Transcript:  EXPIRING APPROPRIATIONS AND WHAT IT MEANS FOR YOU
Podcast:  NIH All About Grants – June 28, 2018

Announcer: 
From the National Institutes of Health in Bethesda, Maryland… This is All About Grants.

Cynthia Dwyer:
Welcome to another episode of All About Grants. This is Cynthia Dwyer from NIH's Office of Extramural Research.  Today, you’ll be hearing about Expiring Appropriations and What it Means for You.

I recently sat down with two experts from NIH to discuss why NIH grant recipients need to be aware of expiring balances and the importance of the June 30th deadline each year for the cash transaction report.  

These experts are:
Ms. Michelle Bulls, Director of the NIH Office of Policy for Extramural Research Administration and Mr. Alan Whatley, Lead Accountant, in the NIH Office of Financial Management.

The following are excerpts from that conversation:

With the end the fiscal year approaching, we’re starting to hear more and more about expiring balances. Ms. Bulls, can you tell us some more background on expiring balances, what they are and why recipients need to be aware of them?

Michelle Bulls:

• Thank you, Cynthia for asking that question.
• Grants and Cooperative agreement funds follow the rules for the availability of appropriated funds and balances when accounting for annual and multi-year appropriation accounts that are expired.
• NIH funds most grants and cooperative agreements in 12-month increments, or budget periods.
• Each budget period is funded with dollars appropriated for that specific fiscal year in which the award is made.
• So, by law these funds are only available until the end (September 30th) of the 5th fiscal year after the funds are awarded - unless authority has been given to the agency to liquidate the obligations under a longer period.
• Any balances that remain at the time will be cancelled and returned to Treasury.
• And this requirement is in the law, 31 U.S.C. §1552(a), that we also outline in the NIH Grants Policy Statement under Section 8, which also is a term and condition for all awards.
• Which is why it’s very important for our recipients to monitor and review the terms and conditions carefully, as NIH grants management offices within the ICs identify these requirements of expiring balances, to ensure that the funds are appropriately used and liquidated before the funds become unavailable.

Cynthia Dwyer:  
Thank you, Ms. Bulls.  I can see why recipients would need to be aware of expiring balances since no one wants to get their money sent back if it can be used to support research.

Mr. Whatley, can you address how a recipient would know that they have expiring funds?

Alan Whatley:

• At the end of Fiscal Year 2018, funds awarded in Fiscal Year 2013 will expire.
• And so on, you know accordingly FY 2014 funds will expire at the end of Fiscal Year 2019.
• Fiscal Year 2015 funds will expire at the end of Fiscal Year 2020, etc.
• So, as you can see this is an annual occurrence. 
• But for the current year we are dealing with, this is FY 2018, and Fiscal Year 2013 funds will expire at the end of this current fiscal year.
• If you are unsure when funds were awarded, you can always look at the fiscal year information in PMS or the Notice of Award.
• The Payment Management System will show you which fiscal year your award came out of and the Notice of Award will show that same information – the exact fiscal year that your award came out of.
• The NIH Office of Financial Management also sends a “Grants Expiring Letter” to recipients if an unexpended balance of funds is about to expire.  These letters are sent electronically to the same email as the NOA.
• And just to expand a little bit on those expired letters. 
• The letters are sent out in April of each year, so it’s an annual process.  And the letters include a notification that an expiring balance exists and the instructions on the steps necessary to liquidate the balance properly.
• This will happen through an FFR submission to NIH or an adjustment to the quarterly expenditure report submitted to the Payment Management System.
• If you have an expiring balance, you also may hear from your Grants Management Specialist, since they are receiving regular reports from the Office of Financial Management regarding expiring balances.

Cynthia Dwyer:
Thank you, Mr. Whatley.  So, once a recipient is aware of an expiring balance what do they need to do?   Is it as simple as just spending all of the money by September 30th?

Alan Whatley:  

• Unfortunately, it’s not that easy.
• Our internal accounting system, NBS, will cancel all remaining FY13 funds on September 30th, 2018.
• That means recipients must report all of their expenditures, meaning their final expenditures, on their June 30th quarterly cash transaction report in PMS.
• This will ensure that all funds are accounted for prior to September 30th when the funds actually expire.
• Recipients should always be spending their grant funds first-in, first-out, to ensure that prior fiscal year funds are being spent before current year money.  Because that is how PMS reports the disbursements – on a first-in, first-out basis.
• So, if you’re awarded multiple years, PMS will always fully disperse the prior years before it starts to disperse the subsequent years.
• So, your internal records should reflect the same thing.

Ms. Cynthia Dwyer:
So, if I’m a recipient, what happens if I miss my deadline and my funds are cancelled?  Can my awarding Institute or Center restore those funds?

Michelle Bulls:

• It’s crucial that recipients work to utilize the funds that were authorized before they expire and submit timely cash transaction reports in the Payment Management System.
• Once the funds have expired and are cancelled, they can no longer be used nor re-obligated, which is why it’s so important for recipients to monitor and pay close attention to the terms and conditions of their award.
• The only time funds are not cancelled is when the agency receives authorization to utilize them for a longer period of time.
• Therefore, any restoration of funds would have to come out of the IC’s current year budget.
• And although this is unlikely and this is something that can’t be guaranteed - it’s more likely that a recipient would simply lose the funds once they expire.
• Therefore, if you have unliquidated obligations, please be sure to obligate all of those funds before they expire.

Alan Whatley:

• That’s right, Michelle.  Even though PMS will let recipients draw down until September the 27th, you can’t wait that long to draw your NIH funds from Fiscal Year 2013.
• Our system needs the data in the June 30th PMS quarterly report in order to accurately clear expired funds on September 30th.
• If you have expiring funds, you need to decide what to do with them as soon as possible.

Michelle Bulls:

• Absolutely.

Cynthia Dwyer:
And with that final piece of advice, we’re going to conclude the conversation on this topic.

Thank you for taking time out of your busy schedules to learn more about the NIH grants process.

From NIH and OER, this is Cynthia Dwyer.

Announcer:
As we’ve just learned, it’s important that recipients be aware of expiring balances and the policies that guide how to handle them before the funds become unavailable. 

If you have specific questions on this topic, please email the NIH Division of Grants Policy at GrantsPolicy@mail.nih.gov.  Once again, that’s GrantsPolicy@mail.nih.gov.

If you have comments regarding this podcast or would like to suggest future topics, we welcome your suggestions at OER@od.nih.gov. Once again, that’s OER@od.nih.gov.