Federal Grants Management Compliance for NIH SBIR/STTR

1
National Institutes of Health
Overview and Compliance for NIH SBIR/STTR
ASSISTING WITH COMPLIANCE Brian Albertini
Chief Grants Management Officer National
Institute of Nursing Research SBIR/STTR
NATIONAL CONFERENCE OMAHA, NE JUNE 30, 2009
2
Overview

• Roles and Responsibilities
• Eligibility for SBIR and STTR
• Application Process
• Award Actions
• Post Award Requirements
• Compliance Basics

3
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)

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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

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Eligibility Grantee Institution

• The award is made to the institution, not an
  individual/PI
• The 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

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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.

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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 RD 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

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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

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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)

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SBIR and STTR Application Process

• Electronic Application through Grants.gov
• Use Parent FOA and SF424 RR forms
• New Applicant Organizations need
• Tax Identification Number
• DUNS
• Human Subjects FWA for grantee (SBC)
• Animal Assurance for grantee (SBC)
• Required for SF424RR submission

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

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SBIR Requirements

• P.I. primarily employed by SBC gt50
• Dont 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

12
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.,
  FA fee) for two years

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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

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Types of Costs For Grants

• Indirect Costs/FA 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.htm
  l

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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 FA
• Grantee must justify this in the application
• All other mechanisms prohibited from fee/profit
  on grants

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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.

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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/NO
  T-OD-09-038.html
• If 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 [phone]
• Attend the IDC Workshop at the Conference!!

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• Award Actions
• Science with Strings Attached

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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

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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

22
Expanded Authorities

• NIH awards are under EA, which means
• 90 day pre-award cost authority at grantees own
  risk
• Reasonable rebudgeting authority
• gt 25 of total award may be unreasonable
• Grantees under expanded authorities may
• Change consortium participant
• Extend project period through the NIH Commons for
  additional 12 months

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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).

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Award Elements

• Under 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).

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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

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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

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Post Award

• These requests should come to NIH in writing.

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Prior NIH Approval Required

• Change of PI and other Key personnel named in
  Notice of Grant Award
• Change of Grantee Organization
• Change of Scope

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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
• Adding a new subcontract if more than 25 of
  Total Costs for the year

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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

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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

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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

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Compliance

• Compliance Basics
• Internal Controls
• Financial Conflict of Interest

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Compliance Basics

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

35
Compliance Problems
Common Contributors

• 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

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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/complianc
  e.htm

37
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?)

38
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 procedures
• Federal Financial and Business Management Systems
  - Sample Policies and Procedures
• http//www2.niddk.nih.gov/Funding/Grants/ffbms.htm
  

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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

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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)

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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 Subjects
• http//www.access.gpo.gov/nara/cfr/waisidx_04/45c
  fr46_04.html

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What do Grantees Need to Know?

• OMB Circulars - http//www.whitehouse.gov.ombcircu
  lars/
• 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

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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

44
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

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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

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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.

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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!

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Requirements!

• All SBIR/STTR recipients must register with SBA
  Tech-Net for reporting purposes
• http//tech-net.sba.gov
• Register NOW with Grants.gov and eRA
• http//era.nih.gov/ElectronicReceipt/preparing.htm
  4
• REQUIRED PUBLIC ACCESS POLICY
• http//grants.nih.gov/grants/guide/notice-files/NO
  T-OD-09-071.html

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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

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NIH Information Sources
For NIH Grantees

• 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??

• E-mail sbir_at_od.nih.gov
• Thank You!