NIH Grants Policy Statement (10/12)
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NIH Grants Policy Statement

(10/12)

Part II: Terms and Conditions of NIH Grant Awards
Subpart A: General – File 6 of 6


8 ADMINISTRATIVE REQUIREMENTS

8.1 Changes in Project and Budget

In general, NIH grantees are allowed a certain degree of latitude to rebudget within and between budget categories to meet unanticipated needs and to make other types of post-award changes. Some changes may be made at the grantee's discretion as long as they are within the limits established by NIH. In other cases, NIH prior written approval may be required before a grantee makes certain budget modifications or undertakes particular activities. The grantee-initiated changes that may be made under the grantee's authority and the changes that require NIH approval are outlined below and, with respect to particular types of awards, activities, or recipients, in Subpart IIB. In addition, individual awards may restrict grantees' authorities to make budget and project changes without NIH prior approval. If NIH approval is required, it must be requested of, and obtained in writing from, the awarding IC GMO in advance of the change or obligation of funds as specified later in this chapter under Requests for Prior Approval.

Recipients shall immediately notify the Federal awarding agency of developments that have a significant impact on the award-supported activities. Also, notification shall be given in the case of problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the award. This notification shall include a statement of the action taken or contemplated, and any assistance needed to resolve the situation.

Changes in project or budget resulting from NIH-initiated actions are discussed in other sections of this chapter.

8.1.1 NIH Standard Terms of Award

Federal administrative requirements allow agencies to waive certain cost-related and administrative prior approvals; these are known as expanded authorities. In 2001, NIH extended expanded authorities to all NIH awards except for the provision to automatically carry over unobligated balances. Certain award instruments, grant programs, and types of recipients are routinely excluded from the authority to automatically carry over unobligated balances. This includes centers (P50, P60, P30, and others); cooperative agreements (U); Kirschstein-NRSA institutional research training grants (T); non-Fast Track Phase 1 SBIR and STTR awards (R43 and R41); clinical trials (regardless of activity code); and awards to individuals.

One or more of these authorities may be overridden by a special term or condition of the award. Grantees must review the NoA to determine if a particular authority is withheld for a specific grant.

Grantees must exercise proper stewardship over Federal funds and ensure that costs charged to awards are allowable, allocable, reasonable, necessary, and consistently applied regardless of the source of funds. NIH may disallow the costs if it determines, through audit or otherwise, that the costs do not meet the tests of allowability, allocability, reasonableness, necessity, and consistency.

Several authorities have specific deadlines for submission of reports or for timely notification to the NIH awarding IC. Grantees should be aware that any consistent pattern of failure to adhere to those deadlines for reporting or notification will be grounds for excluding that grantee from a specific authority.

Exhibit 6. Summary of NIH Standard Terms of Award
Grantee Authorities as NIH Standard Terms of Award Exceptions
Carryover of unobligated balances from one budget period to any subsequent period Centers (P50, P60, P30 and others), cooperative agreements (U), Kirschstein-NRSA institutional research training grants (T), non-Fast Track Phase I SBIR and STTR awards (R43 and R41), clinical trials, and awards to individuals, or if the NoA indicates otherwise.
Cost-related prior approval changes, including research patient care costs and equipment The cost would result in a change of scope.
Extension of final budget period of a project period without additional NIH funds (no-cost extension) The grantee has already exercised its one-time authority to extend the award for up to 12 months.
Transfer of performance of substantive programmatic work to a third party (by consortium agreement) The transfer would be to a foreign component or it would result in a change in scope.

8.1.1.1 Carryover of Unobligated Balances from One Budget Period to Any Subsequent Budget Period

Grantees should be aware that there is a difference between unliquidated obligations and unobligated balances. Unliquidated obligations are commitments of the recipient and are considered to be obligations and, therefore, should not be reported as unobligated balances.

The NoA will include a term and condition to indicate the disposition of unobligated balances. The term and condition will state whether the grantee has automatic carryover authority, or if prior approval is required by the NIH awarding IC. Note the authority to automatically carry over unobligated balances includes the authority to carryover from one competitive segment to another.

Automatic carryover of unobligated balances applies to all awards except centers (P50, P60, P30, other), cooperative agreements (U), Kirschstein-NRSA institutional research training grants (T), non-Fast Track Phase I SBIR and STTR awards (R43 and R41), clinical trials (regardless of activity code), and awards to individuals. For these grants, carryover of unobligated balances requires NIH awarding IC prior approval unless otherwise noted in the NoA. Other awards may be excluded from this authority through a special term or condition in the NoA.

For awards under SNAP (see Administrative Requirements—Monitoring—Reporting—Streamlined Non-Competing Award Process for applicability), funds are automatically carried over to the subsequent budget period. However, the grantee will be required to indicate, as part of the grant's progress report, whether any estimated unobligated balance (including prior-year carryover) is expected to be greater than 25 percent of the current year's total approved budget. The total approved budget amount includes current year and any carryover from prior years of the project period. If the unobligated balance is greater than 25 percent of the total approved budget, the grantee must provide an explanation and indicate plans for expenditure of those funds within the current budget year.

For awards that require an annual FFR, the amount to be automatically carried over must be specified under item 12, "Remarks."

For both SNAP and non-SNAP, when a grantee reports a balance of unobligated funds in excess of 25 percent of the total amount awarded for the budget period, the GMO will review the circumstances resulting in the balance to ensure that these funds are necessary to complete the project, and may request additional information from the grantee, including a revised budget, as part of the review.

If the GMO determines that some or all of the unobligated funds are not necessary to complete the project, the GMO may restrict the grantee's authority to automatically carry over unobligated balances in the future, use the balance to reduce or offset NIH funding for a subsequent budget period, or use a combination of these actions. The GMO also may indicate whether the balance may be carried forward to a budget period other than the succeeding one. The GMO's decision about the disposition of the reported unobligated balance will be reflected in the terms and conditions of the NoA.

All Federal agencies are required by 31 U.S.C. §1552(a) to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, grantees must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. At the end of five years, the funds are cancelled and returned to the Treasury. This provision may limit the availability of funds for carryover.

8.1.1.2 Cost-Related Prior Approvals

NIH prior approval is not required to rebudget funds for any direct cost item that the applicable cost principles identify as requiring the Federal awarding agency's prior approval, unless the incurrence of costs is associated with or is considered to be a change in scope.

8.1.1.3 Extension of Final Budget Period of a Previously Approved Project Period without Additional NIH Funds

The grantee may extend the final budget period of the previously approved project period one time for a period of up to 12 months beyond the original expiration date shown in the NoA if

  • no term of award specifically prohibits the extension,
  • no additional funds are required to be obligated by the NIH awarding IC, and
  • the project's originally approved scope will not change.

Such an action affirms that additional work remains to be completed on the project and that resources are available to continue to support the project, or that additional time is needed to provide for an orderly closeout. The fact that funds remain at the expiration of the grant is not, in itself, sufficient justification for an extension without additional funds.

Effective October 1, 2011, grantees must use the eRA Commons No-Cost Extension feature to electronically notify NIH that they are exercising their one-time authority to extend without funds the expiration date of an award. This extension may be up to 12 months beyond the final budget period end date. In the eRA Commons, this notification can be made up to the last day of the current project end date. An e-mail notification is automatically sent to the GMO and no further action is required.

Notifications may not be submitted via e-mail or fax. Upon receipt of the notification, the GMO will process and acknowledge the extension. If the no-cost extension notification is submitted late, the extension notification automatically becomes a request and requires the approval of the IC Chief GMO. (See Administrative Requirements—Prior Approval Requirements for extension requiring additional funds.)

In extending the final budget period of the project period through this process, the grantee agrees to update all required certifications and assurances, including but not limited to those pertaining to human subjects and vertebrate animals, in accordance with applicable regulations and policies. Grantees are reminded that all terms and conditions of the award apply during the extension period.

Grantees may not extend project periods that were previously extended by the NIH awarding IC. Any additional project period extension requires NIH prior approval. (See Administrative Requirements—Prior Approval Requirements for extensions requiring additional funds.)

All Federal agencies are required by 31 U.S.C. §1552(a) to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, grantees must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. At the end of five years, the funds are cancelled and returned to the Treasury. This provision may limit or eliminate this authority to extend the final budget period when an entire project period is funded by a single award.

8.1.1.4 Transfer of the Performance of Substantive Programmatic Work to a Third Party by Means of a Consortium Agreement

Prior approval by the NIH awarding IC is not required to transfer the performance of already peer reviewed programmatic work unless the activity constitutes a change in scope or results in the transfer of substantive programmatic work to a foreign component.

8.1.2 Prior Approval Requirements

This section describes the activities and/or expenditures that require NIH prior approval. NIH prior approval requirements are summarized in Exhibit 7, which is provided for guidance only. For the prior approval requirements specified in the exhibit, approval is required whether or not the change has a budgetary impact. The circumstances under which prior approval is required also are summarized in the exhibit.

Grantees also should consult Subpart IIB for prior approval requirements that apply to specific mechanisms, types of grants, and types of recipients.

Any question about the need for prior approval for an activity or cost under a specific NIH award should be directed to the GMO.

Exhibit 7. Summary of Actions Requiring NIH Prior Approval
NIH prior approval
is required for
Under the following circumstances
Additional no-cost extension, extension greater than 12 months, or late notification of initial no-cost extension (8.1.2.1) All instances.
A&R (8.1.2.2) Rebudgeting into A&R costs that would exceed 25 percent of the total approved budget for a budget period.

If rebudgeting would not meet this threshold but would result in a change in scope.

Any single A&R project exceeding $500,000.
Capital expenditures (construction, land, or building acquisition) (8.1.2.3) All instances. Also, any proposals to convey, transfer, assign, mortgage, lease, or in any other manner encumber real property acquired with NIH grant funds.
Carryover of unobligated balances (8.1.2.4) If the NoA indicates that the grantee does not have the authority to automatically carry over unobligated balances.
Change in scope (8.1.2.5) All instances.
Change in status of the PD/PI or senior/key personnel named in the NoA (8.1.2.6) Withdrawal from the project; absence for any continuous period of 3 months or more; reduction of the level of effort devoted to project by 25 percent or more from what was approved in the initial competing year award.
Change of grantee organization (8.1.2.7) All instances.
Change of grantee organization status (8.1.2.8) All instances.
Deviation from award terms and conditions (8.1.2.9) All instances. Includes undertaking any activities disapproved or restricted as a condition of the award.
Foreign component added to a grant to a domestic or foreign organization (8.1.2.10) All instances.
Need for additional NIH funding (8.1.2.11 and 8.1.2.12) All instances, including extension of a final budget period of a project period with additional funds.
Pre-award costs (8.1.2.13) More than 90 days before effective date of the initial budget period of a new or competing continuation award; always at the grantee's own risk.
Rebudgeting funds from trainee costs (8.1.2.14) All instances.
Rebudgeting of funds between construction and non-construction work (8.1.2.15) All instances.
Retention of research grant funds when CDA awarded (8.1.2.16) All instances.

8.1.2.1 Additional No-cost Extension or Extension Greater Than 12 Months or Late Notification of Initial No-Cost Extension

The NIH Standard Terms of Award provide the grantee the authority to extend the final budget period of a previously approved project period one time for a period of up to 12 months beyond the original expiration date down in the NoA. Any additional project period extension beyond the initial extension of up to 12 months requires NIH prior approval. The request should include a description of the project activities that require support during the extension and a statement about the funds available to support the extension. Further any late notification of the initial no-cost extension provided by the NIH Standard Terms of Award also requires prior approval.

All Federal agencies are required by 31 U.S.C. §1552(a) to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, grantees must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. At the end of five years, the funds are cancelled and returned to the Treasury. This provision may limit NIH's ability to further extend the final budget period.

8.1.2.2 Alterations and Renovations

NIH prior approval is required if a grantee wishes to rebudget more than 25 percent of the total approved budget for a budget period into A&R costs. NIH prior approval also is required for lesser rebudgeting into A &R costs if the rebudgeting would result in a change in scope. If rebudgeting results in an A&R project exceeding $500,000, NIH always will consider the rebudgeting to be a change in scope. (See the Construction Grants chapter in IIB for documentation requirements for A&R projects exceeding $500,000).

8.1.2.3 Capital Expenditures

Capital expenditures for land or buildings require NIH prior approval. In addition, real property acquired with NIH grant funds may not be conveyed, transferred, assigned, mortgaged, leased, or in any other manner encumbered by the grantee without the written prior approval of the NIH awarding IC or its successor organization.

8.1.2.4 Carryover of Unobligated Balances

The NoA will include a term and condition to indicate the disposition of unobligated balances. The term and condition will state whether the grantee has automatic carryover authority or if prior approval is required by the NIH awarding IC. When NIH prior approval is required, the AOR should submit a request to the GMO that includes at a minimum the following information:

  • A detailed budget by direct cost category with the F&A cost information (base and rate) for the proposed use of the carryover funds. If personnel costs are requested, include a detailed breakdown of personnel costs, including base salary, salary requested and effort to be spent on the project during the extension. In general, carryover action requiring prior approval will be approved using the F&A rate that was in effect at the time the initial funds were awarded for the year to which the funds are being carried over. For example, if the carryover is approved from year -01 to year -03, the F&A rate used to calculate the revised -03 year award will be the rate used to initially calculate year -03. However, actual expenditures will still be based on the rate applicable when the cost is incurred.
  • A scientific justification for the use of funds.
  • The reason for the unobligated balance.

8.1.2.5 Change in Scope

In general, the PD/PI may make changes in the methodology, approach, or other aspects of the project objectives. However, the grantee must obtain prior approval from the NIH awarding IC for a change in scope. A change in scope is a change in the direction, aims, objectives, purposes, or type of research training, identified in the approved project. The grantee must make the initial determination of the significance of a change and should consult with the GMO as necessary.

Potential indicators of a change in scope include, but are not limited to, the following:

  • Change in the specific aims approved at the time of award.
  • Substitution of one animal model for another.
  • Change from the approved use of live vertebrate animals.
  • Change from the approved involvement of human subjects that would result in an increased risk. This includes:
    • An addition or change that would result in changing the overall human subjects or clinical trial designation of the award from No to Yes;
    • The new inclusion of subject populations that are covered by additional regulatory protections under 45 CFR 46;
    • Any change to the study protocol that would increase the risk level for subjects;
    • New information indicating a higher level of risk to participants than previously recognized for a study intervention, procedure, or pharmacological treatment.
  • Shift of the research emphasis from one disease area to another.
  • A clinical hold by FDA under a study involving an IND or an IDE.
  • Application of a new technology, e.g., changing assays from those approved to a different type of assay.
  • Transfer of the performance of substantive programmatic work to a third party through a consortium agreement, by contract, or any other means. If the third party is a foreign component, NIH prior approval is always required.
  • Change in other senior/key personnel not specifically named in the NoA (see Change in Status, Including Absence, of PD/PI and Other Senior/Key Personnel Named in the NoA below for requirements for NIH approval of alternate arrangements for or replacement of named senior/key personnel).
  • Significant rebudgeting, whether or not the particular expenditure(s) require prior approval. Significant rebudgeting occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established for the budget period by 25 percent or more of the total costs awarded. For example, if the award budget for total costs is $200,000, any rebudgeting that would result in an increase or decrease of more than $50,000 in a budget category is considered significant rebudgeting. The base used for determining significant rebudgeting excludes the effects of prior-year carryover balances but includes competing and non-competing supplements. Significant rebudgeting does not apply to modular grants.
  • Incurrence of research patient care costs if costs in that category were not previously approved by NIH or if a grantee desires to rebudget additional funds beyond those approved into or rebudget funds out of the research patient care category.
  • Purchase of a unit of equipment exceeding $25,000.

8.1.2.6 Change in Status, Including Absence of PD/PI and Other Senior/Key Personnel Named in the NoA

The grantee is required to submit a prior approval request to the GMO if:

  • The PD/PI or other Senior/Key Personnel specifically named in the NoA will withdraw from the project entirely, be absent from the project during any continuous period of 3 months or more, or reduce time devoted to the project by 25 percent or more from the level that was approved at the time of initial competing year award (for example, a proposed change from 40 percent effort to 30 percent or less effort or in calendar months a change from 4.8 to 3.6 calendar months). Once approval has been given for a significant change in the level of effort, then all subsequent reductions are measured against the approved, adjusted level.
  • There is a change from a multiple PD/PI model to a single PD/PI model.
  • There is a change from a single PD/PI model to a multiple PD/PI model.
  • There is a change in the number or makeup of the PD/PIs on a multiple PD/PI award.

NIH must approve any alternate arrangement proposed by the grantee, including any replacement of the PD/PI or senior/key personnel named in the NoA, and the addition of any new PD/PIs.

The request for approval of any additional or substitute PD/PIs or Senior/Key Personnel named in the NoA, or change from a multiple PD/PI model to a single PD/PI model, must be accompanied by a strong scientific justification related to the scientific project, including any proposed changes in scope, the biographical sketch of any new individuals proposed and other sources of support, and any budget changes resulting from the proposed change. A new or revised Leadership Plan is required if the request is to change from a single PD/PI model to a multiple PD/PI model, or to change the number or makeup of the PD/PIs on a multiple PD/PI award. The Commons ID must be provided for any new PD/PIs.

If the arrangements proposed by the grantee, including the qualifications of any proposed replacement, are not acceptable to the NIH awarding IC, the grant may be suspended or terminated. If the grantee wishes to terminate the project because it cannot make suitable alternate arrangements, it must notify the GMO, in writing, of its wish to terminate, and NIH will forward closeout instructions.

The requirement to obtain NIH prior approval for a change in status pertains only to those personnel NIH designates in the NoA regardless of whether the applicant organization designates others as senior/key personnel for its own purposes.

8.1.2.7 Change of Grantee Organization

NIH prior approval is required for the transfer of the legal and administrative responsibility for a grant-supported project or activity from one legal entity to another before the expiration of the approved project period (competitive segment). A change of grantee organization may be accomplished under most NIH grants if any of the following conditions are met:

  • The original grantee has agreed to relinquish responsibility for an active project before the expiration of the approved project period. This includes any proposed change of grantee as a result of a PD/PI on a research project transferring from one organization to another organization. The project under the same PD/PI may be supported at a new organization for a period up to the remainder of the previously approved project period in an amount not to exceed that previously recommended for direct costs (plus applicable F&A costs) for the remaining period.
  • The grant to be transferred has been terminated in accordance with 45 CFR part 74.61 or 92.43.
  • A non-competing continuation award that is within an approved project period has been withheld because of the grantee's actions (see Administrative Requirements—Enforcement Actions—Suspension, Termination, and Withholding of Support).

A change of grantee that involves the transfer of a grant to or between foreign institutions or international organizations also must be approved by the IC's Advisory Council or Board.

A grant to an individual may not be transferred.

A successor-in-interest or a name change is not considered a change of grantee (see Change in Grantee Organizational Status below).

A change of grantee organization may involve the transfer of equipment purchased with grant funds. The transfer may be accomplished as part of the original grantee's relinquishment of the grant; otherwise, NIH reserves the right to transfer title to equipment to the new organization as indicated in Administrative Requirements—Management Systems and Procedures—Property Management System Standards.

A change of grantee request normally will be permitted only when all of the permanent benefits attributable to the original grant can be transferred, including equipment purchased in whole or in part with grant funds. In reviewing a request to transfer a grant, NIH will consider whether there is a continued need for the grant-supported project or activity and the impact of any proposed changes in the scope of the project. NIH will also consider the length of time, the percentage of funds, and the amount of work remaining in the project period. A change may be made without peer review, provided the PD/PI plans no significant change in research objectives and the facilities and resources at the new organization will allow for successful performance of the project. If these conditions or other programmatic or administrative requirements are not met, the NIH awarding IC may require peer review or may disapprove the request and, if appropriate, terminate the award.

A change of grantee organization request must be made before the anticipated start date at the new organization and preferably several months in advance. Failure to provide timely notification may result in disapproval of the request or significant delays in processing. Grantees are encouraged to discuss any potential issues with the awarding IC(s) prior to submitting a change of grantee organization request. If requesting a transfer in the middle of a budget period or at the end of the Federal fiscal year, grantees should contact the awarding IC for IC-specific guidance on the timing and preparation of the change of institution application.

A request for a change of grantee organization must be submitted to the GMO. The original institution must include an Official Statement Relinquishing Interests and Rights in a Public Health Service Research Grant (PHS 3734) (relinquishing statement). The relinquishing statement may be submitted in paper or electronically via the eRA Commons. Final FFR Expenditure Data and a Final Invention Statement are due to NIH from the relinquishing organization no later than 90 days after the end of NIH support of the project. Final FFR Expenditure Data should not be submitted until the original institution has received a revised NoA for the relinquished grant.

The proposed new grantee institution must provide the GMO with a change of institution application which may be submitted using the PHS 398 or PHS 416-1 paper application forms, or electronically via Grants.gov using the Parent Funding Opportunity Announcement listed at http://grants.nih.gov/grants/guide/parent_announcements.htm. If the original award was the result of a modular application and the grantee will submit a paper change of institution application, the modular procedures apply to the request for change of grantee. If the original award was the result of a modular application and the grantee will submit an electronic change of institution application, the grantee may submit a detailed budget or streamlined-detailed budget (as described in the FOA).

The paper application from the proposed new grantee institution should include, at a minimum, the following:

  • PHS 398 Face page
  • Budget pages (current and future years). (Under awards resulting from modular applications, the application should include narrative budget information for the current budget period, including total direct cost and the basis for computing F&A costs and, if applicable, future budget periods.) Budgets should not exceed the direct costs (plus applicable F&A costs) previously recommended for any budget period. For transfers in the middle of a budget period, the budget for the initial year may be based on the total costs relinquished only if the grantee has been instructed to do so by the awarding IC. For these applications, grantees will also need to include the Other Project Information and the Senior/Key Personnel components.
  • Updated biographical sketches for the PD/PI and existing senior/key personnel and biographical sketches for any proposed new senior/key personnel.
  • If transferring on the anniversary date, include the progress report for the current year including a statement regarding the goals for the upcoming year. For all transfer applications include also a statement indicating whether the overall research plans/aims have changed from the original submission, and, if so, provide updated information.
  • Updated "other support" page(s), if necessary.
  • Resources page, including probable effect of the move on the project.
  • Checklist page
  • Certification of IRB/IACUC approval, including OHRP and OLAW assurance numbers, if applicable.
  • Detailed list of any equipment purchased with grant funds to be transferred to the new organization (inclusion of this list in the transfer application from the new organization indicates its acceptance of title to that equipment).

The electronic application from the proposed grantee institution should include, at a minimum, the following:

  • SF 424 (R&R) Cover Component
  • SF 424 (R&R) Project/Performance Site Location(s)
  • SF 424 (R&R) Other Project information:

    • Certification of IRB/IACUC approval, including OHRP and OLAW assurance numbers, if applicable.
    • Facilities and Other Resources, including probable effect of the move on the project.
    • Detailed list of any equipment purchased with grant funds to be transferred to the new organization (inclusion of this list in the transfer application from the new organization indicates its acceptance of title to that equipment).
  • SF 424 Research & Related Senior/Key Person Profile:

    Updated biographical sketches for the PD/PI and existing senior/key personnel and biographical sketches for any proposed new senior/key personnel, and updated "other support" page(s) as necessary.
  • Budget pages applicable for activity code (current and future years). If the budget for the original award was submitted in a modular format, use the R&R Detailed Budget form for all electronic applications. Grantee may either complete all of the fields in the R&R Detailed Budget as appropriate or complete only the costs for the PD/PI (Section A), and include the remainder of the direct costs under Section F (Other Direct Costs) Item 8, and Section H (Indirect Costs). (For awards resulting from modular applications, include narrative budget information for the current budget period, including total direct cost and the basis for computing F&A costs and, if applicable, future budget periods.) Budgets should not exceed the direct costs previously recommended for direct costs (plus applicable F&A costs) for any budget period. For transfers during the course of a budget period, the budget for the initial year may be based on the total costs relinquished only if the grantee has been instructed to do so by the awarding IC.
  • PHS 398 Research Plan
  • If transferring on the anniversary date, include the progress report for the current year including a statement regarding the goals for the upcoming year. For all transfer applications include also a statement indicating whether the overall research plans/aims have changed from the original submission, and, if so, provide updated information.
  • PHS 398 Cover Page Supplement
  • PHS 398 Checklist

And, as applicable:

  • PHS 398 Career Development Supplemental Form
  • PHS 398 Fellowship Supplemental Form
  • SBIR/STTR Information

NIH may request additional information necessary to accomplish its review of the request. Acceptance of a relinquishing statement by NIH does not guarantee approval of a transfer application for the continued funding of a project.

NIH will accomplish a change of grantee organization by issuing a revised NoA to the original grantee reflecting the revised budget/project period end dates, deletion of any future-year support, and deobligation of remaining funds, if applicable. (A deobligation of funds will be based on the estimated grant expenditures through the relinquishment date, as determined from the relinquishing statement.)

Concurrently, the new grantee will receive the NoA reflecting the direct cost balance reported on the relinquishing statement plus applicable F&A costs, if funds are available. If the change of grantee organization occurs on the anniversary date of the project, the NoA to the new grantee will reflect the previously committed direct cost level plus applicable F&A costs if funds are available. If the change of grantee organization occurs during the course of the budget period, the policy of the awarding IC will determine if the NoA to the new grantee will reflect the direct cost relinquished by the former grantee plus applicable F&A costs or the total costs relinquished by the former grantee. This amount is subject to change as a result of the closeout of the original grant and may be adjusted downward.

A grantee may, at its own risk and without NIH prior approval, incur obligations and expenditures to cover costs before the beginning date of a transfer award. The grantee may do so only if those costs are necessary to conduct the project and would not require prior approval if incurred under an awarded grant. For the purposes of pre-award costs, transfers are treated like non-competing continuation awards. Therefore, the pre-award costs incurred are not limited to 90 days prior to the beginning date of the initial budget period of that transferred award to the new grantee organization.

8.1.2.8 Change in Grantee Organizational Status

Grantees must give NIH advance notice of the following types of change in organizational status (not a change of grantee organization as described above):

  • Merger. Legal action resulting in the unification of two or more legal entities. When such an action involves the transfer of NIH grants, the procedures for recognizing a successor-in-interest will apply. When the action does not involve the transfer of NIH grants, the procedures for recognizing a name change normally will apply.
  • Successor-in-Interest (SII). Process whereby the rights to and obligations under an NIH grant(s) are acquired incidental to the transfer of all of the assets of the grantee or the transfer of that part of the assets involved in the performance of the grant(s). A SII may result from legislative or other legal action, such as a merger or other corporate change.
  • Name Change. Action whereby the name of an organization is changed without otherwise affecting the rights and obligations of that organization as a grantee.

Advance notification is required to ensure that the grantee remains able to meet its legal and administrative obligations to NIH, and payments are not interrupted.

Grantees are encouraged to contact the GMO of the lead NIH awarding IC to explain the nature of the change in organizational status and receive guidance on whether it will be treated as a name change or SII. The lead awarding IC ordinarily will be the IC with which the organization has the most NIH grants. NIH reserves the right to review the material provided, seek clarification or additional information, and make an independent determination.

A grantee's formal request for a change in organizational status should be submitted to NIH as soon as possible so that NIH can determine whether the organization will continue to meet the grant program's eligibility requirements and take the necessary action to reflect the change in advance of the change in status.

For a SII, a letter signed by the AORs of the current grantee (transferor) and the successor-in-interest (transferee) must be sent to the lead NIH awarding IC, following consultation with the GMO of that awarding IC. The letter must include the following:

  • Stipulate that the transfer will be properly affected in accordance with applicable law.
  • Indicate that the transferor relinquishes all rights and interests in all of the affected grants.
  • Request that the awarding IC(s) modify its (their) records to reflect the transferee as the grantee of record.
  • State the effective date of the transfer.
  • Provide the transferee's EIN. If EIN is new, include completed Form W-9.
  • Include verification of the transferee's compliance with applicable requirements (e.g., research misconduct assurance of compliance).
  • Include a list of all affected NIH grants (active and pending) with the following information for each:
    • Complete grant number (e.g., 5 R01 GM 12345-04).
    • Name(s) of PD/PI(s).
    • Current budget period and project period.
    • The total direct costs (as originally recommended) plus applicable F&A costs for each remaining budget period. If the SII will occur during a budget period rather than on the anniversary date, the transferor also must provide estimated levels of current-year direct and F&A costs remaining as of the SII effective date. The estimate may be reported on the PHS 3734 (Official Statement Relinquishing Interests and Rights in a Public Health Service Research Grant), which may be submitted on paper or electronically through the eRA Commons, or may be itemized by grant number as an attachment to the letter.
  • Include a complete face page (PHS 398) for each affected grant showing the transferee as the applicant organization. Each face page must be signed by an AOR at the transferee organization.
  • Include a copy of the current negotiated F&A rate agreement for the transferee.

NIH is currently piloting the electronic submission of some of the items required for a successor-in-interest request. After discussions with the lead NIH awarding IC, grantees may choose to submit an electronic application for a successor-in-interest request to satisfy the requirement for the face page(s), confirmation of the transferee's EIN, verification of the transferee's compliance with applicable requirements (e.g., research misconduct assurance of compliance), and Relinquishing Statement. The electronic application is submitted via Grants.gov using the Parent Funding Opportunity Announcement at http://grants.nih.gov/grants/guide/parent_announcements.htm.

In order to be recognized as the SII, the "new" (transferee) organization must meet each grant program's eligibility requirements; except for grants awarded under the SBIR/STTR programs. See Small Business Innovation Research and Small Business Technology Transfer Programs—Eligibility in IIB for additional guidance. Upon review and acceptance of this information, NIH will revise the NoA(s) to show the transferee as the grantee of record.

For name changes, the grantee's written notification to the lead NIH awarding IC must include the effective date of the change. Revised face pages are not required for name changes because name changes are reported and processed with the next award action (e.g., non-competing continuation award).

8.1.2.9 Deviation from Award Terms and Conditions, including Restrictions in the NoA

NIH prior approval is required for any deviation from terms or conditions stated or referenced in the NoA, including those in the NIHGPS. This includes undertaking any activities disapproved or restricted as a condition of the award.

8.1.2.10 Foreign Component Added to a Grant to a Domestic or Foreign Organization

Adding a foreign component under a grant to a domestic or foreign organization requires NIH prior approval.

8.1.2.11 Need for Additional NIH Funding without Extension of Budget and Project Period

A request for additional funding for a current budget period to meet increased costs that are within the scope of the approved application, but that were unforeseen when the new or renewal application or grant progress report for non-competing continuation support was submitted, is a non-competing supplemental application. Such requests are submitted, in writing, directly to the GMO and are not required to compete with other applications for funding. Other grantee-initiated requests for supplemental funding during a current budget period are considered to change the scope of the approved project and may be required to compete for funding with other applications. When calculating the award for additional funds, NIH will use the institution’s current F&A rate; i.e., the rate in effect when the new funding is provided.

8.1.2.12 Need for Additional NIH Funding with Extension of the Final Budget Period of a Project Period

A request for a non-competing extension of the final budget period of a project period with a minimal amount of additional funds should be submitted to the GMO, in writing, at least 30 days before the project period is scheduled to expire. Such requests usually are for a period of up to 12 months, based on a need that additional work remains to be completed on the project and that resources are available to continue to support the project, or to permit orderly phase-out of project activities for which there will be no further NIH support. The request must specify the proposed revised ending date and must include justification for both the extension and the additional funds requested. Special justification will be required for an extension that would exceed 12 months. NIH will not approve such requests if the primary purpose of the proposed extension is to permit the use of unobligated balances of funds. All terms and conditions of the award apply during the extended period.

All Federal agencies are required by 31 U.S.C. §1552(a) to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, grantees must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. At the end of five years, the funds are cancelled and returned to the Treasury. This provision may limit NIH's ability to further extend the final budget period with funding.

8.1.2.13 Pre-Award Costs

See Cost Considerations—Selected Items of Cost—Pre-Award (Pre-Agreement) Costs.

8.1.2.14 Rebudgeting of Funds from Trainee Costs

The rebudgeting of amounts previously awarded for trainee costs (stipends, tuition, and fees) to other categories of expense requires NIH prior approval. This excludes trainee travel, which NIH does not consider to be a trainee cost, and training-related expenses (see Ruth L. Kirschstein National Research Service Awards—Institutional Research Training Grants—Rebudgeting of Funds in IIB).

8.1.2.15 Rebudgeting of Funds Between Construction and Non-construction Work

Under awards that provide for both construction and non-construction work, NIH prior approval is required to transfer funds between the two types of work.

8.1.2.16 Retention of Research Grant Funds When a Career Development Award is Issued

Funds budgeted under an NIH grant for an individual's salary and fringe benefits, but available as a result of receiving a K award for that individual, may not be used for any other purpose without NIH prior approval.

8.1.3 Requests for Prior Approval

All requests for NIH awarding IC prior approval must be made in writing (including submission by e-mail) to the GMO no later than 30 days before the proposed change, and signed by the AOR. If the request is e-mailed, it must provide evidence of the AOR's approval; a cc to the AOR is not acceptable. Failure to obtain required prior approval from the appropriate awarding IC may result in the disallowance of costs, termination of the award, or other enforcement action within NIH's authority.

E-mail requests must be clearly identified as prior approval requests, must reflect the complete grant number in the subject line, and should be sent by the AOR to the GMO that signed the NoA. Contact information is provided on each NoA and is also available in the eRA Commons. E-mail addresses for NIH staff can be also obtained from the NIH Enterprise Directory at: https://ned.nih.gov/search/. E-mail requests must include the name of the grantee, the name of the initiating PD/PI, the PD/PI's telephone number, fax number, and e-mail address, and comparable identifying information for the AOR.

The GMO will review the request and provide a response to the AOR indicating the final disposition of the request, with copies to the PD/PI and to the cognizant NIH PO. Only responses provided by the GMO are considered valid. Grantees that proceed on the basis of actions by unauthorized officials do so at their own risk, and NIH is not bound by such responses.

Whenever grantees contemplate rebudgeting or other post-award changes and are uncertain about the need for prior approval, they are strongly encouraged to consult, in advance, with the GMO.

Under a consortium agreement or contract, the prior approval authority usually is the prime grantee. However, the prime grantee may not approve any action or cost that is inconsistent with the purpose or terms and conditions of the NIH grant. If an action by a consortium participant will result in a change in the overall grant project or budget requiring NIH approval, the prime grantee must obtain that approval from NIH before giving its approval to the consortium participant.

8.2 Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources

It is NIH policy that the results and accomplishments of the activities that it funds should be made available to the public. PD/PIs and grantee organizations are expected to make the results and accomplishments of their activities available to the research community and to the public at large. (See also Availability and Confidentiality of Information—Confidentiality of Information—Access to Research Data in Part I for policies related to providing access to certain research data at public request.) If the outcomes of the research result in inventions, the provisions of the Bayh-Dole Act of 1980, as implemented in 37 CFR 401, apply.

As long as grantees abide by the provisions of the Bayh-Dole Act, as amended by the Technology Transfer Commercialization Act of 2000 (P.L. 106-404), and 37 CFR 401, they have the right to retain title to any invention conceived or first actually reduced to practice using NIH grant funds. The principal objectives of these laws and the implementing regulation are to promote commercialization of federally funded inventions, while ensuring that inventions are used in a manner that promotes free competition and enterprise without unduly encumbering future research and discovery.

The regulation requires the grantee to use patent and licensing processes to transfer grant-supported technology to industry for development. Alternatively, unpatented research products or resources—“research tools”—may be made available through licensing to vendors or other investigators. Sharing of copyrightable outcomes of research may be in the form of journal articles or other publications.

The importance of each of these outcomes of funded research is reflected in the specific policies pertaining to rights in data, sharing of research data and unique research resources, and inventions and patents described in the following subsections.

8.2.1 Rights in Data (Publication and Copyrighting)

In general, grantees own the rights in data resulting from a grant-supported project. Special terms and conditions of the award may indicate alternative rights, e.g., under a cooperative agreement or based on specific programmatic considerations as stated in the applicable RFA. Except as otherwise provided in the terms and conditions of the award, any publications, data, or other copyrightable works developed under an NIH grant may be copyrighted without NIH approval. For this purpose, “data” means recorded information, regardless of the form or media on which it may be recorded, and includes writings, films, sound recordings, pictorial reproductions, drawings, designs, or other graphic representations, procedural manuals, forms, diagrams, work flow charts, equipment descriptions, data files, data processing or computer programs (software), statistical records, and other research data.

Rights in data also extend to students, fellows, or trainees under awards whose primary purpose is educational, with the authors free to copyright works without NIH approval. In all cases, NIH must be given a royalty-free, nonexclusive, and irrevocable license for the Federal government to reproduce, publish, or otherwise use the material and to authorize others to do so for Federal purposes. Data developed by a consortium participant also is subject to this policy.

As a means of sharing knowledge, NIH encourages grantees to arrange for publication of NIH-supported original research in primary scientific journals. Grantees also should assert copyright in scientific and technical articles based on data produced under the grant where necessary to effect journal publication or inclusion in proceedings associated with professional activities.

Journal or other copyright practices are acceptable unless the copyright policy prevents the grantee from making copies for its own use (as provided in 45 CFR parts 74.36 and 92.34). The disposition of royalties and other income earned from a copyrighted work is addressed in Administrative Requirements—Management Systems and Procedures—Program Income.

All grantees must acknowledge Federal funding when issuing statements, press releases, requests for proposals, bid invitations, and other documents describing projects or programs funded in whole or in part with Federal money. Each publication, press release, or other document about research supported by an NIH grant must include:

  1. An acknowledgment of NIH grant support such as:
    "Research reported in this [publication, release] was supported by [name of the Institute, Center, or other funding component] of the National Institutes of Health under grant number [specific NIH grant number in this format: R01GM012345]."
  2. A disclaimer that says:
    "The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health."

If the grantee plans to issue a press release about research supported by an NIH grant, it should notify the NIH funding component in advance to allow for coordination. See http://www.nih.gov/news/media_contacts.htm for media contact information.

Publications resulting from work performed under an NIH grant-supported project must be included as part of the annual or final progress report submitted to the NIH awarding IC (see Administrative Requirements—Monitoring—Reporting—Non-Competing Continuation Progress Reports and Administrative Requirements—Closeout—Final Reports—Final Progress Report). When publications are available electronically, the url or the PMCID number must be provided. If not available electronically, one copy of the publication may be provided along with the progress report. See also NIH Public Access Policy below for additional requirements for publications resulting from NIH funded research.

8.2.2 NIH Public Access Policy

The NIH Public Access Policy implements Division F, Section 217 of PL 111-8 (Omnibus Appropriations Act, 2009). The policy ensures that the public has access to the published results of NIH funded research at the NIH NLM PMC, a free digital archive of full-text biomedical and life sciences journal literature (http://www.pubmedcentral.nih.gov/). Under the policy NIH-funded investigators are required by Federal law to submit (or have submitted for them) to PMC an electronic version of the final, peer-reviewed manuscript upon acceptance for publication, to be made publicly available no later than 12 months after the official date of publication. The author's final peer-reviewed manuscript is defined as the final version accepted for journal publication on or after 4/7/2008, and includes all modifications from the publishing peer review process, and all graphics and supplemental material associated with the article. Institutions and investigators are responsible for ensuring that any publishing or copyright agreements concerning submitted articles reserve adequate right to fully comply with this policy. Applicants citing articles in NIH applications, proposals, and progress reports that fall under the policy, were authored or co-authored by the applicant and arose from NIH support must include the PMCID or NIHMS ID. The NIHMSID may be used to indicate compliance with the Public Access Policy in applications and progress reports for up to three months after a paper is published. After that period, a PMCID must be provided to demonstrate compliance.

This policy applies to all peer-reviewed articles resulting from research supported in whole or in part with direct costs from NIH, including research grant and career development awards, cooperative agreements, contracts, Institutional and Individual Ruth L. Kirschstein National Research Service Awards, SBIR/STTR awards, and NIH intramural research studies.

Additional information can be found at: http://publicaccess.nih.gov/.

8.2.3 Sharing Research Resources

Investigators conducting biomedical research frequently develop unique research resources. NIH considers the sharing of such unique research resources (also called research tools) an important means to enhance the value of NIH-sponsored research. Restricting the availability of unique resources can impede the advancement of further research. Therefore, when these resources are developed with NIH funds and the associated research findings have been accepted for publication, or after they have been provided to NIH, it is important that they be made readily available for research purposes to qualified individuals within the scientific community. At the same time NIH recognizes the rights of grantees and contractors to elect and retain title to subject inventions developed with federal funding pursuant to the Bayh-Dole Act. See the Office of Extramural Research, Division of Extramural Inventions & Technology Resources (DEITR), Intellectual Property Policy page: http://grants.nih.gov/grants/intell-property.htm.

Program staff are responsible for overseeing resource sharing policies and for assessing the appropriateness and adequacy of any proposed resource sharing plans.

To provide further clarification of the NIH policy on disseminating unique research resources, NIH published Principles and Guidelines for Recipients of NIH Research Grants and Contracts on Obtaining and Disseminating Biomedical Research Resources (64 FR 72090, December 23, 1999; http://grants.nih.gov/grants/intell-property_64FR72090.pdf). This document will assist grantees in determining reasonable terms and conditions for disseminating and acquiring research tools.

The terms of those agreements also must reflect the objectives of the Bayh-Dole Act and the Technology Transfer Commercialization Act of 2000 to ensure that inventions made are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery.

In addition to sharing research resources with the research community, upon request of the NIH awarding IC, the grantee also must provide a copy of documents or a sample of any material developed under an NIH grant award. The grantee may charge a nominal fee to cover shipping costs for providing this material. Income earned from these charges must be treated as program income (see Administrative Requirements—Management Systems and Procedures—Program Income).

To facilitate the availability of unique or novel materials and resources developed with NIH funds, investigators may distribute the materials through their own laboratory or organization or submit them, if appropriate, to entities such as the American Type Culture Collection or other repositories and should ensure that those entities distribute them in a way that is consistent with the above referenced Principles and Guidelines for Recipients of NIH Research Grants and Contracts on Obtaining and Disseminating Biomedical Research Resources. Investigators are expected to submit unique biological information, such as DNA sequences or crystallographic coordinates, to the appropriate data banks so that they can be made available to the broad scientific community. When distributing unique resources, investigators are to include pertinent information on the nature, quality, or characterization of the materials.

8.2.3.1 Data Sharing Policy

NIH believes that data sharing is essential for expedited translation of research results into knowledge, products, and procedures to improve human health. NIH endorses the sharing of final research data to serve these and other important scientific goals and expects and supports the timely release and sharing of final research data from NIH-supported studies for use by other researchers. “Timely release and sharing” is defined as no later than the acceptance for publication of the main findings from the final data set. All investigator-initiated applications with direct costs of $500,000 or more (excluding consortium F&A costs) in any single year are expected to address data-sharing in their application. In some cases, FOAs may request data-sharing plans for applications that are less than $500,000 (excluding consortium F&A costs) in any single year.

NIH recognizes that data sharing may be complicated or limited, in some cases, by organizational policies, local IRB rules, and local, State and Federal laws and regulations, including the HIPAA Privacy Rule (see Public Policy Requirements and Objectives—Confidentiality of Patient Records: Health Insurance Portability and Accountability). The rights and privacy of individuals who participate in NIH-sponsored research must be protected at all times. Thus, data intended for broader use should be free of identifiers that would permit linkages to individual research participants and variables that could lead to deductive disclosure of the identity of individual subjects. When data-sharing is limited, applicants should explain such limitations in their data-sharing plans.

Investigators must exercise great care to ensure that resources involving human cells or tissues do not identify original donors or subjects, directly or through identifiers such as codes linked to the donors or subjects.

Organizations that believe they will be unable to meet these expectations should promptly contact the GMO to discuss the circumstances, obtain information that might enable them to share data, and reach an understanding in advance of an award.

8.2.3.2 Sharing Model Organisms

All applications where the development of model organisms is anticipated are expected to include a description of a specific plan for sharing and distributing unique model organism research resources generated using NIH funding so that other researchers can benefit from these resources, or state appropriate reasons why such sharing is restricted or not possible. Model organisms include but are not restricted to mammalian models, such as the mouse and rat; and non-mammalian models, such as budding yeast, social amoebae, round worm, fruit fly, zebra fish, and frog. Research resources to be shared include genetically modified or mutant organisms, sperm, embryos, protocols for genetic and phenotypic screens, mutagenesis protocols, and genetic and phenotypic data for all mutant strains.

This expectation is for all applications where the development of model organisms is anticipated, regardless of funding amount.

For additional information on this policy, see the NIH Model Organism for Biomedical Research Web site at: http://www.nih.gov/science/models/.

8.2.3.3 Policy for Genome-Wide Association Studies (GWAS)

NIH is interested in advancing GWAS to identify common genetic factors that influence health and disease through a centralized GWAS data repository. For the purposes of this policy, a genome-wide association study is defined as any study of genetic variation across the entire human genome that is designed to identify genetic associations with observable traits (such as blood pressure or weight), or the presence or absence of a disease or condition.

All applications, regardless of the amount requested, proposing a genome-wide association study are expected to provide a plan for submission of GWAS data to the NIH-designated GWAS data repository, or provide an appropriate explanation why submission to the repository is not possible. For additional information see: http://gwas.nih.gov/.

8.2.4 Inventions and Patents

The Bayh-Dole Act of 1980 (Public Law 96-517; 35 U.S.C. 200-212) and the related EO 12591 (April 10, 1987) provide incentives for the practical application of research supported through Federal funding agreements. To be able to retain rights and title to inventions made with Federal funds, so-called “subject” inventions, the grantee must comply with a series of regulations that ensure the timely transfer of the technology to the private sector, while protecting limited rights of the Federal government.

The regulations apply to any subject invention—defined as any invention either conceived or first actually reduced to practice in the performance of work under the Federal award—and to all types of recipients of Federal funding. This includes non-profit entities and small businesses or large businesses receiving funding through grants, cooperative agreements, or contracts as direct recipients of funds, or as consortium participants or subcontractors under those awards.

Some of the steps required by the regulation to retain intellectual property rights to subject inventions include:

  • Report all subject inventions to NIH.
  • Make efforts to commercialize the subject invention through patent or licensing.
  • Formally acknowledge the Federal government’s support in all patents that arise from the subject invention.
  • Formally grant the Federal government a limited use license to the subject invention.

Exhibit 8 summarizes recipient responsibilities for invention reporting as specified in the regulations in 37 CFR 401. Grantees should refer to 37 CFR 401 (available on the Interagency Edison site: https://s-edison.info.nih.gov/iEdison/) for a complete discussion of the regulations.

Exhibit 8. Extramural Invention Reporting Compliance Responsibilities
Invention Reporting Requirement Action Required When Action Must Be Taken Discussion 37 CFR 401 Reference
Employee Agreement to Disclose All Inventions Grantee employees working under the funding award (e.g., PD/PI) must sign an agreement to abide by the terms of the Bayh-Dole Act and the NIHGPS as they relate to intellectual property rights. At time of employment-term of employment. Grantee organizations and consortium participants must have policies in place regarding ownership of intellectual property, including conflict of interest issues. 401.14(f)(2)
Invention Report and “Disclosure” The grantee organization must submit to NIH a report of any subject invention. This includes a written description (the so-called “invention disclosure”) of the invention that is complete in technical detail. Within 2 months of the inventor’s initial report of the invention to the grantee organization. There is no single format for disclosing the invention to the Federal government. The report must identify inventor(s), NIH grant number, and date of any public disclosure. 401.14(a)(2)
401.14(c)(1)
Rights to Consortium Participant Inventions Consortium participants under NIH grants retain rights to any subject inventions they make. Within 2 months of the inventor’s initial report of the invention to the consortium participant. (The consortium participant has the same invention reporting obligations as the grantee.) The grantee cannot require ownership of a consortium participant’s subject inventions as a term of the consortium agreement. 401.14(g)(1)
401.14(g)(2)
Election of Title to Invention The grantee must notify NIH of its decision to retain or waive title to invention and patent rights. Within 2 years of the initial reporting of the invention to NIH.   401.14(b)
401.14(c)(2)
401.14(f)(1)
Confirmatory License For each invention, the grantee must provide a user license to NIH for each invention. When the initial non-provisional patent application is filed.   401.14(f)(1)
Patent Application The grantee must inform NIH of the filing of any non-provisional patent application. The patent application must include a Federal government support clause. Within 1 year after election of title, unless there is an extension. Initial patent application is defined as a non-provisional application. The patent application number and filing date must be provided. The following language is to be used on patent application: “This invention was made with government support under (identify the funding award) awarded by (identify the IC and Federal Agency). The government has certain rights in the invention." All communications for such requests must be sent to OER. 401.14(c)(3)
401.2(n)
401.14(f)(4)
Assignment of Rights to Third Party If the grantee is a non-profit organization, it must ask NIH approval to assign invention or U.S. patent rights to any third party, including the inventor(s). As needed. All communication for such requests must be sent to OER. The NIH Office of Technology Transfer serves in an advisory capacity to OER for the processing of such assignment requests. Grantees that are for-profit entities (including small businesses) do not need to ask approval, but ongoing reporting remains a requirement for each invention. 401.14(k)
Issued Patent The grantee must notify NIH that a patent has been issued. When the patent is issued. The patent issue date, number, and evidence of Federal government support clause must be provided. 401.5(f)(2)
Extension of Time to Elect Title or File Patent The grantee may request an extension of up to 2 years for election of title, or an extension of up to 1 year for filing a patent application. As needed. Request for extension of time must be made. Such requests are preapproved. 401.14(c)(4)
Change in Patent Application Status The grantee must notify NIH of changes in patent status.  At least 30 days before any pending patent office deadline. This notification allows NIH to consider continuing the patent action. 401.14(f)(3)
Invention Utilization Report The grantee must submit information about the status of commercialization of any invention for which title has been elected. Annually. This report gives an indication of whether the objectives of the law are being met. Specific reporting requirements can be found in iEdison (http://iEdison.gov). 401.14(h)
Annual Invention Statement The grantee must indicate any inventions made during the previous budget period on all grant awards. Part of all competing applications and non-competing continuation progress reports. The information is requested as a checklist item on the PHS 398 application and on the non-competing continuation progress report. PHS 398 and
PHS 2590
Final Invention Statement and Certification The grantee must submit to the NIH awarding IC GMO a summary of all inventions made during the entire term of each grant award. Within 90 days after the project period (competitive segment) ends. Required information is specified on the HHS 568 form. If no inventions occurred during the project period, a negative report must be submitted. 401.14(f)(5)

Failure of the grantee to comply with any of these or other regulations cited in 37 CFR 401 may result in the loss of patent rights or a withholding of additional grant funds.

The Bayh-Dole Act includes provisions for the grantee to assign invention rights to third parties. Grantees that are non-profit organizations must request NIH approval for the assignment. If the assignment is approved and the rights are assigned to a third party, invention and patent reporting requirements apply to the third party. The grantee should review existing agreements with third parties and revise them, as appropriate, to ensure they are consistent with the terms and conditions of their NIH grant awards and that the objectives of the Bayh-Dole Act are adequately represented in the assignment.

Any invention made using funds awarded for educational purposes, e.g. fellowships, training grants or certain types of career development awards, is not considered a subject invention and therefore is not subject to invention reporting requirements (as provided in 45 CFR 74 and 37 CFR 401.1(b)). The grantee should seek the advice of NIH to verify whether any invention made under a career development award should be considered a subject invention.

Details regarding invention reporting and iEdison are discussed under Administrative Requirements—Monitoring—Reporting—Invention Reporting.

All issues or questions regarding extramural technology transfer policy and reporting of inventions and their utilization should be referred to the Division of Extramural Inventions and Technology Resources Branch, OPERA, OER. See Part III for contact information.

8.3 Management Systems and Procedures

Grantee organizations are expected to have systems, policies, and procedures in place by which they manage funds and activities. Grantees may use their existing systems to manage NIH grant funds and activities as long as they are consistently applied regardless of the source of funds and meet the standards and requirements set forth in 45 CFR part 74 or part 92 and the NIHGPS. NIH may review the adequacy of those systems and may take appropriate action, as necessary, to protect the Federal government’s interests, including, but not limited to, the use of special terms and conditions. NIH also will oversee the grantee’s systems as part of its routine post-award monitoring. The grantee’s systems also are subject to audit (see Administrative Requirements—Monitoring—Audit).

NIH seeks to foster within grantee organizations an organizational culture that is committed to compliance, leading to both exemplary research and exemplary supporting systems and use of resources to underpin that research. Actions to achieve this result should include a clear delineation of the roles and responsibilities of the organization’s staff, both programmatic and administrative; written policies and procedures; training; management controls and other internal controls; performance assessment; administrative simplifications; and information sharing.

8.3.1 Financial Management System Standards

Grantees are required to meet the standards and requirements for financial management systems set forth or referenced in 45 CFR part 74.21 or 92.20, as applicable. The standards and requirements for a financial management system are essential to the grant relationship. NIH cannot support the research unless it has assurance that its funds will be used appropriately, adequate documentation of transactions will be maintained, and assets will be safeguarded.

Grantees must have in place accounting and internal control systems that provide for appropriate monitoring of grant accounts to ensure that obligations and expenditures are reasonable, allocable, and allowable. In addition, the systems must be able to identify large unobligated balances, accelerated expenditures, inappropriate cost transfers, and other inappropriate obligation and expenditure of funds. Grantees must notify NIH when problems are identified.

A grantee’s failure to establish adequate control systems constitutes a material violation of the terms of the award. Under these circumstances, NIH may include special conditions on awards or take any of the range of actions specified in Administrative Requirements—Enforcement Actions, as necessary and appropriate.

8.3.2 Program Income

Program income is gross income—earned by a grantee, a consortium participant, or a contractor under a grant—that was directly generated by the grant-supported activity or earned as a result of the award. Program income includes, but is not limited to, income from fees for services performed; charges for the use or rental of real property, equipment or supplies acquired under the grant; the sale of commodities or items fabricated under an award; charges for research resources; registration fees for grant-supported conferences, and license fees and royalties on patents and copyrights. (Note: Program income from license fees and royalties from copyrighted material, patents, and inventions is exempt from reporting requirements unless otherwise specified in the terms and conditions of award.) The requirements for accountability for these various types of income under NIH grants are specified in this subsection. Accountability refers to whether NIH will specify how the income is to be used and whether the income needs to be reported to NIH and for what length of time. Unless otherwise specified in the terms and conditions of the award, NIH grantees are not accountable for program income accrued after the period of grant support.

NIH applies the additive alternative to all grantees, including for-profit entities, unless there is a concern with the recipient or activity and NIH uses special terms and conditions, or the program requires a different program income alternative. NIH may require a different use of program income if a grantee has deficient systems; if the PD/PI has a history of frequent, large annual unobligated balances on previous grants; or if the PD/PI has requested multiple extensions of the final budget period of the project period. Regardless of the alternative applied, program income may be used only for allowable costs in accordance with the applicable cost principles and the terms and conditions of the award. Each NoA will indicate the allowable treatment of program income. Program income alternatives and their usage are noted below in Exhibit 9.

Consortium agreements and contracts under grants are subject to the terms of the agreement or contract with regard to the income generated by the activities, but the terms specified by the grantee must be consistent with the requirements of the grant award. Program income must be reported by the grantee as discussed in this subsection.

8.3.2.1 Reporting Program Income

The amount of program income earned and the amount expended must be reported on the appropriate annual financial report, currently the FFR. Any costs associated with the generation of the gross amount of program income that are not charged to the grant should be deducted from the gross program income earned, and the net program income should be the amount reported. Program income must be reported in the Program Income section of the FFR (lines 10 L – O). (See Administrative Requirements—Monitoring—Reporting—Financial Reporting.) For awards under SNAP, the amount of program income earned must be reported in the non-competing continuation progress report.

Income resulting from royalties or licensing fees is generally exempt from reporting as program income.

When applicable, income earned from the sale of equipment must be reported on the FFR for the period in which the proceeds are received in accordance with the reporting requirements for the program income alternative specified. Amounts due NIH for unused supplies must be reflected as a credit to the grant on the FFR using line 10 m.

Reporting requirements for accountable income accrued after grant support ends will be specified in the NoA.

Exhibit 9. Use and Applicability of Program Income Alternatives
Program Income Alternative Use of Program Income Applicability
Additive Alternative Added to funds committed to the project or program and used to further eligible project or program objectives. Applies to all NIH awards unless there is a concern with the recipient or activity or the program requires a different alternative.
Deductive Alternative Deducted from total allowable costs of the project or program to determine the net allowable costs on which the Federal share of costs will be based. Available for use by NIH programs on an exception basis.
Combination Alternative Uses all program income up to (and including) $25,000 as specified under the additive alternative and any amount of program income exceeding $25,000 under the deductive alternative. Available for use by NIH programs on an exception basis.
Matching Alternative Used to satisfy all or part of the non-Federal share of a project or program. Available for use by NIH programs that require matching.

8.3.2.2 Sale of Real Property, Equipment, and Supplies

The requirements that apply to the sale of real property are addressed in the Construction Grants chapter. For equipment and supplies purchased under NIH grants for basic or applied research by non-profit institutions of higher education or non-profit organizations whose principal purpose is the conduct of scientific research, the grantee is exempt from any requirement to account to NIH for proceeds from the sale of the equipment or supplies; however, NIH has certain rights with respect to such property as specified in Administrative Requirements—Management Systems and Procedures—Property Management System Standards.

All other types of grants and grantees are subject to the requirements in 45 CFR part 74.34 or 92.32 if title to the equipment vests in the grantee rather than in NIH. If the grant-supported project or program for which equipment was acquired is still receiving NIH funding at the time of sale, the grantee must credit the NIH share of the proceeds to the grant and use that amount under the deductive alternative for program income. If the grantee is no longer receiving NIH grant support, the amount due should be paid in accordance with instructions from NIH. These grants and grantees also are subject to the requirements in 45 CFR part 74.35 or 92.33 with respect to the use or sale of unused supplies. If the grantee retains the supplies for use on other than federally sponsored activities, an amount is due NIH as if they were sold.

8.3.2.3 Royalties and Licensing Fees from Copyrights, Inventions, and Patents

NIH grantees do not have to report program income resulting from royalties or licensing fees from sale of copyrighted material unless specific terms and conditions of the award provide otherwise. The NoA may include special terms and conditions if commercialization of an invention is an anticipated outcome of a research project.

However, the regulations implementing the Bayh-Dole Act (37 CFR 401.14(h)) require reporting of income resulting from NIH-funded inventions and patents. Specifically, as part of the annual invention utilization report, grantees must report income generated by all subject inventions to which title has been elected and by inventions such as research tools that have been licensed but not patented (see Administrative Requirements—Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources and Administrative Requirements—Monitoring—Reporting).

8.3.3 Property Management System Standards

Generally, grantees may use their own property management policies and procedures for property purchased, constructed, or fabricated as a direct cost using NIH grant funds, provided they observe the requirements in 45 CFR parts 74.30 through 74.37 or parts 92.31 through 92.34, as applicable, and the following. State governments will use, manage, and dispose of equipment acquired under a grant in accordance with state laws and procedures as specified in 45 CFR 92.32.

The dollar threshold for determining the applicability of several of the requirements in those regulations is based on the unit acquisition cost of an item of equipment. As defined in 45 CFR 74.2, the acquisition cost of an item of equipment to the grantee includes necessary modifications and attachments that make it usable for the purpose for which it was acquired or fabricated. When such accessories or attachments are acquired separately and serve to replace, enhance, supplement, or otherwise modify the equipment’s capacity and they individually meet the definition of equipment (see Glossary in Part I), any required NIH prior approval for equipment must be observed for each item. However, the aggregate acquisition cost of an operating piece of equipment will be used to determine the applicable provisions of 45 CFR part 74.34 or 92.32. If property is fabricated from individual component parts, each component must itself be classified as equipment if it meets the definition of equipment. In this case, the aggregate acquisition cost of the resulting piece of equipment will determine the appropriate accountability requirements in 45 CFR part 74.34 or 92.32.

Grantees are required to be prudent in the acquisition of property under a grant-supported project. It is the grantee’s responsibility to conduct a prior review of each proposed property acquisition to ensure that the property is needed and that the need cannot be met with property already in the possession of the organization. If prior approval is required for the acquisition, the grantee must ensure that appropriate approval is obtained in advance of the acquisition. The grantee also must follow appropriate procurement procedures in acquiring property as specified in Administrative Requirements—Management Systems and Procedures—Procurement System Standards and Requirements.

Recipients of NIH grants other than Federal institutions cannot be authorized to use Federal supply sources.

8.3.3.1 Real Property

See Construction Grants—Real Property Management Standards in IIB for requirements that apply to the acquisition, use, and disposition of real property. Fixed equipment that is part of a construction grant is subject to those requirements.

8.3.3.2 Equipment and Supplies

In general, title to equipment and supplies acquired by a grantee with NIH funds vests in the grantee upon acquisition, subject to the property management requirements of 45 CFR parts 74.31, 74.34, 74.35, and 74.37, or parts 92.32 and 92.33. Limited exceptions to these general rules are States, which may use, manage, and dispose of equipment acquired under a grant in accordance with State laws and procedures, and certain research grant recipients with exempt property. These requirements do not apply to equipment for which only depreciation or use allowances are charged, donated equipment, or equipment acquired primarily for sale or rental rather than for use.

8.3.3.2.1 Exempt Property

Under the Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6306, NIH may permit non-profit institutions of higher education and non-profit organizations whose primary purpose is the conduct of scientific research to obtain title to equipment and supplies acquired under grants for support of basic or applied scientific research without further obligation to the Federal government. However, there is one exception: NIH has the right to require transfer of title to equipment with an acquisition cost of $5,000 or more to the Federal government or to an eligible third party named by the NIH awarding IC under the conditions specified in 45 CFR 74.34(h). NIH may exercise this right within 120 days of the completion or termination of an award or within 120 days of receipt of an inventory, as provided in 45 CFR 74.34(h)(2), whichever is later.

8.3.3.2.2 Nonexempt Property

All other equipment and supplies acquired under all other NIH grant-supported projects by any other type of grantee are subject to the full range of acquisition, use, management, and disposition requirements of 45 CFR parts 74.34 and 74.35, or 45 CFR parts 92.32 and 92.33. Property acquired or used under an NIH grant-supported project, including any federally owned property, also is subject to the requirements for internal control specified in 45 CFR part 74.21 or 92.20. Pursuant to 45 CFR 74.37, equipment (and intangible property and debt instruments) acquired with, or improved with, NIH funds must not be encumbered without NIH approval.

The grantee’s management system for equipment must meet the requirements of 45 CFR part 74.34(f) or 92.32, which include the following:

  • Records that adequately identify (according to the criteria specified in the regulations) items of equipment owned or held by the grantee and state the current location of each item.
  • A physical inventory of the equipment, at least once every 2 years, to verify that the items in the records exist and either are usable and needed or are surplus (a statistical sampling basis is acceptable).
  • Control procedures and safeguards to prevent loss, damage, and theft.
  • Adequate maintenance procedures to keep the equipment in good condition.
  • Proper sales procedures when the grantee is authorized to sell the equipment.

For items of equipment having a unit acquisition cost of $5,000 or more, NIH has the right to require transfer title to the equipment to the Federal government or to an eligible third party named by the NIH awarding IC under the conditions specified in 45 CFR parts 74.34(h) and 92.32, respectively. This right applies to nonexempt property acquired by all types of grantees, including Federal institutions, under all types of grants under the stipulated conditions.

If there is a residual inventory of unused supplies exceeding $5,000 in aggregate fair market value upon termination or completion of the grant and if the supplies are not needed for other federally sponsored programs or projects, the grantee may either retain them for use on other than federally sponsored activities or sell them, but, in either case, the grantee must compensate the NIH awarding IC for its share as a credit to the grant.

Recipients of NIH grants must not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless the terms and conditions of the award provide otherwise.

8.3.3.2.3 Revocable License

As permitted under Federal property management statutes and regulations and NIH property management policies, federally owned tangible personal property may be made available to grantees under a revocable license agreement. The revocable license agreement between NIH and the grantee provides for the transfer of the equipment for the period of grant support under the following conditions:

  • Title to the property remains with the Federal government.
  • NIH reserves the right to require the property to be returned to the Federal government should it be determined to be in the best interests of the Federal government to do so.
  • The use to which the grantee puts the property does not permanently damage it for Federal government use.
  • The property is controlled and maintained in accordance with the requirements of 48 CFR 45.5 (the FAR).

8.3.4 Procurement System Standards and Requirements

8.3.4.1 General

Grantees may acquire a variety of goods or services in connection with a grant-supported project, ranging from those that are routinely purchased goods or services to those that involve substantive programmatic work. States may follow the same policies and procedures they use for procurements from non-Federal funds. All other grantees must follow the requirements in 45 CFR parts 74.40 through 74.48 or 92.36, as applicable, for the purchase of goods or services through contracts under grants. The requirements for third-party activities involving programmatic work are addressed under Consortium Agreements chapter in IIB.

A contract under a grant must be a written agreement between the grantee and the third party. The contract must, as appropriate, state the activities to be performed; the time schedule; the policies and requirements that apply to the contractor, including those required by 45 CFR part 74.48 or 92.36(i) and other terms and conditions of the grant (these may be incorporated by reference where feasible); the maximum amount of money for which the grantee may become liable to the third party under the agreement; and the cost principles to be used in determining allowable costs in the case of cost-type contracts. The contract must not affect the grantee’s overall responsibility for the direction of the project and accountability to the Federal government. Therefore, the agreement must reserve sufficient rights and control to the grantee to enable it to fulfill its responsibilities.

When a grantee enters into a service-type contract in which the term is not concurrent with the budget period of the award, the grantee may charge the costs of the contract to the budget period in which the contract is executed even though some of the services will be performed in a succeeding period if the following conditions are met:

  • The NIH awarding IC has been made aware of this situation either at the time of application or through post-award notification.
  • The project has been recommended for a project period extending beyond the current year of support.
  • The grantee has a legal commitment to continue the contract for its full term.

However, costs will be allowable only to the extent that they are for services provided during the period of NIH support. To limit liability if continued NIH funding is not forthcoming, it is recommended that grantees insert a clause in such contracts of $100,000 or less stipulating that payment beyond the end of the current budget period is contingent on continued Federal funding. The contract provisions prescribed by 45 CFR parts 74.48 and 92.36(i)(2) specify termination provisions for contracts in excess of $100,000.

8.3.4.2 Approval Requirements

The procurement standards in 45 CFR parts 74.44 and 92.36(g) allow NIH to require approval of specific procurement transactions under the following circumstances (and provide a mechanism for governmental grantees to be exempt from this type of review):

  • A grantee’s procurement procedures or operations do not comply with the procurement standards required by those regulations.
  • The procurement is expected to exceed the “simplified acquisition threshold” (currently $100,000) (formerly the “small purchase threshold”) established by the Federal Property and Administrative Services Act, as amended, and is to be awarded without competition or only one bid or proposal is received in response to a solicitation.
  • A procurement that will exceed the simplified acquisition threshold specifies a “brand name” product.
  • A proposed award over the simplified acquisition threshold is to be awarded to other than the apparent low bidder under a sealed-bid procurement.
  • A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount considered to be a simplified acquisition.

When NIH prior approval is required, the grantee must make available sufficient information to enable review. This may include, at NIH discretion, presolicitation technical specifications or documents, such as requests for proposals or invitations for bids, or independent cost estimates. Approval may be deferred pending submission of additional information by the applicant or grantee or may be conditioned on the receipt of additional information. Any resulting NIH approval does not constitute a legal endorsement of the business arrangement by the Federal government nor does such approval establish NIH as a party to the contract or any of its provisions.

8.3.4.3 Contracting with Small Businesses, Minority-Owned Firms, and Women’s Business Enterprises

Grantees must make positive efforts to use small businesses, minority-owned firms, and women’s business enterprises as sources of goods and services whenever possible. Grantees should take the steps outlined in the applicable administrative requirements (45 CFR 74.44(b) or 45 CFR 92.36(e)) to implement this policy.

8.4 Monitoring

Grantees are responsible for managing the day-to-day operations of grant-supported activities using their established controls and policies, as long as they are consistent with NIH requirements. However, to fulfill their role in regard to the stewardship of Federal funds, NIH awarding ICs monitor their grants to identify potential problems and areas where technical assistance might be necessary. This active monitoring is accomplished through review of reports and correspondence from the grantee, audit reports, site visits, and other information available to NIH. The names and telephone numbers of the individuals responsible for monitoring the programmatic and business management aspects of a project or activity will be provided to the grantee at the time of award.

Monitoring of a project or activity will continue for as long as NIH retains a financial interest in the project or activity as a result of property accountability, audit, and other requirements that may continue for a period of time after the grant is administratively closed out and NIH is no longer providing active grant support (see Administrative Requirements—Closeout).

8.4.1 Reporting

NIH requires that grantees periodically submit financial and progress reports. Other required reports may include annual invention utilization reports, lobbying disclosures, conflict of interest reports, audit reports, reports to the appropriate payment points (in accordance with instructions received from the payment office), and specialized programmatic reports. Grantees also are expected to publish the results of research in peer-reviewed journals and to provide information to the public on the objectives, methodology, and findings of their NIH-supported research activities, as specified in Administrative Requirements—Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources.

The GMO is the official receipt point for most required reports. However, NIH has centralized the submission of annual progress reports; details are provided below. In addition, electronic submission through the eRA Commons is required for some annual progress reports (SNAPs) and available for all closeout documents (final grant progress reports, final invention statements and certifications, and final financial status reports). When a paper (non-SNAP) non-competing continuation progress report is submitted, only a signed original is required; no copies are required. Submission of these reports to an address other than the centralized one may result in delays in processing of the non-competing continuation award or the submission being considered delinquent. FFRs must be electronically submitted to OFM (see Financial Reports below) through the eRA Commons eFFR feature unless otherwise indicated in the award’s terms and conditions.

Grantees are allowed a specified period of time to submit required financial and final progress reports (see 45 CFR parts 74.51 and 74.52, 92.40 and 92.41, and the discussion in this subsection). Failure to submit complete, accurate, and timely reports may indicate the need for closer monitoring by NIH or may result in possible award delays or enforcement actions, including withholding, removal of certain NIH Standard Terms of Award, or conversion to a reimbursement payment method (also see Administrative Requirements—Enforcement Actions). The schedule for submission of the non-competing continuation progress report is discussed in the next subsection.

8.4.1.1 Non-Competing Continuation Progress Reports

Progress reports usually are required annually as part of the non-competing continuation award process. NIH may require these reports more frequently. The “Non-Competing Continuation Progress Report” (PHS 2590) or equivalent documentation (e.g., Research Performance Progress Report [RPPR]) must be submitted to, and approved by, NIH to non-competitively fund each additional budget period within a previously approved project period (competitive segment). Except for awards subject to SNAP, the progress report includes an updated budget in addition to other required information.

NIH is transitioning to using the RPPR for progress reporting by grantees beginning in 2013. The RPPR is a federal wide format for the submission of required annual or other interim performance reporting on grant and cooperative agreement awards. The transition to RPPR will be implemented in phases through a module in the eRA Commons. Initially, the RPPR will replace eSNAP and also be available instead of the paper PHS 416-9 (Ruth L. Kirschstein National Research Service Award Individual Fellowship Progress Report for Continuation Support). The RPPR will eventually replace the PHS 2590 paper progress report used for non-SNAP awards.

Initially, grantees will be provided with a period of time during which they may submit either an eSNAP or RPPR, and for Fellowships, either a paper PHS 416-9 or an RPPR. After grantees have some experience with the new RPPR module, the module will replace eSNAP and, for fellowships, the paper PHS 416-9. All information about implementation will be published in the NIH Guide for Grants and Contracts.

For awards not subject to SNAP, paper progress reports are required following the instructions available at http://grants.nih.gov/grants/funding/2590/2590.htm.

The non-competing Progress Report includes an All Personnel Report on which the grantee must report the PD/PI(s) and all individuals who devoted one person month or more effort to the project. The eRA Commons ID must be provided on this report for the PD/PI(s) and those who worked on the project in a postdoctoral role.

NIH has centralized the mailing of paper annual non-competing continuation grant progress reports submitted for all NIH ICs. The centralized mailing address is found in Part III. Note paper progress reports are only accepted for the non-SNAP progress reports. All SNAP progress reports must be submitted electronically using the eSNAP or RPPR module (see Submitting SNAP Progress Reports below).

Grantees should routinely query and review the list of pending grant progress reports and due dates available at the NIH Web site (http://era.nih.gov/commons/quick_queries/index.cfm#progress). Late submission or receipt of an incomplete grant progress report will result in delaying the issuance and funding of the non-competing continuation award and may result in a reduced award amount.

The progress report for the final budget period of a competitive segment for which a competing continuation application is submitted will be part of that application; however, if an award is not made or the grantee does not submit an application for continued support, a final progress report is required (see Administrative Requirements—Closeout—Final Reports—Final Progress Report).

The NIH awarding IC will specify the requirements for progress reporting under construction grants or grants supporting both construction activities, including acquisition or modernization, major alteration and renovation, and non-construction activities.

8.4.1.2 Streamlined Non-Competing Award Process

SNAP includes a number of provisions that modify annual progress reports, NoAs, and financial reports.

The NoA will specify whether an award is subject to SNAP. Awards routinely included in SNAP are "K" awards and "R" awards, except R35. Awards excluded from SNAP are those that generally do not have the authority to automatically carry over unobligated balances (centers; cooperative agreements, Kirschstein-NRSA institutional research training grants, non-Fast Track Phase I SBIR and STTR awards), clinical trials (regardless of activity code), P01, R35, and awards to individuals. In addition, specific awards may be excluded from SNAP if:

  • they require close project monitoring or technical assistance, e.g., high-risk grantees, certain large individual or multi-project grants, or grants with significant unobligated balances, or
  • the grantee has a consistent pattern of failure to adhere to appropriate reporting or notification deadlines.
8.4.1.2.1 Modified Annual Progress Reports (eSNAP)

An eSNAP progress report is a streamlined version of the annual progress report requirements. Only limited information is required for each submission. As indicated above, the RPPR module will replace eSNAP during FY 2013. The format and structure of the RPPR differs from eSNAP, and the provisions below will apply, albeit in a modified manner, to all RPPRs.

  • IRB and IACUC approval dates are not required as part of each submission. It remains an institutional responsibility to ensure that these reviews are conducted in accordance with all Federal requirements. The Federalwide (human subjects) and Animal Welfare Assurance numbers for the grantee organization are maintained in the Institutional Profile section of the eRA Commons. Actual approval dates must be submitted to NIH upon request.
  • No detailed budget information is required; instead, grantees provide answers to the following key questions:
    • Has there been a change in the “other support” of senior/key personnel since the last reporting period? If yes, explain the change(s); if no, so state. Specific information is to be provided only if active support has changed. If a previously active grant has terminated and/or if a previously pending grant is now active, the grantee must submit complete Other Support information using the suggested format and instructions found in the PHS 398 application (http://grants.nih.gov/grants/funding/phs398/phs398.html). Annotate this information so it is clear what has changed from the previous submission. Submission of other support information is not necessary if support is pending or for changes in the level of effort for active support reported previously.

      Other support information should be submitted only for the PD/PI and all other individuals considered by the PD/PI to be scientifically key to the project. Senior/key personnel are defined as individuals who contribute in a substantive measurable way to the scientific development or execution of the project, whether or not a salary is requested. Do not routinely include Other Support information for Other Significant Contributors, e.g., those that may contribute to the scientific development or execution of the project, but are not committing any specified measurable effort to the project. However, if the level of involvement for an individual previously listed in this category has changed such that they are now considered senior/key personnel, this change should be indicated in this section and Other Support information submitted.
    • Will there be, in the next budget period, a significant change in the level of effort for the PD/PI(s) or other senior/key personnel named in the NoA from what was approved for this project? If yes, explain the change(s) (e.g., decreased level of effort from 4.8 CY months to 3.6 CY months); if no, so state. A “significant change” in level of effort is defined in Federal regulations as a 25 percent or greater reduction in time devoted to the project. Reductions are cumulative, i.e., the 25% threshold may be reached by two or more successive reductions that total 25% or more. Once agency approval has been given for a significant change in the level of effort, then all subsequent reductions are measured against the approved adjusted level.
    • Is it anticipated that an estimated unobligated balance (including prior-year carryover) will be greater than 25 percent of the current year’s total approved budget? If yes, the grantee is required to explain why there is a significant balance and how it will be spent if carried forward into the next budget period. If no, so state. The “total approved budget” equals the current fiscal year award authorization plus any carryover of funds from a prior year. The numerator equals the total amount available for carryover and the denominator equals the current year’s total approved budget.
  • If there is a change in performance site or anticipated program income, grantees also must submit the PHS 2590 checklist. If program income is anticipated, the progress report should reflect the estimated amount and source of the income.

Specific instructions for answering the SNAP questions as well as modified requirements of SNAP progress reports are in the PHS 2590 Instructions, http://grants.nih.gov/grants/funding/2590/2590.htm.

The NIH awarding IC will rely on the grantee’s assessment of whether significant changes have occurred or will occur in these areas. NIH program or grants management staff may require additional information to evaluate the project for continued funding. Failure to provide this information will result in a delayed award. Incomplete or inadequate progress reports may result in a delay of continued support.

8.4.1.2.2 Modified NoAs

Under SNAP, the GMO negotiates the direct costs for the entire competitive segment at the time of the competing award or, in the case of modular awards, determines the applicable number of modules for each budget period within the competitive segment. This eliminates the need for annual budget submissions and any negotiations, and reduces the information NIH requires to review, approve, and monitor non-competing continuation awards. SNAP NoAs are issued with only total direct and F&A costs awarded for the budget period. While direct costs categorical breakdowns are not awarded, grantees are required to allocate and account for costs by category in accordance with applicable cost principles. Future year commitments on SNAP awards reflect total cost commitments (direct plus F&A costs).

8.4.1.2.3 Modified Financial Reporting Requirements

For awards under SNAP (other than awards to foreign organizations issued prior to October 1, 2012 or Federal institutions), an FFR is required only at the end of a competitive segment rather than annually. The FFR must be submitted within 90 days after the end of the competitive segment and must report on the cumulative support awarded for the entire segment. An FFR must be submitted at this time whether or not a competing continuation award is made. If no further award is made, this report will serve as the final FFR (see Administrative Requirements—Closeout).

For awards under SNAP (other than awards to foreign organizations and Federal institutions), grantees also are required to submit a quarterly FFR cash transaction data to PMS.

Annual FFRs are required for awards issued to foreign organizations prior to October 1, 2012 and all awards issued to Federal institutions, even if an award is under SNAP. (Also see Administrative Requirements—Monitoring—Reporting—Financial Reports.)

SNAP awards issued to foreign and international organizations after October 1, 2012, will be required to submit FFR expenditure data within 90 days of the end of the competitive segment instead of annually. These awards are not required to submit a quarterly FFR cash transaction data to PMS.

8.4.1.2.4 Submitting SNAP Progress Reports

All SNAP progress reports are due the 15th of the month preceding the month in which the budget period ends (e.g., if the budget period ends 11/30, the due date is 10/15). If the 15th falls on a weekend or Federal holiday, the due date is automatically extended to the next business day. Paper submissions are not acceptable, will not be used for consideration for funding, and will not become part of the official file. If a paper SNAP progress report is submitted, grantees will be required to resubmit the information electronically.

The electronic Streamlined Non-Competing Award Process (eSNAP) is a module in the eRA Commons that allows grantees to electronically prepare and submit SNAP progress reports and supporting documentation. NIH is transitioning to use of the Research Performance Progress Report (RPPR) for SNAP progress reports, and the RPPR module will replace the eSNAP module in FY 2013. The RPPR module is similar to eSNAP, providing the user with dedicated screens to collect the required progress report information, including appropriate uploads for text documents. Data submitted through eSNAP/RPPR for Performance Sites and All Personnel is retained in the system for easy update in the future year submission.

Electronic routing of eSNAP/RPPR information to authorizing officials at the applicant institution for review and approval prior to submission to NIH is also a feature of the eSNAP/RPPR system. In addition, for SNAP awards, eSNAP/RPPR provides grantees with the option to delegate to the PD/PI the authority to submit the progress report directly to NIH. This optional authority is managed on a PD/PI basis in the eSNAP/RPPR system; such authority can be rescinded at any time.

Guidance on eSNAP submission is documented in the eSNAP User Guide found at: http://era.nih.gov/commons/index.cfm. For more information on eSNAP, see https://commons.era.nih.gov/ commons/index.jsp. Guidance on RPPR submission is documented in the RPPR Instruction Guide found at: http://grants.nih.gov/grants/funding/rppr/index.htm.

8.4.1.3 Progress Reports for Multiyear Funded Awards

A limited number of NIH grant awards are multi-year funded, i.e., not funded in budget years but funded in full at the start of the project period from a single fiscal year appropriation. The project period and the budget period are the same in a multi-year funded (MYF) award, and are longer than one year. Progress reports for MYF awards are due annually on or before the anniversary of the budget/project period start date of the award. A progress report is not required if the award is in a no-cost extension period unless specifically required by the IC. The reporting period for a MYF progress report is the calendar year preceding the anniversary date of the award. For example, if an award is made on 04/01/2010, the MYF progress report is due on or before 04/01/2011, and should report on the activities performed under the award between 04/01/2010 and 03/31/2011. For the subsequent year the MYF progress report will be due 04/01/2012, and should report on the activities performed under the award between 04/01/2011 and 03/31/2012. Information on the content of a MYF progress report and instructions on how to submit the report through the eRA Commons are posted at http://grants.nih.gov/grants/policy/myf.htm. The multi-year progress report (MYPR) link to upload the report will be available two months before the anniversary date of the award, on the eRA Commons Status search page in the folder “List of Applications/Grants” in the “Action” column. Note that the eSNAP/RPPR module is not used for submission of a MYF progress report. Progress reports for MYF awards must be completed by the PD/PI, and then submitted by a Signing Official (SO) or a PD/PI with delegated authority from the SO to submit a progress report. Information about SO delegation of authority to a PD/PI to submit a progress report appears in the eSNAP User Guide under Section 2. Delegating Authority.

8.4.1.4 Final Progress Reports

A final progress report is required for any grant that is terminated and any award that will not be extended through award of a new competitive segment. See the Final Progress Report Instructions posted at http://grants.nih.gov/grants/forms.htm. Grantees should also review the information found in Administrative Requirements—Closeout—Final Progress Reports.

8.4.1.5 Financial Reports

Two types of financial reports are typically used. Cash transaction data is submitted on a quarterly basis directly to PMS. Expenditure data is submitted directly to the NIH. Historically this data was submitted using 2 separate forms, the SF272 and the SF269. A new form, the SF425 called the Federal Financial Report (FFR), is now used for collecting both types of financial data. For NIH grantees, it is important to note that while the data is now submitted using the same form, there is no change in the actual receipt and processing of data. Cash transaction data continues to be submitted directly to and processed by PMS. Expenditure data continues to be submitted directly to and processed by NIH.

8.4.1.5.1 Cash Transaction Reports

The FFR has a dedicated section to report Federal cash receipts and disbursements. For domestic grantees this information is submitted quarterly directly to the PMS using the web-based tool. Quarterly reports are due 30 days following the end of each calendar quarter. The reporting period for this report continues to be based on the calendar quarter. Questions concerning the requirements for this quarterly financial report should be directed to the PMS.

For awards issued to foreign institutions after October 1, 2012, even though payment is now through PMS, the requirement for quarterly cash reporting does not apply. These awards are now administered in PMS using subaccounts and payments will be specific to each grant at the time the grantee draws funds. (See also Grants to Foreign Institutions—Administrative Requirements—Reporting and Record Retention.)

8.4.1.5.2 Financial Expenditure Reports

Reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the grantee organization. NIH requires all financial expenditure reports to be submitted using the Federal Financial Report (FFR) system located in the eRA Commons. This includes all initial FFRs being prepared for submission and any revised FSR/FFRs being submitted or re-submitted to NIH. The eRA Commons Federal Financial Report (FFR) system allows participants to view information on currently due and late expenditure reports and to submit these reports electronically to NIH. Paper expenditure reports are not accepted. Expenditure data submitted to NIH is initially reviewed and accepted by OFM. NIH IC grants management staff also review these expenditure reports.

Except for awards under SNAP and awards that require more frequent reporting, the FFR is required on an annual basis. An annual FFR is required for awards to foreign organizations made prior to October 1, 2012 and Federal institutions, whether or not they are under SNAP. When required on an annual basis, the report must be submitted for each budget period no later than 90 days after the end of the calendar quarter in which the budget period ended. The reporting period for an annual FFR will be that of the budget period for the particular grant; however, the actual submission date is based on the calendar quarter. Failure to submit timely reports may affect future funding. The report also must cover any authorized extension in time of the budget period. If more frequent reporting is required, the NoA will specify both the frequency and due date.

In lieu of the annual FFR expenditure data, NIH will monitor the financial aspects of grants under SNAP by using the information submitted directly to PMS. The GMO may review the report for patterns of cash expenditures, including accelerated or delayed drawdowns, and to assess whether performance or financial management problems exist. For these SNAP awards, FFR expenditure data is required only at the end of a competitive segment. It must be submitted within 90 days after the end of the competitive segment and must report on the cumulative support awarded for the entire segment. An FFR must be submitted at this time whether or not a competing continuation award is made. If no further award is made, this report will serve as the final FFR (see Administrative Requirements—Closeout).

Before submitting FFRs to NIH, grantees must ensure that the information submitted is accurate, complete, and consistent with the grantee’s accounting system. When submitting the FFR through the eRA Commons, the AOR or the individual designated to submit this report on behalf of their institution, certifies that the information in the FFR is correct and complete and that all outlays and obligations are for the purposes set forth in grant documents, and represents a claim to the Federal government. Filing a false claim may result in the imposition of civil or criminal penalties.

8.4.1.5.3 Revised Financial Reports and Expenditures

Revisions for F&A Changes. Each Financial Report and Cash Expenditure Report submitted by the grantee shall reflect the proper amount of F&A costs applicable to the grant period. If a provisional or an earlier period’s permanent rate is used in the report, a subsequent adjustment to the FSR is necessary if a lower permanent rate(s) applicable to the grant is established, except for educational institutions subject to OMB Circular A-21.

Revised Expenditure Reports. NIH requires all financial expenditure reports (domestic and foreign) to be submitted using the electronic FSR/FFR system located in eRA Commons. This includes the initial FFR and any FSR/FFR revisions being submitted or re-submitted to NIH. In some cases the grantee may have to revise or amend a previously submitted FSR/FFR. The revised report should be submitted in the same format as the original; e.g., if the original was an FSR, the revision will also be submitted using the FSR format. When the revision results in a balance due to NIH, the grantee must submit a revised report whenever the overcharge is discovered, no matter how long the lapse of time since the original due date of the report. Revised expenditure reports representing additional expenditures by the grantee that were not reported to NIH within the 90-day time frame may be submitted electronically through the eFSR/FFR system to OFM with an explanation for the revision. The explanation also should indicate why the revision is necessary and describe what action is being taken by the grantee to preclude similar situations in the future. This should be done as promptly as possible, but no later than 1 year from the due date of the original report. If an adjustment is to be made, the NIH awarding IC will advise the grantee of actions it will take to reflect the adjustment.

8.4.1.5.4 Unobligated Balances and Actual Expenditures

Disposition of unobligated balances is determined in accordance with the terms and conditions of the award. (See Administrative Requirements—Changes in Project and Budget for NIH approval authorities for unobligated balances.) Using the principle of “first in-first out,” unobligated funds carried over are expected to be used before newly awarded funds.

Upon receipt of the annual FSR/FFR for awards other than those with authority for the automatic carryover of unobligated balances, the GMO will compare the total of any unobligated balance shown and the funds awarded for the current budget period with the NIH share of the approved budget for the current budget period. If the funds available exceed the NIH share of the approved budget for the current budget period, the GMO may select one of the following options:

  • In response to a written request from the grantee, revise the current NoA to authorize the grantee to spend the excess funds for additional approved purposes.
  • Offset the current award or a subsequent award by an amount representing some or all of the excess.
8.4.1.5.5 Recipient Reporting of Subrecipient Data and Executive Compensation Information for Federal Funding Accountability and Transparency Act (FFATA)

A component of Public Law 109-282, the Federal Funding Accountability and Transparency Act of 2006 as amended (FFATA), requires most recipients of new Federal funds awarded on or after October 1, 2010 to report on subawards/subcontracts/consortiums equal to or greater than $25,000. This includes awards that are initially below $25,000 but subsequent grant modifications result in an award equal to or greater than $25,000.

The FFATA Subaward Reporting System (FSRS) tool can be accessed directly at www.fsrs.gov, and will serve as the collection tool for subaward data which will ultimately be distributed for publication and display on www.USASpending.gov. Grantees are required to register with FSRS, collect the necessary data from subawardees, and file subaward reports by the end of the month following the month in which the prime grantee awards any subaward greater than $25,000.

FFATA specifies the data that should be captured for each prime recipient and first-tier subrecipient of Federal awards, regardless of award type. To promote data consistency and reduce reporting burdens, existing agency data sources will be leveraged to pre-populate reports for prime awardees as well as for subawardees when available. Recipients are responsible for confirming the pre-populated data and providing any additional required information.

Included in these requirements is the need to report the names and total compensation of the five most highly compensated officers of the entity if the entity as part of their registration profile in CCR in the preceding fiscal year: 1) received 80 percent or more of its annual gross revenues in Federal grants, subawards, contracts, and subcontracts; and 2) received $25,000,000 or more in annual gross revenues from Federal grants, subawards, contracts, and subcontracts; and 3) had gross income, from all sources, of $300,000 or more; and 4) the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. See FFATA § 2(b)(1). Additionally, recipient organizations may be required to verify the following information in FSRS:

  • Organization DUNS number
  • Name and Address of organization
  • Parent DUNS number
  • CFDA number
  • Federal Award Identification Number (FAIN)
  • Federal Awarding Agency of the grant

8.4.1.6 Invention Reporting

A complete list of the reporting requirements under the Bayh-Dole Act can be found at 37 CFR 401.14. The requirements also are specified in Administrative Requirements—Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources.

In addition to complying with Bayh-Dole-related regulations, each NIH competing grant application and non-competing continuation progress report must indicate whether or not any subject inventions were made during the preceding budget period. If inventions were made, the grantee must also indicate whether they were reported.

The grantee also must submit an annual invention utilization report for all subject inventions to which title has been elected and inventions that have been licensed but not patented (research tools). The utilization report provides a way to evaluate the extent of commercialization of subject inventions, consistent with the objectives of the Bayh-Dole Act.

A grantee’s failure to comply with invention reporting requirements and/or associated NIH policies on intellectual property and resource sharing may result in the loss of patent rights or a withholding of grant funds or other enforcement actions, including the imposition of special terms and conditions.

Bayh-Dole regulations allow grantees to report inventions electronically (37 CFR 401.16). NIH strongly supports electronic reporting through an Internet-based system, Interagency Edison (http://iEdison.gov). To meet the objectives of the Federal Financial Assistance Management Improvement Act of 1999 (P.L. 106-107), grantees should make all reasonable efforts to submit invention reports using iEdison. The system supports confidential transmission of required information and provides a utility for generating reports and reminders of pending reporting deadlines. Further information about the system, including instructions for creating an account needed to submit reports electronically, are on the iEdison site. Grantees also may contact the Division of Extramural Inventions and Technology Resources Branch, OPERA, OER. See Part III for contact information.

8.4.2 Record Retention and Access

Grantees generally must retain financial and programmatic records, supporting documents, statistical records, and all other records that are required by the terms of a grant, or may reasonably be considered pertinent to a grant, for a period of 3 years from the date the annual FFR is submitted. For awards under SNAP (other than those to foreign organizations and Federal institutions), the 3-year retention period will be calculated from the date the FFR for the entire competitive segment is submitted. Those grantees must retain the records pertinent to the entire competitive segment for 3 years from the date the FFR is submitted to NIH. Foreign organizations and Federal institutions must retain records for 3 years from the date of submission of the annual FFR to NIH. See 45 CFR parts 74.53 and 92.42 for exceptions and qualifications to the 3-year retention requirement (e.g., if any litigation, claim, financial management review, or audit is started before the expiration of the 3-year period, the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken). Those sections also specify the retention period for other types of grant-related records, including F&A cost proposals and property records. See 45 CFR parts 74.48 and 92.36 for record retention and access requirements for contracts under grants.

These record retention policies apply to both paper and electronic storage of applicable information, including electronic storage of faxes, copies of paper document, images, and other electronic media. Institutions that rely on an electronic storage system must be able to assure such a system is stable, reliable, and maintains the integrity of the information. When storing electronic images of paper documents, the system must also assure a full, complete, and accurate representation of the original, including all official approvals.

8.4.3 Audit

An audit is a systematic review or appraisal made to determine whether internal accounting and other control systems provide reasonable assurance of the following:

  • Financial operations are properly conducted.
  • Financial reports are timely, fair, and accurately.
  • The entity has complied with applicable laws, regulations, and other grant terms.
  • Resources are managed and used economically and efficiently.
  • Desired results and objectives are being achieved effectively.

NIH grantees (other than Federal institutions) are subject to the audit requirements of OMB Circular A-133, as implemented by 45 CFR parts 74.26 and 92.26, or the audit requirements stated in 45 CFR 74.26(d) and in the NIHGPS (for types of organizations to which OMB Circular A-133 does not directly apply). 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 governmental audit organization. The audit must meet the standards specified in generally accepted government auditing standards (GAGAS). The audit requirements for foreign grantees and for-profit grantees are addressed in the chapters of this NIHGPS that provide specific requirements for those types of grantees.

Exhibit 10. Summary of Audit Requirements
Grantee Type Source of Audit Requirement Where to Submit Audit Reports
State Local Governments OMB Circular A-133 Federal Audit Clearinghouse
(See contact information in Part III)
Colleges Universities OMB Circular A-133 Federal Audit Clearinghouse
(See contact information in Part III)
Non-Profits OMB Circular A-133 Federal Audit Clearinghouse
(See contact information in Part III)
Hospitals OMB Circular A-133 Federal Audit Clearinghouse
(See contact information in Part III)
For-Profits 45 CFR 74.26(d) National External Audit Review Center
(See contact information in Part III)
Foreign NIH Grants Policy Statement (Same as For-Profits) (Same as For-Profits)

When a grantee procures audit services, the procurement must comply with the procurement standards of 45 CFR part 74 or 92, as applicable, including obtaining competition and making positive efforts to use small businesses, minority-owned firms, and women’s business enterprises. Grantees should ensure that comprehensive solicitations made available to interested firms include all audit requirements and specify the criteria to be used for selection of the firm. Grantees’ written agreements with auditors must specify the rights and responsibilities of each party.

OMB Circular A-133 explains in detail the scope, frequency, and other aspects of the audit. Some highlights of this Circular are as follows:

  • Covered organizations expending $500,000 or more per year in Federal awards are required to have an audit performed in accordance with the Circular. However, if the awards are under one program, the organization can have either a single organization-wide audit or a program-specific audit of the single program, subject to the provisions of section 235 of the Circular. NIH’s research awards may not be considered a single program for this purpose. Covered organizations expending less than $500,000 in any year are exempt from these audit requirements in that year but must have their records available for review as required by Administrative Requirements—Monitoring—Record Retention and Access.
  • The reporting package must contain the following:
    • Financial statements and schedule of expenditures of Federal awards.
    • Independent auditor’s report, including an opinion on the financial statements and the schedule of expenditures of Federal awards, a report on compliance and internal control over financial reporting, and a report on compliance with requirements applicable to each major program and on internal control over such compliance requirements.
    • A schedule of findings and questioned costs.
    • If applicable, a summary of prior audit findings and a corrective action plan.
  • An audit under OMB Circular A-133 is in lieu of a financial audit of individual Federal awards. However, Federal agencies may request additional audits necessary to carry out their responsibilities under Federal law or regulation. Any additional audits will build upon work performed by the independent auditor.
  • The data collection form (SF-SAC) and a copy of the Single Audit reporting package must be submitted electronically to the FAC at the address provided in Part III.

If the schedule of findings and questioned costs discloses an audit finding related to an HHS or NIH award or if the schedule of prior audit findings reports the status of any audit finding relating to an HHS or NIH award, the FAC will provide copies of the audit report to NEARC, OIG, HHS. NEARC will, in turn, distribute them within HHS for further action, as necessary. Audit reports should not be sent directly to the GMO.

Recipients must follow a systematic method for ensuring timely and appropriate resolution of audit findings and recommendations, whether discovered as a result of a Federal audit or a recipient-initiated audit. Grantees usually are allowed 30 days from the date of request to respond to the responsible audit resolution official (Action Official) concerning audit findings. Failure to submit timely responses may result in cost disallowance or other actions by NIH or HHS. At the completion of the audit resolution process, the grantee will be notified of the Action Official’s final decision. The grantee may appeal this decision if the adverse determination is of a type covered by the NIH or HHS grant appeals procedures (see Administrative Requirements—Grant Appeals Procedures). Refunds owed to the Federal government as a result of audit disallowances must be made in accordance with instructions issued by the Action Official or OFM.

It is imperative that grantees submit required OMB Circular A-133 audits within the time limits specified in the Circular. If grantees are delinquent in complying with the provisions of the Circular, HHS or NIH will impose sanctions that may result in the loss of Federal funds. No audit costs will be allowed either as F&A costs or direct costs to Federal awards if the required audits have not been completed or have not been conducted in accordance with the provisions of OMB Circular A-133.

See Cost Considerations—Allowability of Costs/Activities—Selected Items of Cost for the allowability of audit costs.

8.5 Special Award Conditions and Enforcement Actions

A grantee’s failure to comply with the terms and conditions of award, including confirmed instances of research misconduct, may cause NIH to take one or more actions, depending on the severity and duration of the non-compliance. NIH will undertake any such action in accordance with applicable statutes, regulations, and policies. NIH generally will afford the grantee an opportunity to correct the deficiencies before taking action unless public health or welfare concerns require immediate action. However, even if a grantee is taking corrective action, NIH may take proactive actions to protect the Federal government’s interests, including placing special conditions on awards or precluding the grantee from obtaining future awards for a specified period, or may take action designed to prevent future non-compliance, such as closer monitoring.

8.5.1 Modification of the Terms of Award

During grant performance, the GMO may include special conditions in the award to require correction of identified financial or administrative deficiencies as a means of protecting NIH's interests and effecting positive change in a grantee's performance or compliance. When the special conditions are imposed, the GMO will notify the grantee of the nature of the conditions, the reason why they are being imposed, the type of corrective action needed, the time allowed for completing corrective actions, and the method for requesting reconsideration of the conditions. See 42 CFR 52.9 and 45 CFR part 74.14 or 92.12.

The NIH awarding IC also may withdraw approval of the PD/PI or other senior/key personnel specifically referenced in the NoA if there is a reasonable basis to conclude that the PD/PI and other such named senior/key personnel are no longer qualified or competent to perform. In that case, the awarding IC may request that the grantee designate a new PD/PI or other named senior/key personnel.

Generally, the decision to modify the terms of an award (e.g., by imposing special award conditions) is discretionary on the part of the NIH awarding IC and is not appealable.

8.5.2 Suspension, Termination, and Withholding of Support

If a grantee has failed to materially comply with the terms and conditions of award, NIH may take an action to wholly or partly suspend the grant, pending corrective action, or may terminate the grant for cause. The regulatory procedures that pertain to suspension and termination are specified in 45 CFR parts 74.61 and 74.62, and in part 92.43.

NIH generally will suspend (rather than immediately terminate) a grant and allow the grantee an opportunity to take appropriate corrective action before NIH makes a termination decision. NIH may decide to terminate the grant if the grantee does not take appropriate corrective action during the period of suspension. NIH may terminate—without first suspending—the grant if the deficiency is so serious as to warrant immediate termination or public health or welfare concerns require immediate action. Termination for cause may be appealed under the NIH and HHS grant appeals procedures (see Administrative Requirements—Grant Appeals Procedures).

A grant also may be terminated, partially or totally, by the grantee or by NIH with the consent of the grantee. If the grantee decides to terminate a portion of a grant, NIH may determine that the remaining portion of the grant will not accomplish the purposes for which the grant was originally awarded. In any such case, NIH will advise the grantee of the possibility of termination of the entire grant and allow the grantee to withdraw its termination request. If the grantee does not withdraw its request for partial termination, NIH may initiate procedures to terminate the entire grant for cause.

See Cost Considerations—Allowability of Costs/Activities—Selected Items of Cost for the allowability of termination costs. Allowability of these costs does not vary whether a grant is terminated for cause by NIH, terminated at the request of the grantee, or terminated by mutual agreement.

Withholding of support is a decision not to make a non-competing continuation award within the current competitive segment. Support may be withheld for one or more of the following reasons:

  • Adequate Federal funds are not available to support the project.
  • A grantee failed to show satisfactory progress in achieving the objectives of the project.
  • A grantee failed to meet the terms and conditions of a previous award.
  • For whatever reason, continued funding would not be in the best interests of the Federal government.

If NIH denies (withholds) a non-competing continuation award because the grantee failed to comply with the terms and conditions of a previous award, the grantee may appeal that determination.

8.5.3 Other Enforcement Actions

Depending on the nature of the deficiency, NIH may use other means of promoting grantee compliance. Other options available to NIH include, but are not limited to, temporary withholding of payment or other actions specified at 45 CFR part 74.62 or 92.43, conversion from an advance payment method to a reimbursement method or disallow (deny) all or part of the cost of the activity or action not in compliance. Other actions may include suspension or debarment under 45 CFR 76, and other available legal remedies, such as civil action. Suspension under 45 CFR 76, implementing E.O.s 12549 and 12689, “Debarment and Suspension,” is a separate action from the “suspension” of an award as a post-award remedy, as described in Suspension, Termination, and Withholding of Support above. The subject of debarment and suspension as an eligibility criterion is addressed in Completing the Pre-Award Process—Determining Eligibility of Individuals and Public Policy Requirements and Objectives—Debarment and Suspension.

8.5.4 Recovery of Funds

NIH may identify and administratively recover funds paid to a grantee at any time during the life cycle of a grant. Debts may result from cost disallowances, recovery of funds, unobligated balances, unpaid share of any required matching or cost sharing, funds in the recipient’s account that exceed the final amount determined to be allowable, or other circumstances. NIH may identify and initiate debt collection activities at any time during the life cycle of a grant.

NIH guidance on the repayment of grant funds that are unrelated to audit findings can be found on the OER web site found at http://grants.nih.gov/grants/compliance/compliance.htm.

8.5.5 Debt Collection

The debt collection process is governed by the Federal Claims Collection Act, as amended (Public Law [P.L.] 89-508, 80 Stat. 308, July 19, 1966); the Federal Debt Collection Act of 1982 (P.L. 97-365, 96 Stat. 1749, October 25, 1982); the Debt Collection Improvement Act (P. L.104-134, 110 Stat. 1321, April 26, 1996); and, the Federal Claims Collection Standards (31 CFR parts 900-904), which are implemented for HHS in 45 CFR 30. NIH is required to collect debts due to the Federal government and, except where prohibited by law, to charge interest on all delinquent debts owed to NIH by grantees.

When NIH determines the existence of a debt under a grant, written debt notification will be provided to the grantee. Unless otherwise specified in law, regulation, or the terms and conditions of the award, debts are considered delinquent if they are not paid within 30 days from the date the debt notification is mailed to the grantee. Delinquent debts are subject to the assessment of interest, administrative cost charges, and penalties. The interest on delinquent debts accrues on the amount due beginning on the date the debt notification is mailed to the grantee.

If a grantee appeals an adverse monetary determination under 42 CFR 50, Subpart D, or 45 CFR 16, interest will accrue but assessment will be deferred pending a final decision on the appeal. If the appeal is not successful, interest will be charged beginning with the date the debt notification was mailed to the grantee, not the date of the appeal decision. Interest charges will be computed using the prevailing rate in effect on the date the debt notification is mailed, as specified by the Department of the Treasury and 45 CFR 30.13(a)(2). See http://www.hhs.gov/of/library/policy/debt/debtcoll.html.

8.6 Closeout

The requirement for timely closeout is a grantee responsibility. Failure to submit timely and accurate closeout documents may affect future funding to the organization. NIH may impose sanctions on institutions that fail to correct recurring reporting problems. Such sanctions may include, but are not limited to, corrective actions, removal of authorities, and/or delay or withholding of further awards to the project or program. NIH will close out a grant as soon as possible after expiration if the grant will not be extended or after termination as provided in 45 CFR parts 74.71 through 74.73 and in 45 CFR 92.50. Closeout includes ensuring timely and accurate submission of all required reports and adjustments for amounts due the grantee or NIH. Closeout of a grant does not automatically cancel any requirements for property accountability, record retention, or financial accountability. Following closeout, the grantee remains obligated to return funds due as a result of later refunds, corrections, or other transactions, and the Federal government may recover amounts based on the results of an audit covering any part of the period of grant support.

Grantees must submit a final FFR, final progress report, and Final Invention Statement and Certification within 90 calendar days of the end of grant support.

8.6.1 Final Federal Financial Report

A final FFR is required for

  • any grant that is terminated,
  • any grant that is transferred to a new grantee, or
  • any award, including awards under SNAP, which will not be extended through award of a new competitive segment.

Grantees are required to electronically submit the final FFR through the eRA Commons (https://commons.era.nih.gov/commons). The final FFR must cover the period of time since the previous FSR/FFR submission or, for awards under SNAP, the entire competitive segment or as much of the competitive segment as has been funded before termination. Final FFRs must indicate the exact balance of unobligated funds and may not reflect any unliquidated obligations. There must be no discrepancies between the Federal share of net outlays reported on the final FFR and the net cash disbursements reported to PMS on the Federal cash section on the FFR. Unobligated funds must be returned to NIH or must be reflected by an appropriate accounting adjustment in accordance with instructions from the GMO or from the payment office. For those organizations receiving their funds through PMS, final reports, as specified by PMS, must be submitted to that office. It is the grantee’s responsibility to reconcile reports submitted to PMS and to the NIH awarding IC. Withdrawal of the unobligated balance following expiration or termination of a grant is not considered an adverse action and is not subject to appeal (see Administrative Requirements—Enforcement Actions—Recovery of Funds).

When the submission of a revised final FSR/FFR results in additional claims by the grantee, NIH will consider the approval of such claims subject to the following minimum criteria:

  • The grantee must indicate why the revision is necessary and explain and implement internal controls that will preclude similar occurrences in the future.
  • The charge must represent otherwise allowable costs under the provisions of the grant.
  • There must be an unobligated balance for the budget period sufficient to cover the claim.
  • The funds must still be available for use.
  • NIH must receive the revised FSR/FFR within 15 months of its original due date.

8.6.2 Final Progress Report

A final progress report is required for any grant that is terminated and any award that will not be extended through award of a new competitive segment. If a competitive renewal (Type 2) application has been submitted, whether funded or not, the progress report contained in that application may serve in lieu of a separate final progress report. Otherwise, a final progress report should be prepared in accordance with the requirements in the PHS 2590 instructions and any specific requirements set forth in the terms and conditions of the award. At a minimum, the final progress report should include a summary of progress made toward the achievement of the originally stated aims, a list of significant results (positive or negative), and a list of publications. Grantees should also report additional information required by the awarding IC in program-specific final progress report instructions. The final progress report also should address the following when applicable:

  • Report on the final enrollment data for study subjects based on sex/gender, race, and ethnicity (use the Inclusion Enrollment Report).
  • Where appropriate, indicate whether children were involved in the study or how the study was relevant for conditions affecting children (see Public Policy Requirements and Objectives—Inclusion of Children as Subjects in Clinical Research).
  • Describe any data, research materials (such as cell lines, DNA probes, animal models), protocols, software, or other information resulting from the research that is available to be shared with other investigators and how it may be accessed.
  • Publications that were authored or co-authored by the PD/PI and arose from the award must include the NIH Manuscript Submission reference number (e.g., NIHMS97531) or the PubMed Central (PMC) reference number (e.g., PMCID234567) for each article. If the PMCID is not yet available because the Journal submits articles directly to PMC on behalf of their authors, indicate "PMC Journal - In Process." A list of these Journals is posted at: http://publicaccess.nih.gov/submit_process_journals.htm.
  • Any other specific requirements set forth in the terms and conditions of the award must also be addressed in the final progress report.

Final Progress Report Instructions for SBIR/STTR Phase II Final Progress Reports are in Section C. of the Final Progress Report Instructions.

8.6.3 Final Invention Statement and Certification

The grantee must submit a Final Invention Statement and Certification (HHS 568), whether or not the funded project results in any subject inventions, and whether or not inventions were previously reported. The HHS 568 must list all inventions that were conceived or first actually reduced to practice during the course of work under the project, and it must be signed by an AOR. The completed form should cover the period from the original effective date of support through the date of expiration or termination or the award, and it should be submitted to the NIH awarding IC. If there were no inventions, the form must indicate “None.” For certain programs (activity codes = C06, R13, R25, S15, Ts, and Fs), the Final Invention Statement and Certification is not currently required. For questions, the grantee should contact NIH awarding IC for specific instructions.

When invention reporting is required, the HHS 568 does not relieve the responsible party of the obligation to assure that all inventions are promptly and fully reported directly to the NIH, as required by terms of the award. Copies of the HHS 568 form are available on the iEdison Web site at http://iEdison.gov and at http://grants.nih.gov/grants/forms.htm.

8.6.4 Submission of Closeout Documents

Use of the Closeout feature in the eRA Commons is strongly encouraged. Submission of non-financial closeout documents (such as the final progress report and HHS 568 Final Invention Statement and Certification) not submitted through the eRA Commons may be e-mailed as PDF attachments to the NIH Central Closeout Center. Paper copies of the final progress report and HHS 568 may be faxed or mailed to the NIH Central Closeout Center at the contact information provided in Part III.

8.7 Grant Appeals Procedures

HHS permits grantees to appeal certain post-award adverse administrative decisions made by HHS officials (see 45 CFR 16 and appendix to part 16). NIH has established a first-level grant appeal procedure that must be exhausted before an appeal may be filed by the grantee with the Departmental Appeals Board (DAB) (see 42 CFR 50, Subpart D). NIH will assume jurisdiction for the following adverse determinations set forth in 45 CFR 50.404:

  • Termination, in whole or in part, of a grant for failure of the grantee to carry out its approved project in accordance with the applicable law and the terms and conditions of award or for failure of the grantee otherwise to comply with any law, regulation, assurance, term, or condition applicable to the grant.
  • Determination that an expenditure not allowable under the grant has been charged to the grant or that the grantee has otherwise failed to discharge its obligation to account for grant funds.
  • Denial (withholding) of a non-competing continuation award for failure to comply with the terms of a previous award.
  • Determination that a grant is void (i.e., a decision that an award is invalid because it was not authorized by statute or regulation or because it was fraudulently obtained).

The formal notification of an adverse determination will contain a statement of the grantee’s appeal rights. In the first level appeal of an adverse determination, the grantee must submit a request for review to the NIH official specified in the notification, detailing the nature of the disagreement with the adverse determination and providing supporting documents in accordance with the procedures contained in the notification.

"The request for review must include a copy of the adverse determination, must identify the issue(s) in dispute, and must contain a full statement of the grantee’s position with respect to such issue(s) and the pertinent facts and reasons in support of the grantee’s position. In addition to the required written statement, the grantee shall provide copies of any documents supporting its claim." 42 CFR 50.406(b).

The grantee’s request to NIH for review must be submitted no later than 30 days after the written notification of the adverse determination is received;  however, an extension may be granted if the grantee can show good cause why an extension is warranted (42 CFR 50.406(a)).

If the NIH decision on the appeal is adverse to the grantee or if a grantee’s request for review is rejected on jurisdictional grounds, the grantee then has the option of submitting a request to the DAB for a further review of the case in accordance with the provisions of 45 CFR 16. A prospective appellant must submit a notice of appeal to the DAB within 30 days after receiving the final NIH decision. "The appellant must have exhausted any preliminary appeal process required by regulation." 45 CFR 16.3(c).

In addition to the adverse determinations indicated above, the DAB is the single level of appeal for disputes related to the establishment of F&A cost rates, research patient care rates, and certain other cost allocations used in determining amounts to be reimbursed under NIH grants (e.g., cost allocation plans negotiated with State or local governments and computer, fringe benefit, and other special rates); http://www.hhs.gov/dab/divisions/appellate/index.html. The determination leading to such disputes may be made by an HHS official other than the GMO and may affect NIH grants as well as other HHS grants.





This page last updated on September 19, 2012
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