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ARCHIVED - NIH Grants Policy Statement (10/03)


NIH Grants Policy Statement
(12/03)

Part II: Terms and Conditions of NIH Grant Awards
Subpart A: General -- File 2 of 5


Requirements Affecting the Rights and Welfare of Individuals as
Research Subjects, Patients, or Recipients of Services

Human Embryo Research, Cloning, and Transplantation

Ban on Human Embryo Research and Cloning

NIH funds may not be used to support human embryo research under any extramural award instrument. NIH funds may not be used for the creation of a human embryo for research purposes or for research in which a human embryo is destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero under 45 CFR 46.204 and 46.207 and subsection 498(b) of the PHS Act. The term “human embryo” includes any organism not protected as a human subject under 45 CFR 46, as of the date of enactment of the governing appropriations act, that is derived by fertilization, parthenogenesis, cloning, or any other means from one or more human gametes or human diploid cells.

In addition to the statutory restrictions on human fetal research under subsection 498((b) of the PHS Act, by Presidential memorandum of March 4, 1997, NIH is prohibited from using Federal funds for cloning of human beings.

Research on Human Fetal Tissue

Human fetal tissue is defined as tissue or cells obtained from a dead human embryo or fetus after a spontaneous or induced abortion or stillbirth. This definition does not include established human fetal cell lines. Research involving the transplantation of human fetal tissue must be conducted in accordance with applicable State and local laws as well as the following NIH guidance.

NIH guidance for grantees conducting research on human fetal tissue and other information on the governing Federal statute, sections 498A and 498B of the PHS Act, 42 U.S.C. 289g-1 and 298g-2, is available on the NIH website at http://grants.nih.gov/grants/guide/notice-files/not93-235.html.

The scientific and ethical challenges associated with research utilizing human fetal tissue make it imperative that researchers and their organizations be fully aware of and in compliance with the Federal requirements, particularly section 498B. When an application involving human fetal tissue research is submitted to NIH, the AOO’s signature certifies that researchers using these tissues are in compliance with section 498B of the PHS Act. The statute specifically prohibits any person from knowingly acquiring, receiving, or transferring any human fetal tissue for valuable consideration. The term “valuable consideration” is a concept similar to profit and does not include reasonable payment for costs associated with the collection, processing, preservation, storage, quality control, or transportation of these tissues. Violation of this statute carries criminal penalties that apply to both those that supply and those that acquire human fetal tissue.

Sections 498A and 498B contain additional legal requirements for research on the transplantation of human fetal tissue for therapeutic purposes conducted or supported by NIH. Under section 498A, the official who signs the application is certifying that the research on transplantation of human fetal tissue will adhere to the following provisions:

l      The woman who donates the fetal tissue must sign a statement declaring that the donation is being made

Ø      for therapeutic transplantation research,

Ø      without any restriction regarding the identity of individuals who may receive the transplantation, and

Ø      without the donor knowing the identity of the recipient.

l      The attending physician must sign a statement that he/she has

Ø      obtained the tissue in accordance with the donor’s signed statement and

Ø      fully disclosed to the donor his or her intent, if any, to use the tissue in research and any known medical risks to the donor or risks to her privacy associated with the donation that are in addition to risks associated with the woman’s medical care.

In the case of tissue obtained pursuant to an induced abortion, the physician’s statement also must state that he/she

Ø      obtained the woman’s consent for the abortion before requesting or obtaining consent for the tissue to be used;

Ø      did not alter the timing, method, or procedures used to terminate the pregnancy solely for the purpose of obtaining the tissue for research; and

Ø      performed the abortion in accordance with applicable State and local laws.

l      The PI must sign a statement certifying that he/she is aware that the tissue is human fetal tissue obtained in a spontaneous or induced abortion, or pursuant to a stillbirth and that the tissue was donated for research purposes. The PI also must certify that this information has been shared with others who have responsibilities regarding the research and, before eliciting informed consent from the transplantation recipient, will obtain written acknowledgment that the patient is aware of the aforementioned information.

l      The PI must certify in writing that he/she has had no part in any decisions as to the timing, method, or procedures used to terminate the pregnancy.

The AOO also is certifying that the physician’s statement, the PI’s statement, and the acknowledgment of the transplantation recipient will be available for audit by the HHS Secretary or designee.

Research on Transplantation of Fetal Tissue

In submitting an application to NIH, the AOO that signs the application is certifying that, if research on the transplantation of human fetal tissue is conducted under the grant-supported project, the organization will make available for audit by the HHS Secretary or designee, the physician statements and informed consents required by subsections 498A(b)(2) and (c) of the PHS Act or will ensure HHS access to those records, if maintained by an entity other than the grantee. This requirement is in addition to the requirements concerning human subjects in research.

In addition, FDA issued a letter on November 30, 2000, indicating that it has jurisdiction over fetal cells and tissues intended for use in humans. FDA is requesting that investigators contact them to determine whether any planned or ongoing clinical research would require submission of an IND application. Additional information and FDA contact information is available at http://www.fda.gov/cber/ltr/fetal113000.htm.

Confidentiality

NIH expects grantees and others involved in NIH grant-supported research to take appropriate actions to protect the confidentiality of information about and the privacy of individuals participating in the research. Investigators, DSMBs, IRBs, and other appropriate entities should ensure that policies and procedures are in place to protect identifying information and must oversee compliance with those policies and procedures.

Certificates of Confidentiality

Section 301(d) of the PHS Act provides that the Secretary may authorize people engaged in biomedical, behavioral, clinical, or other research activities to protect the privacy of research subjects by withholding the names and other identifying characteristics of those subjects from individuals not engaged in the research. Individuals that have authorization may not be compelled to disclose subjects’ identities in any Federal, State, or local civil, criminal, administrative, legislative or other proceeding. CoCs may be granted for studies collecting information that, if disclosed, could have adverse consequences for subjects or damage their financial standing, employability, insurability, or reputation. By protecting researchers from being compelled to disclose information that would identify research subjects, CoCs contribute to achieving research objectives and promote participation in studies by helping to ensure confidentiality and privacy to participants. Information on CoCs is available on the NIH website at the CoC Kiosk at http://grants.nih.gov/grants/policy/coc/index.htm. Requests for CoCs should be submitted to the GMO, and, subject to awarding office review and approval, a certificate may be issued pursuant to section 301(d).

Confidentiality of Patient Records

Section 543 of the PHS Act requires that records of substance abuse patients be kept confidential except under specified circumstances and purposes. The covered records are those that include the identity, diagnosis, prognosis, or treatment of any patient maintained in connection with any program or activity relating to substance abuse education, prevention, training, treatment, rehabilitation, or research that is conducted, regulated, or directly or indirectly assisted by any department or agency of the United States. This requirement is implemented in 42 CFR Part 2.

Standards for Privacy of Individually Identifiable Health Information

HHS issued the final version of the “Standards for Privacy of Individually Identifiable Health Information”—the Privacy Rule—on August 14, 2002. The Privacy Rule is a Federal regulation under the Health Insurance Portability and Accountability Act (HIPAA) of 1996 that governs the protection of individually identifiable health information. It is administered and enforced by OCR, HHS. Those entities required to comply with the Privacy Rule (classified under the rule as “covered entities”) had until April 14, 2003 to do so (with the exception of small health plans which have an extra year to comply).

Decisions about applicability and implementation of the Privacy Rule reside with the researcher and the grantee organization. The OCR website (http://www.hhs.gov/ocr/) provides information on the Privacy Rule, including the complete text of the regulation and a set of decision tools for determining whether a particular entity is subject to the rule. An educational booklet, Protecting Heath Information in Research: Understanding the HIPAA Privacy Rule, is available through OCR’s website and also at http://privacyruleandresearch.nih.gov/. That website also includes other educational materials sanctioned by OCR and the Office of the General Counsel, HHS. Additional information on the impact of the Privacy Rule on NIH processes involving the review, funding, and performance monitoring of grants can be found at http://grants.nih.gov/grants/guide/notice-files/NOT-OD-03-025.html.

Controlled Substances

If controlled substances are proposed to be administered as part of a research protocol or if research is to be conducted on the drugs themselves, applicants/grantees must ensure that the DEA requirements, including registration, inspection, and certification, as applicable, are met. Regional DEA offices can supply forms and information concerning the type of registration required for a particular substance for research use. The main registration office in Washington, DC may be reached at 800-882-9539. Information also is available from the National Institute on Drug Abuse at 301-443-6300.

Human Subjects

HHS regulations for the protection of human subjects, in 45 CFR Part 46, implement section 491(a) of the PHS Act and provide a systematic means, based on established, internationally recognized ethical principles, to safeguard the rights and welfare of individuals who participate as subjects in research activities supported or conducted by NIH or other HHS components.

The Federal regulations require that each institution, domestic or foreign, “engaged” in human subjects research provide OHRP with a satisfactory Assurance of compliance with the regulations, unless the research is exempt under 45 CFR 46.101(b). An institution becomes “engaged” in human subjects research when its employees or agents
(1) intervene or interact with living individuals for research purposes, or (2) obtain individually identifiable private information for research purposes (45 CFR 46.102(d) and (f)).

The HHS regulations require that departments and agencies (e.g., NIH) will conduct or support research covered by this policy only if the institution has an assurance approved by OHRP, and only if the institution has certified to NIH that the research has been reviewed and approved by an IRB provided for in the assurance and will be subject to continuing review by the IRB. Under no condition shall research covered by the regulations be supported prior to receipt of the certification that the research has been reviewed and approved by the IRB (45 CFR 46.103(b) and (f)).

If, at the time of award, a grantee does not have an assurance approved by OHRP and certification of IRB review and approval, NIH will place a restriction on the award so that no human subjects research can be conducted or supported at that site until the assurance and certification of IRB review and approval have been obtained and accepted by NIH. The awardee institution bears ultimate responsibility for protecting human subjects under the award, including human subjects at all participating and consortium sites, and for ensuring that an Assurance approved by OHRP and certification of IRB review and approval have been obtained before human subjects research can be conducted at each collaborating site.

For this requirement, the definitions in 45 CFR 46.102 apply as follows:

l      Human subject. A living individual about whom an investigator (whether professional or student) conducting research obtains (1) data through intervention or interaction with the individual or (2) identifiable private information.

l      Research. A systematic investigation, including research, development, test, and evaluation, designed to develop or contribute to generalizable knowledge. Activities which meet this definition constitute research for purposes of this policy, whether or not they are conducted or supported under a program which is considered research for other purposes. For example, some demonstration and service programs include research activities.

The use of autopsy materials is governed by applicable State and local law and is not directly regulated by 45 CFR 46.

Assurance Requirements and Institutional Review Boards

OHRP negotiates assurances covering all of an organization’s federally supported research activities involving human subjects. [8] Applicant organizations proposing to involve human subjects in nonexempt research must file (or have previously filed) a written assurance (FWA) with OHRP setting forth the commitment of the organization to establish appropriate policies and procedures for the protection of human subjects. For organizations proposing nonexempt research involving human subjects and not currently holding an approved assurance, OHRP will negotiate an FWA.

Each legally separate entity must file its own FWA even if the organization does not operate its own IRB and designates another IRB (registered with OHRP and agreeing to the designation) for that purpose. Affiliated organizations or organizations that will serve as additional performance sites for the grant-supported research also must file an FWA. No individual may receive NIH grant funds for nonexempt research involving human subjects unless the individual is affiliated with or sponsored by an organization that assumes responsibility for the research under an FWA or the individual makes other arrangements with OHRP.

Detailed information concerning FWAs, including the OHRP Assurance Training Module, is available on the OHRP website (http://www.hhs.gov/ohrp/).

In addition to the requirement for an assurance, NIH will not award a grant for nonexempt research in which human subjects are involved unless the grantee provides a certification to NIH that the research has been approved by an appropriate IRB, consistent with 45 CFR Part 46, within 12 months before the budget period start date. IRB approval is not required before NIH peer review of an application. Rather, following peer review and notification of priority score/percentile, applicant organizations should proceed with IRB review for those applications that have not yet received IRB approval and that appear to be in a fundable range. Regardless of when the IRB review occurs, the IRB should ensure that the research described in the application is consistent with any corresponding protocols reviewed and approved by the IRB.

It is the grantee organization’s responsibility to ensure that all sites engaged in research involving human subjects have an appropriate OHRP-approved assurance and IRB approval of the research consistent with 45 CFR Part 46. It also is the grantee’s responsibility to comply with NIH prior-approval requirements related to the addition of sites not included in the approved application (see “Administrative Requirements—Changes in Project and Budget—Prior-Approval Requirements”). The list of organizations with approved assurances is available at the OHRP website (http://www.hhs.gov/ohrp). Grantees may not draw funds from the payment system, request funds from the paying office, or make obligations against Federal funds for research involving human subjects at any site engaged in nonexempt research for any period not covered by both an OHRP-approved assurance and IRB approval consistent with 45 CFR Part 46. Costs associated with IRB review of human research protocols are not allowable as direct charges to NIH-funded research unless such costs are not covered by the organization’s F&A rate.

As specified in 45 CFR 46.111, the IRB review must include a determination that, for research covered by the regulations, the following conditions are met:

l      The procedures to be used will minimize risks to subjects.

l      Risks to subjects are reasonable in relation to expected benefits, if any, to subjects and the importance of the knowledge that may reasonably be expected to result.

l      Selection of subjects is equitable.

l      Informed consent is sought from each prospective subject or the subject’s legally authorized representative and is appropriately documented in accordance with, and to the extent required by, the regulation.

l      When appropriate, the research plan makes adequate provision for monitoring the data collected to ensure the safety of subjects, the protection of privacy, and the confidentiality of data.

l      When some or all of the subjects are likely to be vulnerable to coercion or undue influence, such as children, prisoners, pregnant women, people with acute or severe physical or mental illness, or people who are economically or educationally disadvantaged, appropriate additional safeguards are included in the study to protect the rights and welfare of these subjects.

If an IRB considers the impact of potential financial (or other) conflicts of interest on the research and the protection of human subjects, it should refer to the organization’s policies and procedures for identifying and monitoring conflicts of interest (see “Public Policy Requirements and Objectives—Ethical and Safe Conduct in Science and Organizational Operations—Standards of Conduct—Financial Conflict of Interest”).

The regulations specify additional protections for research involving human fetuses, pregnant women, and neonates (Subpart B); prisoners (Subpart C); and children (Subpart D).

OHRP also has responsibility for oversight of grantee compliance with the HHS human subjects regulations. In carrying out this responsibility, OHRP evaluates all written allegations or indications of non-compliance with the HHS regulations it receives from any source. All compliance oversight evaluations are predicated on the HHS regulations and the organization’s assurance of compliance. Any corrective actions imposed as a result of compliance oversight evaluations are intended to remedy identified non-compliance and prevent reoccurrence. Because each case is different, OHRP tailors corrective actions to foster the best interest of human research subjects and, to the extent possible, of the organization, research community, and HHS. Most compliance oversight evaluations and resultant corrective actions are resolved at the OHRP level. However, OHRP may recommend actions to be taken by other HHS officials.

Information about FWA preparation and negotiation and about OHRP activities related to oversight and compliance, as well as copies of the human subjects regulations, may be obtained from OHRP at the address shown in Part III or from its home page at http://www.hhs.gov/ohrp. OHRP also has produced a publication, available through the GPO[9], and an instructional videotape.

Education in the Protection of Human Research Participants

Before funds are awarded for competing applications involving human subjects, applicants must submit documentation that all key personnel have received training in the protection of human subjects. Key personnel include all individuals responsible for the design or conduct of the study, including key personnel of consortium participants or alternate performance sites if they are participating in research that involves human subjects. This documentation should be part of a cover letter signed by the AOO that accompanies the description of other support, IRB and IACUC approval, and other information submitted prior to funding in accordance with just-in-time procedures. For non-competing continuation awards, the description of education for new key personnel should be part of the progress report submitted as a prerequisite to award. Additional information about this education requirement is available on the NIH website at: http://grants.nih.gov/grants/policy/hs_educ_faq.htm.

Data and Safety Monitoring

For all federally funded research involving human subjects, the regulations for the protection of human subjects (45 CFR 46) specify criteria for IRB approval of research and require, at 45 CFR 46.111(a)(6), that “[W]hen appropriate, the research plan makes adequate provision for monitoring the data collected to ensure the safety of subjects.”

NIH provides the following more specific requirements for data and safety monitoring. NIH requires oversight and monitoring of all human intervention studies (clinical trials) to ensure the safety of participants and the validity and integrity of the data. The NIH policies on data and safety monitoring specify that the level of monitoring should be commensurate with the risks and the size and complexity of the clinical trial, and are in addition to any monitoring requirements imposed by FDA or the NIH Guidelines for Research Involving Recombinant DNA Molecules. The frequency of monitoring will depend on potential risks, complexity, and the nature of the trial; therefore, a number of options for monitoring trials are available. These can include, but are not limited to, monitoring by a/an

l      PI (required),

l      independent individual/safety officer,

l      designated medical monitor,

l      internal committee or board with explicit guidelines,

l      DSMB (required for multi-site trials), and

l      IRB (required).

For competing research applications including clinical trials, the applicant must include a general description of the data and safety monitoring for review by the SRG. A general description of a monitoring plan establishes the overall framework for data and safety monitoring. It should describe the entity that will be responsible for monitoring and how adverse events will be reported to the IRB) and, if appropriate, OBA, and FDA in accordance with IND or IDE regulations. In specific cases where the NIH awarding office is the sponsor of the test agent, i.e., the holder of the IND application, investigators must submit individual adverse event reports to the awarding office in accordance with FDA regulations.

A detailed monitoring plan must be included as part of the research protocol, be submitted to the local IRB, and be reviewed and approved by the NIH awarding office prior to the accrual of human subjects. The awarding office may specify the reporting requirements for adverse events, which are in addition to the annual report to the IRB. The clinical trial monitoring function is above and beyond that traditionally provided by IRBs; however, the IRB must be cognizant of the procedures used by clinical trial monitoring entities and the monitor must provide periodic reports to investigators for transmittal to the local IRB.

NIH specifically requires the establishment of DSMBs for multi-site clinical trials involving interventions that entail potential risk to the participants, and generally for Phase III clinical trials. Although Phase I and Phase II clinical trials also may use DSMBs, smaller clinical trials may not require this oversight format, and alternative monitoring plans may be appropriate.

For multi-site Phase I and II trials, investigators should organize a central reporting entity that will be responsible for preparing timely summary reports of adverse events for distribution among sites and the IRBs of participating sites. The frequency of summary reports will depend on the nature of the trial. Organizations with a large number of clinical trials may develop standard monitoring plans for Phase I and II clinical trials. However, such plans should always be evaluated for appropriateness for the particular investigation.

For multi-site Phase I and II trials, investigators should organize a central reporting entity that will be responsible for preparing timely summary reports of adverse events for distribution among sites and the IRBs of participating sites. The frequency of summary reports will depend on the nature of the trial. Organizations with a large number of clinical trials may develop standard monitoring plans for Phase I and II clinical trials. However, such plans always should be evaluated for appropriateness for the particular investigation.

All multi-site trials with DSMBs are expected to forward summary reports of adverse events to individual IRBs so they can address reports related to the site for which they have responsibility. Grantees should address questions on this subject to the NIH PO.

Further information concerning these requirements is contained in several NIH Guide for Grants and Contracts notices (http://grants.nih.gov/grants/guide/notice-files/not99-107.html, http://grants.nih.gov/grants/guide/notice-files/NOT-OD-00-038.html, and http://grants.nih.gov/grants/guide/notice-files/not98-084.html) and the PHS 398 instructions (http://grants.nih.gov/grants/funding/phs398/instructions2/p1_specific_instructions.htm#e_Human_Subjects_Research).

Investigational New Drug Applications/Investigational Device Exceptions

To be eligible for NIH funding, all clinical research involving INDs, drugs approved for a different indication, or experimental combinations of drugs must meet FDA’s IND regulations, FDA’s human subjects’ protection requirements, and HHS’s human subjects’ requirements. As provided in the FDA regulations, an IND or IDE also may apply to biologics or devices. The FDA regulations are published in 21 CFR Parts 50 and 312.

The official sponsor of the IND/IDE, whether NIH, a grantee, or a third party, is legally responsible for meeting the FDA requirements. If the IND/IDE sponsor is a third party, such as a pharmaceutical company or research organization under contract to a grantee or to a pharmaceutical company, the legal responsibility for monitoring the clinical trial and reporting to FDA rests with the sponsor rather than the grantee. This generally will be the case for larger, multi-site clinical trials. If the grantee is the IND/IDE holder, commonly referred to as an “investigator-initiated IND/IDE,” the grantee or the investigator serves as the sponsor and assumes the legal responsibility. In any case, the grantee is ultimately responsible to NIH for ensuring compliance with the requirements for protection of human subjects, including compliance with FDA’s requirements.

Following the filing of an IND, FDA has a 30-day period in which to review it. FDA may allow the IND to proceed or may defer approval of the IND until changes it deems acceptable are made. FDA also may order a clinical trial to be suspended or terminated, at any time, based on information it receives about that clinical trial.

When NIH funds all, or part of, a clinical study involving an IND or an IDE, NIH must be knowledgeable about any significant communications with FDA concerning the study. The grantee organization must report certain types of FDA communications to the NIH awarding office within 72 hours of receiving a copy of or upon being informed of the FDA communication (through the PI or another person acting on behalf of the grantee), whichever occurs first. This notification requirement applies to any of the following communications from FDA with the sponsor of the IND or IDE:

l      Warning letters (whether sent to the grantee or to the commercial sponsor)

l      Notices of Initiation of Disqualification Proceedings and Opportunity to Explain

l      Notice of Opportunity for Hearing

l      Notice of Disqualification

l      Consent Agreements

l      Clinical hold letters that pertain to breaches of good manufacturing practices, good clinical practices, or other major issue requiring significant changes in the protocol.

The notification should be made in writing, but also may be done by telephone if a written notice would delay the notification. It should include a statement of the action taken or contemplated and the assistance needed to resolve the situation. These requirements apply to the grantee even if the grantee or the NIH-funded PI is the sponsor. Failure to comply with this requirement may result in NIH imposing a corrective and/or enforcement action (see “Administrative Requirements—Enforcement Actions”). FDA communications are considered grant-related records for purposes of retention and access (see “Administrative Requirements—Monitoring—Record Retention and Access”).

Pro-Children Act of 1994

Public Law 103-227, Title X, Part C, Environmental Tobacco Smoke, also known as the Pro-Children Act of 1994, imposes restrictions on smoking in facilities where federally funded children’s services are provided. NIH grants are subject to these requirements only if they meet the Act’s specified coverage. The Act specifies that smoking is prohibited in any indoor facility (owned, leased, or contracted for) used for the routine or regular provision of kindergarten, elementary, or secondary education or library services to children under the age of 18. In addition, smoking is prohibited in any indoor facility or portion of a facility (owned, leased, or contracted for) used for the routine or regular provision of federally funded health care, day care, or early childhood development (Head Start) services to children under the age of 18. The statutory prohibition also applies if such facilities are constructed, operated, or maintained with Federal funds. The statute does not apply to children’s services provided in private residences, facilities funded solely by Medicare or Medicaid funds, portions of facilities used for inpatient drug or alcohol treatment, or facilities where Women, Infants and Children (WIC) coupons are redeemed. Failure to comply with the provisions of the law may result in the imposition of a civil monetary penalty of up to $1,000 per violation and/or the imposition of an administrative compliance order on the responsible entity.

Because of the nature of NIH programs and funding, individual transactions, rather than entire programs, may be subject to these requirements. The signature of the AOO will indicate the intent to comply. Any questions concerning the applicability of these provisions to an NIH grant should be directed to the GMO.

Animal Welfare

The PHS Policy on Humane Care and Use of Laboratory Animals (the Policy) requires applicants proposing to use vertebrate animals in NIH-supported activities to file a written Animal Welfare Assurance with OLAW. The Policy defines “animal” as any live, vertebrate animal used or intended for use in research, research training, experimentation, biological testing, or related purposes. Under the Policy, the applicant/grantee is responsible for the humane care and treatment of animals in NIH grant-supported activities. The Policy implements and supplements the U.S. Government Principles for the Care and Utilization of Vertebrate Animals used in Testing, Research, and Training. The Policy also requires the applicant to establish appropriate policies and procedures for the humane care and use of animals, based on the Guide for the Care and Use of Laboratory Animals, and to comply with the Animal Welfare Act and its implementing regulations. This includes appointing an IACUC with specified responsibilities.

NIH will not make an award for research involving live vertebrate animals unless the applicant organization and all performance sites are operating in accordance with an approved Animal Welfare Assurance and provide verification that the IACUC has reviewed and approved those sections of the application that involve use of vertebrate animals, in accordance with the requirements of the Policy. NIH will not make an award for research involving live vertebrate animals to an individual unless that individual is affiliated with an organization that accepts responsibility for compliance with the Policy and has filed the necessary assurance with OLAW.

Applications from organizations with approved Animal Welfare Assurances will be considered incomplete if they do not contain the information concerning the use of vertebrate animals required as part of the application’s research plan (see instructions for completing the PHS 398 and PHS 416-1 for the specific points that need to be addressed). In the case of apparent or potential violation of the Policy, NIH may refer an application back to the applicant for further IACUC review.

Verification of the IACUC review may be filed at any time before award unless required earlier by the IC. Therefore, following peer review and notification of priority score/percentile, applicant organizations with approved Assurances should proceed with IACUC review for those applications that have not yet received IACUC approval and that appear to be in a fundable range. Regardless of when the review occurs, the IACUC should ensure that the research described in the application is consistent with any corresponding protocols reviewed and approved by the IACUC. If an application is selected for award and the verification of IACUC review has not been submitted, the awarding office will contact the organization with instructions for negotiating an assurance or submitting the IACUC verification.

When organizations collaborate and multiple recognized IACUCs may be involved, only one of those IACUCs is required to review the research project or evaluate a program facility. In such cases, organizations must define their respective responsibilities to ensure compliance with the Policy. If both institutions have full Animal Welfare Assurances, they may exercise discretion in determining which IACUC will review the research protocol(s) and under which organization’s program the research will be performed.

OLAW may negotiate an inter-organizational Animal Welfare Assurance when an awardee organization without an animal care and use program or IACUC will rely on the program of an organization with an assurance. Assured institutions also have the option to amend their Animal Welfare Assurances to cover performance sites without such assurances.

Foreign organizations proposing activities involving vertebrate animals are required to comply with the Policy or provide evidence that acceptable standards for the humane care and use of animals will be met.

The Policy does not affect applicable State or local laws or regulations that impose more stringent standards for the care and use of laboratory animals. In addition, all organizations are required to comply, as applicable, with the Animal Welfare Act, as amended, 7 U.S.C. 2131 et seq., and other Federal statutes and regulations relating to animals.

Information about preparing and submitting Animal Welfare Assurances and copies of the Policy and other relevant materials are available from OLAW (see Part III for contact information).

Requirements for Inclusiveness in Research Design

NIH requires grant-supported research projects to be as inclusive in design as possible to extend the validity of research findings and allow for enhancement of the health status of all population groups.

Inclusion of Women and Minorities as Subjects in Clinical Research

Clinical research involving human subjects of any age must comply with the NIH Policy and Guidelines on the Inclusion of Women and Minorities as Subjects in Clinical Research (http://grants.nih.gov/grants/funding/women_min/guidelines_amended_10_2001.htm), implementing section 492B of the PHS Act. These guidelines require that women and members of minority groups and their subpopulations (http://grants.nih.gov/grants/guide/notice-files/NOT-OD-01-053.html) be included in any NIH-supported biomedical and behavioral clinical research project involving human subjects, unless a clear and compelling rationale and justification establishes, to the satisfaction of the IC Director, that inclusion is inappropriate with respect to the health of the subjects, the purpose of the research, or other circumstances. Cost is not an acceptable reason for exclusion, except when the research would duplicate data already available from other sources. Women of childbearing potential should not be routinely excluded from participation in clinical research. The guidelines should be reviewed for policy concerning inclusion of these groups in all NIH-supported clinical trials. This policy applies to subjects of all ages.

One of the requirements of those guidelines is collecting information on racial/ethnic group in accordance with government-wide requirements to allow comparisons to other Federal databases, especially the census and national health databases. OMB Directive No. 15 (http://www.whitehouse.gov/omb/fedreg/race-ethnicity.html) defines minimum standards for maintaining, collecting, and presenting data on race and ethnicity for all Federal reporting. The categories in this classification are social-political constructs and should not be interpreted as being scientific or anthropological in nature. The standards include five racial categories: American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White. There are two categories for ethnicity: “Hispanic or Latino,” and “Not Hispanic or Latino.” Reports of data on race and ethnicity shall use these categories. These categories are defined in OMB Directive 15.

Peer reviewers will evaluate proposed plans for inclusion of members of minority groups and both genders, the design of clinical trials, and recruitment and outreach as part of the scientific assessment. Failure to comply with this policy may result in NIH not making an award. Grantees are required to report annually on the enrollment of individuals by gender and racial or ethnic minority group as part of the grant progress report, including SNAP reporting (see “Administrative Requirements—Monitoring—Reporting—Non-Competing Grant Progress Reports”).

Inclusion of Children as Subjects in Clinical Research

NIH has a separate policy on inclusion of children as subjects in clinical research that is similar to the policy regarding inclusion of women and minorities (http://grants.nih.gov/grants/funding/children/children.htm). All new research projects involving human subjects research must include children in the research design unless there are scientific or ethical reasons not to include them. If children will be excluded from the research, the application must present an acceptable justification for the exclusion. For the purpose of addressing the NIH policy requirement for inclusion, a child is defined as an individual under the age of 21 years.

The inclusion of children as subjects in research must comply with all applicable provisions of pertinent Federal laws and regulations, including 45 CFR Part 46. Regulatory requirements in 45 CFR 46 Subpart D address HHS protections for children who participate in research. These requirements must be addressed when “children” (persons who, under the applicable law of the jurisdiction in which the research will be conducted, have not attained the legal age for consent to treatments or procedures involved in the research) are involved as subjects in research.

This policy applies to both exempt and nonexempt research activities (see “Human Subjects” in this section); however, if the applicant claims that the proposed study meets the criteria for exemption 4 under 45 CFR Part 46, no justification for the exclusion of children is required.

Civil Rights

Before NIH may make an award to a domestic organization, the AOO must certify, by means of the signature on the application, that the organization has on file with OCR an Assurance of Compliance with the statutes described in this subsection. The Assurance, Form HHS 690, is filed for the organization and is not required for each application. If the application has been recommended for funding and the applicant organization does not have an Assurance of Compliance on file, it will receive, from the awarding office, the required form and instructions for completion and submission. The HHS 690 also is available from GrantsInfo@nih.gov or by telephone at 301-435-0714.

Domestic organizations that receive funding from grantees (including consortium participants and contractors under grants) rather than directly from NIH also are required to file an HHS 690. The applicant/grantee is responsible for determining whether those organizations have the required Assurance on file and, if not, ensuring that it is filed with OCR.

Age Discrimination Act of 1975

The Age Discrimination Act of 1975 prohibits discrimination on the basis of age in any program or activity receiving Federal financial assistance. The HHS implementing regulations are codified at 45 CFR Part 91.

Civil Rights Act of 1964

Title VI of the Civil Rights Act of 1964 provides that no person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. The HHS implementing regulations are codified at 45 CFR Part 80.

Education Amendments of 1972

Title IX of the Education Amendments of 1972 provides that no person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any educational program or activity receiving Federal financial assistance. The HHS implementing regulations are codified at 45 CFR Part 86.

Rehabilitation Act of 1973

Section 504 of the Rehabilitation Act of 1973, as amended, provides that no otherwise qualified handicapped individual in the United States shall, solely by reason of the handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. These requirements pertain to the provision of benefits or services as well as to employment. The HHS implementing regulations are codified at 45 CFR Parts 84 and 85.

Limited English Proficiency

EO 13166, August 11, 2000, requires grantees receiving Federal financial assistance to take steps to ensure that people with limited English proficiency can meaningfully access health and social services. A program of language assistance should provide for effective communication between the service provider and the person with limited English proficiency to facilitate participation in, and meaningful access to, services. The obligations of grantees are explained on the OCR website at http://www.hhs.gov/ocr/lep/revisedlep.html.

Environmental Impact and Other Requirements Related to Acquisition, Alteration and Renovation, and Construction of Facilities

Public policy requirements that apply to construction activities are described in “Construction Grants—Public Policy Requirements and Objectives.” Those requirements also may apply to A&R activities. A grantee undertaking an A&R project under a nonconstruction award should consult the GMO concerning potential applicability of these requirements.

Availability of Information

Except for certain types of information that may be considered proprietary or private information that cannot be released, most grant-related information submitted to NIH by the applicant or grantee in the application or in the post-award phase is considered public information and, once an award is made, is subject to possible release to individuals or organizations outside NIH. The statutes and policies that require this information to be made public are intended to foster an open system of government and accountability for governmental programs and expenditures and, in the case of research, to provide information about federally funded activities.

NIH routinely places information about awarded grants, including project title, the name of the PI, and the project description, in the CRISP system. For funded research grant applications, NIH also sends the project description provided by an applicant to the DoC’s NTIS. NTIS disseminates scientific information for classification and program analysis. The public may obtain the project descriptions from CRISP (available from the OER home page) or request them from NTIS. Other information may be released case by case as described in this subsection.

Several policies require acknowledgment of support and a disclaimer for publications, inventions, and other research products, as provided in “Administrative Requirements—Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources” and elsewhere in the NIHGPS.

Acknowledgment of Federal Funding

As required by HHS appropriations acts, all HHS 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. Grantees are required to state (1) the percentage and dollar amounts of the total program or project costs financed with Federal money and (2) the percentage and dollar amount of the total costs financed by nongovernmental sources.

The Freedom of Information Act

The Freedom of Information Act, 5 U.S.C. 552, and implementing HHS regulations (45 CFR Part 5) require NIH to release certain grant documents and records requested by members of the public, regardless of the intended use of the information. These policies and regulations apply to information in the possession of NIH and generally do not require grantees or contractors under grants to permit public access to their records. An exception related to certain research data is described in this subsection.

NIH generally will release the following types of records pursuant to a FOIA request:

l      Funded applications and funded progress reports, including award data

l      Final reports that have been transmitted to the grantee organization of any audit, survey, review, or evaluation of grantee performance.

NIH generally will withhold the following types of records or information in response to a FOIA request:

l      Pending competing grant applications

l      Unfunded new and competing continuations and competing supplemental applications

l      Financial information pertaining to project personnel, such as institutional base salary information

l      Information pertaining to an individual, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy

l      Predecisional opinions in interagency or intraagency memorandums or letters expressed by Federal government officers, employees, or consultants

l      Evaluative portions of site visit reports and peer review summary statements, including priority scores

l      Trade secrets and commercial, financial, and otherwise intrinsically valuable items of information that are obtained from a person or organization and are privileged or confidential

l      Information which, if released, would adversely affect the competitive position of the person or organization

l      Patent or other valuable commercial rights of the person or organization.

If, after receiving a FOIA request, NIH has substantial reason to believe that information in its records could reasonably be considered exempt from release, the appropriate NIH FOI office will notify the applicant or grantee, through the PI, before the information is released. The PI will be given an opportunity to identify potentially patentable or commercially valuable information that the PI believes should not be disclosed. After NIH consideration of the response, the PI and grantee will be informed if NIH does not agree with the PI’s position. If a document contains both disclosable and nondisclosable information, the nondisclosable information will be deleted and the balance of the document will be disclosed.

The HHS regulations implementing FOIA provide that only the NIH FOI Officer may deny requests for information. Requests for information, the release of which is believed to be exempt under FOIA, are referred to the NIH FOI Officer along with written documentation of the rationale for nondisclosure. If the NIH FOI Officer determines that the requested information is exempt from release under FOIA, the requester may appeal that determination to the Deputy Assistant Secretary for Public Affairs (Media), HHS. Additional information on the FOIA process is available at the NIH FOI Office website (http://www.nih.gov/icd/od/foia).

Access to Research Data

NIH handles requests for the release of research data by certain types of recipients as FOIA requests. The term “research data” is defined as the recorded factual material commonly accepted in the scientific community as necessary to validate research findings. It does not include preliminary analyses; drafts of scientific papers; plans for future research; peer reviews; communications with colleagues; physical objects (e.g., laboratory samples, audio or video tapes); trade secrets; commercial information; materials necessary to be held confidential by a researcher until publication in a peer-reviewed journal; information that is protected under the law (e.g., intellectual property); personnel and medical files and similar files, the disclosure of which would constitute an unwarranted invasion of personal privacy; or information that could be used to identify a particular person in a research study.

As required by 45 CFR 74.36, grantees that are institutions of higher education, hospitals, or non-profit organizations must release research data first produced in a project supported in whole or in part with Federal funds that are cited publicly and officially by a Federal agency in support of an action that has the force and effect of law (i.e., regulations and administrative orders). If the data are publicly available, NIH directs the requester to the public source. Otherwise, the IC FOI coordinator handles the request, consulting with the affected grantee and the PI. This requirement also provides for assessment of a reasonable fee to cover grantee costs and (separately) the NIH costs of responding.

This requirement to release research data does not apply to commercial organizations or to research data produced by State or local governments. However, if a State or local governmental grantee contracts with an educational institution, hospital, or non-profit organization, and the contract results in covered research data, those data are subject to the disclosure requirement.

Additional information is available on the NIH website at http://grants.nih.gov/grants/policy/data_sharing/index.htm. (Also see “Administrative Requirements—Availability of Research Results: Publications, Intellectual Property Rights, and Sharing Research Resources.”)

The Privacy Act

The Privacy Act of 1974, 5 U.S.C. 552a, and its implementing regulations (45 CFR Part 5b) provide certain safeguards for information about individuals maintained in a system of records (i.e., information may be retrieved by the individual’s name or other identifying information). These safeguards include the rights of individuals to determine what information about them is maintained in Federal agencies’ files (hard copy or electronic) and how it is used, to have access to such records, and to correct, amend, or request deletion of information in their records that is inaccurate, irrelevant, or outdated.

Records maintained by NIH with respect to grant applications, grant awards, and the administration of grants are subject to the provisions of the Privacy Act. NIH has two Privacy Act systems of records that cover NIH grant records:

l      09-25-0036, Extramural Awards and Chartered Advisory Committees: IMPAC (Grant/Contract/Cooperative Agreement Information/Chartered Advisory Committee Information), HHS/NIH/OER and HHS/NIH/CMO

l      09-25-0112, Grants and Cooperative Agreements: Research, Research Training, Fellowship and Construction Applications and Related Awards, HHS/NIH/OD.

These two systems provide guidance on requirements for the management of applicable grant records in NIH’s possession and include appropriate routine uses of such information. They also include requirements for safeguarding the records and for record retention and disposal.

Parties other than PIs may request the release of Privacy Act records. Such requests are processed in the same manner as FOIA requests. For example, information requested by co-investigators in grant applications is released to them only when required under FOIA because they have no right of access under the Privacy Act. When releasing information about an individual to a party other than that individual, NIH will balance the individual’s right to privacy with the public’s right to know as provided by the FOIA.

Records maintained by grantees ordinarily are not subject to the requirements of 45 CFR Part 5b.

Other Public Policy Requirements and Objectives

Metric System

Consistent with EO 12770 (July 25, 1991), Metric Usage in Federal Government Programs, measurement values in applications and grantee-prepared reports, publications, and other grant-related documents should be in metric. See “Construction Grants” in Subpart B of this part for requirements for metric usage in construction activities.

Military Recruiting and Reserve Officer Training Corps Program Access to
Institutions of Higher Education

NIH is subject to section 588 of the National Defense Authorization Act of 1995, as implemented in 32 CFR Part 216, that precludes grant awards to institutions of higher education that DoD determines have an anti-Reserve Officer Training Corps (ROTC) policy or practice (regardless of when implemented) that either prohibits or, in effect, prevents the Secretary of Defense from gaining entry to campuses or access to students or information for military recruiting. DoD publishes each determination of ineligibility in the Federal Register as well as publishing, once every 6 months, a list of all currently ineligible schools. If DoD determines that an institution is ineligible during an ongoing project period, NIH may either continue the award or take an action to end the award as provided in “Administrative Requirements—Enforcement Actions—Suspension, Termination, and Withholding of Support.” Funding eligibility may be restored on the basis of new information provided to DoD.


THE NOTICE OF GRANT AWARD

The NGA is the legal document issued to notify the grantee that an award has been made and that funds may be requested from the designated HHS payment system or office. An NGA is issued for the initial budget period and each subsequent budget period in the approved project period. The NGA reflects any future-year commitments. A revised NGA may be issued during a budget period to effect an action resulting in a change in the period or amount of support or other change in the terms and conditions of award. NIH will not issue a revised NGA to reflect a grantee’s post-award rebudgeting. Until an IC has issued an NGA for the initial award, any costs incurred by the applicant for the project are incurred at its own risk (see “Allowability of Costs/Activities—Selected Items of Cost—Pre-Award (Pre-Agreement) Costs” for NIH policy on the allowability of pre-award costs).

The NGA sets forth pertinent information about the grant, including, but not limited to, the following:

l      Application/grant identification number (“grant number”)

l      Name of grantee organization

l      Name of the PI

l      Approved project period and budget period start and end dates

l      Amount of funds authorized for obligation by the grantee

l      Amount of anticipated future-year commitments (if applicable)

l      Names of the cognizant IC PO, GMO, and GMS

l      Applicable terms and conditions of award, either by reference or inclusion.

A grantee indicates acceptance of an NIH award and its associated terms and conditions by drawing or requesting funds from the designated HHS payment system or office. If the grantee cannot accept the award, including the legal obligation to perform in accordance with its provisions, it should notify the GMO immediately upon receipt of the NGA. If resolution cannot be reached, the GMO will void the grant. NIH’s determination of applicable terms and conditions of award or a GMO’s denial of a request to change the terms and conditions is discretionary and not subject to appeal (post-award appeal rights are discussed in “Administrative Requirements—Grant Appeals Procedures”). Once the award is accepted by the grantee, the contents of the NGA are binding on the grantee unless and until modified by a revised NGA signed by the GMO.

Funding

For most grants, NIH uses the project period system of funding. Under this system, projects are programmatically approved for support in their entirety but are funded in annual increments called budget periods. The length of an initial project period (competitive segment) or of any subsequent competitive segment is determined by the NIH awarding office on the basis of

l      any statutory or regulatory requirements,

l      the length of time requested by the applicant to complete the project,

l      any limitation on the length of the project period recommended by the peer reviewers,

l      the awarding office’s programmatic determination of the frequency of competitive review desirable for managing the project, and

l      NIH’s funding principles.

The total project period consists of the initial competitive segment, any additional competitive segments authorized by approval of a competing continuation application, and any non-competing extensions. NIH policy limits each competitive segment to a maximum of 5 years (exclusive of non-competing extensions). A single award covering the entire period of support generally is used only if the project is solely for construction or A&R of real property, if the total planned period of support will be less than 18 months, or if the project is awarded under a special support mechanism.

The initial NGA provides funds for the project during the first budget period. Budget periods usually are 12 months long; however, shorter or longer budget periods may be established for compelling programmatic or administrative reasons. An NGA that documents approval of a project period that extends beyond the budget period for which funds are provided (including anticipated levels of future support) expresses NIH’s intention to provide continued financial support for the project. The amounts shown for subsequent years represent projections of future funding levels based on the information available at the time of the initial award. Such projected levels of future support are contingent on satisfactory progress, the availability of funds, and the continued best interests of the Federal government. They are not guarantees by NIH that the project will be funded or will be funded at those levels and create no legal obligation to provide funding beyond the ending date of the current budget period as shown in the NGA.

Grantees are required to submit an annual progress report as a prerequisite to NIH approval and funding of each subsequent budget period (non-competing continuation award) within an approved project period (see “Administrative Requirements—Monitoring—Reporting—Non-Competing Grant Progress Report”). A decision to fund the next budget period will be formalized by the issuance of an NGA indicating the new budget period and the amount of new funding. The NGA also will reflect any remaining future-year commitments. NIH may decide to withhold support for one or more of the reasons cited in “Administrative Requirements—Enforcement Actions—Suspension, Termination, and Withholding of Support.” A grantee may appeal this decision only if the withholding was for the grantee’s failure to comply with the terms and conditions of a previous award (see “Administrative Requirements—Grant Appeals Procedures”).

Budget

Each NGA sets forth the amount of funds awarded. The amount may be shown either as a categorical (line item) budget or as an amount for total direct costs (not broken down by category) and an amount for F&A costs, if applicable. Modular awards represent a type of award made without a categorical budget (see “Modular Applications and Awards”). The grantee has certain rebudgeting flexibility within the overall amount awarded (see “Administrative Requirements—Changes in Project and Budget”). The grantee may be required to provide matching funds under construction awards as specified in “Construction Grants—Matching” in Subpart B of this part as well as under other NIH programs or awards if specified in the funding opportunity announcement.

Additional Terms and Conditions

In addition to, or in lieu of, the standard terms and conditions of award specified in the NIHGPS, NIH may use terms and conditions for program-specific or award-specific reasons. For example, if, on the basis of a grantee’s application or other available information, the GMO finds—at the time of award or at any time subsequent to award—that the grantee’s management systems and practices are not adequate to ensure the appropriate stewardship of NIH funds or to achieve the objectives of the award, the GMO may impose special, more restrictive terms and conditions on the award in accordance with 42 CFR 52.9 and 45 CFR 74.14 or 92.12. For example, NIH could require a grantee to obtain prior approval for expenditures that ordinarily do not require such approval or to provide more frequent reports. In addition to closer monitoring, NIH may assist the grantee in taking any necessary corrective action.

PAYMENT

HHS grant payments may be made by one of several advance payment methods, including SMARTLINK II/ACH, CASHLINE/ACH, or cash request, or by cash request on a reimbursement basis, as specified in the NGA and as described in this section. Payments under NIH grants generally are made as advance payments. Except as indicated in this section, NIH grant payments are made by PMS, operated by DPM, in accordance with Department of the Treasury and OMB requirements, as implemented by 45 CFR 74.22 and 92.21. These requirements are intended to minimize the time elapsing between the transfer of funds from the Federal government and disbursement by a grantee. Therefore, although the grant may be financed by advance payments, the intent is that grantees draw funds on an as-needed basis—specifically, no more than 3 days before the funds are needed.

All Federal funds deposited by PMS in a grantee’s bank account as an unrestricted advance payment should be fully disbursed (checks written, signed, and issued to the payees) by the close of business the next workday after receipt of the funds. The potential for excessive Federal cash on hand exists each time a grantee does not disburse Federal funds in this manner. The grantee is responsible for determining when the Federal funds have been deposited into its bank account for each drawdown, ensuring that the funds are fully disbursed by the close of business the next workday after they are received, and immediately returning all undisbursed Federal funds to PMS.

The Treasury and OMB policies also establish accountability for interest earned on advances of grant funds and provide for use of the reimbursement method if cash management requirements are not met. Advances made by grantees to consortium participants and contractors under grants must conform to substantially the same standards of timing and amount that govern advances to the grantee.

Operational guidance for recipients is contained in the DHHS Manual for Recipients Financed under the Payment Management System (available through the HHS website at http://www.dpm.psc.gov/doc/hhsrecmanual.pdf). Inquiries regarding payments should be directed to DPM at the address shown in Part III of the NIHGPS.

OFM makes payments under grants to foreign or international organizations, awards to individuals, and awards to agencies of the Federal government.

SMARTLINK II/ACH

The SMARTLINK II/ACH method of advance payment makes direct deposit of funds to a grantee’s bank account and requires grantees to have Internet access to submit a request for funds to PMS. SMARTLINK II/ACH provides funds the day following the request with direct deposit using the Federal Reserve Bank’s (Richmond, Virginia) ACH process.

CASHLINE/ACH

The CASHLINE/ACH method of advance payment provides for direct deposit of funds to the recipient’s bank account using a touch-tone telephone to dial directly to a “voice-response” computer located at PMS. CASHLINE/ACH makes funds available the day following the request with direct deposit using the Federal Reserve Bank’s ACH process.

Cash Request

Grantees not eligible for an unrestricted advance of funds by SMARTLINK II/ACH or CASHLINE/ACH must submit a cash request, usually monthly. The cash request may be on either an advance or reimbursement basis, as specified by the NIH awarding office. Cash requests are used when a grantee’s cash management must be closely monitored (for example, grantees whose financial management systems do not meet the standards specified in 45 CFR 74.21 or 92.20) or under programs where reimbursement financing is appropriate. A grantee also may be converted from an unrestricted advance payment method to a cash request basis if, during post-award administration, the GMO determines that a grantee is not complying with the cash management requirements or other requirements of the award, including the submission of complete and timely reports (see “Administrative Requirements—Monitoring—Reporting” and “Administrative Requirements—Enforcement Actions—Modification of the Terms of Award”).

If the cash request is for an advance payment, the grantee may request grant funds from PMS monthly on the basis of expected disbursements during the succeeding month and the amount of Federal funds already on hand. A request for reimbursement may be submitted more often, if authorized. For timely receipt of cash, a grantee must submit the request through the awarding office early enough for it to be forwarded to PMS at least 2 weeks before the cash is needed. PMS makes payment to the grantee electronically through the ACH process upon receipt of the approved payment request from the awarding office.

Interest Earned on Advances of Grant Funds

Except as provided in 45 CFR 74.22(k), any NIH grantee subject to the requirements of 45 CFR Part 74 that receives advance payments must maintain those advances in an interest-bearing account.

Interest earned on advances of Federal funds must be handled as follows:

l      Nongovernmental grantees. Any interest on Federal advances of grant funds that exceeds $250 per year in the aggregate must be remitted annually to PMS (as the government-wide agent for collection). Recipients with electronic funds transfer (EFT) capability should use an electronic medium to remit interest.

l      Governmental grantees other than States. Except as provided in 45 CFR 92.21(i), any interest in excess of $100 per year in the aggregate earned by local governments or Indian tribal governments on Federal advances of grant funds must be remitted promptly, and at least quarterly, to PMS.

l      State governments. State governments operating under Treasury-State agreements are subject to the payment and receipt of interest as specified in their agreements. All other State grantees are expected to follow sound financial management practices that minimize the potential for excessive Federal cash on hand and to comply with the cash management requirements of 45 CFR 92.20 and 21.

COST CONSIDERATIONS

General

Cost considerations are critical throughout the life cycle of a grant. An applicant’s budget request is reviewed for compliance with the governing cost principles and other requirements and policies applicable to the type of recipient and the type of award. Any resulting award will include a budget that is consistent with these requirements.

NIH anticipates that, because of the nature of research, the grantee may need to modify its award budget during performance to accomplish the award’s programmatic objectives. Therefore, NIH provides some flexibility for grantees to deviate from the award budget, depending on the deviation’s significance to the project or activity. More significant post-award changes require NIH prior approval. Prior-approval requirements and authorities are discussed in “Administrative Requirements—Changes in Project and Budget.”

During post-award administration, the GMO monitors expenditures for conformance with cost policies. The GMO’s monitoring includes, among other things, responding to prior-approval requests and reviewing progress reports, audit reports, and other periodic reports. The GMO also may use audit findings as the basis for final cost adjustments (see “Administrative Requirements—Closeout”).

This section addresses the general principles underlying the allowability of costs, differentiates direct costs from F&A costs, and highlights a number of specific costs and categories of cost for NIH applicants and grantees. It is not intended to be all-inclusive and should be used as a supplement to the applicable cost principles.

The Cost Principles

In general, NIH grant awards provide for reimbursement of actual, allowable costs incurred and are subject to Federal cost principles. The cost principles establish standards for the allowability of costs, provide detailed guidance on the cost accounting treatment of costs as direct or F&A costs, and set forth allowability and allocability principles for selected items of cost. Applicability of a particular set of cost principles depends on the type of organization making the expenditure. For example, a for-profit organization collaborating with a university grantee would be subject to the cost principles for commercial organizations, while the university would be subject to the cost principles for educational institutions.

The cost principles are set forth in the following documents and are incorporated by reference in 45 CFR 74.27 and 92.22:

l      OMB Circular A-21—Cost Principles for Educational Institutions

l      OMB Circular A-87—Cost Principles for State and Local Governments and Indian Tribal Governments

l      OMB Circular A-122—Cost Principles for Non-Profit Institutions[10]

l      45 CFR Part 74, Appendix E—Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals

l      48 CFR Subpart 31.2 (Federal Acquisition Regulation)—Contracts with Commercial Organizations.

The cost principles apply to all NIH award instruments, award mechanisms, and special programs and authorities, including modular awards and awards under SNAP with one exception: they do not apply to Kirschstein-NRSA individual fellowship awards. The allowable use of funds under those awards is included in “Ruth L. Kirschstein National Research Service Awards” in Subpart B of this part.

Grantees can use their own accounting systems, policies, and procedures to implement the cost principle requirements as long as the standards prescribed in 45 CFR 74.21 or 92.20 for financial management systems are met.

The cost principles address four tests that NIH follows in determining the allowability of costs. The tests are as follows:

l      Reasonableness (including necessity). A cost may be considered reasonable if the nature of the goods or services acquired or applied and the associated dollar amount reflect the action that a prudent person would have taken under the circumstances prevailing when the decision to incur the cost was made. The cost principles elaborate on this concept and address considerations such as whether the cost is of a type generally necessary for the organization’s operations or the grant’s performance, whether the recipient complied with its established organizational policies in incurring the cost or charge, and whether the individuals responsible for the expenditure acted with due prudence in carrying out their responsibilities to the Federal government and the public at large as well as to the organization.

l      Allocability. A cost is allocable to a specific grant, function, department, or other component, known as a cost objective, if the goods or services involved are chargeable or assignable to that cost objective in accordance with the relative benefits received or other equitable relationship. A cost is allocable to a grant if it is incurred solely in order to advance work under the grant; it benefits both the grant and other work of the institution, including other grant-supported projects; or it is necessary to the overall operation of the organization and is deemed to be assignable, at least in part, to the grant.

l      Consistency. Grantees must be consistent in assigning costs to cost objectives. Therefore, under NIH grants, although costs may be charged as either direct costs or F&A costs, depending on their identifiable benefit to a particular project or program. They must be treated consistently for all work of the organization under similar circumstances, regardless of the source of funding, so as to avoid duplicate charges.

l      Conformance. This test of allowability—conformance with limitations and exclusions as contained in the terms and conditions of award, including those in the cost principles—varies by the type of activity, the type of recipient, and other characteristics of individual awards. “Allowability of Costs/Activities” provides information common to most NIH grants and, where appropriate, specifies some of the distinctions if there is a different treatment based on the type of grant or grantee. Subpart B of this part contains additional information on allowability of costs for particular types of grants, grantees, and activities.

These four tests apply regardless of whether the particular category of costs is one specified in the cost principles or one governed by other terms and conditions of an award. These tests also apply regardless of treatment as a direct cost or an F&A cost. The fact that a proposed cost is awarded as requested by an applicant does not indicate a determination of allowability.

Direct Costs and Facilities and Administrative Costs[11]

Project costs consist of the allowable direct costs directly related to the performance of the grant plus the allocable portion of the allowable F&A costs of the organization, less applicable credits (as described below and in the cost principles). A “direct cost” is any cost that can be specifically identified with a particular project, program, or activity or that can be directly assigned to such activities relatively easily and with a high degree of accuracy. Direct costs include, but are not limited to, salaries, travel, equipment, and supplies directly benefiting the grant-supported project or activity. Most organizations also incur costs for common or joint objectives that, therefore, cannot be readily identified with an individual project, program, or organizational activity. Facilities operation and maintenance costs, depreciation, and administrative expenses are examples of costs that usually are treated as F&A costs. The organization is responsible for presenting costs consistently and must not include costs associated with its F&A rate as direct costs.

The amount NIH awards for each budget period will reflect the total approved budget for the grant, including direct costs and, if applicable, F&A costs. (SBIR and STTR awards also may include a fee as specified in “Grants to For-Profit Organizations—Small Business Innovation Research and Small Business Technology Transfer Programs” in Subpart B of this part.) If a grantee waives reimbursement of full F&A costs, NIH will either not award F&A costs or will award only partial F&A costs, as appropriate. The NIH award amount shown in the NGA constitutes NIH’s maximum financial obligation to the grantee under that award.

Reimbursement of Facilities and Administrative Costs

NIH will not reimburse F&A costs unless the grantee has established an F&A cost rate covering the applicable activities and period of time, except for awards under which F&A costs are reimbursed at a fixed rate or for awards under which NIH does not reimburse F&A costs.

In addition, NIH will not require a recipient to establish an F&A rate if the organization’s total operations consist of a single grant-supported project or if the organization appropriately and consistently treats all costs as direct costs to projects and accounts for them as such. In the latter case, the GMO must be satisfied that the organization’s accounting system can adequately identify and support all costs as direct costs to the project. This includes being able to identify and segregate costs on the basis of a process that assigns costs commensurate with the benefits provided to individual projects (see “Administrative Requirements—Management Systems and Procedures—Financial Management System Standards”).

F&A rates are negotiated by DCA, DFAS in the Office of Acquisition Management and Policy, NIH (responsible for negotiating F&A cost rates for for-profit entities receiving awards from HHS), or other agency with cognizance for F&A cost rate (and other special rate) negotiation. If an applicant is advised by the GMO of the need to establish a rate, the GMO will indicate the responsible office to be contacted.

F&A cost proposals must be prepared in accordance with the applicable cost principles and guidance provided by the cognizant office or agency, and must conform to cost policies in the NIHGPS. Further information concerning the establishment of F&A rates and the reimbursement of F&A costs may be obtained from DCA or DFAS (see Part III). DCA should be consulted to determine the need to submit a Disclosure Statement (DS-2) pursuant to the requirements of OMB Circular A-21.

In accordance with NIH’s cost management plan, regardless of the type of recipient, the negotiated rate(s) in effect at the beginning of the competitive segment will be used to determine the amount budgeted for F&A costs for each year of the competitive segment. If the rate agreement does not extend to the end of the project period, the last rate in effect will be used to establish the total cost commitment for any remaining future years. NIH generally will not award additional F&A costs beyond those calculated in the approved budget.

F&A costs awarded may be subject to upward or downward adjustment, depending on the type of rate negotiated, and grantees may rebudget between direct and F&A costs (in either direction) without NIH prior approval, provided there is no change in the scope of the approved project. F&A costs are subject to downward adjustment if the proposal that served as the basis for the negotiation included unallowable costs.

Some award mechanisms require negotiation of project costs annually, e.g., GCRCs, clinical trials, and Primate Research Center Grants (P51). For these awards, the policies pertain to each year of support rather than to a multiyear competitive segment.

Once NIH awards a grant, it is not obligated to make any supplemental or other award for additional F&A costs or for any other purpose. There are limited circumstances under which the GMO may award F&A costs where none were previously awarded or may increase the amount previously awarded. If an award does not include an amount for F&A costs because the applicant or grantee did not submit a timely F&A cost proposal and the grantee subsequently establishes a rate, the GMO may amend the award to provide an appropriate amount for F&A costs if the amendment can be made using funds from the same Federal fiscal year in which the award was made. However, the amount will be limited to the F&A costs applicable to the period after the date of the grantee’s F&A cost proposal submission. This provision does not affect local governmental agencies that are not required to submit their F&A (indirect) cost proposals to the Federal government. They may charge F&A costs to NIH grants based on the rate computations they prepare and keep on file for subsequent Federal review.

If funds are available, a GMO may amend an award to provide additional funds for F&A costs, but only under the following circumstances:

l      NIH made an error in computing the award. This includes situations in which a higher rate than the rate used in the grant award is negotiated and the date of the rate agreement for the higher rate is on or before 1 calendar month prior to the beginning date of the grant budget period.

l      NIH restores funds previously recaptured as part of a grantee’s unobligated balance.

l      The grantee is eligible for additional F&A costs associated with additional direct costs awarded for the supplementation or extension of a project.

NIH does not reimburse indirect costs under the following classes of awards:

l      Fellowships. F&A costs will not be provided on Kirschstein-NRSA individual fellowships or similar awards for which NIH funding is in the form of fixed amounts or is determined by the normal published tuition rates of an institution and for which the recipient is not required to account on an actual cost basis.

l      Construction. F&A costs will not be provided on construction grants.

l      Grants to individuals. F&A costs will not be provided on awards to individuals.

l      Grants to Federal institutions. F&A costs will not be provided on grants to Federal institutions.

l      Grants in support of scientific meetings (conference grants). F&A costs will not be provided under grants in support of scientific meetings.

NIH provides F&A costs without the need for a negotiated rate under the following classes of awards:

l      Research training and education grants (e.g., R25), and K awards. F&A costs under Kirschstein-NRSA institutional research training grants and K awards will be budgeted and reimbursed at a rate of 8 percent of modified total direct costs, exclusive of tuition and fees, expenditures for equipment, and subgrants and contracts in excess of $25,000. State and local governmental agencies, except State universities or hospitals, and Indian tribal governments may receive full F&A cost reimbursement under NIH Kirschstein-NRSA institutional research training grants and K awards.

l      Grants to foreign institutions and international organizations. With the exception of the American University of Beirut and the World Health Organization, which are eligible for full F&A cost reimbursement, F&A costs under grants to foreign and international organizations will be funded at a rate of 8 percent of modified total direct costs, exclusive of expenditures for equipment. NIH provides F&A costs under these grants to support the costs of compliance with applicable public policy requirements including, but not limited to, the protection of human subjects, animal welfare, financial conflict of interest, and invention reporting. NIH will not support the acquisition of or provide for depreciation on any capital expenses (facilities) or the normal general operations of foreign and international organizations. Awards to domestic organizations with a foreign or international consortium participant may include 8 percent of modified total direct costs, less equipment, for the consortium.

Cost Transfers, Overruns, and Accelerated and Delayed Expenditures

Cost transfers to NIH grants by grantees, consortium participants, or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee, consortium participant, or contractor. An explanation merely stating that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.

Grantees must maintain documentation of cost transfers, pursuant to 45 CFR 74.53 or 92.42, and must make it available for audit or other review (see “Administrative Requirements—Monitoring—Record Retention and Access”). The grantee should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, grantees are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. NIH also may require a grantee to take corrective action by imposing additional terms and conditions on an award(s).

The GMO monitors grantee expenditure rates under individual grants within each budget period and within the overall project period. The funding that NIH provides for each budget period is based on an assessment of the effort to be performed during that period and the grantee’s associated budget, including the availability of unobligated balances. Although NIH allows its grantees certain flexibilities with respect to rebudgeting (see “Administrative Requirements—Changes in Project and Budget”), NIH expects the rate and types of expenditures to be consistent with the approved project and budget and may question or restrict expenditures that appear inconsistent with these expectations.

The GMO may review grantee cash drawdowns to determine whether they indicate any pattern of accelerated or delayed expenditures. Expenditure patterns are of particular concern because they may indicate a deficiency in the grantee’s financial management system or internal controls. Accelerated or delayed expenditures may result in a grantee’s inability to complete the approved project within the approved budget and period of performance. In these situations, the GMO may seek additional information from the grantee and may make any necessary and appropriate adjustments.

Allocation of Costs and Closely Related Work

When salaries or other activities are supported by two or more sources, issues arise as to how the direct costs should be allocated among the sources of support. In general, a cost that benefits two or more projects or activities in proportions that can be determined without undue effort or cost should be allocated to the projects on the basis of the proportional benefit. A cost that benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved may be allocated or transferred to the benefiting projects on any reasonable basis as long as the costs charged are allowable, allocable, and reasonable under the applicable cost principles and the grantee’s financial management system includes adequate internal controls (for example, no one person has complete control over all aspects of a financial transaction). As a result, a grantee may allocate costs normally assignable to multiple projects to one of those projects.

Applicable Credits

The term “applicable credits” refers to those receipt or negative expenditure types of transactions that operate to offset or reduce direct or F&A cost items. Typical examples are purchase discounts, rebates or allowances, recoveries or indemnities on losses, and adjustments for overpayments or erroneous charges. Additional information concerning applicable credits is included in the cost principles.

Applicable credits to direct charges made to NIH grants must be treated as an adjustment on the grantee’s FSR, whether those credits accrue during or after the period of grant support. (See “Administrative Requirements—Monitoring—Reporting” and “Administrative Requirements—Closeout—Final Reports.”) The NIH awarding office will notify the grantee of any additional actions that may be necessary.

Services Provided by Affiliated Organizations

A number of universities and other organizations have established closely affiliated, but separately incorporated, organizations to facilitate the administration of research and other programs supported by Federal funds. Such legally independent entities are often referred to as “foundations,” although this term does not necessarily appear in the name of the organization. Typically, the parent organization provides considerable support services, in the form of administration, facilities, equipment, accounting, and other services, to its foundation, and the latter, acting in its own right as an NIH grantee, includes the cost of these services in its F&A proposal.

Costs incurred by an affiliated, but separate, legal entity in support of a grantee foundation are allowable for reimbursement under NIH grants only if at least one of the following conditions is met:

l      The grantee foundation is charged for, and is legally obligated to pay for, the services provided by the parent organization.

l      The affiliated organizations are subject to State or local law that prescribes how Federal reimbursement for the costs of the parent organization’s services will be expended and requires that a State or local official acting in his or her official capacity approves such expenditures.

l      There is a valid written agreement between the affiliated organizations whereby the parent organization agrees that the grantee foundation may retain Federal reimbursement of parent organization costs. The parent organization may either direct how the funds will be used or permit the grantee foundation that discretion.

If none of the above conditions is met, the costs of the services provided by the parent organization to the grantee foundation are not allowable for reimbursement under an NIH grant. However, the services may be acceptable for cost-sharing (matching) purposes.

Allowability of Costs/Activities

The governing cost principles address selected items of cost, some of which are mentioned in this subsection for emphasis. This subsection is not intended to be all-inclusive. The cost principles should be consulted for the complete explanation of the allowability or unallowability of these costs.

This subsection also includes NIH-specific requirements concerning costs and activities. The allowability of costs under individual NIH awards may be subject to other requirements specified in the program legislation, regulations, or the specific terms and conditions of an award, which will take precedence over the general discussion provided here. Applicants or grantees that have questions concerning the allowability of particular costs should contact the GMO.

If a cost is allowable, it is allocable as either a direct cost or an F&A cost, depending on the grantee’s accounting system. For some costs addressed in this subsection, the text specifies whether the cost is usually a direct cost or an F&A cost.

Unless otherwise indicated in the NGA, an award based on an application that includes specific information concerning any costs or activities that require NIH prior approval constitutes the prior approval for those costs or activities. The grantee is not required to obtain any additional approval for those costs/activities. Post-award requests to incur costs or undertake activities requiring prior approval that are not described in the approved application are subject to the requirements in “Administrative Requirements—Changes in Project and Budget.”

Consortium participants and contractors under grants are subject to the requirements of the cost principles otherwise applicable to their type of organization and to any requirements placed on them by the grantee to be able to comply with the terms and conditions of the NIH grant.

The cost principles do not address profit or fee. NIH policy allows the payment of fee on SBIR/STTR grants (see “Grants to For-Profit Organizations”) but NIH will not provide profit or fee to any other type of recipient under any other grant program or support mechanism. A fee may not be paid by a grantee to a consortium participant, including a for-profit organization. However, a fee (profit) may be paid to a contractor providing routine goods or services under a grant in accordance with normal commercial practice.


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