IC Directors' Meeting Highlights
September 7, 2006
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 —
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:
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 http://oma.od.nih.gov/ma/controls/RMIC.ppt.
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:
Dr. Gottesman delineated the initial suggestions.
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.
This page was last reviewed on September 15, 2006 .
National Institutes of Health (NIH)