing internal
and external compliance activities, both proactive and for-cause.
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• The effective management of public funds to
maximize research outcomes
• The avoidance of fraud, institutional
mismanagement, and poor management of
Federal funds
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• It strengthens the relationship of trust that
exists between federal sponsor and grant
recipient
• It suggests a presence of the stewardship
necessary to properly safeguard the Federal
investment in biomedical and behavioral
research
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• At NIH
o Grants Management Officer/Specialist
o Program Official
o Scientific Review Officer
• At Institution
o Authorized Organizational Representative
o Project Director/Principal Investigator
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•
•
•
•
•
•
•
Unallowable costs
Misallocation of costs
Excessive cost transfers
Inaccurate effort reporting
Inadequate subrecipient monitoring
Administrative & Clerical costs
Noncompliance with Assurances and
special terms and conditions of award
• Delinquent closeout reporting
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Common Contributors:
• Outdated or nonexistent policies and procedures
• Inadequate internal controls
• Inadequate management systems
(e.g., effort reporting, financial management)
 Perception that small grantees do not need to
comply
 Inadequate resources
 Inadequate staff training and education
 Perception that internal control systems are not
necessary
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Compliance
Requirements
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Code of Federal Regulations (CFR)
• 42 CFR Part 52 – Grants for Research Projects
http://www.access.gpo.gov/nara/cfr/waisidx_03/42cfr52_03.html
• 45 CFR Parts 74 and 92 – Public Welfare, Administrative
Requirements
(74) http://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr74_04.html
(92) http://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr92_04.html
• 45 CFR Part 46 – Public Welfare, Protection of Human Subjects
http://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr46_04.html
• 45 CFR Part 50 Subpart F – Financial Conflict of Interest
http://www.gpo.gov/fdsys/pkg/FR-2011-08-25/pdf/2011-21633.pdf
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OMB Circulars - http://www.whitehouse.gov.ombcirculars
Administrative Requirements or Standards:
o A-102: Uniform Administrative Requirements for Grants
and Cooperative Agreements awarded to State and Local
Governments and Indian Tribes
o A-110 / 2 CFR Part 215:
Uniform Administrative Requirements for Grants and
Agreements awarded to Universities, Hospitals, and
Other Non-Profit Organizations
These include pre-award and post-award requirements
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Cost Principles: Applicable OMB Circulars and CFRs
o A-21 (2 CFR Part 220): Cost Principles for Educational
Institutions
o A-87 (2 CFR Part 225): Cost Principles for State and Local
Governments and Indian Tribes
o A-122 (2 CFR Part 230): Cost Principles for Non-Profit
Organizations
o 45 CFR Part 74, Appendix E: Principles for Determining Costs
Applicable to Hospitals
o 48 CFR Subpart 31.2 (Federal Acquisition Regulation)
Applicable to For-Profit Organizations
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Audit Requirements: Applicable OMB Circular and
CFR
o A-133: Audits of States, Local Governments, and
Non-Profit Organizations
o 45 CFR Part 74.26 (d): Audits of For-Profit and
Foreign Organizations
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Summary of Applicable Regulations
Grantee Type
Administrative
Requirements
Cost Principles
State & Local
Governments
A-102
(45 CFR Part 92)
A-87
(2 CFR Part 225)
Colleges &
Universities
A-110 or
2 CFR Part 215
A-21
(2 CFR Part 200)
Non-Profits
A-122
(2 CFR Part 230)
Hospitals
45 CFR Part 74,
Appendix E
For-Profits
FAR 31.2
(48 CFR Subpart
31.2)
Foreign
As stated above
for the grantee
type
Audit
Requirements
A-133
_____________
45 CFR Part 74.26(d)
NIH GPS, uses
45 CFR Part 74.26(d)
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• As part of a larger Federal effort to increase efficiency
and reduce waste, on December 26, 2013, the Office of
Management and Budget (“OMB”) published a series of
significant reforms to the Government’s policies relating
to grants and cooperative agreements.
• This Final Guidance consolidates and supersedes the
eight OMB circulars (A-21, A-50, A-87, A-89, A-102, A-110,
A-122, and A-133).
• These new federal policies become effective for new
federal awards and new funding for existing awards on
Dec 26, 2014.
• https://cfo.gov/cofar/
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Other Compliance
Requirements
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• Animal Welfare http://olaw.nih.gov
• NIH Grants Policy Statement (GPS)
http://grants.nih.gov/grants/policy/nihgps_2013/
• Notice of Award (NoA)
• NIH Guide to Grants and Contracts (for new
requirements)
http://grants.nih.gov/grants/guide/index.html
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Grantees are responsible for….
• Safeguarding all assets
• Spending funds in accordance with the
authorized purpose
• Developing and implementing systems to
ensure proper stewardship of funds
o
o
o
o
o
Financial management systems
Procurement systems
Time & effort reporting systems
Monitoring activities
Adherence to terms & conditions of award
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Develop and Maintain Written Policies and Procedures
•
•
•
•
•
•
•
•
Organizational Structure
Purchasing
Accounting/Budgetary Controls
Time and Effort Reporting
Travel
Consulting
Property Management
Ethics/Conflict of Interest
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Financial Management/Accounting
Requirements
•
Accounting system must track costs between
o direct and indirect costs (general ledger)
o by project (project ledger)
•
Expenses are charged in accordance with
o
o
o
o
o
•
Notice of Award terms and conditions
NIH Grants Policy Statement
Salary Rate Limitations
Cost Accounting Standards
OMB Circulars & CFRs (e.g., 48 CFR Subpart 31.2)
Accounting records must be supported by appropriate source
documentation (e.g., invoices, payroll slips, time sheets, justifications,
explanations, etc.).
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Monitoring Requirements
• Budgetary controls must be in place to require that:
o Actual expenses are periodically compared with budget
o Actual expenses are accurate, i.e., reasonable, allocable,
allowable and consistently charged
o Mischarges are corrected in a timely manner (cost transfers)
o Prior approvals are obtained when required
o Subrecipient expenses are monitored – (Grantee’s
responsibility to monitor expenses)
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Time and Effort Reporting Requirements
Commercial organizations must document salaries and wages charged to
grants
o Maintain a labor distribution system for all employees regardless of
o
o
o
o
function.
Implement a system that accounts for total hours
Charge direct and indirect labor to the appropriate cost objectives to
accurately identify labor costs
• Charges to direct projects
• Charged to indirect activities
• Included in the base to which indirect costs are allocated
Establish written procedures
Implement internal controls on labor charges
o See the website for more information and sample time sheet
http://oamp.od.nih.gov/dfas/indirect-cost-branch/indirect-costsubmission/time-and-effort-reporting-commercial-organizations
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(FCOI Regulations)
• 42 CFR Part 50 Subpart F (grants and
cooperative agreements)
• 45 CFR Part 94 (contracts)
Applies to Phase II SBIRs and STTRs applicants/awardees
(Phase I SBIR/STTRs are exempt)
Revised Final Rule published on 8-25-11
http://www.gpo.gov/fdsys/pkg/FR-2011-08-25/pdf/2011-21633.pdf
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This regulation promotes objectivity in
research by establishing standards that
provide a reasonable expectation that
the design, conduct, or reporting of
research funded under NIH grants and
cooperative agreements will be free
from bias resulting from Investigator
financial conflicts of interest.
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•
•
Applies to the PD/PI and any individual defined as an “Investigator” under
the regulation
Investigators disclose “Significant Financial Interests” (SFIs)
o Some SFI exclusions include:
• Salary, royalties, or other remuneration paid by the Institution (i.e.,
SBIR/STTR awardee) to the Investigator if the Investigator is
currently employed or otherwise appointed by the Institution, and
• Any ownership interest in Institution (i.e., SBIR/STTR awardee) held
by the Investigator
•
Institutions must, among other things:
o Have a policy that complies with the regulation at the time of
application
o Train Investigators prior to engaging in NIH-funded research
o Solicit disclosures from Investigators and review disclosures
o Identify, manage and report identified FCOIs to NIH prior to expenditure
of funds, within 60 days of identifying a conflict during the period of
award, and annually
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• Mailbox for inquiries
o FCOICompliance@mail.nih.gov
• Office of Extramural FCOI webpage
o http://grants.nih.gov/grants/policy/coi/index.htm
Resources include a Tutorial, Webinars, Checklist
for Policy Development, FAQs, PowerPoint
presentations with case studies, etc.
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 A legally binding agreement with the government
 Official notice that an award has been made
 NoA includes:
 Funding level (amount available for project)
 Periods of support (Project and budget period)
 Terms and conditions
(Restrictions/requirements)
 NIH contact information
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• Grant awards are made to institutions/organizations
• Recipients of NIH grant funds must comply with all
applicable Federal statutes, regulations and policies
• By drawing down funds from the HHS Payment
Management System, grantees agree to the terms and
conditions of the grant award.
DHHS Division of Payment Management
http://www.dpm.psc.gov
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• Terms of Award – Section III
o 45 CFR Part 74 or 92 - HHS rules and requirements
o
o
o
o
that govern the administration of grants
NIH Grants Policy Statement – policy requirements
that serve as the terms and conditions of NIH awards
(latest version 10/01/13)
Program legislation
Appropriation acts
Program regulations
42 CFR Part 52 - Grants for Research Projects
o Carryover authority
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•
Section IV - Special Terms and Conditions
o Includes Institute and/or Center (IC) specific terms
o Restrictive/Requirement/Informational Terms. Examples include:
• Restriction on the use of funds
• Requirement of a grantee to take action (F&A rate negotiations,
obtain assurances associated with human or animal use, etc.)
• Provide information to ensure compliance with Federal
requirements.
• Final year term, if applicable
•
Restricted funds must be tracked by grantee to ensure compliance
o EXAMPLE of Award Restriction: Funds may not be expended for the
purchase of equipment without the written prior approval of the NIH
awarding component.
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Compliance with
NIH Prior Approval
Requirements
What actions require
NIH prior approval?
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•
Change in scope or objective of a
project
•
Change in Scope is a change in direction,
type of training, or other area that
constitutes a significant change from the
aims, objectives, or purpose of the
originally approved project
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Some actions likely to be considered a change in scope thus
requiring NIH Prior Approval include:
•
•
•
•
•
•
Change in Senior/Key personnel Named in the Notice of Award
Significant rebudgeting
Purchase of a unit of equipment exceeding $25,000
Change in the specific aims approved at the time of award
Substitution of one animal model for another
Any change from the approved use of animals or human
subjects
• Shifting research emphasis from one disease area to another
• Applying a new technology; i.e., changing assays from
those approved to a different type of assay
• Transferring the performance of substantive programmatic work
to a third party through a consortium agreement, by contract, or
any other means
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• Change in PD/PI or Senior/Key personnel identified by
NIH and specifically named in the Notice of Award
(NoA)
o
o
Must notify NIH if the PD/PI or other Senior/key
personnel named in the NoA will:
• withdraw from the project entirely
• be absent for 3 months or more
• reduce time devoted to the project by 25% or
more
Must request approval of a substitute PD/PI or
other Senior/Key personnel named in the NoA
Note: Must notify the awarding office GMO in writing if grantee
wishes to terminate the award because it cannot make suitable
alternate arrangements.
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•
Preaward costs > 90 days prior to the effective date of the initial budget
period of a project period for a new or competing continuation award
•
Deviation from award terms and conditions
•
Activities disapproved or restricted as a condition of the award
•
Change of grantee organization
•
Second extension without additional funds
•
Change of Grantee Organizational Status
o
o
o
Merger
Successor-in-interest
Name change
For more information see NIH Grants Policy Statement at
http://grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch8.htm#prior_approval_requirements
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• All requests for NIH awarding office prior approval must be:
o
made in writing (includes submissions by e-mail)
o sent to the designated GMO identified on the NoA
o made no later than 30 days before the proposed change
o signed by the Authorized Organizational Representative
Note: Approval must be obtained from the GMO through a
revised NoA or other written communication
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Whenever you are contemplating significant
postaward changes and you are uncertain
about the need for prior approval, consult in
advance with:
• Your business official
• NIH awarding component’s Grants
Management Officer/Specialist identified on
the Notice of Award
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What authorities do
grantees have?
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 Carryover of funds from one budget period to
the next. Authority is provided as a term on
the Notice of Award (NoA) (Section III).
 Phase I SBIR/STTR awards – carryover does not apply
 Phase II SBIR/STTR awards - carryover authority generally
applies
 Cost-related prior approvals – Allows the
rebudgeting of funds for any direct cost item
provided there is no change in scope
 A rebudgeting action greater than 25% of the total cost
awarded is a potential indicator of a change in scope
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 Grantee may extend (without additional funds) the
final budget period of the project up to 12 months
via the eRA Commons up to 90 days prior to the end
date of the award under certain conditions.
 Transfer performance of substantive programmatic
work to a third party by means of a consortium
agreement.
 For more information see NIH Grants Policy
Statement at
http://grants.nih.gov/grants/policy/nihgps_2013/nihgps_ch8.htm#_Ex
panded_Authorities
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Compliance with NIH
Reporting
Requirements
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 RPPR Webpage:
http://grants.nih.gov/grants/rppr/
 Includes links to
oRPPR Application Guide
oRPPR Guide Notices
oFrequently Asked Questions
oTraining
oContacts
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• RPPR required for ALL type 5 progress
reports (SNAP and non-SNAP) submitted
on or after October 17, 2014 - NOT-OD-14092 (http://grants.nih.gov/grants/guide/noticefiles/NOT-OD-14-092.html)
o NIH continues development of the RPPR for final
progress reports and for administrative extensions
(Type 4s; e.g., SBIR/STTR Fast-Track Phase II
application)
o NIH will update the community as progress is made.
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• SBIR/STTR Fast-Track Phase II
applications (SBIR/STTR Fast-Track
Phase I final progress reports) use
o Non-Competing Continuation Progress Report
PHS 2590 at
http://grants.nih.gov/grants/funding/2590/2590.htm.
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•
Phase IIs are generally subject to the SNAP – See Section III of NoA.
o Follow (SNAP) instructions within RPPR.
o SNAP progress reports (e-SNAP) are due 45 days prior to
anniversary start date and are sent electronically through eRA
Commons at http://era.nih.gov/grantees/index.cfm
o SNAP eliminates need for annual submission of budget with
progress report and annual Federal Financial Report (FFR).
o All progress reports for awards subject to SNAP must be
submitted electronically using the eRA Commons eSNAP module
(see http://grants.nih.gov/grants/guide/notice-files/NOT-OD-10093.html)
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• Federal Financial Report (FFR)
(SF-425)
• Two types of financial reports used:
• Federal Cash Transaction Report (PMS)
• Federal Expenditure Report (NIH)
• Cash Transaction data submitted
quarterly to the Payment
Management System (PMS), HHS
• Expenditure data submitted annually
or at the end of a project to NIH
through eRA Commons – see NoA
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• Timely - Expenditure report submission
deadlines:
o Annual – (Non-SNAP Awards)
• FFR submitted for each budget period no later than 90 days
after the end of the calendar quarter (CQ) in which the
budget period ended.
Budget period ends 1/31/2014 – FFR due 6/30/14
(90 days after the end of the CQ of 3/31/14)
o Final - (End of Competitive Segment) – (SNAP
Awards)
• FFR submitted within 90 days following the end of the
project period
(SNAP – Streamlined Non-competing Award Process)
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 FFRs should be submitted accurately
 Reported expenses and program income must
agree with institutional accounting records
 Routine Revisions to correct FFRs are not
appropriate
See FFR (SF425) Instructions for NIH Grantees available at
http://grants.nih.gov/grants/forms.htm
See NIH Guide, January 4, 2011, Implementation of Federal Financial Report – Upcoming
Mandatory Use of the Federal Financial Report System in the eRA Commons beginning
February 1, 2011 http://grants.nih.gov/grants/guide/notice-files/NOT-OD-11-017.html
See NIH Guide, February 22, 2001, FINANCIAL STATUS REPORTS: REMINDER AND
INFORMATION ON TIMELINESS AND ACCURACY REQUIREMENTS
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-01-021.html
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•
Failure to submit timely final reports may affect future
funding to the organization
o Final Federal Financial Report - Expenditure Data
•
o
o
•
No discrepancies between final FFR expenditure data and cash transaction
data
Final Invention Statement and Certification
Final Progress Report
Final Reports are due within 90 days of the end of grant
support.
April 2, 2008, NIH Announces New Centralized Processing Center for Receipt of Grant Closeout
Documents and Reminds Grantees of Required Closeout Reports for NIH Assistance Awards
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-08-061.html
June 17,2005, NIH Announces New Closeout Feature in the eRA Commons and Reminds Grantees
of Required Closeout Reports for NIH Assistance Awards
http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-05-051.html
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Closeout reports and 90 day submission requirements remain
the same.
Final guidance dependent on HHS implementation of Uniform
Guidance.
Anticipated changes:
• Shorter timeframe to complete process
• New requirements for NIH to initiate “unilateral”
closeout if reports are missing or unacceptable
• New requirements which may result in a debt
obligation to the grantee
For details see NOT-OD-14-084 and Closeout FAQs
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-14-084.html
http://grants.nih.gov/grants/closeout/faq_grants_closeout.htm
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•
•
•
•
•
•
Special terms and conditions of award
Loss of carryover authority
Cost disallowances
Closer Monitoring
Special or More Frequent Reporting
Suspension, termination, and Withholding of
Support
Opportunity for improved grantee systems
and policies to assure compliance
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QUESTIONS?
Thank You!
Division of Grants Compliance and Oversight
Office of Policy for Extramural Research Administration
National Institutes of Health
Kathy.Hancock@nih.gov
301.435.1962
FCOICompliance@mail.nih.gov
GrantsCompliance@nih.gov
E-mail: sbir@od.nih.gov
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