ASSISTING WITH COMPLIANCE Brian Albertini Chief Grants Management Officer

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)

4. 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

5. 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

6. 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.

7. 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

8. 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

9. SBIR and STTREligibility • 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)

10. 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)

11. 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

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., F&A + fee) for two years

13. 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

14. 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

15. 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

16. 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.

17. 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.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

18. 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!!

19. Award Actions Science with Strings Attached

20. 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

21. 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 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

23. 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).

24. Award Elements Under the Expanded Authoritiesfor 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).

25. 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

26. 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

27. Post Award These requests should come to NIH in writing.

28. Prior NIH Approval Required • Change of PI and other Key personnel named in Notice of Grant Award • Change of Grantee Organization • Change of Scope

29. 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

30. 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

31. 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

32. Compliance Compliance Basics Internal Controls Financial Conflict of Interest

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

34. ComplianceProblems 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

35. 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

36. 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?)

37. 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

38. Who is Accountable? • TheCompanyis accountable for the finances and the administration of the grant • The PI is accountable for the research • The PImakes budget allocation decisions • The Company exercises oversight on budget allocation decisions

39. 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)

40. 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_04/45cfr46_04.html

41. 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-awardrequirements

42. 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

43. 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

44. 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

45. 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.

46. 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!

47. 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/NOT-OD-09-071.html

48. 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

49. 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.htm • Grants Information • grantsinfo@nih.gov(contact email address) • NIH Grants Policy Information • http://grants1.nih.gov/grants/policy/policy.htm

50. QUESTIONS?? E-mail: sbir@od.nih.gov Thank You!