Division of Grants Compliance and Oversight Office of Policy for Extramural Research Administration, OER National Institutes of Health, DHHS NIH Regional Seminar – San Diego, CA – October 2015 1 Diane Dean, Director Kathy Hancock, Assistant Grants Compliance Officer Joel Snyderman, Assistant Grants Compliance Officer
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Timely and Accurate Submission of Financial Status Reports ...€¦ · Office of Policy for Extramural Research Administration, OER National Institutes of Health, DHHS NIH Regional
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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 – San Diego, CA – October 2015
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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• 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. 2 CFR Part 200
• This Final Uniform Regulation (a.k.a. Guidance) (2 CFR Part 200) 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 regulations became effective for new federal awards and new funding for existing awards on or after Dec 26, 2014.
• For more information on 2 CFR Part 200 see: http://www.gpo.gov/fdsys/pkg/FR-2014-12-19/pdf/2014-28697.pdf
• On December 19, 2014, HHS published in the Federal Register, an Interim Final Rule (45 CFR Part 75) adopting OMB’s final regulation (a.k.a. guidance) in 2 CFR Part 200 with certain amendments, based on existing HHS regulations, to supplement the guidance as needed for the Department.
• HHS made this interim final rule effective on December 26, 2014.
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Cost Principles:
o 45 CFR Part 75, Subpart E (§ 75.400- § 75.476)• Institutions of Higher Education (IHE), State, Local
Governments and Indian Tribes, and Non-profit Organizations
• 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 Compensation for personal services
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• 45 CFR Part 75, Subpart C – PreawardFederal Award Requirements and Contents of Federal Awards
(§ 75.200- § 75.217)
• 45 CFR Part 75, Subpart D – Post Federal Award Requirements (§ 75.300- § 75.391)
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Prescribes:
• Preaward requirements• Postaward requirements
Also includes requirements for:
o Payment
o Matching or Cost sharing
o Accounting for program income
o Revision of budget and program plans
o Non-Federal audits
o Allowable costs
• Financial management systems standards
• Property standards
• Procurement standards
• Reports and records9
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o 45 CFR 75.501: Institutions of Higher
Education, States and Local Governments,
and Non-Profit Organizations, including Non-
Profit Hospitals
o 45 CFR 75.501(h) through (k): For-Profits
Organizations, including For-Profit Hospitals
o NIH Grants Policy Statement: Foreign
Organizations must follow the same
requirements as For-Profit Organizations
All NIH grant recipients that expend $750,000 or more within a year in Federal awards are subject to an audit requirement.
o Applicable to Non-Federal Entity Fiscal Years Beginning on or after 12/26/2014.
o For-Profit and Foreign Organization audit requirement: • Expend $750,000 under one or more HHS awards (as a
direct recipient and/or consortium participant)
• At least one award is an HHS grant
• Audits are due within the earlier of 30 days after receipt of the auditor’s report(s) or 9 months after the end of the recipient’s audit period.
• Recipients delinquent in submitting audits risk the imposition of sanctions and potential loss of Federal funds. 11
Summary of Audit Requirements
Recipient
Type
Source of Audit
Requirement (Non-
Federal Entity Fiscal
Years Beginning Prior
to 12/26/2014)
Source of Audit
Requirement (Non-
Federal Entity Fiscal
Years Beginning
On/After 12/26/2014)
Where to Submit
Audit Reports
State & Local
Governments
OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse
(See contact information in NIH GPS
Part III)
Institutions of
Higher Education
OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse
(See contact information in NIH GPS
Part III)
Non-Profits,
including non-profit
hospitals
OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse
(See contact information in NIH GPS
Part III)
For-Profits,
including for-profit
hospitals
45 CFR 74.26(d) 45 CFR 75.501(h) through
75.501(k) and 45 CFR 75.215
National External Audit Review
Center
(See contact information in NIH GPS
Part III)
Foreign
Organizations
NIH Grants Policy Statement
(same as For-Profits)
NIH Grants Policy
Statement (same as For-
Profits)
National External Audit Review
Center
(same as For-Profits, see contact
information in NIH GPS Part III)
.
Summary of Federal Requirement References
Recipient Type Administrative
Requirements
Cost Principles Audit Requirements
State & Local
Governments and
Indian Tribes45 CFR Part 75,
Subpart C – Pre-
Federal Award
Requirements and
Contents of Federal
Awards §75.200-
§75.217
AND
45 CFR Part 75,
Subpart D – Post
Federal Award
Requirements
§75.300-§75.391
45 CFR Part 75, Subpart E
See also §75.416 and §75.417
45 CFR Part 75, Subpart F
at §75.501
Also applicable to non-
profit Hospitals
Institutions of Higher
Education
45 CFR Part 75, Subpart E
See also §75.418 and §75.419
Non-Profits 45 CFR Part 75, Subpart E
Hospitals 45 CFR Part 75, Appendix IX 45 CFR Part 75, Subpart F
at §75.501 (h)-(k) and
§75.215
Also applicable to for-
profit Hospitals
For-Profits FAR 31.2
(48 CFR Subpart 31.2)
Foreign Organizations Same as above depending on
type of institution
Per NIH GPS use
45 CFR Part 75.501 (h)-(k)
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• Terms of Award – Section III
o 45 CFR Part 75 – 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
• 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., Additive
Deductive
Combination
Matching
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• Requires that:
oExpenses are charged in accordance with: NoA Terms and Conditions
NIH Grants Policy Statement
Including addenda in effect as of the beginning date of the budget period
Salary Cap / Rate Limitation
Cost Accounting Standards
Federal regulations
oALL 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 – (Recipient’s responsibility to monitor expenses)
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• Actual expenses should be compared 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 $10,000 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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• Recipients 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 like 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.
• Conformance 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