Policy Update Michelle G. Bulls Chief Grants Management Officer Grants Policy

Policy Update What’s New? IHS Grants Policy Source Documents Policy Topics Prior Approval Reporting Requirements Closeout

What’s New? Grants Policy Statement U.S. Department of Health and Human Services Office of the Assistant Secretary for Resources and Technology Office of Grants October 1, 2006

What’s New? HHS Grants Policy Statement Effective: October 1, 2006 Applicability: HHS Operating Divisions and Staff Divisions that issue Discretionary Grant Awards w/the exception of NIH. Makes available to HHS grantees, in a single document, up-to-date policy guidance.

IHS Grants Policy Source Documents Grants Policy Directives Awarding Agency Grants Administration Manual (AAGAM) Policy Announcements – “coming soon” 45 CFR 74 and 92 HHS Grants Policy Statement Indian Health Service Circular

Cost Principles OMB Circular A-87: State, Local, and Indian Tribes OMB Circular A-122: Non-profit Orgs OMB Circular A-133: Audits OMB Circular A-102: Administrative OMB Circular A-122: Administrative Requirements

Cost Principles What are the Cost Principles? Establish principles to determine cost applicability to grants, contract & other agreements Designed to ensure that the Federal Government provide its fair share of total costs In accordance with generally accepted accounting principles

What’s Included in the Cost Principles? Covers allowability of costs Costs must be reasonable Costs must be allocable Costs must be given consistent treatment Costs must conform to any limitations or exclusions Provides guidance for institutions to annually disclose cost accounting practices (disclosure statement) Provides guidance for Direct Costs which are costs that can be readily identified w/a particular sponsored project…or that can be directly assigned to such activities relatively easily w/a high degree of accuracy

What’s Included in the Cost Principles? Comprehensive instructions and/or information issued by OMB to all Federal agencies. Grants policy related circulars include: 1) Administrative requirements (A-110 & A-102) A-110 now found at 2 CFR, Chapter II, Pt 215 2) Cost Principles (A-122 & A-87) A-122 now found at 2 CFR, Chapter II, Pt 230 A-87 now found at 2 CFR, Chapter II, Pt 225 3) Audit requirements (A-133) Target Audience: Federal agencies and grantee organizations

Cost related Requirements for Grantees Costs must be related to the project charged Costs must be reasonable - prudent person test Costs related to multiple projects allocated: on proportional benefit, where possible on any reasonable basis, where necessary

Grants Management 101 Definitions of Frequently Used Terms Used Unobligated Balance Unliquidated Obligations Prior Approval Change in Scope Significant Rebudgeting

Definitions of Frequently Used Terms in Grants Unobligated Balance: The portion of the funds authorized by the Federal agency that has not been obligated by the recipient. Unliquidated Obligations: Reports prepared on an accrued expenditure basis, the amount of obligations incurred by the recipient for which an outlay has not been recorded.

Definitions of Frequently Used Terms in Grants (Continued) Prior Approval: Written permission provided by the authorized granting official from the IHS grants and program office before the recipient may undertake certain activities (such as performance or modification of an activity), significant rebudgeting, or exceed a certain dollar level. Change in Scope: A process, usually initiated by the grantee, whereby the objectives or specific aims identified in the approved grant application are significantly changed.

Goals of Project Monitoring Assess progress toward meeting the goals and objectives of the project Determine level and use of Federal resources

Why is it Important to Monitor Progress? Assess progress in the field Identify potential problems Create annual reports Ability to give an account for the Federal dollars Justify budget requests Determine future needs in the program areas

Progress Reporting Requirements Generally, progress reports are due annually unless otherwise indicated in the NoA. Format of the progress report is generally included in the NoA.

Financial Reporting Requirements Reports of expenditures are required as documentation of the grants financial status according to the records of the recipient. Generally, due annually unless otherwise indicated in the NoA.

Expanded Authorities Waives certain cost related and other prior approval requirements for the grantee. Available to all grantees unless otherwise indicated in the NoA.

Expanded Authorities Pre Award Costs up to (and including) 90 days One-time no cost extension up to 12 months All cost-related prior approvals unless the action is considered a change in scope.

Prior Approval Requirements Alterations and renovations Capital expenditures Addition of a foreign component Preaward Costs >90 days prior to effective date of new or competing award Deviation from award terms and conditions Changes in grantee organizational status

Prior Approval Requirements Transferring of funds between construction and nonconstruction work Second no-cost extension or extension > 12 months Need for additional NIH funds—aka supplement Carryover of unobligated balances Change in scope Change in key personnel Change in grantee Institution

Carryover Policy Special Term of Award for NARCH: All carryover actions require prior approval from the GMO and Program Official. The request must include be made in writing signed by the authorized organizational official and must include a budget and budget justification for carryover amounts.

Carryover of Large Unobligated Balances Both Grants Management and Program Staff must approve the request. Both officials will ask the following questions as they review the request: Will it benefit the proposed research (goals of the project)? Does it signify a program expansion? Will the approval generate the need for recurring costs in future years? Is the project on target considering the amount of carryover that is available?

Carryover of Unobligated Balances Continued DGO and Program Staff will check FSR to make sure that the total cost of the request is available. Grantee should be notified, in writing, from the GMO of the decision within 30 days after receiving the request.

Second No Cost Extension No additional funds required Scope of project will not change Time required to ensure adequate completion of originally approved project Grantee agrees to update all required assurances

Change of Status of PI and Other Key Personnel Withdrawal of PI or Key Personnel named in NGA Absence for period of 3 continuous months Reduction of effort by 25 or more percent of level approved at award

Approval of Substitute PI/Key Personnel Requires… Justification for the change Biographical sketch of proposed individual Other support for that individual Budget changes resulting from the proposed change

Change in Scope Change in specific aims Change from approved use of human subjects Shift in emphasis to a different disease area

More Indicators of Change in Scope? Significant Rebudgeting—i.e., when expenditures in a single direct cost budget category deviate by more than 25% of the current budget year total costs awarded Transfer of the performance of substantive programmatic work to a third party Incurrence of patient care costs if not previously approved Purchase of a unit of equipment >$25,000

Indian Health Service Incentives Policy Incentive items are allowable costs and may be purchased with IHS grant funds. Incentives may be used to support participants in such activities that include, but are not limited to, health fairs, and fitness programs. The items purchased by grantees must have a reasonable value, not to exceed $30 each, per activity

Indian Health Service Incentives Policy (Continued) The incentive funds should be reflected under the “other expenses” category of the budget. Generally, items that are not considered incentives include, but are not limited to, gifts, cash and/or cash prizes, door prizes, or any type of entertainment (e.g., movie passes). Policy Link: 05_06/circ05_06.htm 05_06/circ05_06.htm

Reimbursement of Indirect Costs Necessary part of our grants Cannot be readily identified with the project Current rate must be established with the cognizant Federal agency in order to receive indirect costs in the award.

Enforcement Actions In the event of a grantee’s failure to comply with the terms and conditions of award, IHS may take one or more enforcement actions, depending on the severity and duration of the non- compliance.

Enforcement Actions (continued) Modification of the Terms of Award:  Include special conditions in the award to identify financial or administrative deficiencies.  Withdraw approval of PI or key personnel if there is basis to conclude that the PI and other key personnel are no longer qualified.

Types of Enforcement Actions Temporarily withhold grant funds pending correction of the deficiency Disallow costs Suspension Termination

Closeout Requirements Closeout within 90 days of end date if the grant is not to be extended or awarded through a competing segment. Documents Required: Final Financial Status Report Must cover the period of time since the last FSR submitted No unliquidated obligations Must indicate the unobligated funds

Closeout Requirements (continued) Documents continued: Final Progress Report Summary of progress toward the stated aims List of significant results List of publications Data on Human Subjects and Data Sharing plan, if applicable…

Record Retention and Access Requirements for Records Financial records, supporting documents, statistical records and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final FSR.

When Does the Grantee Need to Contact IHS After the Initial Award? Continuation progress reports Required Prior Approvals Questions Closeout

Policy Matters? Contact Michelle G. Bulls for policy- related matters. Telephone: