Modified Financial Reporting Requirements
NIH GUIDE, Volume 25, Number 22, July 5, 1996
P.T. 34; K.W. 1014006
National Institutes of Health
INTRODUCTION
In FY 1995, the National Institutes of Health (NIH) implemented the
Streamlined Non-Competing Award Process (SNAP), which simplified the
requirements of the non-competing application process (Phase I). In Phase
II of SNAP, which was begun in FY 96, the Notice of Grant Award was changed
to reflect only direct and indirect costs, and indirect costs are now
included in the future year recommended levels.
In an attempt to further streamline the non-competing process, NIH is
implementing Phase III of SNAP by modifying the financial reporting
requirements. Effective for grants (competing and non-competing) with July
1, 1995 start dates, a Financial Status Report (FSR) will only be required
at the end of the competitive segment rather than annually. If the award
which was effective July 1, 1995 was the final award for the competitive
segment, an FSR will be required.
SNAP applies to all mechanisms routinely covered under expanded authorities
(see NIH Guide for Grants and Contracts, Vol. 23, No. 45, December 23,
1994), except Program Project Grants (P01s) and Outstanding Investigator
Grants (R35s). Awards may be specifically included or excluded from SNAP by
a term and condition on the Notice of Grant Award. Questions concerning the
status of a specific award should be addressed to the Grants Management
Officer of the awarding component.
Throughout its efforts to simplify and streamline the policy requirements
for Federal grants, NIH has emphasized the importance of continued effective
and efficient monitoring of Federal grant funds. Federal grant managers and
grantee staff are required to assure that Federal funds are expended for the
purpose for which the grant was awarded and in compliance with Federal
regulations. Monitoring the financial aspects of grants is a requirement
for both grantee and NIH staff and is of paramount importance. This
requirement does not diminish because of the modified reporting requirements
under this announcement.
IMPLEMENTATION
For all grant awards under SNAP with July 1, 1995 start dates, annual FSRs
will no longer be required. FSRs will be required 90 days after the end of
the competitive segment. This FSR should reflect cumulative support provided
for the entire competitive segment. The FSR must be submitted whether or
not the grant receives funding for a competitive renewal. It must also be
submitted if a grant terminates early or transfers to a new institution.
NIH staff will use the Federal Cash Transaction Report (FCTR) to continue to
monitor the financial aspects of grants. The FCTR provides a quarterly
breakdown of cash transactions on a grant record basis. These transactions
will be monitored to determine if the pattern of cash expenditures indicates
possible problems. For example, if it appears that funds are being drawn
too quickly, this could be an indication of an inappropriate acceleration of
expenditures; or if funds are not being drawn at all, this could indicate
poor progress, delayed hiring, or a significant unobligated balance. If the
pattern of cash expenditures appears inappropriate, grants management staff
will request additional information (e.g., annual accounting records) from
the grantee to determine if there are issues related to the grant that need
closer monitoring.
It is incumbent upon grantee organizations to have in place accounting and
internal control systems which provide for appropriate monitoring of grant
accounts to assure that areas of concern are addressed and communicated to
the awarding component's Chief Grants Management Officer. Internal control
systems should assure that obligations and expenditures are reasonable,
allocable and allowable and provide for identification of large
unanticipated unobligated balances, accelerated expenditures, inappropriate
cost transfers, and other inappropriate expenditure and obligation of funds.
These are all areas that could be indicators of problems with the progress
of the project and/or the maintenance of grantee stewardship
responsibilities for the funds provided with the grant. It is also
incumbent upon the grantee organization to assure that day-to-day financial
monitoring is being accomplished at all levels of the organization.
Accordingly, appropriate training, support, and internal controls must be
available to departmental administrators and other grantee staff who are in
a position to assist investigators in the day-to-day management of Federal
funds.
WHO WILL BENEFIT
This effort to streamline the financial reporting requirements for most
grant mechanisms should benefit NIH and grantee staff. Resources currently
focused on compliance with timely financial reports on an annual basis can
be reallocated to provide assistance to investigators and administrators and
oversight to assure that grants are operated in accordance with Federal
regulations.
INQUIRIES
Questions regarding this policy may be directed to the Grants Management
Specialist identified on the Notice of Grant Award.
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