Division of Grants Compliance and Oversight Office of Policy for Extramural Research Administration, OER National Institutes of Health, DHHS NIH Regional.

Division of Grants Compliance and Oversight

Office of Policy for Extramural Research Administration, OERNational Institutes of Health, DHHS

NIH Regional Seminar – Indianapolis, IN – April 2012

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Diane Dean, Director

Kathy Hancock, Assistant Grants Compliance Officer

Joel Snyderman, Assistant Grants Compliance Officer

• Cost Principles• Administrative

Standards• Audit Requirements • Grant Award Basics• Award Restrictions• Responsibilities• Accounting Basics

• 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 costso 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:

• Preaward requirements• Postaward requirements

Also includes requirements for:

o Paymento Matching or Cost sharing o Accounting for program incomeo Revision of budget and program planso Non-Federal auditso Allowable costs

• Financial management systems standards• Property standards• Procurement standards • Reports and records

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• 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 Audit Requirements

State & Local Governments

A-102

(45 CFR Part 92)

A-87

(2 CFR Part 225)

A-133

_________________

45 CFR Part 74.26(d)

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

NIH GPS, uses

45 CFR Part 74.26(d)9

**************** NOTICE OF AWARD************

*******

CENTER GRANT

Issue Date:06/24/2010

Department of Health and Human Services

National Institutes Of Health

**************** NOTICE OF AWARD************

*******

CENTER GRANT

Issue Date:06/24/2010

Department of Health and Human Services

National Institutes Of Health

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• Terms of Award – Section IIIo 45 CFR Part 74 or 92 - HHS rules and

requirements that govern the administration of grants

o NIH Grants Policy Statement (GPS) – policy requirements that serve as the terms and conditions of NIH awards (latest version 10/01/11)

o Program legislationo Appropriation actso Program regulations

42 CFR Part 52 - Grants for Research Projects

• Special Terms and Conditions – Section IV11

• 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., Additive Deductive Combination Matching

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• Requires that:o Expenses are charged in accordance

with 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 exceededo Total funds are used appropriatelyo 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 Allocableo Consistently appliedo 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 chargeso Unreasonable chargeso Unallocable chargeso Inconsistently applied chargeso 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 dayso Deviation from award terms and conditionso 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_2011/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

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 fundso 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 1/31/2011 – FFR due 6/30/11

(90 days after the end of the CQ of 3/31/11)

o Final (End of Competitive Segment) – (SNAP and Non-SNAP Awards)

FFR submitted within 90 days following the end of the project period

(SNAP – Streamlined Non-competing Award Process)34

• 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. 35

• 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.html36

• Failure to submit timely final reports may affect future funding to the organizationo Final Federal Financial Report (FFR) SF-425 Expenditure Datao Final Invention Statement and Certification o Final Progress Report

• Final Reports are due within 90 days of the end of grant support.

• 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

Reminder

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Whenever you are contemplating a significant postaward change, and you are uncertain about the need for prior approval, consult in advancein 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

[email protected]

Kathy Hancock, Assistant Grants Compliance Officer

[email protected]

Joel Snyderman, Assistant Grants Compliance Officer

[email protected]

[email protected]