NIH Grants Policy Statement
Part II: Terms and Conditions of NIH Grant Awards
Subpart A: General -- File 5 of 5
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; 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.) 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
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 PI has a history of
frequent, large annual unobligated balances on previous grants; or if the 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.
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.
Program income earned during the period of grant support
(other than income earned as a result of copyrights, patents, or inventions or
as a result of the sale of real property, equipment, or supplies) shall be
retained by the grantee and, as specified by NIH in the NGA, may be used in one
or a combination of the ways indicated in Exhibit 6.
Exhibit 6. Use and Applicability of Program Income
Use of program income
Added to funds committed to
the project or program and used to further eligible project or program
Applies to all NIH awards
unless there is a concern with the recipient or activity or the program
requires a different 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.
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
Available for use by NIH
programs on an exception basis.
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.
Sale of Real Property, Equipment,
The requirements that apply to the sale of real property are
addressed in “Construction Grants.” 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 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 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.
The amount of program income earned and the amount expended
must be reported on the FSR (SF 269—Long Form). 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 subject to the
additive alternative must be reported on lines 10r and 10s, as appropriate, of
the FSR; program income subject to the deductive alternative must be reported
on lines 10c and 10q of the FSR; and program income subject to the matching
alternative must be reported on lines 10g and 10q of the FSR. (See “Administrative Requirements—Monitoring—Reporting—Financial
Reporting.”) For awards under SNAP, the amount of program income earned
must be reported in the non-competing grant progress report.
Income resulting from royalties or licensing fees is exempt
from reporting as program income.
Income earned from the sale of equipment must be reported on
the FSR 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 line 10c of the FSR.
When the terms of the NGA, including the NIHGPS, do not
specify any accountability requirement for income earned, no reporting of
income is required. Reporting requirements for accountable income accrued after
grant support ends will be specified in the NGA.
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 NGA 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 (“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
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 74.31 through 74.37 or 92.31 through 92.34, as applicable, and the
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 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”), 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 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 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.
Grants—Administrative Requirements—Real Property Management Standards” 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
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 74.31, 74.34, 74.35, and 74.37,
or 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.
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 office 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.
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 74.34 and 74.35, or 45 CFR 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 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 74.34(f) or 92.32, which include the following:
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
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)
procedures and safeguards to prevent loss, damage, and theft
maintenance procedures to keep the equipment in good condition
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
office under the conditions specified in 45 CFR 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
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 office 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.
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:
to the property remains with the Federal government.
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.
use to which the grantee puts the property does not permanently damage it for
Federal government use.
property is controlled and maintained in accordance with the requirements of
48 CFR 45.5 (the FAR).
Procurement System Standards and
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
45 CFR 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.”
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 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
NIH awarding office has been made aware of this situation either at the time of
application or through post-award notification.
project has been recommended for a project period extending beyond the current
year of support.
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 74.48 and
92.36(i)(2) specify termination provisions for contracts in excess of $100,000.
The procurement standards in
45 CFR 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):
grantee’s procurement procedures or operations do not comply with the
procurement standards required by those regulations.
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.
procurement that will exceed the simplified acquisition threshold specifies a
“brand name” product.
proposed award over the simplified acquisition threshold is to be awarded to
other than the apparent low bidder under a sealed-bid procurement.
proposed contract modification changes the scope of a contract or increases the
contract amount by more than the amount considered to be a simplified
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.
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 are
required to take the following steps to implement this policy:
qualified small, minority, and women-owned business enterprises on solicitation
that small, minority, and women-owned business enterprises are solicited
whenever they are potential sources.
contracting with consortia of small businesses, minority-owned businesses, or
women’s business enterprises when an intended contract is too large for any one
such firm to handle on its own or, if economically feasible, divide larger
requirements into smaller transactions for which such organizations might
information on contracting opportunities available and establish delivery
schedules that encourage participation by small, minority, and women-owned
the services and assistance of the SBA and DoC’s Minority Business Development
Agency, as appropriate.
subcontracts are to be let, require the prime contractor to take the
affirmative steps listed above.
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
offices 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
NIH requires that grantees periodically submit financial and
progress reports. Other required reports may include annual invention
utilization reports, lobbying disclosures, 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 and 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
The GMO is the receipt point for most required reports,
including non-competing and final grant progress reports, final invention
statements and certifications, and lobbying disclosure statements.
Non-competing grant progress reports must be submitted in an original and two
copies. Submission of these reports to individuals other than the GMO may
result in delays in processing of the non-competing continuation award or the
submission being considered delinquent. FSRs are to be submitted to OFM (see “Financial Reports” in this subsection) unless
otherwise indicated in the award’s terms and conditions.
Grantees are allowed a specified period of time in which
to submit required financial and final progress reports (see 45 CFR 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 expanded authorities, or conversion
to a reimbursement payment method (also see “Administrative
Requirements—Enforcement Actions”). The schedule for submission of the
non-competing grant progress report is discussed in the next subsection.
Non-Competing Grant Progress Reports
Progress reports usually are required annually as part of
the non-competing continuation award process. However, NIH may require these
reports more frequently. The “Grant Progress Report” (PHS 2590) or equivalent
documentation 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.
The information to be included in the progress report is
specified in the PHS 2590 instructions, which also include alternate
instructions for awards under SNAP (as described in the next subsection). Forms
for non-competing grant progress reports are available at http://grants.nih.gov/grants/funding/2590/2590.htm.
Non-competing grant progress reports must be submitted
directly to the awarding office. Grantees should routinely query and review the
list of pending grant progress reports and due dates available at the NIH
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 office will specify the requirements for
progress reporting under construction grants or grants supporting both
construction activities, including acquisition or modernization, and
Streamlined Non-Competing Award
The NGA will specify whether
an award is subject to SNAP. Award mechanisms routinely included in SNAP are
“R” awards, with the exception of R35 and K awards. Award mechanisms excluded
From SNAP are those that do not have the expanded 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 mechanism), P01, R35, and
awards to individuals. In addition, individual awards under any mechanism may
be excluded from SNAP if
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
grantee has a consistent pattern of failure to adhere to appropriate reporting
or notification deadlines.
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 and approve non-competing continuation awards and to monitor these
awards. As a result, for awards under SNAP, grantees are required to submit
only limited portions of the Grant Progress Report. 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.
As part of the progress
report, grantees must answer the following questions:
there been a change in the “other support” of key personnel since the last
reporting period? If so, the changes, including termination of a previously
active grant or activation of a previously pending grant, must be explained. If
not, the grantee must so state.
the next budget period, will there be a significant change in the level of
effort for key personnel from what was approved for this project? A
“significant change” is a 25 percent or greater reduction in time devoted to
the project. If so, the grantee must explain. If not, the grantee must so
the grantee anticipate that it will have an estimated unobligated balance
(including prior-year carryover) that will be greater than 25 percent of the
current year’s total budget? If so, the grantee will be required to explain why
there is a significant balance and how it will be spent if carried forward into
the next budget period. If not, the grantee should so state.
The awarding office will rely on the grantee’s assessment of
whether significant changes have occurred or will occur in these areas;
however, the GMO may require additional information to evaluate the project for
continued funding. Failure to provide this information will result in a delayed
For awards under SNAP (other than awards to foreign
organizations or Federal institutions), an FSR is required only at the end of a
competitive segment rather than annually. The FSR 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 FSR 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 FSR (see “Administrative
Requirements—Closeout”). For awards under SNAP, grantees (other than
foreign grantees and Federal institutions) also are required to submit a
quarterly FCTR (SF 272) to PMS. Foreign organizations and Federal
institutions must submit an annual FSR even if an award is under SNAP. (Also
Reports of expenditures are required as documentation of the
financial status of grants according to the official accounting records of the
grantee organization. Financial or expenditure reporting is accomplished using
the FSR (SF 269 or SF 269 A); the grantee must use the long form (SF 269) to
report program income earned and used.
Except for awards under SNAP and awards that require more
frequent reporting, the FSR is required on an annual basis. An annual FSR is
required for awards to foreign organizations 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 close of
the budget period. The report also must cover any authorized extension in time
of the budget period. If more frequent reporting is required, the NGA will
specify both the frequency and due date.
For domestic awards under SNAP, in lieu of the annual FSR,
NIH will use the quarterly FCTR, submitted to PMS to monitor the financial
aspects of grants. 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 awards, an FSR 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 FSR 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 FSR (see “Administrative
FSRs may be transmitted electronically to OFM through NIH’s
eRA Commons website at https://commons.era.nih.gov/commons.
Before submitting FSRs to NIH, grantees must ensure that the information
submitted is accurate, complete, and consistent with the grantee’s accounting
system. The AOO’s signature on the FSR certifies that the information in the
FSR 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
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 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:
response to a written request from the grantee, revise the current NGA to
authorize the grantee to spend the excess funds for additional approved purposes
the current award or a subsequent award by an amount representing some or all
of the excess.
In some cases the grantee may have to revise or amend a
previously submitted FSR. When the revision results in a balance due to NIH,
the grantee must submit a revised FSR 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 to
the GMO 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, i.e., 15 months following the end of the budget period (or
competitive segment for awards under SNAP). If an adjustment is to be made, the
NIH awarding office will advise the grantee of actions it will take to reflect
the adjustment. NIH will not accept any revised report received after that date
and will return it to the grantee.
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 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 may result in the loss of patent rights or a withholding of grant
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 (https://s-edison.info.nih.gov/iEdison/). 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 NIH at
Extramural Inventions and Technology
Office of Policy for Extramural
Office of Extramural Research
6705 Rockledge Drive, MSC 7980
Bethesda, MD 20892-7980
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 FSR 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
FSR 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 FSR is submitted to NIH. Foreign organizations and Federal
institutions must retain records for 3 years from the date of submission of the
annual FSR to NIH. See 45 CFR 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 74.48 and 92.36 for record retention and access
requirements for contracts under grants.
An audit is a systematic
review or appraisal made to determine whether internal accounting and other
control systems provide reasonable assurance of the following:
operations are properly conducted.
reports are timely, fair, and accurately.
entity has complied with applicable laws, regulations, and other grant terms.
are managed and used economically and efficiently.
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 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 sections of this NIHGPS
that provide specific requirements for those types of grantees.
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:
organizations expending $500,000 or more per year in Federal awards are
required to have an audit made 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.”
reporting package must contain the following:
Financial statements and schedule of expenditures of Federal
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
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
The data collection form and copies of the reporting package must
be submitted to the FAC at the following address:
Federal Audit Clearinghouse
Bureau of the Census
1201 E. 10th Street
Jeffersonville, IN 47132
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.
Considerations—Selected Items of Cost” for the allowability of audit costs.
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 enforcement 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 enforcement
action unless public health or welfare concerns require immediate action.
However, even if a grantee is taking corrective action, NIH may take proactive
action 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. If NIH imposes sanctions on a
grantee as a result of research misconduct or will more closely monitor an
award(s) through the use of special conditions, NIH will share this information
with other HHS components.
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. 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 74.14 or 92.12.
The awarding office also may withdraw approval of the PI or
other key personnel if there is a reasonable basis to conclude that the PI and
other key personnel are no longer qualified or competent to perform. In that
case, the awarding office may request that the grantee designate a new PI or
other key personnel.
The decision to modify the terms of an award—by imposing
special conditions, by withdrawing approval of the PI or other key personnel,
or otherwise—is discretionary on the part of the NIH awarding office.
Suspension, Termination, and
Withholding of Support
If a grantee has failed to
materially comply with the terms and conditions of award, NIH may 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 74.61 and 74.62, and in 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”). Pending the outcome of an appeal or other action by the
grantee, NIH may award a replacement grant for a limited period of time (up to
18 months) without competition.
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
Considerations—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
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
Federal funds are not available to support the project.
grantee failed to show satisfactory progress in achieving the objectives of the
grantee failed to meet the terms and conditions of a previous award.
whatever reason, continued funding would not be in the best interests of the
If a non-competing continuation award is denied (withheld)
because the grantee failed to comply with the terms and conditions of a
previous award, the grantee may appeal that determination.
Depending on the nature of
the deficiency, NIH may use other means of obtaining grantee compliance. Other
options available to NIH include, but are not limited to, temporary withholding
of payment or other actions specified at 45 CFR 74.62 or 92.43, conversion
from an advance payment method to a reimbursement method, suspension or
debarment under 45 CFR Part 76, and other available legal remedies, such
as civil action. Suspension under 45 CFR Part 76 is a distinct action from
“suspension” as a post-award remedy described under “Suspension, Termination, and Withholding
of Support” in this subsection. The subject of debarment and suspension as
an eligibility criterion is addressed in “Completing
the Pre-Award Process—Eligibility” and “Public
Policy Requirements and Objectives—Ethical and Safe Conduct in Science and
Organizational Operations—Debarment and Suspension.”
Recovery of Funds
NIH may administratively
recover funds paid to a grantee in excess of the amount to which the grantee is
finally determined to be entitled under the terms and conditions of the award,
including misspent funds or unallowable costs incurred. If the grantee does not
pay back the funds in accordance with the demand by the awarding office, which
specifies the period of time for repayment, the awarding office may collect the
an administrative offset against payments that would be due under other grant
advance payments that would otherwise be due, or
any other action permitted by statute.
The Federal Debt Collection Act (Act) (31 U.S.C. 3711) and
the Federal Claims Collection Standards (4 CFR Parts 101-105) require NIH
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 (also
see HHS claims collection regulations at 45 CFR Part 30). Debts may result
from cost disallowances, recovery of funds, unobligated balances, or other
Unless otherwise specified in law, regulation, or the terms
and conditions of the award, debts are considered delinquent 30 days after
notification to the grantee of the indebtedness. The interest on delinquent
debts will be computed from the original notification date to the grantee of
the indebtedness. The interest rate applied will be the current value of funds
rate or the private consumer rate of interest fixed by Treasury, whichever is
higher. A higher rate may be charged if necessary to protect the interests of
the Federal government.
Penalties and administrative
collection costs also will be charged in accordance with the Act and the
implementing HHS regulations, as follows:
penalty charge of 6 percent a year will be assessed on debts that are more than
90 days overdue. Penalty charges will accrue from the date the debt became
overdue until the indebtedness is paid.
debtors will be assessed charges to cover the Federal government’s
administrative costs of collecting overdue debts. From time to time, HHS will publish
a notice in the Federal Register setting forth the amounts to be
assessed for administrative collection costs.
If a grantee appeals an adverse monetary determination under
42 CFR Part 50, Subpart D, or 45 CFR Part 16, collection will be
suspended pending a final decision on the appeal. If the determination is
sustained (either fully or partially), interest will be charged beginning with
the date of the original notification to the grantee of the indebtedness.
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 74.71 through 74.73 and in 45 CFR 92.50. Closeout includes
ensuring timely 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.
Unless the GMO grants an extension, grantees must submit a
final FSR, final progress report, and Final Invention Statement and
Certification within 90 days of the end of grant support. Failure to submit
timely and accurate final reports may affect future funding to the organization
or awards with the same PI.
A final FSR is required for
grant that is terminated,
grant that is transferred to a new grantee, or
award, including awards under SNAP, which will not be extended through award of
a new competitive segment.
The final FSR must cover the period of time since the
previous FSR submission or, for awards under SNAP, the entire competitive
segment or as much of the competitive segment as has been funded before
termination. Final FSRs must have no unliquidated obligations and must indicate
the exact balance of unobligated funds. 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 office. 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 results in additional claims by the grantee, NIH will
consider the approval of such claims subject to the following minimum criteria:
grantee must indicate why the revision is necessary and explain and implement
internal controls that will preclude similar occurrences in the future.
charge must represent otherwise allowable costs under the provisions of the
must be an unobligated balance for the budget period sufficient to cover the
funds must still be available for use.
must receive the revised FSR within 15 months of its original due date.
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. The final progress report
should include a summary of progress toward the achievement of the originally
stated aims, a list of significant results (positive or negative), and a list
of publications. The final progress report also should address the following:
on the inclusion of gender and minority study subjects (using the gender and
minority inclusion table as provided in the PHS 2590)
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—Requirements for Inclusiveness in Research Design—Inclusion of
Children as Subjects in Clinical Research” and the PHS 398)
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.
An original and one copy of this report should be submitted
to the GMO.
The grantee must submit a Final Invention Statement and
Certification (HHS 568), whether or not the funded project results in any
subject inventions. 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 the PI and an AOO. 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 office. If there were no inventions, the form should indicate “None.”
Copies of the HHS 568 form are available on the iEdison website at https://s-edison.info.nih.gov/iEdison/.
Grant Appeals Procedures
HHS permits grantees to
appeal to the DAB certain post-award adverse administrative decisions made by
HHS officials (see 45 CFR Part 16). NIH has established a first-level
grant appeal procedure that must be exhausted before an appeal may be filed
with the DAB (see 42 CFR Part 50, Subpart D). NIH will assume jurisdiction
for the following adverse determinations:
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
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
(withholding) of a non-competing continuation award for failure to comply with
the terms of a previous award
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
The formal notification of an adverse determination will
contain a statement of the grantee’s appeal rights. As the first level in
appealing 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
grantee’s request to NIH for review must be postmarked no later than 30 days
after receipt of the written notification of the adverse determination;
however, an extension may be granted if the grantee can show good cause why an
extension is warranted (42 CFR 50.406).
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 Part 16.
A grantee may not submit an appeal directly to the DAB
because the DAB will review only those appeals that have been reviewed and
acted on by NIH.
In addition to the adverse
determinations indicated, 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).
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