NIH Grants Policy Statement
Revised October 2017. This document applies to all NIH grants and cooperative agreements for budget periods beginning on or after October 1, 2017.
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5.3 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 IC on the basis of:

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 modernization 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 NoA 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. The NoA 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 NoA.

Recipients 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 Continuation Progress Report). A decision to fund the next budget period will be formalized by the issuance of the NoA indicating the new budget period and the amount of new funding. The NoA 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 recipient may appeal this decision only if the withholding was for the recipient's failure to comply with the terms and conditions of a previous award (see Administrative Requirements-Grant Appeals Procedures).

All Federal agencies are required by 31 U.S.C. §1552(a) to close fixed year appropriation accounts and cancel any remaining balances by September 30 of the fifth fiscal year after the year of availability. In order for the NIH to meet its obligation to close these accounts and cancel any remaining balances by September 30, recipients must report disbursements on the quarterly cash transaction report (using the FFR) no later than June 30 of the fifth fiscal year after the year of availability. This provision may limit the availability of funds for carryover. It may also limit or eliminate the authority to extend the final budget period when an entire project period is funded by a single award.