Division of Grants Compliance and Oversight (DGCO) Office of Policy for Extramural Research Administration (OPERA), OER National Institutes of Health (NIH), DHHS 19 th Annual SBIR/STTR Conference Milwaukee, Wisconsin November 2017 Kathy Hancock, Assistant Grants Compliance Officer, DGCO, OPERA, Office of Extramural Research, NIH, HHS
Michelle Bulls Director, OPERA Diane Dean Director, Division of Grants Compliance and Oversight Kathy Hancock, Sahar Rais, Joel Snyderman and Samantha Tempchin Assistant Grants Compliance Officers This Division is responsible for managing internal and external compliance activities, both proactive and for-cause. 3
Compliance Basics Compliance Requirements Cost Information Grant Award Basics Prior Approval Requirements Recipient Authorities NIH Reporting Requirements Special Award Conditions and Remedies for Noncompliance 2
The effective management of public funds to maximize research outcomes The avoidance of fraud, institutional mismanagement, and poor management of Federal funds 4
Unallowable costs Misallocation of costs Excessive cost transfers Inaccurate effort reporting Inadequate subrecipient monitoring Noncompliance with Assurances and special terms and conditions of award Delinquent financial reporting Delinquent closeout reporting 5
Nonexistent or outdated policies and procedures Inadequate internal controls Perception that internal control systems are not necessary Inadequate management systems (e.g., effort reporting, financial management) Perception that small institutions do not need to comply Inadequate resources Inadequate staff training and education 6
At NIH o Grants Management Officer/Specialist o Program Official o Scientific Review Officer At Institution o Authorized Organization Representative (AOR) o Project Director/Principal Investigator (PD/PI) 7
Safeguarding all assets Spending funds in accordance with the authorized purpose Developing and implementing policies and systems to ensure proper stewardship of funds o Financial management systems o Procurement systems o Payroll Distribution system o Monitoring activities o Adherence to terms & conditions of award 8
Develop and Maintain Written Policies and Procedures Organizational Structure Purchasing Accounting/Budgetary Controls Time and Effort Reporting Travel Consulting Property Management Ethics/Conflict of Interest 9
Federal Requirements 10
45 CFR Part 75 Public Welfare, Uniform Administrative Requirements, Cost Principles and Audit Requirements for HHS Awards o Effective for all HHS awards made on or after December 26, 2014 o http://www.ecfr.gov/cgi-bin/textidx?node=pt45.1.75&rgn=div5 11
Special Provisions for SBIR/STTR Awards: HHS funds may be paid as profit in excess of allowable direct and indirect costs Program income can be used to further eligible project or program objectives Audit requirements include two options 12
45 CFR Part 75 - Subpart C Pre-Federal Award Requirements and Contents of Federal Awards ( 75.200 75.217) 45 CFR Part 75 - Subpart D Post Federal Award Requirements ( 75.300 75.391) - Standards for Financial and Program Management - Property Standards - Procurement Standards - Performance and Financial Monitoring and Reporting - Subrecipient Monitoring and Management - Record Retention and Access - Remedies and Noncompliance - Closeout - Post-Closeout Adjustments and Continuing Responsibilities 13 - Collection and Amounts Due These include pre-award and post-award requirements
Cost Principles: o 45 CFR Part 75, Subpart E ( 75.400-75.476) o Institutions of Higher Education (IHE), State, Local Governments and Indian Tribes, and Non-profit Organizations o 45 CFR Part 75, Appendix IX o Hospitals Allowable costs are reasonable, allocable, conform with any limitations or exclusions set for in the Federal cost principles or in the NoA, and are consistently applied regardless of source of funding. 14
Cost Principles for For-Profit Organizations (SBIR/STTRs): o 48 CFR Subpart 31.2 (Federal Acquisition Regulation) 15
Establishes principles for determining costs applicable to grants, contracts, and other agreements Direct costs F&A/indirect costs Selected items of cost o Allowable/unallowable costs o Compensation for personal services 16
o 45 CFR 75.216: Commercial Organizations (SBIR/STTR Program) onih Grants Policy Statement: See 18.4.5 Audit o 45 CFR 75.501(h) through (k): For-Profits (commercial), including For-Profit Hospitals 17 o 45 CFR 75.501: Institutions of Higher Education, States and Local Governments, and Non-Profit Organizations, including Non-Profit Hospitals
A non-federal audit is required if the for-profit organization expends $750,000 or more under one or more HHS award as a direct recipient or consortium participant. Audit options include: 18 o A financial-related audit (as defined in, and in accordance with, the Generally Accepted Government Auditing Standards (commonly known as the "Yellow Book"), of all the HHS awards; or o An audit that meets the requirements of 45 CFR 75.501
Submit audits to the National External Audit Review Center Audits are due within the earlier of 30 days after receipt of the auditor s report(s) or 9 months after the end of the recipient s audit period, i.e., the end of the organization's fiscal year, whichever is earlier. Recipients delinquent in submitting audits risk the imposition of sanctions and potential loss of Federal funds. 19
42 CFR Part 50 Subpart F (grants and cooperative agreements) 45 CFR Part 94 (contracts) Applies to Phase II SBIRs and STTRs applicants/awardees (Phase I SBIR/STTRs are exempt) Revised Final Rule published on 8-25-11 http://www.gpo.gov/fdsys/pkg/fr-2011-08-25/pdf/2011-21633.pdf 20
This regulation promotes objectivity in research by establishing standards that provide a reasonable expectation that the design, conduct, or reporting of research funded under NIH grants and cooperative agreements will be free from bias resulting from Investigator financial conflicts of interest. 21
Applies to the PD/PI and any individual defined as an Investigator under the regulation - see 45 CFR 50.603 Investigators disclose to the Institution Significant Financial Interests (SFIs) that are related to the Investigator s Institutional responsibilities (e.g., research activities) - see 45 CFR 50.603 SFI exclusions include: Salary, royalties, or other remuneration paid by the Institution (i.e., SBIR/STTR awardee) to the Investigator if the Investigator is currently employed or otherwise appointed by the Institution, and Any ownership interest in the Institution (i.e., SBIR/STTR awardee) held by the Investigator 22
FCOI is an SFI that could directly and significantly affect the design, conduct, or reporting of Public Health Service (e.g., NIH) funded research. Institutions must, among other things: o Have a policy that complies with the regulation at the time of application and post it on your public website o Train Investigators prior to engaging in NIH-funded research o Solicit financial disclosures from Investigators and review disclosures o Identify, manage and report identified FCOIs to NIH prior to expenditure of funds, within 60 days of identifying a conflict during the period of award, annually, and at time of extension, if applicable. 23
Mailbox for FCOI-related inquiries o FCOICompliance@mail.nih.gov Office of Extramural Research FCOI webpage o http://grants.nih.gov/grants/policy/coi/index.htm Resources include a Tutorial, Webinars, Checklist for Policy Development, FAQs, PowerPoint presentations with case studies, etc. 24
Other Compliance Requirements 25
NIH Grants Policy Statement (GPS) http://grants.nih.gov/policy/nihgps/index.htm Notice of Award (NoA) NIH Guide to Grants and Contracts (for new requirements) http://grants.nih.gov/grants/guide/index.html 26
27
A legally binding agreement with the government Official notice that an award has been made NoA includes: Funding level (amount available for project) Periods of Performance (Project and budget period dates) Terms and Conditions of Award (Section III and IV) NIH contact information 28
Grant awards are made to institutions/organizations Recipients of NIH grant funds must comply with all applicable Federal statutes, regulations and policies By drawing down funds from the HHS Payment Management System (PMS), recipients agree to the terms and conditions of the grant award. DHHS Division of Payment Management http://www.dpm.psc.gov 29
Terms and Conditions Section III o 45 CFR Part 75 - HHS rules and requirements that govern the administration of grants o NIH Grants Policy Statement policy requirements that serve as the terms and conditions of all NIH awards NIH Institute and/or Center Special Terms and Conditions Section IV 30
Only applied to a particular grant for cause Shown on the Notice of Award (NoA) after Section III Institute and/or Center specific terms of award Funds usually are not restricted in the PMS Restricted funds must be tracked by recipient to ensure compliance o EXAMPLE of Award Restriction: Funds may not be used to purchase equipment without the written prior approval of the NIH awarding component. 31
NIH Prior Approval Requirements (NIH GPS 8.1.2) What are some actions that require NIH prior approval? 32
Change in scope or objective of a project Change in PD/PI or Senior/Key personnel identified by NIH and specifically named in the Notice of Award (NoA) o o Must notify NIH if the PD/PI or other Senior/key personnel named in the NoA will: withdraw from the project entirely be absent for 3 months or more reduce time devoted to the project by 25% or more See NIH GPS for changes in a multiple PD/PI model. 33
Preaward costs > 90 days prior to the effective date of the initial budget period of a project period for a new or competing continuation award Deviation from award terms and conditions, including restrictions Activities disapproved or restricted as a condition of the award Change of recipient organization Second extension without additional funds Change of Recipient Organizational Status o Merger o Successor-in-interest o Name change For a complete list of prior approval items see NIH Grants Policy Statement Section 8.1.2 Prior Approval Requirements 34
Most requests for NIH awarding office prior approval must be: o made in writing (includes submissions by e-mail) o sent to the designated GMO identified on the NoA o made no later than 30 days before the proposed change o signed by the Authorized Organization Representative Note: Approval must be obtained from the GMO through a revised NoA or other written communication See Extramural Nexus for information on submitting extension requests and PD/PI change requests electronically in era Commons at https://nexus.od.nih.gov/all/2017/03/06/new-features-in-eracommons/. 35
What authorities do recipients have? 36
Carryover of funds from one budget period to the next. Authority is provided as a term on the Notice of Award under Section III. Phase I SBIR/STTR awards carryover does not apply Phase II SBIR/STTR awards - carryover authority generally applies Cost-related prior approvals Allows the rebudgeting of funds for any direct cost item provided there is no change in scope A rebudgeting action greater than 25% of the total cost awarded is a potential indicator of a change in scope 37
Recipient may extend (without additional funds) the final budget period of the project up to 12 months via the era Commons up to 90 days prior to the end date of the award under certain conditions. Transfer performance of substantive programmatic work to a third party by means of a consortium agreement. For more information see NIH Grants Policy Statement, Section 8.1.1 NIH Standard Terms of Award under Section 8 Administrative Requirements 38
Progress Reporting Requirements 39
RPPR Webpage: http://grants.nih.gov/grants/rppr/ Includes links to orppr Application Guide orppr Guide Notices ofrequently Asked Questions otraining ocontacts 40
All type 5 progress reports must be submitted using the RPPR module in era Commons Failure to submit complete and timely progress reports may affect future funding to the organization 41
Due dates: Non-SNAP - approximately 60 days before the start of the next budget period SNAP - approximately 45 days before the start of the next budget period Multi-year funded - on or before anniversary date Searchable list to determine which progress reports are due: https://public.era.nih.gov/chl/public/search/pro gressreportbyipf.era 42
Financial Reporting Requirements 43
Federal Financial Report (FFR) (SF-425) FFRs are expected to be submitted timely and accurately Two types of financial reports: Federal Cash Transaction Report Federal Expenditure Report 44
Federal Cash Transaction Report Submitted quarterly to the Payment Management System (PMS), HHS Federal Expenditure Report Submitted annually (non-snap) or at the end of the project (SNAP) to NIH through era Commons Refer to Notice of Award for determination of SNAP vs Non-SNAP (SNAP Streamlined Non-competing Award Process) 45
FFR Expenditure Data Report (to NIH) Timely - Must adhere to submission deadlines: o Annual (Non-SNAP Awards) FFR submitted no later than 90 days after the end of the calendar quarter (CQ) in which the budget period ended. o Final (SNAP and Non-SNAP Awards) FFR submitted within 120 days following the end of the period of performance end date 46
IMPORTANT Information and NIH Guide Notices related to financial reporting: See FFR (SF425) Instructions for NIH Recipients available at http://grants.nih.gov/grants/forms.htm NOT-OD-15-136 at http://grants.nih.gov/grants/guide/notice-files/not- OD-15-136.html NOT-OD-15-135 at http://grants.nih.gov/grants/guide/notice-files/not- OD-15-135.html 47
Closeout Requirements 48
Recipients must submit the following documents, when required, within 120 calendar days of the end of the period of performance: o o o Final Federal Financial Report (FFR) SF-425 Expenditure Data (submitted through era Commons) Final Research Performance Progress Report (F-RPPR) Final Inventions Statement & Certification Timely and accurate closeout reporting is a recipient responsibility 49
The Final Research Performance Progress Report (F-RPPR) has replaced the Final Progress Report (FPR) for closeout o Effective June 30, 2017 for SBIR/STTR Phase I/II final reports. o o o o Effective January 1, 2017 for all grants except SBIR/STTR grants The general format is the same as the interim/annual RPPR Recipients are required to report on Project Outcomes. Due dates have not changed. See NOT-OD-17-022 and NOT-OD-17-085 for additional information
NIH requires that organizations submit an Interim-RPPR while their renewal application (Type 2/Phase II/IIB) is under consideration. o o In the event that the Type 2/Phase II/IIB is funded, NIH will treat the Interim-RPPR as the annual performance report for the final year of the previous competitive segment. If the Type 2/Phase II/IIB is not funded, NIH will treat the Interim-RPPR as the institution s Final-RPPR. As with the Final-RPPR, recipients are required to report on Project outcomes in the Interim-RPPR. To reduce burden NIH will not require recipients to submit an additional Final-RPPR if the renewal application is not funded See NOT-OD-17-037 and NOT-17-085 for additional information
NIH recipients must file the HHS 568 at the conclusion of an NIH award All subject inventions reported on the HHS 568 must be reported in iedison. Failure to report all inventions may result in your organization s loss of rights in the invention or other actions as appropriate. See NOT-OD-16-066 for additional information and resources 52
At time of Closeout: Ensure there are no discrepancies in reporting between: o Final FFR expenditure data (in era Commons) and o FFR cash transaction data (in PMS) 53
Failure to submit an acceptable final FFR in a timely manner may result in disallowed costs or federal debt o o If a recipient fails to submit a final FFR expenditure data report: NIH must use the last recorded quarterly cash disbursement level If the final FFR expenditure data does not match the amount reported on last FFR cash disbursement report to PMS: NIH must use the lower amount - results in federal debt 54
NIH must initiate unilateral closeout as an action of last resort if a recipient does not: o o provide timely, accurate closeout reports; or respond to NIH requests within 270 days after the end date of the period of performance to reconcile discrepancies in grant records Unilateral Closeout emphasizes the need for TIMELY and ACCURATE reporting See NOT-OD-14-084 for additional information
Recipients are required to submit the Final/Interim RPPR and the Final FFR electronically through the Closeout feature in the era Commons. Recipients are strongly encouraged to submit the HHS 568 Final Invention Statement & Certification electronically through the Closeout Feature in the era Commons. NIH Centralized closeout office still accepts receipt of the HHS 568 Final Invention Statement and Certification via emailed PDF attachment, fax, or mail: NIH Centralized Processing Center 6705 Rockledge Drive, Suite 5016, MSC 7986 Bethesda, MD 20892-7986 (for regular or US Postal Service Express mail) Bethesda, MD 20817 (for other courier/express mail only) NIHCloseoutCenter@mail.nih.gov Fax: 301-480-2304 56
Progress Reports, financial and final reports should be submitted on time to avoid consequences. Failure to submit timely reports may adversely affect future NIH funding to: o The Recipient Institution o The Principal Investigator NIH may take action(s) when these reporting requirements are not met, including: o Enforcement action o Special award conditions o Corrective actions See NOT-OD-17-074 for additional information
Loss of carryover authority Cost disallowances Special or More Frequent Reporting Suspension, termination, and withholding of support NIH generally affords the recipient an opportunity to correct deficiencies before taking action unless public health or welfare concerns require immediate action. 58
Whenever you have a question regarding compliance with Federal requirements, consult in advance: o The Notice of Award (terms and conditions) o Your business official (if applicable) o NIH awarding component Grants Management Officer/Specialist 59
QUESTIONS? Kathy Hancock Assistant Grants Compliance Officer Division of Grants Compliance and Oversight Office of Policy for Extramural Research Administration National Institutes of Health Kathy.Hancock@nih.gov 301.435.1962 FCOICompliance@mail.nih.gov GrantsCompliance@nih.gov E-mail: sbir@od.nih.gov 60
Recipient Type Summary of Audit Requirements Source of Audit Requirement (Non- Federal Entity Fiscal Years Beginning Prior to 12/26/2014) Source of Audit Requirement (Non- Federal Entity Fiscal Years Beginning On/After 12/26/2014) Where to Submit Audit Reports State & Local Governments OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse (See contact information in NIH GPS Part III) Institutions of Higher Education OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse (See contact information in NIH GPS Part III) Non-Profits, including non-profit hospitals OMB Circular A-133 45 CFR 75.501 Federal Audit Clearinghouse (See contact information in NIH GPS Part III) For-Profits, including for-profit hospitals 45 CFR 74.26(d) 45 CFR 75.501(h) through 75.501(k) and 45 CFR 75.215 National External Audit Review Center (See contact information in NIH GPS Part III) Foreign Organizations NIH Grants Policy Statement (same as For-Profits) NIH Grants Policy Statement (same as For- Profits) National External Audit Review Center (same as For-Profits, see contact information in NIH GPS Part III)
Summary of Federal Requirement References Recipient Type Administrative Requirements Cost Principles Audit Requirements State & Local Governments and Indian Tribes Institutions of Higher Education 45 CFR Part 75, Subpart C Pre- Federal Award Requirements and Contents of Federal Awards 75.200-75.217 45 CFR Part 75, Subpart E See also 75.416 and 75.417 45 CFR Part 75, Subpart E See also 75.418 and 75.419 45 CFR Part 75, Subpart F at 75.501 Also applicable to nonprofit Hospitals AND Non-Profits 45 CFR Part 75, Subpart E 45 CFR Part 75, Hospitals Subpart D Post 45 CFR Part 75, Appendix IX 45 CFR Part 75, Subpart F Federal Award at 75.501 (h)-(k) and Requirements For-Profits FAR 31.2 75.215 75.300-75.391 (48 CFR Subpart 31.2) Also applicable to for-profit Hospitals Foreign Organizations Same as above depending on type of institution Per NIH GPS use 45 CFR Part 75.501 (h)-(k)
Animal research NIH s Office of Laboratory Animal Welfare http://grants.nih.gov/grants/olaw/olaw.htm Human Subjects research NIH s Office of Extramural Programs Human Subjects http://grants.nih.gov/grants/policy/hs/index.htm Indirect Cost Rate Negotiation - http://oamp.od.nih.gov/dfas/indirect-cost-branch and http://oamp.od.nih.gov/dfas/indirect-costbranch/indirect-cost-submission Intellectual Property - Invention Reporting - http://grants.nih.gov/grants/intell-property.htm Grants Policy & Guidance - http://grants.nih.gov/grants/policy/policy.htm NIH Frequently Asked Questions - http://grants.nih.gov/grants/frequent_questions.htm 63
NIH Public Access - http://publicaccess.nih.gov Research Integrity - http://grants.nih.gov/grants/research_integrity/ index.htm SBIR/STTR Programs - https://sbir.nih.gov/ Time and Effort Reporting for Commercial Organizations - http://oamp.od.nih.gov/dfas/indirect-costbranch/indirect-cost-submission/time-andeffort-reporting-commercial-organizations 64