The NIH differs greatly from other government agencies; it has its own payment system, its own rules for indirect rate negotiations and its own accounting and reporting mandates. Naturally, Jameson is well-versed in them all.
The National Institutes of Health (NIH) and its parent, the Department of Health and Human Services (HHS) exist to protect and improve our nation’s health. They do this by funding, conducting and supporting research through SBIR/STTR, BARDA, BAA, R21, R01 and U01 awards. The vast majority of these funds are awarded as grants, with a smaller portion being awarded through contracts.
All of the awards listed above are “cost reimbursable” type funding vehicles and require the recipient to properly account for all actual project specific costs in accordance with the FAR and NIH Supplemental Regs. including the proportional indirect costs associated with the award, and are subject to several types of audits.
NIH REPORTS AND AUDITS
Every government award comes with an assortment of mandatory reports and audits. You can count on the following:
1. An Annual Incurred Cost Submission or “true up” report is due 180 days after the Company’s fiscal year end and must reflect all general ledger expenses on a generally accepted accounting principles (GAAP) basis. This report is used by the Division of Financial Advisory Services (DFAS) located in Bethesda, MD to settle the final accounting for all HHS/NIH grants and contracts, including the negotiation of a final indirect cost rate agreement as well as a provisional indirect cost rate agreement for future government billing and proposal purposes.
Included in the schedules and information, which needs to be submitted to DFAS are:
Once the annual incurred cost report is submitted, any over-billing or under-billing of indirect expenses must be proactively remedied on a grant by grant basis.
2. OMB A-133 audit. If an awardee has annual revenue from grants that exceeds $500,000 ($750,000 for fiscal years beginning on or after January 1, 2015) then it is also subject to an annual OMB A-133 audit. The awardee is required to hire and pay for a CPA firm professionally qualified to conduct this type of audit, which encompasses both financial and compliance components. The audit report must be submitted to the National External Audit Review Center within nine months of the Company’s fiscal year end. The auditor’s report is reviewed by the Inspector General’s Office (IG) for quality control purposes and the CPA firm’s work papers may be audited by the IG.
The annual negotiation of your incurred cost submission will not occur until DFAS is provided a copy of your final OMB A-133 report.
3. Form SF-425, Federal Financial Report (FFR) Filed on a quarterly basis, this report reconciles the funds drawn from the Payment Management System (PMS) to the actual spending from the Company’s accounting system. The form sign-off includes a certification (on line 13) that “any false, fictitious, or fraudulent information may subject me to criminal, civil, or administrative penalties”.
Improper cash draws from the PMS and improper supervision/accountability of subcontractors and consultants are the most common audit findings that require repatriation of funds.
GET THE HELP—AND EXPERTISE—YOU NEED
If you’re overwhelmed by the previous section, consider Jameson & Company. We are the leading experts in government grants and contracts, we know the NIH inside and out, and there are a number of ways in which we can help.