Facts about Grants Funding Pre

1
Grants Management
Facts about Grants Funding Pre Post Award
Kathleen Shino Acting NIH SBIR/STTR
Coordinator Grants Management Officer,
NIDDK NIH SBIR/STTR Conference July 2005
2
Overview

• Roles and Responsibilities
• Eligibility and Budgets
• Funding Considerations Pre-award
• Post Award
• Compliance
• NIH eRA Commons

3
Grants Management Officer (GMO)

• Responsible for the business management of the
  grant, including
• Review
• Negotiation
• Award Administration
• Interpretation of policies and provisions
• GMO is the only person authorized to obligate
  monies and permit changes to approved projects on
  behalf of the NIH

4
Program Official

• Advice and Guidance
• Whats Hot New initiatives
• Answer your scientific questions
• Review Issues Dos and Donts
• Discuss funding alternatives

5
Grantee Institution

• The award is made to the institution, not an
  individual
• The Institution
• 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 NIH policies and procedures

6
Authorized Institute Official (IO)

• Designated representative of the grantee
  organization in matters related to the award and
  administration of NIH grants
• In signing a grant application, this individual
  certifies that the institution will
• Comply with all applicable assurances and
  certifications
• Be held accountable for the funds awarded and for
  the performance of the grant-supported project or
  activities
• Ensure that the organization complies with
  applicable Federal laws and regulations

7
Principal Investigator (PI)

• Responsible for the scientific and/or technical
  aspects of the grant
• Day-to-day management of the project
• Responsible for the scientific conduct of the
  project and to provide the required progress
  reports

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Eligibility SBIR/STTR

• See NIH Omnibus Solicitation
• http//grants1.nih.gov/grants/funding/sbir.htmsol
  
• First the definition 13 CFR 121.105
• a small business is a business entity organized
  for profit, with a place of business located in
  the United States, and which operates primarily
  within the United States or which makes a
  significant contribution to the U.S. economy
  through payment of taxes or use of American
  products, materials or labor.
• has, including its affiliates, 500 or fewer
  employees

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Eligibility SBIR/STTR

• Second - Ownership - 13 CFR 121.702
• (1) A for-profit business concern, as defined in
  Sec. 121.105, that is at least 51 owned and
  controlled by one or more individuals who are
  citizens of the United States, or permanent
  resident aliens in the United States or,
• (2) (SBIR only) A for-profit business concern,
  as defined in Sec. 121.105, that is at least 51
  owned and controlled by another for-profit
  business concern, as defined in Sec. 121.105,
  that is itself at least 51 owned and controlled
  by individuals who are citizens of, or permanent
  resident aliens in, the United States.

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Eligibility SBIR/STTR

• See NIH Omnibus Solicitation
• http//grants1.nih.gov/grants/funding/sbir.htmsol
  
• NIH Guide Announcement - http//grants.nih.gov/gra
  nts/guide/notice-files/NOT-OD-03-053.html
• SBA highlighted the requirement that owners of
  the SBIR participant be "individuals" who are
  citizens of, or permanent resident aliens in, the
  United States.

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Verifying Eligibility
Business Structure Inc., Corp., LTD, JV, LLC,
SA, PLC Review the Commercialization Plan in
Phase II applications or company description for
affiliations. Biosketch information - Are there
any former or concurrent employment with larger
entities? (Email address?)
12
Verifying Eligibility
A listing of the majority or all shareholders,
including the venture capital investment
companies, The percentage of company stock each
investor or company holds, and Identify foreign
investors/shareholders
13
Verifying Eligibility

• The research space occupied by the grantee is
  generally not shared with another organization
  and is under the control of the grantee.
• All research on the SBIR/STTR grant will be
  performed in its entirety in the United States.

14

• Application Considerations

15
Cost Considerations

• Cost Principles and Organizations
• The Four Tests

16
Reasonableness

• A cost may be considered reasonable if the nature
  of the goods or services acquired or applied and
  the associated dollar amount reflect the action
  that a prudent person would have taken under the
  circumstances prevailing at the time the decision
  to incur the cost was made

17
Reasonableness

• The cost principles address the following
  considerations
• Whether the cost is generally necessary to
  operations or the grants performance
• Whether the recipient complies with their own
  established policies
• Whether individuals expending Federal funds acted
  with due prudence

18
Allocability

• A cost is allocable to a specific grant,
  function, department, etc., known as a cost
  objective, if the goods or services involved are
  chargeable or assignable to that cost objective
  in accordance with the relative benefits received
  or other equitable relationship

19
Allocability

• A cost is allocable to a grant if
• The cost is incurred solely in order to advance
  work under the grant
• It benefits both the grant and other work of the
  company (including other grant-supported
  projects)
• It is necessary to the overall operation of the
  company and is deemed to be assignable, at least
  in part, to the grant

20
Allowability

• Applicable cost principles establish standards
• Applicability of a particular set of cost
  principles depends on the type of organization
  making the expenditure
• In order to be allowable, costs must also conform
  with NIH specific limitations and exclusions as
  contained in the terms and conditions of the award

21
Consistency

• Grantees must be consistent in assigning costs to
  cost objectives
• Although costs may be charged either as direct or
  indirect, depending on their identifiable benefit
  to a particular program, they must be treated
  consistently for all work of the organization
  under similar circumstances, regardless of the
  source of funding

22
Types of Costs

• Indirect Costs/Facilities and Administrative
  (FA) Costs Not Easily Identified With A
  Specific Project
• Fringe Benefits, Overhead, GA
• Direct Costs Easily Identified With A Specific
  Project
• Direct Salaries Wages
• Materials Supplies
• Consultants Subcontracts

23
Budget Format

• Submit PHS 398 form page 4 (detailed budget for
  initial budget period) and form page 5 for entire
  proposed period of support
• STTR include research institution budget form
  page

24
Budget Preparation

• Consortia - third party
• The grantees signature on the application
  certifies, as the direct and primary recipient of
  grant funds, that it is aware of and is
  accountable to NIH for the performance of the
  project, the appropriate expenditure of grant
  funds by all parties, and all other obligations
  as specified in the NIH Grants Policy Statement.

25
SBIR STTR Fee/Profit

• Fee must be requested in application
• May not exceed 7 of total costs for NIH grants
• Fee must be justified in the application
• Based on profit margin consistent with all
  projects of similar scope, regardless of source
  of funding.

26
Negotiation Process

• Contact the Indirect Cost Branch Ruth Bishop
• When Notification Grant/Contract Is Going To Be
  Awarded
• How Via
• E-Mail rb17i_at_nih.gov
• Fax [phone]

27
Negotiation Process

• Indirect Cost Proposal Submitted
• Indirect Cost Branch Reviews Proposal
• Indirect Cost Branch Follows-up With Questions To
  Company
• Rates are Negotiated
• Typically By Telephone
• Rate Agreement Is Issued Or Rate Memo Is Sent To
  Grant Specialist

28
Pre-award Funding Considerations
29
Just-in-Time (JIT)

• Information that is not submitted with the
  application, but when the application has a
  possibility of being funded based on the priority
  score . This will be requested
• Other support
• Institutional base salaries for non-modular
  budgets
• PI and institution documentation of eligibility
  (see Verification Statement in NIH Solicitation)
• Human subject assurance/IRB IACUC review dates

30
Assurances/Certifications

• Human subjects (See OHRP on NIH.gov website)
• Vertebrate animals (See OLAW on NIH.gov website)
• Debarment and suspension
• Drug-free workplace
• Lobbying
• Research misconduct
• Financial conflict of interest

31
Assurances/Certifications

• PHS metric program
• Smoke free workplace
• Government use of information under the privacy
  act
• Information available to the PI
• Information available to the general public
• Freedom of Information Act (FOIA)

32
Funding Decisions

• The paylist is determined by
• IRG recommendations (Peer Reviewers)
• Scientific merit (score)
• Council recommendations
• Program Official recommendations
• Scientific priorities

33
Determining Award Levels

• Initial review group recommendations (summary
  statement administrative notes)
• Advisory Council actions
• Cost analysis (GMS review of application)
• Overlap
• Policy considerations (e.g., eligibility)
• Programmatic adjustments

34
Budget Cost Elements Personnel

• Proposed hours for any employee should not exceed
  direct work year (2,080 hours/ year)
• Are proposed salaries supported by source
  documents? (Employment Contract, agreement)
• Is any part of the proposed labor also charged as
  indirect? (PI/CEO/President)
• Is the role of all staff (professional and
  non-professional) concisely defined?

35
Budget Cost Elements - Consultants

• Consultants must not be employees of the SBC
• Consultants should only be used when their
  expertise is essential to the project
• Documentation provided in the application should
  include name of the consultant the nature of
  the services rendered and their relevance to the
  grant the period of service the basis for
  calculating the amount requested

36
Budget Cost Elements - Equipment

• Equipment may be classified as either project
  specific or general purpose
• Project specific equipment is defined as
  equipment which directly facilitates the purpose
  of and is an integral part of the activities of a
  grant
• General purpose equipment includes items such as
  office equipment and furnishings. Typically,
  these items are part of the FA costs

37
Budget Cost Elements - Supplies

• Are supplies consistently treated as direct costs
  on other projects, regardless of source of
  funding?
• Are the proposed supplies reasonable for the
  scope of the work?

38
Budget Cost Elements - Travel

• Costs incurred for project related travel
• Budget costs in accordance with the grantees
  established travel cost reimbursement policy
• For-profits--Government rates should be used as a
  basis for charging travel costs to the grant
  (www.policyworks.gov)

39
Budget Cost Elements - Subcontracts

• Subcontract costs should be proposed in
  accordance with their governing cost principles
• OMB Circulars (A21, A122, A87, FAR)
• FA for subcontracts are proposed as direct costs
  on the grantee budget

40

• Award Actions
• Its free money, but its not easy
• --anonymous grantee

41
Notice of Grant Award (NGA)

• A legally binding contract
• Official notice that an award has been made
• Includes
• Funding level
• Periods of support
• Terms and conditions (footnotes)
• NIH contact information
• Program Official for Scientific issues
• Grants Management Specialist for administrative
  issues

42
Standard Terms and Conditions

• Carry over
• The authority to expend funds from the previous
  budget period
• Streamlined Non-competing Award Process (SNAP)
  (Phase II)
• Eliminates need for annual submission of budget
  with progress report and annual submission of
  Financial Status Report (FSR)

43
Other Terms and Conditions

• Restrictive terms - may specify required action
  on the part of the grantee to remove restriction
  (FA rate negotiation, human subjects)
• Close-out reporting requirements
• Included in the Final year NGA
• Financial, invention and final progress report

44
Expanded Authorities

• All NIH awards are under EA, which means
• 90 day pre-award cost authority at grantees own
  risk
• No-cost extension of project period for up to 12
  months (notify GMS before project end date!)

45
Post Award
46
Prior NIH Approval Required

• Change of PI and other Key personnel
• Change of Grantee Organization
• Change of Scope

47
Change in Scope

• Change in direction
• Change in type of training or
• Change other area that constitutes a significant
  change from the aims, objectives, or purposes of
  the originally approved project

48
Actions Likely to be Considered a Change in Scope

• Change in the specific aims from those approved
  in the competing application
• Substitution of one animal model for another
• Any change from the approved use of animals or
  human subjects
• Shifting the research emphasis from one disease
  area to another

49
Change in Scope

• Transferring the performance of substantive
  programmatic work to a third party through a
  consortium agreement, by contract, or any other
  means (not in original application)
• Change in key personnel
• Significant rebudgeting (gt25 of total award)

50
Changes - Prior Approval Required!

• Notify the NIH immediately if any of these apply
  or will apply to your business
• Successor-in-interest
• Name change
• Merger

51
Change Prior Approval Required!

• The following changes involving the PI or
  other key personnel should also be promptly
  reported
• Withdrawal from the project entirely
• An absence of three months or more
• Reduced time devoted to the project by 25 or
  more

52
Submitting prior approval requests to NIH

• Requests for project changes that require Grants
  Management Office approval must be submitted in
  writing and signed by the PI and the Institution
  Official (IO)
• An e-mail request is acceptable
• initiated by the PI and sent through the IO
• to the agency GMO and Program Official

53
No-cost Extensions

• Grantee may extend (without additional funds) the
  final budget period of the project up to 12
  months (one-time only). If registered in Commons
  grantees can enter a first NCE through the
  Commons (up to 90 days before the end date of the
  award).
• Notify NIH of extensions at least 10 days prior
  to the project period end date
• Explain the reason for the extension and the
  length of the extension
• No revised NGA for first on-time extension

54
No-cost Extensions

• Requests submitted after the project period has
  expired or extensions beyond the initial 12 month
  extension requires NIH prior approval
• 2nd NCE (or late) Request should include
• Length of the request
• An estimate of funds remaining
• A brief progress report and the goals to be
  attained during the extended period
• If the request was submitted late, state the
  reason for the late request
• If approved, a revised NGA will be issued

55
Federal Cash Transaction Report (PSC 272)

• Grantees must report expenditures (Cash
  Disbursements) quarterly using the PSC 272 to the
  Division of Payment Management (DPM)
• Reports are due within 45 days of 3/31, 6/30,
  9/30 and 12/31
• Delays in submission of the quarterly reports
  will result in the withholding of grant payments.
  Please contact your DPM account representative
  with any questions.
• http//dpmlink.dpm.psc.gov/Contact.aspx

56
Federal Cash Transaction Report (FCTR) form PSC
272

• Awarding agencies (GMS) use these quarterly
  reports from PMS
• To monitor patterns of cash expenditures,
  including accelerated or delayed draw downs, and
• To assess performance or to identify financial
  management problems

57
Close-out and Compliance
58
Close Out Requirements

• Due within 90 days of the end of the project
  period to the awarding Institute
• Final Progress Report (no form)
• Final Invention Statement - Form HHS 568
• Final Financial Status Report SF 269A or SF 269
• Refer to the terms and conditions on the final
  Notice of Grant Award (Section IV)

59
Compliance Basics

• Do the right thing
• Keep your policies current with Federal
  requirements
• Develop a continuing training program
• Perform risk assessments and implement
  appropriate internal controls
• COMMUNICATE!! COMMUNICATE!!

60
Why is Compliance Important?

• It strengthens the relationship of trust that
  exists between sponsor and recipient
• It suggests a presence of the stewardship
  necessary to properly safeguard the Federal
  investment in biomedical research
• Comments on Compliance Program Guidance for
  Recipients of NIH Research Grants
• Federal Guide Notice 9/23/03 http//a257.g.akamait
  ech.net/7/257/2422/14mar20010800/edocket.access.gp
  o.gov/2003/03-22626.htm

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Who is Accountable for Compliance?

• The Company is accountable for the finances and
  the administration of the grant
• The PI is accountable for the research
• The PI makes allocation decisions
• The Company exercises oversight on allocation
  decisions

62
Types of Issues

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

63
Common Contributors to Compliance Problems

• Inadequate resources
• Lack of understanding of roles and
  responsibilities of institutional staff
• Outdated or nonexistent policies and procedures
• Inadequate staff training and education
• Inadequate systems
• Perception that internal control systems are not
  necessary

64
NIH Enforcement Actions

• Special terms and conditions of awards
• Loss of carryover authority
• Cost disallowances
• Suspension/termination of award
• Opportunity for improved grantee systems and
  policies to assure compliance

65
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.

66
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 contractual agreements
• See NIH Guide http//grants2.nih.gov/grants/guide
  /notice-files/NOT-OD-OO-040.html

67
Whats New in FY2006?

• Its electric! Research Administration
• New Electronic SF424 RR
• December 1, 2005 receipt date for SBIR/STTR
  competing applications
• Program Outcomes Data System (PODS)
  Electronic final progress report

68
NIH eRA Commons

• Open to All Institutions
• Authorized Organizational Official should
  register the institution
• Is your Institution already registered?
  http//era.nih.gov/userreports/ipf_com_org_list.cf
  m
• To register
• Go to Commons home page click registration link
• Enter small amount of information
• Print out page and fax to NIH
• Approx 2-3 days to process registration
• Help desk can help with any problems

69
Commons Functionality

• FSR submission
• IAR (internet assisted review)
• Demo facility any one can use!
• JIT submission (all data in single submission)
• Profiles (Institution and Professional Profiles)
• View status of application, priority score (PI
  only), NGA and other grant related documents
• See http//era.nih.gov/commons
• eRA help desk [phone] (730-530 EST M-F)

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NIH Grants Information Sources

• Notice of Grant Award (read it!)
• Provides terms of award and agency contacts
• Frequently Asked Questions
• http//www.grants.nih.gov/grants/funding/giofaq.ht
  m
• Grants Information
• grantsinfo_at_nih.gov (contact email address)
• NIH Grants Policy Information
• http//grants1.nih.gov/grants/policy/policy.htm

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QUESTIONS??

• Want to Know More?
• Subscribe to the NIH Guide
• http//grants1.nih.gov/grants/guide/listserv.htm
• Thank You!
• Kathleen J. Shino, M.B.A.
• Acting NIH SBIR/STTR Program Coordinator
• Voice 301 435-2689 Fax [phone]
• Email shinok_at_mail.nih.gov