NIH GUIDE, Volume 23, Number 45, December 23, 1994

P.T. 34


  Grants Administration/Policy+ 

National Institutes of Health

Effective October 1, 1994, the National Institutes of Health (NIH)

has revised its implementation of Expanded Authorities (PHS Grants

Policy Statement Section 8 pages 5-8).  The implementation is based

on recent revisions to OMB Circular A-110 and Department of Health

and Human Services Regulations at 45 CFR Part 74, Administration of

Grants, which waive the following prior approval requirements

(expanded authorities) for awards that support research unless the

Federal awarding agency provides otherwise in the award notice or in

the agency's regulations:

(1)  Incur preaward costs 90 calendar days prior to award.  Preaward

costs more than 90 calendar days prior to award requires the prior

approval of the Federal awarding agency.  All preaward costs are

incurred at the recipient's risk (i.e., the Federal awarding agency

is under no obligation to reimburse such costs if for any reason the

recipient does not receive an award or if the award is less than

anticipated and inadequate to cover such costs).

(2)  Initiate a one-time extension of the expiration date of the

award of up to 12 months unless one or more of the following

conditions apply.  For one-time extensions, the recipient must notify

the Federal awarding agency in writing with the supporting reasons

and revised expiration date at least 10 days before the expiration

date (project period end date) specified in the award.  This one-time

extension may not be exercised merely for the purpose of using

unobligated balances, nor may grantees extend project periods

previously extended by the NIH awarding office.  Such extensions are

not permitted where:

(i)   The terms and conditions of award prohibit the extension.

(ii)  The extension requires additional Federal funds.

(iii) The extension involves any change in the approved objectives or

scope of the project.

(3)  Carry forward unobligated balances to subsequent funding


(4)  Waives cost-related (rebudgeting) and administrative prior

written approvals required by OMB Circulars A-21 and A-122.

(5)  Authorizes program income earned during the project period to be

added to funds committed to the project by the Federal awarding

agency and recipient and used to further eligible project or program


The application of expanded authorities is intended to eliminate

unnecessary administrative burdens of sponsored research for both

grantee and awarding office staff.  Consistent with the revised

Circular and HHS Regulations, the new NIH implementation expands the

routine coverage of grants awarded under expanded authorities to

include Program Project grants (P01s), Research Career Awards (Ks),

Minority High School Student Research Apprentice Program awards

(S03s), and all Research Project grants (Rs), except Phase I Small

Business Innovation Research (R43) and Small Business Technology

Transfer (R41) awards.

Individual awards may be excluded from the routine inclusion under

expanded authorities based on the following criteria:

o  Grants that require close project monitoring or technical

assistance, e.g., clinical trials, exceptional grantees, or certain

large multi-project grants, may be excluded.

o  Grantees that have a consistent pattern of failure to adhere to

appropriate reporting or notification deadlines may be excluded.

o  In accordance with 45 CFR Part 74, except for awards issued under

the Small Business Innovation Research or Small Business Technology

Transfer programs, awards to for-profit organizations are excluded

from the additional cost alternative for general program income (item

5 above).  On individual awards to non-profit institutions, awarding

office discretion may be used to specify an alternative disposition

for general program income, i.e., the deductive or combination


Although the Circular authorizes all NIH grant activities as eligible

for expanded authorities, NIH staff have determined that certain

grant activities, e.g., centers and training grants, should not

automatically receive expanded authorities, in whole or in part, due

to the routine requirement for close project monitoring or technical

assistance.  In addition, because of substantial programmatic

involvement, cooperative agreements will also be routinely excluded

from expanded authorities.  However, awarding office discretion may

be used to authorize expanded authorities for these grant activities

and cooperative agreements on an individual or group award basis.

With recent revisions to the PHS Grants Policy Statement (April 1,

1994) and OMB Circular A-110, grants awarded with the expanded

authorities described above will be subject to NIH Institute or

Center (IC) staff review under the following conditions:

o  PHS policy (PHS Grants Policy Statement page 8-6) requires that

when a grantee reports on the annual Financial Status Report a

balance of unobligated funds in excess of 25 percent of the total

amount awarded, or $250,000, whichever is less, IC staff shall review

the circumstances resulting in such balances to assure that the funds

are necessary to complete the project.  Based on the outcome of the

review, the Grants Management Officer may take appropriate action,

e.g., authorize approval of the unobligated balance as carryover;

restrict on future Notices of Grant Award the authority to

automatically carryover unobligated balances; use the balance as an

offset against a subsequent award; or allow the carryover, but reduce

the next budget period award level.

o  PHS policy (PHS Grants Policy Statement pages 8-1 and 8-7)

requires that when significant rebudgeting occurs, the grantee shall

consult with the awarding IC Grants Management Officer and Program

Official for a decision as to whether the rebudgeting constitutes a

change of scope.  As a guideline, significant rebudgeting as defined

by PHS occurs when the cumulative amount of transfers among direct

cost categories for the current budget period exceeds 25 percent of

the total amount awarded, or $250,000, whichever is less.

o  OMB Circular A-110 requires grantees to seek prior approval from

the awarding agency when anticipating a 25 percent reduction in time

(e.g., percent effort reduction from 40 to 30 percent) devoted to the

project by the approved project director or principal investigator.

Each Notice of Grant Award issued with budget period begin dates

after October 1, 1994, will carry a term and condition to indicate

whether or not the award is subject to expanded authorities.

Questions concerning the new NIH implementation should be addressed

to the NIH IC grants management staff identified on the Notice of

Grant Award.


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