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Division of Grants Compliance and Oversight
Office of Policy for Extramural Research Administration, OER
National Institutes of Health, DHHS
NIH Regional Seminar – Baltimore, MD – June 2013
Diane Dean, Director
Kathy Hancock, Assistant Grants Compliance Officer
Sahar Rais, Assistant Grants Compliance Officer
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• Cost Principles
• Administrative
Standards
• Audit Requirements
• Grant Award Basics
• Award Restrictions
• Responsibilities
• Accounting Basics
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• Monitoring Basics
• Subrecipient
Monitoring
• Other Cost
Considerations
• NIH Financial
Reporting Basics
• Closeout
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OMB Circular A-21 (2 CFR Part 220) - Educational Institutions
OMB Circular A-122 (2 CFR Part 230) – Non-Profits
OMB Circular A-87 (2 CFR Part 225) – State/Local Governments
45 CFR Part 74, Appendix E - Hospitals
48 CFR Subpart 31.2 (FAR) – For-profits
• Foreign institutions comply with the applicable cost principles
depending on the type of organization
http://www.whitehouse.gov/omb/circulars/
http://www.gpoaccess.gov/cfr/index.html
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• Establishes principles for determining
costs applicable to grants, contracts, and
other agreements
• Direct costs
• F&A/indirect costs
• Selected items of cost
o allowable/unallowable costs
o time and effort reporting
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• OMB Circular A-110 – relocated to 2 CFR Part
215 - Uniform Administrative Requirements
for Grants and Agreements with Universities,
Hospitals and Other Non-Profit
Organizations (domestic and foreign)
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Prescribes:
•
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Preaward requirements
Postaward requirements
Also includes requirements for:
o
o
o
o
o
o
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Payment
Matching or Cost sharing
Accounting for program income
Revision of budget and program plans
Non-Federal audits
Allowable costs
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Financial management systems standards
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Property standards
Procurement standards
Reports and records
• In general, OMB Circular A-133 requires a State
government, local government, or non-profit
organization (including institutions of higher
education) that expends $500,000 or more per year
under Federal grants, cooperative agreements,
and/or procurement contracts to have an annual
audit by a public accountant or a Federal, State, or
local government audit organization.
• Foreign and Commercial (for-profit) organizations
are subject to audit provisions contained in 45 CFR
74.26(d) and the NIH Grants Policy Statement (GPS).
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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
(2 CFR Part 215)
A-21
(2 CFR Part 220)
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
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Audit Requirements
A-133
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45 CFR Part 74.26(d)
NIH GPS, uses
45 CFR Part 74.26(d)
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• Terms of Award – Section III
o 45 CFR Part 74 or 92 - HHS rules and
o
o
o
o
requirements that govern the administration of
grants
NIH Grants Policy Statement (GPS) – policy
requirements that serve as the terms and
conditions of NIH awards (latest version
10/01/12)
Program legislation
Appropriation acts
Program regulations
42 CFR Part 52 - Grants for Research Projects
• Special Terms and Conditions – Section IV
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• Only applied to a particular grant for cause
• Shown on the Notice of Award (NoA) after Section III
– Institute and/or Center specific terms of award
• Funds usually are not restricted in the Payment
Management System
• Restricted funds must be tracked by grantee to
ensure compliance
o EXAMPLE of Award Restriction: Funds may not be
used to purchase equipment without the written prior
approval of the NIH awarding component.
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• A. The Principal Investigator
• B. The Departmental Administrator
• C. The Department Chair
• D. The Institution
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• Requires that:
o Separate account is established for each project
o Program Income is identified and accounted for
by project
o Program Income is used in accordance with the
appropriate alternative, i.e.,
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Additive
Deductive
Combination
Matching
• Requires that:
o Expenses are charged in accordance
with
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NoA Terms and Conditions
NIH Grants Policy Statement
Salary Cap / Rate Limitation
Cost Accounting Standards
OMB Circulars
o ALL expenses are appropriately documented
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• Requires 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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• Actual expenses should be compared at
least monthly to the budget to ensure:
o Total funds on the grant have not been exceeded
o Total funds are used appropriately
o Total funds for any cost category have not been
exceeded if restricted on the NoA
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• Actual expenses should be reviewed to
ensure they are accurate and allowable
o Reasonable (including necessary)
o Allocable
o Consistently applied
o Conforms to any limitations or exclusions
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• A cost may be considered reasonable if the
nature of the goods or services acquired or
applied reflect the action that a prudent
person would have taken under the
circumstances prevailing at the time the
decision to incur the cost was made.
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• Dr. Grant needed a specialized microscope
for his research supported by an NIH grant
from the National Cancer Institute. When
deciding on the model that would best suit
his needs, he received several price quotes
on various models that were all within the
same general price range. However, one
microscope in particular appealed to him – it
met all of the necessary specifications plus
many additional features. Although it was
about $8,500 more than the others, he
ordered it.
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• A cost is allocable to a specific grant if it is
incurred solely in order to advance work
under the grant and is deemed assignable, at
least in part, to the grant.
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• When Dr. Grant’s microscope finally arrived,
he found that equipment funds for his
National Cancer Institute grant were fully
expended. Since the microscope was for use
on an NIH grant, he decided to charge the
cost to another one of his NIH grants that
was funded by the National Eye Institute.
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• Grantees must be consistent in assigning
costs to cost objectives.
• Costs may be charged as either direct costs
or F&A costs, depending on their identifiable
benefit to a particular project or program.
• All costs must be treated consistently for all
work of the organization under similar
circumstances, regardless of the source of
funding.
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• Dr. Grant’s lab was running low on office
supplies and postage stamps. Since he
couldn’t wait any longer for his institution to
provide the supplies, he purchased them
and charged them to his NIH grant account.
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• A cost is allowable if it is reasonable, allocable and
conforms to the cost principles and the sponsored
agreement AND is not prohibited by law, regulation
or term of award.
• This type of allowability -- conformance with
limitations and exclusions as contained in the terms
and conditions of award including those in the cost
principles—varies by type of activity, type of
recipient, and other characteristics of individual
awards.
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• Dr. Grant decided to host a very important
Departmental meeting at his home and serve
beer and pizza hoping that everyone would
attend. The purpose of the meeting was to
discuss changes in NIH grants policy, which
affected the work of the entire Department.
Therefore, he decided to charge the cost of
the beer and pizza to his grant, especially
since he was providing the use of his home.
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• Used to correct:
o Erroneous charges
o Unreasonable charges
o Unallocable charges
o Inconsistently applied charges
o Unallowable charges
• Must be well documented
• Must be made within 90 days from
the time error was discovered
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Other Cost
Considerations
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• NIH Grants Policy Statement defines actions
requiring NIH prior approval.
• Some prior approval actions affecting cost include
the following:
o Carryover of funds (if required-see Section III of
NoA)
o Incurrence of preaward costs greater than 90 days
o Deviation from award terms and conditions
o Activities disapproved or restricted as a condition
of award
• For a complete listing of prior approval
requirements see:
http://grants.nih.gov/grants/policy/nihgps_2012/nihgps
_ch8.htm#prior_approval_requirements
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• Requests for carryover of funds should be
signed by Authorized Representative.
• Request must be sent to GMO and include:
o Detailed budget by direct cost category with F&A
cost information (base and rate). If personnel
costs are requested, include
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a detailed breakdown of personnel costs
base salary
salary requested
effort to be spent on the project
o A scientific justification for the use of funds
o The reason for the unobligated balance
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Federal Financial Report (FFR)(SF-425)
Expenditure Data
• Timely - Must adhere to 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 1/31/2013 – FFR due 6/30/13
(90 days after the end of the CQ of 3/31/13)
o Final (End of Competitive Segment) – (SNAP and Non-SNAP
Awards)
 FFR submitted within 90 days following the end of the project period
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(SNAP – Streamlined Non-competing Award Process)
• FFRs should be submitted accurately
• Reported expenses and program income must
agree with institutional accounting records
• Routine Revisions to correct FFRs are not
appropriate
• Any revisions must be submitted in the same format
as the original submission.
For example: If the original report was submitted as a
Financial Status Report (FSR)(SF-269), the revised report
must be submitted as an FSR.
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• Information and NIH Guide Notices related to
Financial Reporting:
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 (NOT-OD-11-017)
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-11-017.html
See NIH Guide, July 27, 2007, NIH Requiring Mandatory Use of the Electronic
Financial Status Report System in the eRA Commons Beginning October 1,
2007 http://grants.nih.gov/grants/guide/notice-files/NOT-OD-07-078.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
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o
o
Final Federal Financial Report (FFR) SF-425 Expenditure Data
Final Invention Statement and Certification
Final Progress Report
•
Final Reports are due within 90 days of the end of grant support.
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Grantee must ensure there are no discrepancies between final FFR
expenditure data (in eRA Commons) and FFR cash disbursement
data in the Payment Management System.
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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Whenever you are contemplating a
significant postaward change, and you are
uncertain about the need for prior approval,
consult in advance with:
• The Notice of Award (terms and conditions)
• Your Office for Sponsored
Research/Projects
• NIH awarding component Grants
Management Officer/Specialist
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Diane Dean, Director, Division of Grants Compliance and Oversight
diane.dean@nih.gov
301-435-0949
Kathy Hancock,
Assistant Grants Compliance Officer
kathy.hancock@nih.gov
301-435-1962
Sahar Rais, Assistant Grants Compliance Officer
raisdanais@nih.gov
301-435-0940
GrantsCompliance@nih.gov