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Home > Institutes, Centers & Offices > Office of the Director > Freedom Of Information Act Office > Selected NIH Institute and Center Director's Meeting Minutes

IC Directors' Meeting Highlights

September 7, 2006

To: IC Directors
From: Director, Executive Secretariat
Subject: IC Directors' Meeting Highlights — May 11, 2006

Discussion Items

Changes to Budget and Reporting Structure

In deploying the NBS Acquisitions Module, the NIH was faced with establishing a method to distinguish R&D and Station Support financial data for budget reports and acquisitions operations. Ms. Barros explained that this raised a larger issue: the NIH reporting capacity lags behind industry and other agency standards in that the current NIH process lacks data standardization necessary for aggregation of data. As a result of these obstacles, the NIH Steering Committee decided that there should be a standard financial structure for all ICs that will allow the collection of corporate budget information.

Ms. Barros explained that the NBS will work with OB, OFM, OCITA, and the budget community to identify areas where tracking and reporting of corporate financial information is desirable and will also address reporting standards for special items such as loan repayment. While this approach will change the way many ICs structure their financial data, it —

  • is consistent with the NIH-Wide approach to developing data for decision making,
  • will enable an aggregated reporting capability,
  • will allow ICs discretion to use fields unique to its needs, and
  • will use standard software.

The standard financial structure will be implemented for R&D Contracts for FY 2007 and for remaining mechanisms for FY 2008. Stressing that such standardization must be accomplished, Dr. Katz noted that the Steering Committee guided this plan through several iterations and provided for a phase- in approach so we can learn from the initial R&D implementation.

II. Risk Management

Noting lessons learned from recent events in the Agency as well as external drivers such as revised OMB circular A-123 and Sarbanes-Oxley legislation, Ms. Barros reported that the NIH has recognized the need to strengthen, reshape, and refocus its risk management process. Proactively identifying risks and hazards helps prevent and/or mitigate adverse outcomes. All key processes, functions, and systems that support research and research administration are risk areas if not operating efficiently, effectively, safely, and with integrity.

The NIH Risk Management Program has been developed in consultation with Agency leaders, senior managers, and transaction processors. The core principles follow:

  • The program will reinforce a culture of outstanding management.
  • The NIH Steering Committee oversees the stewardship of NIH resources and therefore will oversee the risk management program.
  • All NIH managers have the responsibility to develop and maintain risk management programs.
  • The program’s scope will include intramural, extramural, and IT processes, in addition to financial and administrative performance.
  • A successful program requires proactive management that challenges the status quo.
  • The program is of sufficient importance that resources must be devoted to ensure its success.
  • The emphasis is on integrating risk management techniques into project management plans.

Risk management governance comprises the NIH Director and the NIH Steering Committee, with support from the Office of Management Assessment, OMA. The management structure follows from the NIH Director to the DDM, the CIO, DDIR, and DDER, as well as to each IC Director, and thence through to each entity’s Risk Management Official. OMA serves the management level by conducting NIH-Wide assessments and studies and providing overall oversight.

Ms. Barros and Ms. Servis, Director, OMA, delineated the various roles and responsibilities of senior NIH staff and NIH managers. The NIH Risk Management Program will provide training for multiple staff levels; identify and rank risk areas; conduct in-depth reviews of most vulnerable areas and follow up on corrective actions; provide annual assurances by IC Directors, NIH Deputy Directors, and the NIH CIO; and provide oversight through the NIH governance structure. See presentation slides at

During the discussion that followed, several IC Directors expressed concern about the range of activities the program covers and asked for more discussion as to what areas the corporate policy should encompass. Dr. Zerhouni stressed that this program is a valuable one and will be implemented carefully to ensure a participatory approach so that all concerns are heard and addressed.

III. Ad Hoc Intramural Working Group update

Dr. Gottesman reviewed activities of the Intramural Research Budget Working Group (IRBWG) that he co-chairs with Dr. Tom Insel. The group has been intent on organizing a grass roots effort so as to ensure across-the-board input from intramural staff. This group initially charged a subcommittee chaired by Barbara Merchant, NIDDK, with considering specific intramural budget trends in order to identify “cost drivers.” The IRBWG also considered major areas for cost savings not covered by the subcommittee such as 1) management funds and 2) reductions in programs.

The Subcommittee assessed FY 02, 03, and 04 IRP obligation data from 5 ICs (NIDDK, NIMH, NCI, NIDA, and NHLBI) the majority of spending was in salaries and benefits, other services, and equipment. Its recommendations for cost savings are in the concomitant object class codes: 11, 12, 25, and 31. The initial suggestions for cost savings in these areas with the following key principles:

  • Cost savings realized as a result of these recommended activities, insofar as possible, will remain in the IC IRP that achieved them.
  • Tools and ideas resulting from the recommendations will be used as deemed appropriate by individual ICs.

Dr. Gottesman delineated the initial suggestions.

  • Personnel — consider increased use of time-limited appointments under existing Title 42 authority/reduce use of contracts or create own contracts.
  • Animal Care & Facility Costs—assess true costs/charge costs to PIs directly
  • Equipment — increase information-sharing among ICs and combine orders at COAC level/utilize DHHS BPAs where possible
  • Maintenance — negotiate maintenance agreements for multiple years/consider self insurance in lieu of maintenance agreements (could be done at IC level)
  • Renovation — insofar as possible, allow ICs to manage contracts for small jobs to reduce overhead costs and ORF fees
  • Telephone and Data Lines — ICs should perform phone inventory (labor intensive for ICs but has added value) and possibly build in reward incentive
  • Year-end Funds — provide ICs with acceptable venues for setting aside and effectively using these funds/one suggestion was to set up the equipment budget with an end date of June instead of September to facilitate better planning/no penalty to labs that don’t spend their entire budget

This approach has been discussed and endorsed by SDs, IWG, head AOs, EOs. The Steering committee recommended the presentation to IC Directors. Finally, a “Grassroots” IRBWG and subcommittees have been formed to develop implementation plans and additional ideas and to create a communications plan to help change spending patterns in the IRB.

IV. Information Items

Dr. Zerhouni discussed the ongoing NIH effort to communicate to the extramural community the reality of current and planned NIH activities. He encouraged IC Directors to contact him if they wanted him to present at Council Meetings or other fora and also said he would be happy to share the slides he has developed.

Dale Johnson
cc: OD Senior Staff


This page was last reviewed on September 15, 2006 .

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