cost analysis, assessment of management systems, budget, financial and business management system, pre-award process

2.5.5 Cost Analysis and Assessment of Management Systems

The GMO will ensure that a cost analysis is performed on any application that requires a detailed budget. Cost analysis involves obtaining cost breakdowns, validating cost data, evaluating specific elements of cost, and examining data to determine the necessity for, and the reasonableness and allowability of, the costs included in the application budget. The extent of cost analysis will depend on the type of funding instrument and award mechanism, the complexity of the project, prior experience with the applicant, and other factors. Information on the applicable cost principles The government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. See Cost Considerations-The Cost Principles for additional details. and on allowable and unallowable costs under NIH grants is provided in the Cost Considerations chapter.

The amount of NIH funding is based on reasonable and allowable costs consistent with the principles of sound cost management, considering IC The NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award. priorities (e.g., program relevance), constraints on the growth of average grant costs, and available funds.

In addition to considering the specific information provided in the application, the GMO determines the adequacy of the applicant's financial and business management systems that will support the expenditure of and accountability for NIH funds. When an applicant has had no prior Federal grants or cost-reimbursement contracts, the GMO may review the applicant's financial management and other management systems before award, or within a reasonable time after award, to determine their adequacy and acceptability. For an applicant with prior NIH or other Federal cost-reimbursement awards, the GMO may review recent audit reports and other relevant available information to determine whether the applicant's management systems meet the standards established in 2 CFR Part 200. The GMO will advise the applicant if additional information is required. Based on the results of the review results, the GMO will determine the need for any corrective action and may impose specific award conditions on the award.