September 15, 2023
NATIONAL INSTITUTES OF HEALTH (NIH)
NIH acknowledges concerns raised by the community related to the Federal Register Notice; however, NIH issued the Notice in response to the HHS Office of Inspector General’s recommendations that NIH “implement enhanced monitoring, documentation, and reporting requirements for recipients with foreign subrecipients,” the Government Accountability Office’s concern that NIH “more immediately demonstrate progress to improve its oversight of awards with foreign subrecipients,” and the Government Accountability Office’s recommendation that NIH implement actions.. to more quickly improve its oversight of awards with foreign subrecipients.” NIH published the Notice in the Federal Register (88 FR 36603) on June 5, 2023, outlining its plans to update the NIH Grants Policy Statement, section 15.2, to require that foreign subrecipients provide copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report, to the primary recipient no less than once every six months. NIH requested the public to provide comments by July 5, 2023.
NIH is most appreciative for the extensive comments we received. We encourage the community to read both audit reports along with a commentary independently developed by a major law firm. Current NIH actions are being taken in response to unambiguous recommendations of two government oversight bodies, and in both cases, NIH concurred with the recommendations.
We want to underscore our strong and longstanding support of robust international research collaborations. We appreciate concerns regarding how best to mitigate excessive administrative burdens and other unintended adverse consequences.
We want to stress that this is not new policy. The policy clarification is intended to remind NIH recipients that they must comply with longstanding policy requirements as outlined in NIH Grants Policy Statement Chapter 15, Consortium Agreements, which implements 2 CFR 200.332(a)(5) and 45 CFR 75.352(a)(5) as a standard term and condition of all NIH awards. These regulations state that subaward agreements must have a “requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part.” Regulations require primary recipients to have effective internal controls in place to ensure that the awards are being carried out in compliance with terms and conditions (45 CFR 75.303) and they must monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes which include the need to review and monitor financial and performance reports. Primary recipients acting as pass-through entities “must have the right of access to any documents, papers, or other records of the non-Federal entity which are pertinent to the Federal award...” (45 CFR 75.364).
NIH is required to manage and administer NIH awards in a manner to ensure that Federal funding is expended and associated programs are implemented in full accordance with the U.S. Constitution, Federal Law, and public policy requirements. Consistent with this, NIH primary recipients are obligated to meet terms and conditions of award by meeting their longstanding oversight requirements with respect to foreign subrecipients (2 CFR 200.332(a)(5), 45 CFR 75.352(a)(5), 45 CFR 75.303, and 45 CFR 75.364). The guidance not only serves as a reminder of, but it provides specificity on how these regulatory requirements should be implemented in the case of foreign subrecipients in order to ensure compliance with terms and conditions of award. Thus, these requirements outlined in the policy clarification stem from government-wide regulations and are not new. We acknowledge, though, that our original language, which used the word “provide,” did not stress and clearly reflect the importance of “access” as explicitly stated in the regulations.
Given the OIG and GAO audit findings and recommendations, NIH determined that it is necessary to require recipients to include a term in their subaward agreements that explicitly requires foreign subrecipients to make available (in other words, as per 2 CFR 200.332(a)(5) and 45 CFR 75.352(a)(5) “permit to have access to”) all records related to the NIH-funded research described in progress reports to the primary grant recipient at an agreed upon frequency. In many cases, this requirement can be met by using commonly available digital file-sharing platforms (e.g., Teams, Box, Dropbox, Google-docs, SharePoint, and Redcap).
Some commenters pointed to the NIH Data Management and Sharing Policy, noting that the policy explicitly excludes sharing of materials from laboratory notebooks. However, the Data Management and Sharing Policy focuses on data that should be shared with the public, whereas subrecipient oversight focuses on data and documents that collaborators should be sharing with each other to meet terms and conditions of grant awards and to assure satisfactory scientific progress.
Some commenters voiced concerns about the Federal Register Notice’s focus on foreign subrecipients; however, this focus is in response to the recommendations of both auditors. OIG wrote, “For foreign subrecipients, the effectiveness of the prime recipient’s monitoring may depend on the level of cooperation between the recipient and the subrecipient. In certain countries where research is performed, there may be a risk that larger political or governmental issues may impede cooperation and prime recipients will have limited ability to effectively monitor their foreign subrecipients.” GAO titled their report “NIH Could Take Additional Actions to Manage Risks Involving Foreign Subrecipients” and went on to write its view that NIH should “immediately demonstrate progress to improve its oversight of awards with foreign subrecipients.”
Some commenters noted that the stipulation “that supports the research outcomes as described in the progress report” is problematic if actions are expected every six months. Since progress reports are typically written once a year, subrecipients may not know what information and data will support a progress report six months into the year.
Based on feedback received during the public comment period, NIH is modifying the requirements in the Federal Register Notice to state that subaward agreements must stipulate that foreign subrecipients will provide access to copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report, to the primary recipient with a frequency of no less than once per year, in alignment with the timing requirements for Research Performance Progress Report submission. By “access to,” it is understood that such access may be entirely electronic. NIH expects recipients to update existing subaward agreements to address this requirement within 60 days of the effective date of this notice. NIH recognizes that recipients may need additional time depending on the number of agreements an institution has in place for each project. Therefore, extensions may be requested, if needed.
Therefore, effective January 1, 2024, section 15.2 will be updated to include the following clarifications (changes are bold and italicized):
15.2 ADMINISTRATIVE AND OTHER REQUIREMENTS
The following highlights several areas within the consortium relationship that the recipient needs to address with consortium organizations receiving subawards under a grant to ensure compliance with NIH requirements. The requirement for a written agreement addressing these and other areas is specified in this section. NIH will not support any agreement that does not meet the minimum requirements outlined in the written agreement section below (15.2.1). NIH reserves the right to request copies of the written agreement and relevant supporting documentation as needed, as part of its oversight responsibilities. Failure to provide requested documentation may lead to remedies for noncompliance and potential enforcement actions (see 8.5, Specific award conditions and remedies for noncompliance).
NIH expects recipients to ask potential subrecipients, at the application stage, to submit language in their letters of support indicating their awareness of these requirements and the subrecipient’s willingness to abide by all requirements should an award be issued.
Note that most of these requirements only apply to a recipient’s consortium relationships with sub-recipients. When the relationship is with a vendor that is providing routine goods and services within normal business operations that are ancillary to the operation of the research program, the public policy requirements listed below do not apply. The vendor must also be providing similar goods and services to many different purchasers and provide them in a competitive environment.
15.2.1 Written Agreement
The recipient must enter into a formal written agreement, signed, and agreed to by both parties, with each consortium participant/subrecipient that addresses the negotiated arrangements for meeting the scientific, administrative, financial, and reporting requirements of the grant, including those necessary to ensure compliance with all applicable Federal regulations and policies and facilitate an efficient collaborative venture. If a subrecipient is unwilling to accept the requirements outlined in this section, by signing a written agreement, then an agreement cannot be issued. At a minimum, this agreement must include the following:
Note: All current requirements remain in place, with the addition of:
NIH Office of Policy for Extramural Research Administration
Division of Grants Policy