GAB Decision 006
September 12, 1974 Donald Guthrie Foundation for Medical Research,
Sayre, Pennsylvania; Docket No. 11 DeGeorge, Frank; Saunders, Charles
Van Orman, William
This is an appeal pursuant to 45 CFR Part 16 from the National Heart
and Lung Institute of the National Institures of Health decision on
August 24, 1973 not to allow the foundation to retroactively alter the
cost-sharing proposals of the grant to enable the grantee to claim full
indirect cost reimbursement on a research project that had expired three
years previously. The undersigned members of the Grant Appeals Board
have been designated as a panel of three for the disposition of the
instant case. This decision is made on the basis of documents submitted
to the Board.
BACKGROUND
A 3-year research grant was made to the Donald Guthrie Foundation for
Medical Research. The grantee agreed to the cost-sharing proposal to
accept less than full indirect cost reimbursement. Each year for three
years it received the Institute's standard instruction on cost sharing
in research grants and agreed to the conditions of the grant. The grant
period ended on May 31, 1970. On August 7, 1973 the grantee wrote to
the Institute indicating that it had been brought to its attention that
it should have claimed the donated time of the principal investigator,
an amount calculated to be $5,400, as a cost-sharing item.
FACTS
The National Heart Institute on August 22, 1969, notified the Donald
Guthrie Foundation for Medical Research in its standard instruction memo
on cost-sharing in research grants that it was necessary to establish in
advance, the extent of cost participation by the applicant institution.
The letter indicated that if the grantee elected to contribute through
indirect costs it was to indicate the portion of indirect costs being
requested from the Public Health Service and that indirect costs related
to salaries or other items contributed by the grantee isntitution were
not to be included in the amount requested from the Public Health
Service. Additioanl information contained in the memo indicated any
proposed contribution of less than 5 percent of the total cost should be
accompanied by (2) an explanation of the reason therefore.
On October 16, 1967, the grantee returned the revised Grantee
Cost-Sharing Proposals in which it elected to cost share at the required
acceptable minimum of 5 percent of the total cost and this sharing would
be in the indirect cost category.
On October 31, 1967, the Institute wrote to the grantee making minor
revisions in the indirect cost amounts and restating the grantee's
proposals to cost share 5% of the total activity and that the grantee
contribution would be done completely through the indirect cost
category.
On April 29, 1968, the Institute sent the grantee another standard
instructional memo on Cost-Sharing in Research Grants.
On April 24, 1969, the Institute sent the grantee a third standard
instructional memo on Cost-Sharing in Research Grants.
On May 19, 1969, the Grantee wrote to the Institute indicating that
it had again "elected to obtain grantee cost sharing through the
indirect cost method".
On August 7, 1973, the grantee appealed to the Institute for relief
from excessive cost-sharing requirements and indicated that the
principal investigator had donated time to the project equivalent to
$5,400 and that it had been brought to its attention that "this cost
should have been listed in the grant application budget and should have
been considered in the cost sharing reqirements which in itself would
have amounted to approximately 10% of the total expenditures incurred in
the performance of the grant . . . the allowance of this method of
cost-sharing would not exceed the amount originally awarded for this
grant".
On August 24, 1973, the Institute replied to the grantee indicating
it could not comply with the grantee's request citing that an
arrangement for receiving less than full indirect costs was proposed by
the grantee on three separate occasions and during the active life of
the project the grantee made no attempt to alter the proposed method of
cost-sharing. The Institute feels the grantee's intent was clear and it
cannot allow a change in options on an inactive grant at this late date
merely because the grantee found in retrospect it would be to its
advantage to do so.
On October 11, 1973, the grantee appealed to this Board indicating
its belief that the time contributed (donated) should now be used for
cost-sharing purposes and that at the time the grant was made it
understood that the principal investigator's contributed time could not
be used as a cost-sharing item.
(3) DISCUSSION
1. On three occasions the grantee received the Institute's standard
memorandum of instruction which contains quidance on cost-sharing in
research grants. This memorandum indicates that grantees may cost share
personnel.
2. The grantee elected to cost share at the required acceptable
minimum of 5% of the total cost in the indirect cost category.
3. There is no indication that the grantee tried to modify the
agreement during the three years of the project.
The panel feels that the grantee's subsequent discovery that it
could, by using the estimated value of the services of the principal
investigator as its cost contribution have claimed full indirect cost
reimbursement, which is the issue of this appeal, does not retroactively
alter the cost-sharing arrangement entered into.
DECISION
The appeal is denied and the action of the National Institutes of
Health is sustained.
OCTOBER 22, 1983