Michele Chin-Purcell David March Sarah Waldemar 02.17.2009

1. Hot Topics in Research Compliance Michele Chin-Purcell David March Sarah Waldemar 02.17.2009

2. The National Scene • Who is watching? • Office of the Inspector General (OIG) • Department of Health and Human Services (DHHS) • National Science Foundation (NSF) • Department of Defense (DoD) • Department of Justice (DoJ) • Office of Research Integrity (ORI) • Office of Laboratory Animal Welfare (OLAW) • Office for Human Research Protection (OHRP)

3. The National Scene The National Scene • What are they looking at? • Effort Reporting • Cost transfers • Direct vs. Indirect Costs • Service Centers • Human Subject/Research Animals suspension of spending • Final Rule

4. The National Scene “The government also alleged the researchers wrongfully charged 100 percent of their summer activity to grants when the researchers spent significant time on unrelated work.” “Florida International University in 2005 agreed to pay $11.5 million to settle allegations that it mischarged costs and overbilled under several contracts and grants with the Department of Energy, authorities said. .” “The PI has made a significant change from the aims and objectives for purposes of the approved project and has failed to obtain IACUC approval. This causes a cascade of events where the grant funds may not be drawn down for the animal work andthe research stops. “ “In response to a written complaint about this research, OHRP opened a compliance oversight evaluation … regarding allegations of non-compliance with HHS regulations for the protection of human subjects.” “…we estimate that the University claimed approximately $1.7 million in unallowable charges as direct costs to grants, contracts and other agreements…”

5. The National Scene The National Scene • What are they looking at? • Effort Reporting • NSF has severely curtailed cost-sharing requirements, it is no longer required on proposals nor does it add “weight” to review of proposals • NSF has revised its summer salary policy to allow maximum of two months of senior project personnel regular salary per year(previously limited to 2/9ths of regular academic-year salary) • NIH continues to review PI commitment levels (90% limit recommended for investigators with 5 or more NIH awards)

6. The National Scene The National Scene • What are they looking at? • Cost Transfers • Large fines levied for costs transfers found to be improper • Specifically scrutinized are transfers done after award close out • Costs transferred to other sponsored projects rather than to non-sponsored funds • Costs transferred between sponsored projects to spend down remaining balances • Applies to • Salary transfers • Non-salary transfers

7. The National Scene The National Scene What are they looking at? • Direct vs. Indirect Charges • ensure that costs charged to grants, contracts, and other agreements are allowable under the cost principles established in Office of Management and Budget (OMB) Circular A-21 • costs must be reasonable, be allocable, conform to any exclusions or limitations set forth in the cost principles or sponsored agreements, and be given consistent treatment through the application of generally accepted accounting principles • “Major projects” are defined in section F.6.b.2 of the Circular as projects that require an “extensive amount of administrative or clerical support, which is significantly greater than the routine level of such services provided by academic departments. • Applies to: • administrative and clerical salaries • non salary, general-type supplies and services

8. The National Scene The National Scene • What are they looking at? • Service Centers • assess internal control over compliance with applicable requirements described in the OMB Circulars A-21 andA-133 • determine the allowability of direct costs claimed • verify that the correct indirect cost rates were applied to federal awards

9. The National Scene What are they looking at? Human Subjects/Research Animals Incurring expenses in the absence of a valid IRB or IACUC approval due to: failure to obtain approval suspension of approval expiration of approval Institutional processes for notification that spending for these activities must be suspended until approval is obtained Institutional processed that ensure training for those involved in research using either humans or animals The National Scene

10. The National Scene The National Scene • What are they looking at? • Final Rule: FAR Clause 52.222-39 • timely disclosure of violations of federal criminal law involving fraud, conflict of interest, bribery or gratuity violations • violation of Civil False Claims Act • significant overpayments on a contract • disclosure required by “principle” up to three years after project end date • requires written Code of Ethics that require full disclosure • training/education on content of Code of Ethics • applies to domestic and international agreements

11. The Local Scene • What are we doing? • Effort Reporting • Effort Certification Policy • Effort Certification Reporting Tool (ECRT) • Electronic system allows for more timely and accurate reporting • Oversight through: • Risk Assessments – late reporting, uncertified effort • PI Reports – unfulfilled commitments • Automated follow up of late/missing reports • Effort Reporting to be added to faculty education options

12. The Local Scene • What are we doing? • Cost Transfers • Processing Internal Transactions Policy • Worked closely with EFS team to ensure sufficient monitoring is embedded in data fields • Length of time between initial charge and transfer • Required approvals in place • Query in place for monitoring transactions while reports are finalized

13. The Local Scene • What are we doing? • Direct vs. Indirect Charges • Removing Uncollectible Costs Policy • justification standards • education of grant administrators • revised Fiscal Responsibilities module for faculty • continued monitoring of questionable expenditures

14. The Local Scene • What are we doing? • Service Centers • Obtaining Approval to Conduct Internal Sales Policy • assess internal control over compliance with applicable requirements described in the OMB Circulars A-21 and A-133 • determine the allowability of direct costs claimed • verify that the correct indirect cost rates were applied to federal awards

15. The Local Scene • What are we doing? • Human Subjects/Research Animals • Research Involving Human Subjects Policy • Code of Conduct Policy • confirmation of application/review/renewal • notification of absence/suspension/expiration of protocols – processes being reviewed • UMN training requirements

16. What are we doing? • Final Rule: FAR Clause 52.222-39 • To be reviewed and monitoring processes and procedures developed in concert with SPA, SFR, UMN Office of Compliance • Education for faculty, grant administrators, central unit staff to be developed and implemented as necessary • Stay tuned for further developments!

17. Scenes From the Front Line • What can you do? • Educate yourself whenever, however possible – know what to watch for, what is within the boundaries of compliance, how to resolve issues • Make use of job aids, web sites, your colleagues • Stay current on changes in policies and processes • Get to know your contacts in the central units • Help others whenever possible, teaching is learning • Remember to breathe; as Red Green says, “we’re pulling for you, we’re all in this together.”

18. Resources – The National Scene Selected federal research sites • Code of Federal Regulations • Federal Acquisition Regulation (FAR) • Current NIH Grants Policy Statement (effective for budget periods beginning on or after December 1, 2003) Notice of publication and list of significant changes for NIH Grants Policy Statement. • Information on Prior Approval • NSF Grant Policy Manual • Proposal and Award Policies and Procedures Guide (effective for NSF proposals submitted on or after June 1, 2007) • Office of the Inspector General: http://www.oig.hhs.gov/index.asp • Office of Research Integrity: http://ori.hhs.gov/ • NSF/OIG Audit Reports: http://www.nsf.gov/oig/auditpubs.jsp • OMB Circulars: • A-21 • A-110 • A-133

19. Selected University Research Policies Animal Care and Use (Board of Regents)Code of ConductCost Sharing(Offering Cost Sharing, Matching, and In-Kind Contributions on Sponsored Projects) [Procedures]Cost Transfer(Processing Internal Accounting Transactions) [Procedures]Direct/Indirect Costs(Charging of Direct and Facilities and Administrative [Indirect] Costs) [Procedures]Effort Certification [Procedures]Human Subjects(Board of Regents:Research Involving Human Subjects) Human Subjects(Paying Human Subjects and Maintaining Confidentiality and 1099 Reporting) [Procedures]Misconduct(Academic Misconduct) [Procedures] Misconduct(Reporting and Addressing Concerns of Misconduct) [Procedures]Responsible Conduct of Research Uncollectible Costs (Removing Uncollectible Costs Charged to Sponsored Projects) [Procedures] An additional list of policies can be found at: http://www.oar.umn.edu/CA/Rsrch_Policies_EFS.cfm Resources – The Local Scene

20. Questions, comments or concerns? David March OAR march016@umn.edu 612-624-1229 Sarah Waldemar OAR s-wolg@umn.edu 612-624-8349 Michele Chin-Purcell RIOP chin0077@umn.edu 612-625-7213 Resources – The Local Scene