ASSISTING WITH COMPLIANCE

Brian Albertini Chief Grants Management Officer

National Institute of Nursing Research

SBIR/STTR NATIONAL CONFERENCE

OMAHA, NE JUNE 30, 2009

Overview and Compliance for NIH SBIR/STTR

National Institutes of Health

Overview

Roles and Responsibilities

• Eligibility for SBIR and STTR–Application Process

• Award Actions

• Post Award Requirements

• Compliance Basics

NIH Staff Roles • Grants Management Officer (GMO)

Signs awards, ensures compliance and reviews prior approval requests.

• Grants Management Specialist (GMS)

Handles day to day activities and manages a grant portfolio.

• Program Official (PO)

Scientific, and/or technical aspects of grant• Scientific Review Administrator (SRAs)

Manage the activities of Scientific Review Groups (aka, peer reviewers)

NIH Staff - Responsibilities • Prior approval items (when required)

GM Staff - review for compliance with policies and regulations

PO Staff - change in scientific scope• Noncompetitive applications (Annual progress report)

GM - review for administrative compliance PO - review scientific progress

• Closeout for projects (Final reports) GM - all close-out documents PO - review final scientific progress report

Eligibility: Grantee InstitutionThe award is made to the institution, not an

individual/PIThe Institution Official (IO): Is legally responsible for the proper conduct

and execution of the project Provides fiscal management of the project Provides oversight on allocation decisions Ensures compliance with Federal laws and

regulations, and policies and procedures

Principal Investigator (PI)

Works with the Institution Official Is responsible for the scientific and/or

technical aspects of the grant. Handles day-to-day management of

the project. Is responsible for the scientific

conduct of the project and must provide the required progress reports.

SBIR and STTR Overview See NIH SBIR/STTR website

http://grants1.nih.gov/grants/funding/sbir.htm

• Phase I – Feasibility/design (R43/R41)– Normally 6 months (SBIR) to 1 year (STTR)– Normally $100,000 Total Award (Direct costs +

Indirect costs + Fee)• Phase II – Full R&D continuation of Phase I (R44/R42)

Only Phase I awardees eligible for for Phase II– Normally Two Years and $750,000 Total Award

(Direct + Indirect costs + Fee)• Phase III – Commercialization

– No SBIR or STTR funding

SBIR/STTR Eligibility

• For-profit U.S. business firm

• 51% U.S. owned by individuals* & independently operated

• Small Business Concern (SBC) located in the U.S.

• 500 or fewer employees, including affiliates

*See SBA regulations for SBIR & STTR ownership

SBIR and STTR Eligibility

• Eligibility determined at time of award.• All project activities should be performed in the United States.• “Normally Not-To-Exceed” Funding Levels.• Project period

– SBIR Phase I - request 12 months budget period if project has:

• Vertebrate Animals research• Human subjects involvement• Third party (consortium/contracts)

SBIR and STTR Application Process

• Electronic Application through Grants.gov– Use Parent FOA and SF424 R&R forms

• New Applicant Organizations need:– Tax Identification Number**– DUNS **– Human Subjects – FWA for grantee (SBC) – Animal Assurance for grantee (SBC)

** Required for SF424R&R submission

• Annual Reporting required: Misconduct in Science to the Office of Research Integrity (ORI)

SBIR Requirements • P.I. primarily employed by SBC >50%

– Don’t confuse employment w/Time and Effort– PI employment is rarely negotiable

• Phase I (R43) - third party involvement – Normally NTE 33% of total award amount– Includes consultants & consortia– Does not include ‘fee for service contracts’– May exceed 33% if requested, justified, and approved

by reviewers and program– Justify deviations from SBA guidelines in funding

levels & project period in the application

SBIR Requirements Phase II

• Commercialization Plan required for All Phase II applications and Fast-Track

• Phase II (R44)– PI employment at least 51% by SBC– Third party costs normally NTE 50%– Total amount awarded normally NTE

$750,000 (D.C., F&A + fee) for two years

STTR Phase I (R41) + II (R42)

• Single, partnering Research Institution Minimum 30% effort/budget

• STTR subaward budget page and letter from RI required in application (Small Business Minimum 40%)

• Principal Investigator– Minimum 10% time & effort– Must have formal agreement with SBC

• Commercialization Plan for Phase II

Types of Costs For Grants

• Indirect Costs/F&A Costs: – Not Easily Identified With A Specific Project – Fringe Benefits, Overhead, Exec. salaries

• Direct Costs– Easily Identified With A Specific Project– Direct Salaries & Wages– Materials & Supplies– Consultants & Subcontracts

• Unallowable Costs -- Government will not reimburse! http://www.arnet.gov/far/loadmainre.html

Percentage Calculations

• Work Performance (Research Activities)– Normally based on total award amount– Formula for STTR is based on Total Cost

less any requested Fee– Explain in budget justification for exceptions

• Fee/profit (NTE 7%)– ONLY for SBIR/STTR grantee (SBC)*– May be based on total DC + F&A– Grantee must justify this in the application*All other mechanisms prohibited from fee/profit on grants

Phase I and Indirect Cost Rates

• If you have a current negotiated ICR agreement with NIH or another Federal Agency, request the ICR stated in the agreement

• PHASE I – If no current negotiated rate agreement, indirect costs funded cannot exceed 40% of total direct costs.

NIH does not negotiate rates for Phase I SBIR or STTR awards.

Phase II - Indirect Cost Rates• If you have a current negotiated rate agreement; use the

ICR stated in the agreement.• Per the NIH guide notice dated 01/21/2009

http://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-038.htmlIf you do not have a current negotiated ICR agreement; and your proposed indirect costs exceed 40% of total direct costs, rates must be reviewed by NIH/DFAS. The Awarding IC may elect to restrict indirect cost recovery to 10% of Salaries & Wages until DFAS negotiation is complete.

• If proposed indirect costs are 40% or less of total direct costs, you do not need to provide supporting documentation or negotiate the rate

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Questions about Indirect Costs?

NIH Division of Financial Advisory Services (DFAS)

http://oamp.od.nih.gov/dfas/rates.asp

Raphael Woodruff, Acting Branch Chief Ph: (301) 496-2444

Attend the IDC Workshop at the Conference!!

Award Actions

Science with Strings Attached

Notice of Grant Award (NGA) A legally binding contract with the

government Official notice that an award has been

made NGA includes

Funding level (amount available for project)

Periods of support (Project and budget period

Terms and conditions (Restrictions/requirements)

NIH contact information

Grantee Acceptance

The grantee indicates acceptance of the terms and conditions of the award by drawing down funds against the grant from the Payment Management System.

DHHS Division of Payment Management

http://www.dpm.psc.gov

Expanded Authorities

NIH awards are under EA, which means: 90 day pre-award cost authority at grantee’s own risk Reasonable rebudgeting authority

> 25% of total award may be unreasonable

Grantee’s under expanded authorities may: Change consortium participant Extend project period through the NIH Commons for

additional 12 months

No-cost Extensions Grantee may extend (without additional

funds) the final budget period of the project up to 12 months via the NIH commons up to 90 days prior to the end date of the award. (one-time only).

Award ElementsUnder the Expanded Authorities for select phase I

and all Phase II awards… Carryover (Only on for multi year awards)

The authority to expend funds from the previous budget period.

Streamlined Non-competing Award Process (SNAP uses PHS 2590 forms) Eliminates need for annual submission of

budget with progress report and annual submission of Financial Status Report (FSR).

Additional Terms and Conditions

Restrictive/Requirement/Informational Terms: May specify required action on the part of the grantee to remove restriction, provide updates, or restrict efforts or activities. (e.g., IDC rate negotiation, human subjects etc.)

Close-out reporting requirements

Included in the Final year Notice of Grant Award (NGA)

Financial, invention and final progress reports

Close Out Requirements Due within 90 days of the end of the project

period to the awarding Institute/Commons:

Final Progress Report (no form, format included in final Notice of Grant Award terms!)

Final Invention Statement - Form HHS 568

Final Financial Status Report – SF 269A or SF 269

Post Award

These requests should come to NIH in writing.

Prior NIH Approval Required

Change of PI and other Key personnel named in Notice of Grant Award

Change of Grantee Organization

Change of Scope

Additional Prior Approval Requirements

Written notification via email should be made if one of the following occurs:

• Successor-in-interest

• Name change

• Merger or acquisition

Additional Prior Approval Requirements

Any changes involving the Principal Investigator or other key* personnel should also be promptly reported if they plan to:

• Withdrawal from the project entirely.• Are absent three months or more.• Reduce time devoted to the project by 25% or

more.

*Key personnel named in the NGA Terms of Award

Submitting prior approval

Requests for project changes that require NIH approval must be submitted with the concurrence of Institutional Official (IO).

• An e-mail request is acceptable – Sent through the IO to the awarding

institute GMO and Program Official

Compliance

Compliance BasicsInternal Controls

Financial Conflict of Interest

Compliance Basics

Misuse of funds Unallowable costs Allocation of costs Accelerated expenditures Large unobligated balances Cost transfers Financial Conflict of interest

Compliance Problems

Lack of understanding of roles and responsibilities of institutional staff

Inadequate resources Outdated or nonexistent policies and

procedures Inadequate staff training and education Inadequate systems Perception that internal control systems are

not necessary

Common Contributors:

Why is Compliance Important?

• It strengthens the relationship of trust that exists between federal sponsor and grant recipient

• It suggests a presence of the stewardship necessary to properly safeguard the Federal investment in biomedical research

Compliance Program Guidance for Recipients of NIH Research Grants

http://grants.nih.gov/grants/compliance/compliance.htm

Internal Controls

Are budgetary controls in effect to preclude incurred expenses/obligations from exceeding total awarded funds or budget cost categories?

Is there a separation of duties (record keeping/ cash receipts/ cash payments)?

Are all accounting entries adequately documented? (Journal + Chart of Accounts?)

Internal Controls Capability

The grantee organization must have

• a job cost accounting system,

• an adequate timekeeping system,

• must segregate direct and indirect costs.

• Must have written policies & proceduresFederal Financial and Business Management

Systems - Sample Policies and Procedureshttp://www2.niddk.nih.gov/Funding/Grants/ffbms.htm

Who is Accountable?

The Company is accountable for the finances and the administration of the grant

The PI is accountable for the research The PI makes budget allocation decisions The Company exercises oversight on budget allocation decisions

NIH Compliance Activities• Institutional compliance process

– Technical assistance– Corrective action process– Settlement process

• Outreach– Educational seminars– National and regional meetings– NIH Regional Seminars

• Proactive Compliance Site Visits • Targeted Site Reviews (FCOI)

What do Grantees Need to know? Code of Federal Regulations (CFR)

• 42 CFR Part 52 – Grants for Research Projects http://www.access.gpo.gov/nara/cfr/waisidx_03/42cfr52_03.html

• 45 CFR Parts 74 and 92 – Public Welfare, Administrative Requirements

(74) http://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr74_04.html

(92) http://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr92_04.html

• 45 CFR Part 46 – Public Welfare, Protection of Human Subjectshttp://www.access.gpo.gov/nara/cfr/waisidx_04/45cfr46_04.html

What do Grantees Need to Know?

OMB Circulars - http://www.whitehouse.gov.ombcirculars/

Administrative Requirements or Standards:

– A-102: Uniform Administrative Requirements for Grants and Cooperative Agreements awarded to State and Local Governments and Indian Tribes

– A-110: Uniform Administrative Requirements for Grants and Agreements awarded to Universities, Hospitals, and Other Non-Profit Organizations (& for-profits at NIH)

These include pre-award and post-award requirements

What do Grantees Need to Know?

Cost Principles: Applicable OMB Circulars and CFRs

– A-21: Cost Principles for Educational Institutions

– A-87: Cost Principles for State and Local Governments and Indian Tribes

– A-122: Cost Principles for Non-Profit Organizations

– 45 CFR Part 74, Appendix E: Principles for Determining Costs Applicable to Hospitals

– 48 CFR Subpart 31.2 (Federal Acquisition Regulation) Applicable to For-profit organizations

What do Grantees Need to Know?

Audit Requirements: Applicable OMB Circular and Regulations

A-133: Audits of States, Local Governments, and Non-Profit Organizations

45 CFR Part 74.26: Audits of For-Profit and

Foreign Organizations

What do Grantees Need to Know?

• NIH Grants Policy Statement

http://odoerdb2.od.nih.gov/gmac/nihgps_2003/index.htm

• Notice of Grant Award (Read it before you start!)

• NIH Guide to Grants and Contracts

(Stay on top of new requirements)

http://grants.nih.gov/grants/guide/index.html

Financial Conflict of Interest

Expectation: Companies must establish written policies and procedures to address financial conflict of interest for their investigators. These standards are designed to ensure that investigators maintain research objectivity in the design, conduct, analysis and reporting of research funded under grants.

Financial Conflict of Interest

Identified a conflict of interest? You must: Notify Chief GMO to assure that the conflicting interest is

being managed, reduced, or eliminated Provide additional information, if requested FCOI must be addressed in consortium, consultant and

employee contractual agreements See the NIH Guide:

http://grants2.nih.gov/grants/guide/notice-files/NOT-OD-OO-040.html

**FCOI regulations exclude Phase I SBIR and STTR!

Requirements! • All SBIR/STTR recipients must register with SBA Tech-Net for

reporting purposeshttp://tech-net.sba.gov

• Register NOW with Grants.gov and eRAhttp://era.nih.gov/ElectronicReceipt/preparing.htm#4

• REQUIRED PUBLIC ACCESS POLICYhttp://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-071.html

ARRA and SBIR/STTR

• If an application is awarded using ARRA funding, specific reporting and transparency requirements must be complied with:

• Specific Terms and Conditions applied to ARRA awards are viewable on the link:http://grants.nih.gov/grants/policy/NIH_HHS_ARRA_Award_Terms.pdf

Notice of Grant Award (read it!)Notice of Grant Award (read it!) Provides terms of award and agency contactsProvides terms of award and agency contacts

Frequently Asked Questions Frequently Asked Questions http://www.grants.nih.gov/grants/funding/http://www.grants.nih.gov/grants/funding/giofaq.htmgiofaq.htm

Grants InformationGrants Informationgrantsinfo@nih.govgrantsinfo@nih.gov (contact email address)(contact email address)

NIH Grants Policy Information NIH Grants Policy Information http://grants1.nih.gov/grants/policy/policy.htmhttp://grants1.nih.gov/grants/policy/policy.htm

NIH Information SourcesFor NIH Grantees:

E-mail: E-mail: sbir@od.nih.gov

Thank You!Thank You!

QUESTIONS??QUESTIONS??