Key Dates

Effective Date:                                                                                  October 1, 2024

Related Announcements

None

Issued by

NATIONAL INSTITUTES OF HEALTH (NIH)

Purpose

Background

In April 2024, the Office of Management and Budget issued revisions to the Uniform Administrative Requirements for Federal Financial Assistance, located at 2 CFR Part 200. On October 2, 2024, HHS issued an Interim Final Rule that provides the HHS implementation of the 2024 Revisions.

With the issuance of this notice, NIH implements the OMB administrative flexibilities and updates our grant terms and conditions related to administrative requirements that are outlined throughout 2 CFR Part 200. NIH will incorporate the policy updates outlined in this notice in the FY25 issuance of the NIH Grants Policy Statement.

In accordance with guidance from the Council on Federal Financial Assistance (COFFA), NIH will continue to honor Negotiated Indirect Cost Rate Agreements (NICRA) negotiated prior to October 1, 2024. Cognizant agencies for indirect costs may, but are not required to, renegotiate existing NICRAs (i.e., issue revised or amended agreements) to reflect the new Modified Total Direct Cost (MTDC) base. OMB has encouraged cognizant agencies for indirect costs to accommodate requests to renegotiate existing NICRAs that are in effect beyond October 1, 2025; however, NIH will not honor changes to NICRAs on non-competing continuations. For questions related to the NICRA, Institutions of Higher Education (IHEs) and non-profit research institutions should contact HHS Program Support Center. For-profit applicants and recipients should contact the NIH Division of Financial Advisory Services.

NIH Implementation - Flexibilities

Aligned with HHS, NIH adopted and implemented the following provisions effective for new and competing renewal awards issued on or after October 1, 2024. NIH will not make changes to NICRA related to non-competing continuation awards.

• 2 CFR 200.1 – Modified Total Direct Cost Definition - Calculating Indirect Costs: NIH recognizes the updated definition of MTDC to include up to the first $50,000 of each subaward. For applicants and recipients to apply the increased threshold, they must have a current NICRA, that cites the updated threshold amount (i.e., $50,000).  For new and competing renewals, if the rate was negotiated prior to October 1, 2024, and allows for the administrative increases which is cited in the NICRA, then NIH will apply the increases effective October 1, and recipients may utilize the higher thresholds. See COFFA guidance for details.
• 2 CFR 200.313 (e) - Equipment: NIH recognizes the updated threshold value for equipment, increasing from $5,000 to $10,000. For applicants and recipients to apply the increased threshold, they must have a current negotiated indirect cost rate agreement that cites the updated threshold amount (i.e., $10,000).  For new and competing renewals, if the rate was negotiated prior to October 1, and allows for the administrative increases which is cited in the NICRA, then NIH will apply the increases effective October 1, and recipients may utilize the higher thresholds. See COFFA guidance for details. NIH also adopts the provision clarifying that Indian Tribes may use their own procedures for use, management, and disposal of equipment.
• 2 CFR 200.314(a) - Unused Supplies: NIH recognizes the updated policy on handling of residual inventory of unused supplies. If there is a residual inventory exceeding $10,000 in aggregate fair market value upon termination or completion of the grant and if the supplies are not needed for other federally sponsored programs or projects, the recipient may either retain them for use on other than federally sponsored activities or sell them. NIH will maintain its current policy that in either case, the recipient must compensate the NIH awarding IC for its share as a credit to the grant.

Aligned with HHS, NIH adopted the following provisions effective for new, competing renewals, non-competing continuations and supplemental awards issued on or after October 1, 2024.

• 2 CFR 200.333 - Fixed Amount Awards Subawards: NIH recognizes the updated prior approval threshold of $500,000 for the use of fixed amount subawards, unless otherwise stated in the Notice of Funding Opportunity (NOGO) or the terms and conditions of award.
• 2 CFR 200.414(f) - De Minimis Indirect Rate: For non-Small Business Innovative Research (SBIR) /Small Business Technology Transfer Research (STTR) awards, NIH recognizes the updated de minimis indirect cost rate of 15%. Any non-Federal entity, including for-profit organizations, that does not have a current negotiated indirect cost rate, except for those non-Federal entities described in 2 CFR Part 200, Appendix VII, Section D(1)(b) may elect to charge a de minimis rate of 15% of MTDC which may be used indefinitely. This updated rate may be recovered for new and continuation awards issued on or after October 1, 2024. At the discretion of the funding Institutes and Centers (ICs), ICs may provide additional funding or allow recipients to rebudget to accommodate the increase. Recipients should contact the Grants Management Official named on the Notice of Award for more information. Note that currently, the de minimis rate does not apply to NIH training, career development or foreign awards.

NIH policies for National Research Service Awards (NRSA) along with other training grants, career development awards, foreign awards, and subrecipients regarding reimbursement of facilities and administrative costs continue to apply at NIHGPS 7.4.

• For non-competing continuation awards for National Research Service Awards and other training grants, career development and foreign awards, NIH will allow recipients to recover 8% of the MTDC for up to the first $25,000 for each subaward (no change to current policy). For new and competing renewal awards, NIH will allow recipients to recover the 8% of the MTDC for up to the first $50,000 each subaward.
• NIH will continue to allow SBIR/STTR recipients to recover up to 40% of the total direct costs as outlined in the NIH GPS 18.5.4.3.
• 2 CFR 200.501 - Single Audit: NIH recognizes the increase, from $750,000 to $1,000,000, to the level at which an NIH recipient of Federal funds is required to conduct a single audit or a program specific audit. This increased threshold applies to State governments, local governments, and non-profit organizations (including institutions of higher education). NIH will continue to require foreign recipients to conduct a single audit when they expend $750,000 or more per year in Federal awards. NIH will continue to require written prior approval from the funding IC before recipients may elect to use a program specific audit.

Administrative Requirements – Terms and Conditions – Fiscal Year (FY) 25 and 26 Awards

• 2 CFR 200.415 – Required Certifications. Effective October 1, 2025 (FY 26), NIH recipients that enter into written subaward agreements must include a provision requiring subrecipients to certify that all information submitted in applications, requests for payments, disbursements, and financial reports submitted to the pass-through entity must be aligned with the terms and conditions and is complete and accurate. 
• 2 CFR 200.419 – Cost Accounting Standards: NIH recognizes the removal of the requirement for Institutions of Higher Education that receive an aggregate total of $50 million or more in Federal awards and instruments subject to subpart E to submit a disclosure statement form (DS-2) containing information on cost accounting standards.
• 2 CFR 200.431 – Compensation – Fringe Benefits: NIH clarifies that recipients and subrecipients are not allowed to charge unfunded pension costs directly to an NIH award if those unfunded pension costs are not allocable to the NIH specific project.

Cost Policies – NIH Grant Programs

For NIH grant programs, prior approval for costs outlined below are not required unless otherwise stated in the terms and conditions of award, or NOFOs, or the costs requested represent a change in scope from the original project that was peer reviewed and approved. 

• 2 CFR 200.454 - Memberships, Subscriptions, and Professional Activity Costs. The cost of membership in any civic or community organization is allowable, without NIH prior approval, if the costs are used to support research and development activities and do not support advocacy or lobbying.
• 2 CFR 200.456 – Participant support costs. Participant support costs are allowable, without NIH prior approval if additional cost categories are not requested, i.e., souvenirs, t-shirts, memorabilia, or otherwise stated in the NOFO or terms and conditions of award. The classification of items as participant support costs must be documented in the recipient’s or subrecipient’s written policies and procedures and treated consistently across all Federal awards.
• 2 CFR 200.461 Publication and printing costs. Publication costs for electronic and print media, including distribution, promotion, and general handling, are allowable. These costs should be allocated as indirect costs to all benefiting activities of the recipient or subrecipient if they cannot be directly identified with a particular cost objective.

Page charges, article processing charges (APCs), or similar fees such as open access fees for professional journal publications and other peer-reviewed publications resulting from an NIH award are allowable where:

• The publication report work was supported by an NIH funded project.
• The charges are levied impartially on all items published by the journal, whether or not under an NIH funded project.
• The recipient or subrecipient may charge the NIH award during the final period of performance as closeout costs for the cost of publications if the costs were not charged during the period of performance (prior to the final year of the award) unless the terms and conditions do not allow for such costs under a specific project.
• 2 CFR 200.472 – Termination and standard closeout costs. Charges for administrative costs specifically associated with the closeout of an NIH award are allowable, without NIH prior approval, or unless otherwise stated in the NOFO and/or terms and conditions of award. These costs may be incurred until the due date of the final reports (i.e., 120 days after the end of the period of performance.

Inquiries

Please direct all inquiries to:

Office of Policy for Extramural Research Administration (OPERA)

Division of Grants Policy

[email protected]

If any institutions have questions regarding how their institution has implemented these flexibilities, please contact OPERA.