**HHS**

**Grants Policy Statement**

![](media/image1.wmf){width="4.497222222222222in"
height="4.334722222222222in"}

U.S. Department of Health and Human Services\
Office of the Assistant Secretary for Resources and Technology\
Office of Grants

January 1, 2007

# Introduction

The Department of Health and Human Services Grants Policy Statement (HHS
GPS) is intended to make available in a single document the general
terms and conditions of HHS discretionary grant and cooperative
agreement awards. These general terms and conditions are common across
all HHS Operating Divisions (OPDIVs)[^1] and apply as indicated in the
HHS GPS unless there are statutory, regulatory, or award-specific
requirements to the contrary (as specified in individual Notices of
Award). The HHS awarding offices are components of the OPDIVs and Staff
Divisions (hereafter "OPDIVs") that have grant-awarding authority.

This document also is designed to be useful to those interested in the
HHS grants process by providing information about that process and its
associated authorities and about responsibilities. The HHS GPS is
available online from the HHS home page at
<http://www.hhs.gov/grantsnet>.

## HHS GPS Organization

The HHS GPS has four parts and an appendix, which allow general
information, application information, and other types of reference
material to be separated from legally binding terms and conditions:

-   *Part I: HHS Grants Process.* Part I describes the OPDIVs, their
    role, and the roles of other HHS organizations in HHS grants;
    specifies recipient and HHS staff responsibilities; outlines the
    grant application and review processes; and explains the various
    resources available to those interested in the HHS grants process.

-   *Part II: Terms and Conditions of HHS Grant Awards*. Part II
    includes generally applicable terms and conditions. This part also
    specifies the terms and conditions that apply to particular types of
    grants, recipients, and activities that differ from, supplement, or
    elaborate on the general terms and conditions.

-   *Part III: Points of Contact*. Part III lists pertinent offices and
    officials with their addresses and telephone numbers.

-   *Part IV: OPDIV-Specific Information and Terms and Conditions.* Part
    IV, which supplements Parts I, II, and III for a given OPDIV,
    contains any OPDIV supplementary information and OPDIV-specific
    terms and conditions of award. This includes statutory, regulatory,
    or public policy requirements that apply only to that OPDIV or its
    programs. OPDIV-specific terms and conditions in Part IV take
    precedence if they conflict with requirements in Part II of the HHS
    GPS.

-   *Appendices:* The appendices include all abbreviations and a
    glossary of terms used throughout the HHS GPS for ease of reference.

## Supersession and Applicability

### Supersession

Applicants for HHS grants and recipients have historically relied on a
variety of sources for information about the grants processes and
requirements of HHS and its component OPDIVs. For the recipients of
grants from the OPDIVs constituting the Public Health Service (PHS), the
primary source of information for recipients was the *Public Health
Service Grants Policy Statement*. This HHS GPS supersedes in its
entirety the *Public Health Service Grants Policy Statement*, dated
April 1, 1994, and addendum, dated January 24, 1995.

### Applicability 

This policy statement applies only to HHS discretionary grant programs
and only to awards to organizational entities made by OPDIVs other than
the National Institutes of Health (NIH). It does not apply to awards
under mandatory grant programs\
(e.g., entitlement programs) or to awards made directly to individuals
(e.g., scholarships). In 1998 (and with subsequent updates), NIH issued
its own NIH Grants Policy Statement. Until further notice, NIH will
continue to issue and maintain its own Grants Policy Statement in lieu
of the HHS GPS.[^2]

Recipients are not directly subject to the requirements of HHS Grants
Policy Directives and implementing HHS Grants Administration Manuals (or
any predecessor OPDIV manuals), which are internal documents guiding HHS
operations. If an OPDIV implements a requirement in an internal document
that does affect recipients, it will not do so by citing that document;
rather, the requirement is placed on the recipient through explicit
coverage in the NoA.

### Cooperative Agreements

The Federal Grant and Cooperative Agreement Act of 1977, 31 U.S.C. 6301,
defines the cooperative agreement as an alternative assistance
instrument to be used in lieu of a grant whenever substantial Federal
involvement with the recipient during performance is anticipated. The
difference between grants and cooperative agreements is the degree of
Federal programmatic involvement rather than the type of administrative
requirements imposed. Therefore, statutes, regulations, policies, and
the information contained in this policy statement that are applicable
to grants also apply to cooperative agreements, unless the award itself
provides otherwise.

### Subrecipients and Contractors under Grants

The information contained in this policy statement applies directly to
the primary recipients of HHS funds. The HHS GPS indicates in Part II
whether requirements must be applied to or "flowed down" to subawards or
contracts under grants. Recipients are responsible for specifying those
requirements in subawards (which includes consortium agreements) or
contracts, as applicable.

## Effective Date

This document is effective for all new, competing continuation, and
non-competing continuation HHS grant and cooperative agreement awards
with beginning dates on or after January 1, 2007. This document reflects
current HHS requirements as specified in 45 CFR parts 74 and 92.

The information in this document is subject to change following its
issuance due to changes in statutes, regulations, or policies adopted
subsequent to its effective date. To ensure that applicants and
recipients are aware of changes, recipients should refer to the *Federal
Register* and Code of Federal Regulations (Titles 45 and 42). These
documents are available online at <http://www.gpoaccess.gov/>.

## Conventions

Certain conventions are followed throughout this document. The term
"grant" is used to mean both grants and cooperative agreements; however,
for clarity, certain sections mention both grants and cooperative
agreements. The term "recipient" generally is used to refer to the
organization to which an OPDIV makes a grant or cooperative agreement
award. However, depending on the context, the terms "grantee" may be
used rather than "recipient." "HHS" may be used in this document to
refer to the entire organization or to its component organizations, or
else to contrast an action by an OPDIV with an action by a recipient or
other organization. A reference to Part I, II, III, or IV without
further elaboration means the corresponding part of the HHS GPS.
Although most of the requirements in the HHS GPS apply to the covered
activities of all OPDIVs, if a requirement applies more narrowly, the
exception is explicitly noted.

## Maintenance 

The Office of Grants---part of the HHS Office of the Assistant Secretary
for Resources and Technology---is responsible for developing and
maintaining this document, which will be reissued periodically. Interim
changes will be posted on the HHS and OPDIV Web sites (see Part I). Each
change, including its applicability and effective date and the affected
sections of the HHS GPS specified, will be described, and the necessary
language to implement it as a term or condition of award will be
provided. The Office of Grants welcomes comments and suggestions for
future versions of the HHS GPS.

# Table of Contents

[Part I: HHS Grants Process I-1](#part-i-hhs-grants-process)

[General Information I-1](#general-information)

[HHS Grant-Awarding Operating Divisions
I-1](#hhs-grant-awarding-operating-divisions)

[Types of HHS Financial Assistance Programs
I-3](#types-of-hhs-financial-assistance-programs)

[Sources of Requirements I-4](#sources-of-requirements)

[Roles and Responsibilities I-4](#roles-and-responsibilities)

[Roles and Responsibilities of OPDIV Staff Members and Other HHS Offices
I-5](#roles-and-responsibilities-of-opdiv-staff-members-and-other-hhs-offices)

[Roles and Responsibilities of Recipients and Their Principals
I-6](#roles-and-responsibilities-of-recipients-and-their-principals)

[Fraud, Waste, and Abuse I-7](#fraud-waste-and-abuse)

[Paperwork Reduction Act I-8](#paperwork-reduction-act)

[Sources of Information about HHS Grant Processes and Programs
I-9](#sources-of-information-about-hhs-grant-processes-and-programs)

[Application and Application Review Processes
I-9](#application-and-application-review-processes)

[Grants.gov and Funding Opportunity Announcements
I-10](#grants.gov-and-funding-opportunity-announcements)

[Eligibility I-11](#eligibility)

[Suspension and Debarment I-13](#suspension-and-debarment)

[Delinquency on Federal Debt I-14](#delinquency-on-federal-debt)

[Lobbying I-15](#lobbying)

[Application Process I-15](#application-process)

[Types of Applications and Letters of Intent
I-15](#types-of-applications-and-letters-of-intent)

[Application Forms I-17](#application-forms)

[Preparing an Application I-18](#preparing-an-application)

[Public Policy Requirements I-18](#public-policy-requirements)

[Research-Related Requirements I-19](#research-related-requirements)

[National Environmental Policy Act
I-20](#national-environmental-policy-act)

[Preservation of Cultural and Historic Resources
I-21](#preservation-of-cultural-and-historic-resources)

[Protection of Wetlands I-22](#protection-of-wetlands)

[Uniform Relocation Act and Real Property Acquisition Policies Act
I-22](#uniform-relocation-act-and-real-property-acquisition-policies-act)

[The Application Budget I-22](#the-application-budget)

[Indirect Costs I-23](#indirect-costs)

[Matching or Cost Sharing I-24](#matching-or-cost-sharing)

[Research Patient Care Costs I-25](#research-patient-care-costs)

[Third-Party Reimbursement I-26](#__RefHeading___Toc155580139)

[Submitting an Application I-26](#submitting-an-application)

[Executive Order 12372 and Public Health System Reporting Requirements
I-27](#executive-order-12372-and-public-health-system-reporting-requirements)

[Use of Application Information I-28](#use-of-application-information)

[Freedom of Information Act I-28](#freedom-of-information-act)

[Privacy Act I-30](#privacy-act)

[Objective Review of Applications
I-30](#objective-review-of-applications)

[Disposition of Applications I-31](#disposition-of-applications)

[Business Management Reviews and Other Pre-Award Activities
I-32](#business-management-reviews-and-other-pre-award-activities)

[Assurances of Compliance I-32](#assurances-of-compliance)

[Cost Analysis I-33](#cost-analysis)

[Assessment of Financial and Other Management Systems
I-33](#assessment-of-financial-and-other-management-systems)

[The Notice of Award I-34](#the-notice-of-award)

[Project Period and Budget Period
I-35](#project-period-and-budget-period)

[Other Terms and Conditions I-37](#other-terms-and-conditions)

[Payment I-37](#payment)

[SMARTLINK II/ACH I-38](#smartlink-iiach)

[CASHLINE/ACH I-38](#cashlineach)

[Cash Request I-38](#cash-request)

[Post-Award Administration I-39](#post-award-administration)

[Part II: Terms and Conditions of Award
II-1](#part-ii-terms-and-conditions-of-award)

[Overview of Terms and Conditions of Award
II-1](#overview-of-terms-and-conditions-of-award)

[General, Program-Specific, and Award-Specific Terms and Conditions
II-1](#general-program-specific-and-award-specific-terms-and-conditions)

[Effect and Order of Precedence II-1](#effect-and-order-of-precedence)

[Flow-Down of Requirements under Subawards and Contracts under Grants
II-2](#flow-down-of-requirements-under-subawards-and-contracts-under-grants)

[Public Policy Requirements II-2](#public-policy-requirements-1)

[Standards of Conduct for Recipient Employees
II-7](#standards-of-conduct-for-recipient-employees)

[Hatch Act II-8](#hatch-act)

[Age Discrimination Act of 1975 II-8](#age-discrimination-act-of-1975)

[Civil Rights Act of 1964 II-8](#civil-rights-act-of-1964)

[Education Amendments of 1972 II-8](#education-amendments-of-1972)

[Rehabilitation Act of 1973 II-8](#rehabilitation-act-of-1973)

[Biological Agents and Toxins II-9](#biological-agents-and-toxins)

[USA PATRIOT Act II-9](#usa-patriot-act)

[Public Health Security and Bioterrorism Preparedness and\
Response Act
II-9](#public-health-security-and-bioterrorism-preparedness-and-response-act)

[Human Subjects II-9](#human-subjects)

[Office for Human Research Protections' and Recipient Responsibilities
II-10](#office-for-human-research-protections-and-recipient-responsibilities)

[Protection of Research Subjects' Identities
II-12](#protection-of-research-subjects-identities)

[Animal Welfare II-12](#animal-welfare)

[Other Research-Related Requirements
II-13](#other-research-related-requirements)

[Research Misconduct II-13](#research-misconduct)

[Financial Conflict of Interest II-14](#financial-conflict-of-interest)

[Recombinant DNA and Human Gene Transfer Research
II-16](#recombinant-dna-and-human-gene-transfer-research)

[Human Embryonic Stem Cell Research and Cloning
II-16](#human-embryonic-stem-cell-research-and-cloning)

[Research on Human Fetal Tissue II-17](#research-on-human-fetal-tissue)

[Transplantation of Human Fetal Tissue
II-18](#transplantation-of-human-fetal-tissue)

[Certificates of Confidentiality
II-19](#certificates-of-confidentiality)

[Investigational New Drug Applications/Investigational Device\
Exceptions
II-19](#investigational-new-drug-applicationsinvestigational-device-exceptions)

[Controlled Substances II-20](#controlled-substances)

[Construction-Related Requirements
II-21](#construction-related-requirements)

[Flood Insurance II-21](#flood-insurance)

[Architectural Barriers II-21](#architectural-barriers)

[Clean Air and Clean Water Act II-21](#clean-air-and-clean-water-act)

[Safe Drinking Water Act II-21](#safe-drinking-water-act)

[Health, Safety, and Related Requirements
II-22](#health-safety-and-related-requirements)

[Restriction on Funding Abortions
II-22](#restriction-on-funding-abortions)

[Restriction on Distribution of Sterile Needles/Needle Exchange
II-22](#restriction-on-distribution-of-sterile-needlesneedle-exchange)

[Standards for Privacy of Individually Identifiable Health Information
II-22](#standards-for-privacy-of-individually-identifiable-health-information)

[Confidentiality of Patient/Client Records
II-22](#confidentiality-of-patientclient-records)

[Drug-Free Workplace II-22](#drug-free-workplace)

[Pro-Children Act II-23](#pro-children-act)

[Smoke-Free Workplace II-23](#smoke-free-workplace)

[Health and Safety II-23](#health-and-safety)

[Acknowledgment of Federal Funding
II-24](#acknowledgment-of-federal-funding)

[Activities Abroad II-24](#activities-abroad)

[Limited English Proficiency II-24](#limited-english-proficiency)

[Resource Conservation and Recovery Act
II-24](#resource-conservation-and-recovery-act)

[Seat Belts II-24](#seat-belts)

[Cost Considerations II-25](#cost-considerations)

[General II-25](#general)

[The Cost Principles II-25](#the-cost-principles)

[Direct Costs and Indirect Costs
II-27](#direct-costs-and-indirect-costs)

[Reimbursement of Indirect Costs
II-27](#reimbursement-of-indirect-costs)

[Applicable Credits II-29](#applicable-credits)

[Allowable Costs and Activities II-30](#allowable-costs-and-activities)

[Cost Transfers II-44](#cost-transfers)

[Cost Overruns and Rate of Expenditure
II-45](#cost-overruns-and-rate-of-expenditure)

[Allocation of Costs II-45](#allocation-of-costs)

[Services Provided by Affiliated Organizations
II-46](#services-provided-by-affiliated-organizations)

[Matching or Cost Sharing II-47](#matching-or-cost-sharing-1)

[Valuation of Donated Goods and Services
II-47](#valuation-of-donated-goods-and-services)

[Donated Supplies, Equipment, Space, or Land
II-47](#donated-supplies-equipment-space-or-land)

[Volunteer Services II-49](#volunteer-services)

[Using Program Income to Meet a Matching or Cost-Sharing Requirement
II-49](#using-program-income-to-meet-a-matching-or-cost-sharing-requirement)

[Documentation II-49](#documentation)

[Prior-Approval Requirements II-49](#prior-approval-requirements)

[OPDIV Prior Approval II-50](#opdiv-prior-approval)

[Carryover of Unobligated Balances
II-52](#carryover-of-unobligated-balances)

[Change of Grantee Organization II-53](#change-of-grantee-organization)

[Change in Scope II-55](#change-in-scope)

[Change in Status, including Absence, of Principal Investigator/Project
Director and Other Key Personnel
II-56](#change-in-status-including-absence-of-principal-investigatorproject-director-and-other-key-personnel)

[Need for Additional OPDIV Funding II-56](#__RefHeading___Toc155580230)

[Need for Additional Time to Complete Project- or Program-Related
Activities ("No-Cost Extension")
II-57](#need-for-additional-time-to-complete-project--or-program-related-activities-no-cost-extension)

[Significant Rebudgeting II-57](#significant-rebudgeting)

[Transfer of Substantive Programmatic Work
II-57](#transfer-of-substantive-programmatic-work)

[Requesting OPDIV Prior Approval
II-58](#requesting-opdiv-prior-approval)

[Expanded Authorities II-59](#expanded-authorities)

[Carryover of Unobligated Balances
II-60](#carryover-of-unobligated-balances-1)

[Extension of Final Budget Period of a Previously Approved Project\
Period
II-60](#extension-of-final-budget-period-of-a-previously-approved-project-period)

[Financial Management II-61](#financial-management)

[Financial Management System II-61](#financial-management-system)

[Program Income II-62](#program-income)

[Accountability and Alternatives for Use
II-62](#accountability-and-alternatives-for-use)

[Reporting of Program Income II-64](#reporting-of-program-income)

[Interest Earned on Advances of Grant Funds
II-64](#interest-earned-on-advances-of-grant-funds)

[Property Management II-65](#property-management)

[Exempt Property II-66](#exempt-property)

[Nonexempt Property II-66](#nonexempt-property)

[Equipment Management System II-66](#equipment-management-system)

[Sale of Equipment and Supplies II-67](#sale-of-equipment-and-supplies)

[Revocable License II-68](#revocable-license)

[Debt Instruments II-68](#debt-instruments)

[Real Property II-68](#real-property)

[Acquisition, Use, and Management
II-68](#acquisition-use-and-management)

[Disposition II-69](#disposition)

[Notice of Federal Interest II-70](#notice-of-federal-interest)

[Insurance II-70](#insurance)

[Intellectual Property II-71](#intellectual-property)

[Rights in Data II-72](#rights-in-data)

[Access to Research Data II-72](#access-to-research-data)

[Publications II-73](#publications)

[Patents and Inventions II-74](#patents-and-inventions)

[Royalties and Licensing Fees from Copyrights, Inventions,\
and Patents
II-74](#royalties-and-licensing-fees-from-copyrights-inventions-and-patents)

[Invention Reporting II-75](#invention-reporting)

[Sharing Research Tools II-77](#sharing-research-tools)

[Procurement Management II-78](#procurement-management)

[Approval Requirements II-79](#approval-requirements)

[Requirements for Using Small Businesses, Minority-Owned Firms, and\
Women-Owned Businesses
II-80](#requirements-for-using-small-businesses-minority-owned-firms-and-women-owned-businesses)

[Subawards II-81](#subawards)

[Changes in Organizational Status
II-82](#changes-in-organizational-status)

[Federally Sponsored Surveys II-84](#federally-sponsored-surveys)

[Monitoring II-85](#monitoring)

[Reporting II-86](#reporting)

[Financial Reporting II-86](#financial-reporting)

[Progress Reporting II-88](#progress-reporting)

[Other Reporting II-88](#other-reporting)

[Overdue Reports II-89](#overdue-reports)

[Record Retention and Access II-89](#record-retention-and-access)

[Audit Requirements II-90](#audit-requirements)

[Enforcement Actions II-92](#enforcement-actions)

[Modification of the Terms and Conditions of Award
II-92](#modification-of-the-terms-and-conditions-of-award)

[Withholding a Non-Competing Continuation Award
II-93](#withholding-a-non-competing-continuation-award)

[Suspension or Termination II-93](#suspension-or-termination)

[Closeout II-94](#closeout)

[Final Financial Status Report II-94](#final-financial-status-report)

[Final Progress Report II-95](#final-progress-report)

[Final Invention Statement and Certification
II-96](#final-invention-statement-and-certification)

[Debt Collection II-96](#debt-collection)

[Appeals II-97](#appeals)

[Requirements for Specific Types of Grants
II-98](#requirements-for-specific-types-of-grants)

[Conference Grants II-98](#conference-grants)

[Definitions II-98](#definitions)

[Representation II-99](#representation)

[Funding II-99](#funding)

[Acknowledgment of Support and Disclaimer
II-99](#acknowledgment-of-support-and-disclaimer)

[Use of HHS and OPDIV Logos II-99](#use-of-hhs-and-opdiv-logos)

[Allowable and Unallowable Costs
II-100](#allowable-and-unallowable-costs)

[Intellectual Property: Publications, Copyright, and Public Disclosure
II-101](#intellectual-property-publications-copyright-and-public-disclosure)

[Reporting and Record Retention II-102](#reporting-and-record-retention)

[Construction and Modernization of Facilities
II-102](#construction-and-modernization-of-facilities)

[Funding II-103](#funding-1)

[Allowable and Unallowable Costs and Activities
II-103](#allowable-and-unallowable-costs-and-activities)

[Prior-Approval Requirements II-105](#prior-approval-requirements-1)

[Procurement Requirements II-106](#procurement-requirements)

[Equal Employment Opportunity, Labor Standards, and Other Contract
Requirements
II-106](#equal-employment-opportunity-labor-standards-and-other-contract-requirements)

[Use of Facility and Disposition
II-109](#use-of-facility-and-disposition)

[Traineeship, Fellowship, and Similar Awards Made to Organizations on\
Behalf of Individuals
II-109](#traineeship-fellowship-and-similar-awards-made-to-organizations-on-behalf-of-individuals)

[Initiation of Support II-110](#initiation-of-support)

[Payment II-110](#payment-1)

[Allowable Costs II-111](#allowable-costs)

[Supplementation of Stipends, Compensation, and Other Income
II-113](#supplementation-of-stipends-compensation-and-other-income)

[Reporting Requirements II-114](#reporting-requirements)

[Changes in the Project/Activity
II-115](#changes-in-the-projectactivity)

[Consecutive Support II-116](#consecutive-support)

[Termination II-116](#termination)

[Copyright II-116](#copyright)

[Inventions and Patents II-117](#inventions-and-patents)

[Disposition of Professional Fees
II-117](#disposition-of-professional-fees)

[Requirements for Specific Types of Recipients
II-117](#requirements-for-specific-types-of-recipients)

[Grants to Foreign Organizations, International Organizations, and
Domestic Grants with Foreign Components and Subawards to Foreign\
Organizations
II-117](#grants-to-foreign-organizations-international-organizations-and-domestic-grants-with-foreign-components-and-subawards-to-foreign-organizations)

[Public Policy Requirements II-117](#public-policy-requirements-2)

[Funding and Payment II-118](#funding-and-payment)

[Allowable Costs II-118](#allowable-costs-1)

[Prior-Approval Requirements II-119](#prior-approval-requirements-2)

[Audit II-119](#audit)

[Subawards II-119](#subawards-1)

[Grants to Federal Institutions and Allowable Costs and Payments to\
(or on Behalf of) Federal Employees under Grants
II-120](#grants-to-federal-institutions-and-allowable-costs-and-payments-to-or-on-behalf-of-federal-employees-under-grants)

[Eligibility II-120](#eligibility-1)

[Payment II-121](#payment-2)

[Allowable Costs under Grants to Federal Institutions
II-121](#allowable-costs-under-grants-to-federal-institutions)

[Equipment Accountability II-121](#equipment-accountability)

[Procurement Requirements II-122](#procurement-requirements-1)

[Intellectual Property II-122](#intellectual-property-1)

[Reporting Requirements II-122](#reporting-requirements-1)

[Allowable Costs and Payments to (or on Behalf of) Federal Employees
under Grants
II-122](#allowable-costs-and-payments-to-or-on-behalf-of-federal-employees-under-grants)

[Grants to For-Profit Organizations
II-124](#grants-to-for-profit-organizations)

[General II-124](#general-1)

[Allowable Costs and Payment of Fee
II-125](#allowable-costs-and-payment-of-fee)

[Intellectual Property II-125](#intellectual-property-2)

[Audit II-125](#audit-1)

[Small Business Innovation Research and Small Business Technology
Transfer Programs
II-126](#small-business-innovation-research-and-small-business-technology-transfer-programs)

[Part III: Points of Contact III-1](#part-iii-points-of-contact)

[Appendix A: Abbreviations A-1](#appendix-a-abbreviations)

[Appendix B: Glossary B-1](#appendix-b-glossary)

[Index C-1](#index)

# Part I: HHS Grants Process

## General Information

This section provides information about how HHS is organized to award
and administer grants and cooperative agreements. This section describes
the roles of organizations within HHS with responsibilities for the HHS
grants process, as well as organizations external to HHS that have a
role in that process.

HHS is the Federal government's principal agency for protecting the
health of Americans and providing essential human services, especially
for those who are least able to help themselves. In support of its
mission, HHS awards grants under more than 300 programs, making it the
largest grant-awarding agency in the Federal government.

### HHS Grant-Awarding Operating Divisions

HHS grant programs are the responsibility of 12 OPDIVs (see Exhibit 1).

+-----------------+----------------------------------------------------+
| Exhibit 1.      |                                                    |
| OPDIVs with     |                                                    |
| R               |                                                    |
| esponsibilities |                                                    |
| for HHS Grant   |                                                    |
| Programs        |                                                    |
+=================+====================================================+
| OPDIV           | Mission                                            |
+-----------------+----------------------------------------------------+
| Administration  | ACF is responsible for programs that promote the   |
| for Children    | economic and social well-being of children,        |
| and Families    | families and communities. Administers the          |
|                 | State-Federal welfare program, Temporary           |
|                 | Assistance for Needy Families, providing           |
|                 | assistance to an estimated 5 million people,       |
|                 | including 4 million children. Administers the      |
|                 | national child support enforcement system.         |
|                 | Administers the Head Start program, serving more   |
|                 | than 900,000 preschool children. Provides funds to |
|                 | assist low-income families in paying for child     |
|                 | care, and supports State programs to support       |
|                 | foster care and provide adoption assistance. Funds |
|                 | programs to prevent child abuse and domestic       |
|                 | violence.                                          |
|                 |                                                    |
|                 | <http://www.acf.dhhs.gov/>                         |
+-----------------+----------------------------------------------------+
| Administration  | AoA supports a nationwide aging network, providing |
| on Aging        | services to the elderly, especially to enable them |
|                 | to remain independent. Supports close to 240       |
|                 | million meals for the elderly each year, including |
|                 | home-delivered \"meals on wheels.\" Helps provide  |
|                 | transportation and at-home services. Supports      |
|                 | ombudsman services for the elderly, and provides   |
|                 | policy leadership on aging issues.                 |
|                 |                                                    |
|                 | [                                                  |
|                 | http://www.aoa.dhhs.gov](http://www.aoa.dhhs.gov/) |
+-----------------+----------------------------------------------------+
| Agency for      | AHRQ supports research to improve the quality,     |
| Healthcare      | safety, efficiency, and effectiveness of health    |
| Research and    | care for all Americans.                            |
| Quality         |                                                    |
|                 | [http://www.ahrq.gov](http://www.ahrq.gov/)        |
+-----------------+----------------------------------------------------+
| Office of the   | The ASPE is the principal advisor to the Secretary |
| Assistant       | of HHS on policy development and is responsible    |
| Secretary for   | for major activities in policy coordination,       |
| Planning and    | legislation development, strategic planning,       |
| Evaluation      | policy research, evaluation, and economic          |
|                 | analysis.                                          |
|                 |                                                    |
|                 | <http://aspe.hhs.gov/_/index.cfm>                  |
+-----------------+----------------------------------------------------+
| Centers for     | Working with States and other partners, CDC        |
| Disease Control | provides a system of health surveillance to        |
| and Prevention  | monitor and prevent disease outbreaks (including   |
|                 | bioterrorism), implement disease prevention        |
|                 | strategies, and maintain national health           |
|                 | statistics. Provides for immunization services,    |
|                 | workplace safety, and environmental disease        |
|                 | prevention. Working with the World Health          |
|                 | Organization, CDC also guards against              |
|                 | international disease transmission, with personnel |
|                 | stationed in more than 25 foreign countries. CDC   |
|                 | helps prevent exposure to hazardous substances     |
|                 | from waste sites on the U.S. Environmental         |
|                 | Protection Agency\'s National Priorities List, and |
|                 | develops toxicological profiles of chemicals at    |
|                 | these sites through the Agency for Toxic           |
|                 | Substances and Disease Registry.                   |
|                 |                                                    |
|                 | [http://www.cdc.gov](http://www.cdc.gov/)          |
+-----------------+----------------------------------------------------+
| Centers for     | CMS administers the Medicare and Medicaid          |
| Medicare and    | programs, which provide health care to about one   |
| Medicaid        | in every four Americans. Medicare provides health  |
| Services        | insurance for more than 41 million elderly and     |
|                 | disabled Americans. Medicaid, a joint              |
|                 | Federal-State program, provides health coverage    |
|                 | for some 44 million low-income persons, including  |
|                 | 19 million children, and nursing home coverage for |
|                 | low-income elderly. CMS also administers the State |
|                 | Children\'s Health Insurance Program that covers   |
|                 | more than 4.2 million children.                    |
|                 |                                                    |
|                 | [h                                                 |
|                 | ttp://www.medicare.gov](http://www.medicare.gov/), |
|                 | [http://www.cms.gov](http://www.cms.gov/)          |
+-----------------+----------------------------------------------------+
| Food and Drug   | FDA ensures the safety of foods and cosmetics, and |
| Administration  | the safety and efficacy of pharmaceuticals,        |
|                 | biological products, and medical devices, products |
|                 | which represent almost 25 cents out of every       |
|                 | dollar in U.S. consumer spending.                  |
|                 |                                                    |
|                 | [http://www.fda.gov](http://www.fda.gov/)          |
+-----------------+----------------------------------------------------+
| Health          | HRSA provides access to essential health care      |
| Resources and   | services for people who are low-income, uninsured, |
| Services        | or live in rural areas or urban neighborhoods      |
| Administration  | where access to or availability of health care is  |
|                 | limited. HRSA-funded health centers provide        |
|                 | medical care to more than 13 million patients each |
|                 | year at more than 3,600 sites nationwide. HRSA     |
|                 | also helps prepare the nation\'s health care       |
|                 | system and providers to respond to bioterrorism    |
|                 | and other public health emergencies, is            |
|                 | responsible for the National Health Service Corps, |
|                 | and helps build the health care workforce through  |
|                 | many training and education programs. HRSA         |
|                 | administers a variety of programs to improve the   |
|                 | health of mothers and children and serves people   |
|                 | living with HIV/AIDS through the Ryan White CARE   |
|                 | Act programs. HRSA also oversees the nation\'s     |
|                 | organ transplantation system.                      |
|                 |                                                    |
|                 | [http://www.hrsa.gov](http://www.hrsa.gov/)        |
+-----------------+----------------------------------------------------+
| Indian Health   | IHS is the principal Federal health care provider  |
| Service         | and health advocate for Indian people, and its     |
|                 | goal is to raise their health status to the        |
|                 | highest possible level.                            |
|                 |                                                    |
|                 | [http://www.ihs.gov](http://www.ihs.gov/)          |
+-----------------+----------------------------------------------------+
| National        | NIH is the world\'s premier medical research       |
| Institutes of   | organization. Its mission is to improve human      |
| Health          | health by increasing scientific knowledge related  |
|                 | to disease and health. NIH carries out its mission |
|                 | through the conduct of intramural and extramural   |
|                 | support of biomedical and behavioral research,     |
|                 | research training, research infrastructure, and    |
|                 | communications. NIH makes extramural awards though |
|                 | its Institutes and Centers.                        |
|                 |                                                    |
|                 | [http://www.nih.gov](http://www.nih.gov/)          |
+-----------------+----------------------------------------------------+
| Office of       | OPHS is located within the Office of the Assistant |
| Public Health   | Secretary for Health, who is the primary adviser   |
| and Science     | to the Secretary, HHS on matters involving the     |
|                 | nation's public health and oversees the U.S.       |
|                 | Public Health Service (PHS). OPHS includes several |
|                 | offices---Office of Minority Health, Office of     |
|                 | Population Affairs, and Office of Disease          |
|                 | Prevention and Health Promotion.                   |
|                 |                                                    |
|                 | <http://www.osophs.dhhs.gov/ophs/>                 |
+-----------------+----------------------------------------------------+
| Substance Abuse | SAMHSA works to improve the quality and            |
| and Mental      | availability of substance abuse prevention,        |
| Health Services | addiction treatment, and mental health services.   |
| Administration  | Provides funding through block grants to States to |
|                 | support substance abuse and mental health          |
|                 | services, including treatment for more than        |
|                 | 650,000 Americans with serious substance abuse     |
|                 | problems or mental health problems. Helps improve  |
|                 | substance abuse prevention and treatment services  |
|                 | through the identification and dissemination of    |
|                 | best practices. Monitors prevalence and incidence  |
|                 | of substance abuse.                                |
|                 |                                                    |
|                 | [http://www.samhsa.gov](http://www.samhsa.gov/)    |
+-----------------+----------------------------------------------------+
|                 |                                                    |
+-----------------+----------------------------------------------------+

There are several references throughout the HHS GPS to "PHS OPDIVs."
Unless otherwise specified for a specific requirement, the PHS OPDIVs
include the following: AHRQ, CDC, FDA, HRSA, IHS, OPHS, and SAMHSA. NIH
also is a PHS OPDIV; however, the requirements that apply to NIH grants
are included in the NIH Grants Policy Statement.

### Types of HHS Financial Assistance Programs

HHS financial assistance programs reflect a breadth of programmatic
activity, consistent with the mission of each OPDIV. Activities are
carried out under a variety of types of grants as well as by use of
cooperative agreements. HHS generally classifies its financial
assistance programs in two major categories of grants---discretionary
and mandatory. Discretionary grants are those for which the OPDIV may
exercise judgment ("discretion") in determining the recipient and the
amount of the award. Discretionary grants may be further categorized by
purpose (for example, research, training, services, construction, and
conference support). Generally such awards are made following a
competitive process. Mandatory grants are those that an OPDIV is
required to award if the recipient (usually a State) submits an
acceptable plan or application and meets the statutory and regulatory
eligibility and compliance requirements for the program. Mandatory
grants include block grants and entitlement grants.

When an OPDIV expects to be substantially involved in carrying out the
project/program, it awards a cooperative agreement rather than a grant.
Substantial involvement pertains to programmatic involvement rather than
administrative oversight.

These distinctions help in determining the appropriate relationship
between the OPDIV and the recipient and in determining which governing
requirements apply. In general, discretionary grants are subject to more
detailed programmatic and administrative requirements than block grants,
which afford States a significant degree of programmatic and
administrative discretion within broad guidelines. However, even within
discretionary grants, a range of potential requirements may apply
depending on the type of recipient and the nature of the programmatic
activity. For example, different requirements apply to university-based
research grants than to community-based services grants. The applicable
requirements are communicated to potential recipients as part of the
funding opportunity announcement process and also are observed as part
of the award and post-award administration processes.

### Sources of Requirements

This policy statement is based on generally applicable public laws and
Executive orders, OMB circulars and the HHS implementation of them, and
HHS-specific policies and procedures applicable to discretionary grants
and cooperative agreements. Among these are the regulations that
implement OMB Circular A-102 (applicable to grants to State, local, and
Indian tribal governments) and OMB Circular A-110 (applicable to grants
to institutions of higher education, hospitals, and other non-profit
organizations), reissued as 2 CFR part 215, and OMB circulars
incorporated in them---the OMB cost principles and single audit
circular. These regulations are codified at 45 CFR part 74[^3] (Uniform
Administrative Requirements for Awards and Subawards to Institutions of
Higher Education, Hospitals, Other Non-Profit Organizations, and
Commercial Organizations) and 45 CFR part 92 (Uniform Administrative
Requirements for Grants and Cooperative Agreements to State, Local, and
Tribal Governments). These requirements provide the framework for the
terms and conditions of OPDIV awards as specified in Part II and apply
generally; however, where applicable, differences based on grant purpose
or type of recipient will be highlighted. In addition, grants are
awarded and administered under a variety of programmatic authorities
(established in statute and program regulations) and under OPDIV and
award-specific requirements. Part II also addresses the relationship
among these differing types of requirements. Part IV includes OPDIV
requirements that differ from those in Part II of the HHS GPS. The NoA
includes any requirements that are specific to that award.

### Roles and Responsibilities

HHS, as a Federal grantor agency, is responsible to Congress and the
U.S. taxpayer for carrying out its mission cost-effectively and in
compliance with applicable requirements. HHS seeks to ensure integrity
and accountability in the award and administration of grants by relying
on a system of checks and balances and separation of responsibilities
within its own staff and by establishing a similar set of expectations
for recipient organizations. The recipient's roles and responsibilities
have assumed greater importance as HHS has shifted to increased reliance
on systems compliance and provided greater decision-making authority to
recipients.

The following sections highlight the major functions and areas of
responsibility of Federal and recipient offices and staffs. HHS
recognizes that additional staff members in a number of different
organizations may be involved in grant-related activities; however, this
section details only the major participants representing the Federal
government and the recipient.

#### Roles and Responsibilities of OPDIV Staff Members and Other HHS Offices

The roles and responsibilities of HHS participants are as follows:

-   *Grants Management Officer.* The GMO is the OPDIV official whose
    name appears on the NoA and is the official responsible for the
    business management and other non-programmatic aspects of an award.
    These activities include, but are not limited to, evaluating grant
    applications for administrative content and compliance with
    statutes, regulations, and guidelines; negotiating awards; providing
    consultation and technical assistance to applicants and recipients,
    including interpretation of grants administration policies and
    provisions; and administering and closing out grants. The GMO is the
    focal point for receiving and acting on requests for prior approval
    or for changes in the terms and conditions of award. The GMO is the
    only official authorized to obligate the OPDIV to the expenditure of
    Federal funds or to change the funding, duration, or other terms and
    conditions of an award. OPDIVs may have one or more GMOs with
    responsibility for particular programs or awards. The GMO works
    closely with his or her counterparts at the recipient organization
    and with the designated HHS PO.

-   *Grants Management Specialist.* The GMS is an OPDIV employee with
    assigned responsibility for the day-to-day management of a portfolio
    of OPDIV grants. The GMS performs many of the activities described
    above on behalf of the GMO and usually is the primary point of
    contact for the recipient when dealing with grant-related issues.

-   *Project Officer/Program Official.* The PO is the OPDIV official
    responsible for the programmatic, scientific, and/or technical
    aspects of assigned applications and grants. The PO's
    responsibilities include, but are not limited to, development of
    programs to meet the OPDIV mission; preparation of funding
    opportunity announcements; provision of programmatic technical
    assistance; post-award monitoring of project/program performance,
    including review of progress reports and making site visits; and
    other activities complementary to those of the GMO. The PO and the
    GMO work as a team in many of these activities.

-   *Review Administrator.* In some OPDIVs, RAs manage application
    review activities for discretionary grants. The RA, who may be an
    employee of the funding OPDIV, another OPDIV that provides review
    services, or a contractor, reviews applications for completeness and
    conformity to requirements; ensures that an adequate number of
    reviewers with appropriate expertise is available for application
    review; and assigns applications to individual reviewers.

-   *Other HHS Functions.* In addition to the GMO and PO, an applicant
    or recipient may be required to interact with other HHS staff
    members or offices with respect to its organization-wide systems
    and/or individual transactions. These include the office responsible
    for negotiating indirect cost rates (known as "facilities and
    administrative costs" for some organizations) and research patient
    care rates, typically the responsible[^4] DCA office or NIH's DFAS;
    the HHS OIG; the Assistant Secretary for Resources and Technology's
    Division of Financial Systems, Payment Integrity, and Audit
    Resolution; OHRP; OLAW; DPM; and ORI. Staff members in these offices
    generally coordinate with the GMO on grant-related matters, but they
    are responsible for discrete areas of specialization and are not
    required to channel their communications with the applicant or
    recipient through the GMO. Part III of this policy statement
    includes a list of these organizations and contact information.

#### Roles and Responsibilities of Recipients and Their Principals

HHS grant awards generally are made to organizations. The organization
is legally accountable for the performance of the award and the
expenditure of funds. The roles and responsibilities of designated
individuals at recipient organizations, who serve as agents of the
recipient, are as follows:

-   *Authorized Organizational Representative.* The authorized
    organizational representative is the designated representative of
    the applicant/recipient organization with authority to act on the
    organization's behalf in matters related to the award and
    administration of grants. In signing a grant application, this
    individual agrees that the organization will assume the obligations
    imposed by applicable Federal statutes and regulations and other
    terms and conditions of the award, including any assurances, if a
    grant is awarded. These responsibilities include accountability both
    for the appropriate use of funds awarded and the performance of the
    grant-supported project or activities as specified in the approved
    application. Although HHS requires that the recipient organization
    designate such an individual, HHS does not specify the
    organizational location or full set of responsibilities for this
    individual.

-   *Principal Investigator/Program or Project Director.* The PI/PD is
    the individual, designated by the recipient, responsible for the
    scientific, technical, or programmatic aspects of the grant and for
    day-to-day management of the project or program. The PI/PD generally
    is an employee of the recipient. However, because the grant, if
    awarded, is made to the recipient organization, if the PI/PD is not
    an employee of that organization, the organization must have a
    formal written agreement with the PI/PD that specifies an official
    relationship between the parties even if the relationship does not
    involve a salary or other form of remuneration. If the PI/PD is not
    an employee of the applicant organization, the OPDIV will assess
    whether the arrangement will result in the organization being able
    to fulfill its responsibilities under the grant, if awarded.

> The PI/PD is a member of the recipient team responsible for ensuring
> compliance with the financial and administrative aspects of the award.
> This individual works closely with designated officials within the
> recipient organization to create and maintain necessary documentation,
> including both technical and administrative reports; prepare
> justifications; appropriately acknowledge Federal support in
> publications, announcements, news programs, and other media; and
> ensure compliance with other Federal and organizational requirements.
> The PI/PD is encouraged to maintain contact with the PO with respect
> to the scientific, technical, or programmatic aspects of the project
> or program and, as applicable, the GMO concerning the business and
> administrative aspects of the award.

Organizations receiving HHS grant funds, whether such funds are received
directly from an OPDIV, indirectly under a contract, subaward, or as
student assistance under a training grant, are responsible for and must
adhere to all applicable Federal statutes, regulations, and policies,
including income tax regulations. Questions concerning the applicability
of income tax regulations to grant funds should be directed to the IRS.
Organizations also are expected to be in compliance with applicable
State and local laws and ordinances.

### Fraud, Waste, and Abuse

Anyone who becomes aware of the existence (or apparent existence) of
fraud, waste, or abuse related to HHS grants or use of grant funds
should report this information to HHS. The HHS OIG provides several
means, including toll-free numbers, for this purpose. The OIG hotline
may be reached by telephone at 1-800-HHS-TIPS (1-800-447-8477) or TTY at
1-800-377-4950; by fax at 1-800-223-8164; by e-mail at
<HHSTips@oig.hhs.gov>; or by mail at Office of the Inspector General,
Department of Health and Human Services, Attn: HOTLINE, 330 Independence
Avenue, SW, Washington, DC 20201. Fraud, waste, and abuse includes, but
is not limited to, embezzlement, misuse, or misappropriation of grant
funds or property, and false statements, whether by organizations or
individuals. Examples are theft of grant funds for personal use; using
funds for non-grant-related purposes; theft of federally owned property
or property acquired or leased under a grant; charging inflated building
rental fees for a building owned by the recipient; submitting false
financial reports; and submitting false financial data in bids submitted
to the recipient (for eventual payment under the grant).

Callers are not required to give their names and, if they do, their
identities are kept confidential. Contact information for the OIG and
the OIG hotline also is included in Part III of this policy statement.
In addition, some OPDIVs have a designated point of contact within the
OPDIV for receiving information from third parties about administrative
or programmatic concerns relating to an application or award. These
contacts may be found in Part IV or on the OPDIV's Web site.

The Federal government may pursue administrative, civil, or criminal
action under a variety of statutes that relate to fraud and false
statements or claims. Even if a grant is not awarded, the applicant may
be subject to penalties if the information contained in or submitted as
part of an application, including its certifications and assurances, is
found to be false, fictitious, or fraudulent.

The Program Fraud and Civil Remedies Act of 1986, 31 U.S.C. 3801 *et
seq*., provides for the imposition by HHS of civil penalties and
assessments against people who knowingly make false, fictitious, or
misleading claims to the Federal government for money, including money
representing grants, loans, or benefits. A civil penalty of not more
than \$5,000 may be assessed for each such claim. If a grant is awarded
and payment is made on a false or fraudulent claim, an assessment of not
more than twice the amount of the claim, up to \$150,000, may be made in
lieu of damages. Regulations at 45 CFR part 79 specify the process for
imposing civil penalties and assessments, including hearing and appeal
rights.

The Criminal False Claims Act, 18 U.S.C. 287 and 1001, provides for
criminal prosecution of a person who knowingly makes or presents any
false, fictitious, or fraudulent statements, representations, or claims
against the United States. Violations carry a maximum sentence of 5
years imprisonment (or 8 years for offenses involving international or
domestic terrorism) and/or a fine.

The Civil False Claims Act, 31 U.S.C. 3729(a), provides for imposition
of penalties and damages by the United States, through civil litigation,
against any person who knowingly makes a false or fraudulent claim for
payment, makes or uses a false record or false statement to get a false
claim paid or approved, or conspires to defraud the Federal government
to get a false claim paid. A "false claim" is any request or demand for
money or property made to the United States or to a contractor, grantee,
or other recipient, if the Federal government provides or will reimburse
any portion of the funds claimed. Civil penalties of \$5,500 to \$11,000
may be imposed for each false claim, plus damages of up to three times
the amount of the false claim.

Part II of this policy statement addresses the administrative remedies
included in 45 CFR parts 74 and 92 that the Federal government may use
after award if a recipient deliberately withholds information, submits
fraudulent information, or does not comply with applicable requirements.
These remedies include recovery of misspent grant funds.

### Paperwork Reduction Act

OMB clearance is required for OPDIV "information collections." An
information collection occurs when identical questions are posed to, or
identical reporting, recordkeeping, or disclosure requirements are
imposed on, 10 or more people, whether the collection is mandatory,
voluntary, or required to obtain or retain a benefit. All application or
reporting forms, whether paper or electronic, that an OPDIV requires an
applicant or recipient to complete and submit must receive OMB approval
before the OPDIV may collect the information. Information collection
under a cooperative agreement award or a grant award, under specified
conditions, also requires OMB clearance. See Part II of this policy
statement for OMB clearance requirements under the PRA.

### Sources of Information about HHS Grant Processes and Programs

The *Catalog of Federal Domestic Assistance* is a government-wide
publication available to members of the public that can be used to
obtain general information about assistance programs. It is updated
twice a year. A listing of current entries in the CFDA is available at
<http://www.cfda.gov/>. HHS programs are found under the prefix 93.XXX.

Grants.gov FIND is a government-wide source of information about
specific funding opportunities. HHS uses detailed funding opportunity
announcements to invite applications for specific funding opportunities.
Synopses of these announcements are posted at Grants.gov FIND. The
"Application and Review Processes" section of this policy statement
provides information about Grants.gov FIND and the types of HHS funding
opportunity announcements.

HHS and its individual OPDIVs maintain a number of information resources
about their grant programs and activities that can be accessed through
their Web sites. Some are descriptive materials that enable interested
parties to learn about OPDIV grant initiatives, funding opportunities,
and proposed and actual policy changes. Others provide historical data.
This information is updated periodically. The HHS Web site address for
grant-related materials and links to OPDIVs is
<http://www.hhs.gov/grantsnet/>.

## Application and Application Review Processes

This section provides an overview of the following:

-   Funding opportunity announcements

-   Types of entities generally eligible to receive grants

-   Types of applications

-   The application submission process (including application forms,
    application receipt points and deadlines, and use of information in
    applications)

-   The objective review of applications.

    Several of these areas also pertain after award. For example, an
    organization must remain eligible in order to continue to receive
    funding. In addition, post-award changes may invoke requirements
    that in this section are identified as "application" requirements,
    e.g., undertaking an activity not contemplated at the time of award
    that might affect a historic property.

### Grants.gov and Funding Opportunity Announcements

It is HHS policy to maximize competition for discretionary grants to the
greatest extent practicable. As such, OPDIVs promote the widest and
earliest possible dissemination of information for potential applicants
concerning the availability of competing funding opportunities. A
synopsis of each new competing funding opportunity is posted at
Grants.gov FIND. Grants.gov FIND
(http://grants.gov/applicants_grant_opportunities.jsp) is a
government-wide electronic site that includes, in a single place,
postings of available Federal grant and other financial assistance
opportunities. Each synopsis includes a brief description of the funding
opportunity, eligibility requirements, cost sharing or matching
requirements, application deadline date, and other information that
allows a potential applicant to determine whether it wants to read the
funding opportunity announcement to obtain further details about the
funding opportunity.

All HHS funding opportunity announcements follow the standard
government-wide format and must be available on the Internet.[^5] Each
synopsis is required to provide an electronic link to the full funding
opportunity announcement. For HHS, that link may be to the OPDIV or a
program Web site, the *Federal Register*, or the *NIH Guide for Grants
and Contracts*. An OPDIV also may choose to issue a notice in the
*Federal Register* that indicates the availability of the funding
opportunity announcement and its location (e.g., directing the reader to
the OPDIV or program Web site).

In addition, if the OPDIV can identify all eligible applicants, the
OPDIV may send the funding opportunity announcement directly to each
eligible organization (generally the business office with a copy to the
PI/PD). This may be the case if a competition is limited to a certain
class or group of eligible organizations (see "Eligibility" below); for
example, a program may be limited, by statute, to States, or a funding
opportunity may be limited to incumbent recipients, based on a justified
limitation of competition. Synopses/funding opportunity announcements
generally will allow applicants a minimum of 30 days to prepare and
submit applications.

There are several types of authorized exceptions to the requirements for
use of Grants.gov FIND, Internet posting of an announcement, and/or the
maximum time to prepare an application. The authorization is provided on
a case-by-case basis according to an internal HHS justification process.
The recognized exceptions include applications for single-source awards
and urgent applications.

A single-source application is one resulting from an OPDIV request to
only one applicant. Urgent applications are ones required to fulfill
immediate needs such as public health needs after a natural disaster.
For urgent awards, which may be made on a single-source or
limited-competition basis, OPDIVs are required to allow the maximum
feasible time for application preparation.

Because single-source (including urgent single-source) applications do
not represent competitive funding opportunities, information about them
is not posted at Grants.gov FIND. When an awarding office anticipates
making a single-source award, the OPDIV is required to publish in the
*Federal Register* a notice of its intent to make the award prior to or
simultaneous with issuance of the award.

### Eligibility

Authorizing legislation and governing programmatic regulations specify
eligibility for individual grant programs. In general, HHS grants may be
awarded to domestic public or private, non-profit or for-profit
organizations.[^6] Eligible organizations may include State, local, and
Indian tribal governments; institutions of higher education; other
non-profit organizations (including faith-based, community-based, and
tribal organizations); and hospitals. In some cases, grants also may be
made to foreign or international organizations. Eligibility for a
particular funding opportunity announcement is specified in the
Grants.gov FIND synopsis, with more detailed eligibility information
found in the funding opportunity announcement.

On the basis of a statute or regulation or a limitation, with
appropriate justification, described in a funding opportunity
announcement, an OPDIV may limit eligibility to, or exclude from
eligibility, classes or types of entities. Examples are limitations on
the participation of foreign entities, and programs under which only
small businesses are eligible applicants. In addition to organizational
eligibility, an OPDIV may include responsiveness criteria in a funding
opportunity announcement. Responsiveness criteria are objective
criteria, such as possessing a particular certification or, if specified
by the OPDIV, not exceeding a stated page limitation. These are
sometimes called "go-no-go" criteria.

The applicant may be required to provide proof of its status by
submitting documentation. For non-profit entities, except where the
grant program's authorizing statute sets particular limits, acceptable
evidence of eligibility includes the following:

-   A copy of a currently valid Internal Revenue Service tax exemption
    certificate

-   A statement from a State taxing body, State attorney general, or
    other appropriate State official certifying that the applicant
    organization has a non-profit status

-   A certified copy of the organization's certificate of incorporation
    or similar document that clearly establishes non-profit status

-   Any of the above proof for a State or national parent organization
    and a statement signed by the parent organization that the applicant
    organization is a local non-profit affiliate.

Any requirements, such as citizenship, affecting the eligibility of the
PI/PD or others (e.g., trainees) will be specified in the funding
opportunity announcement (which may provide a link or reference to
another document in which the requirements are found). For example, for
career awards, the individual to be trained must be a citizen or a
non-citizen national of the United States or have been lawfully admitted
for permanent residence at the time of award. A non-citizen national is
a person who, although not a citizen of the United States, owes
permanent allegiance to the United States. They generally are
individuals born in U.S. outlying possessions (American Samoa and Swains
Island)

-   on or after the date of formal acquisition of the possession, or

-   to parents who are non-citizen nationals and have had a residence in
    the United States or one of its outlying possessions before the
    birth of that individual.[^7]

In most cases, individuals are required to have the appropriate
citizenship status when the award is made rather than when the
application is submitted. For research grants, the applicant is required
to determine that individuals identified as key personnel possess visas
that will allow them to remain in this country long enough for them to
be productive on the research project. Recipient organizations are
expected to have policies, consistently applied regardless of the source
of funds, to address this area. If a grant is awarded and an
individual's visa will not allow a long enough stay to be productive on
the project, the grant may be terminated. Trainees must have been
lawfully admitted for permanent residence at the time of appointment.
This must be documented by the individual\'s possession of an alien
registration receipt card I-151 or I-551. Individuals on temporary or
student visas are not eligible to receive training grant (or fellowship)
support.

Upon receipt of applications, the awarding office performs an initial
screening for eligibility. Unless an applicant is required to submit
proof of eligibility, the authorized organizational representative's
signature on the application generally serves as assurance that the
applicant is eligible to apply for and receive an award (e.g., a small
business applying under the SBIR or STTR programs). However, an awarding
office may independently verify the applicant's status.

If an applicant is found to be ineligible or if the applicant or
application does not meet published responsiveness criteria, the OPDIV
will return the application without further review. If a grant is
awarded, in the post-award phase, the OPDIV monitors changes in
recipient and project status to ensure continued eligibility.

#### Suspension and Debarment

HHS regulations published in 45 CFR part 76[^8] implement the
government-wide debarment and suspension requirements for HHS's
non-procurement transactions. "Non-procurement transactions" include
grants and cooperative agreements (as well as scholarships, fellowships,
and loans). Organizations or individuals that are suspended, debarred,
declared ineligible, or voluntarily excluded from eligibility for
covered transactions by any Federal department or agency cannot, during
the period of suspension, debarment, or exclusion, receive HHS grants or
be paid from HHS grant funds, whether under a primary or lower-tier
transaction. Because individuals who have been debarred, suspended,
declared ineligible or who have been voluntarily excluded from covered
transactions may not receive Federal funds for a specified period of
time, charges made to HHS grants for such individuals (e.g., salary) are
unallowable.

Applicants are required to disclose if any of the following conditions
apply to them or their principals, including PIs and other key
personnel:

-   Within the 3-year period preceding the application, they have been
    convicted of, or had a civil judgment rendered against them for:

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-   fraud or a criminal offense in connection with obtaining, attempting
    to obtain, or performing a public (Federal, State, or local)
    transaction or contract under a public transaction;

-   violation of a Federal or State antitrust statute;

-   embezzlement, theft, forgery, bribery, falsification, or destruction
    of records; or

-   false statements or receipt stolen property.

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-   They are presently indicted or otherwise criminally or civilly
    charged by a governmental entity (Federal, State, or local) with
    commission of any of the offenses enumerated above.

-   Within a 3-year period preceding the application, they have had any
    public transaction (Federal, State, or local) terminated for cause
    or default.

Disclosure of unfavorable information will not necessarily cause an
OPDIV to return an application. If the applicant discloses unfavorable
information, the application still may undergo objective review (see
"Objective Review of Applications" in this section). If appropriate, the
OPDIV will consider the information as part of the determination of
whether to award a grant. The OPDIV also will consider any additional
information or explanation that an applicant elects to submit with the
disclosed information. If an awarding office makes an award and later
determines that the recipient failed to disclose relevant information,
the OPDIV may void the award, terminate the award for material failure
to comply with the terms and conditions of the award, or pursue any
other available remedies, including suspension and debarment.

In addition to reviewing any information submitted by the applicant, the
GMO will determine whether the applicant is included on the Excluded
Parties Listing System maintained by GSA.[^9] This system is a centrally
maintained government-wide database that includes the names of
organizations and individuals that have been debarred, suspended,
declared ineligible, or been voluntarily excluded; the reasons for that
status; and the duration of that status.

A variety of "lower-tier" transactions also are subject to these
requirements. Contracts (including individual consultants) under grants
(where the contract requires the provision of goods or services that
will equal or exceed \$25,000) and all subawards (including consortium
agreements) also are subject to these suspension and debarment rules. A
recipient is required to comply with the requirements of 45 CFR 76.300
through 76.365 as a condition of its award from HHS. The recipient must
include a requirement in any covered transaction at the next lower tier
to comply with those same regulatory provisions. One of those provisions
is that, before entering into a covered transaction, the recipient or
lower-tier participant must verify that the entity is not suspended or
debarred or otherwise excluded. This requirement extends to trainees
under an institutional training grant before their appointment. This
verification may be accomplished by checking the Excluded Parties
Listing System, collecting a certification from the organization or
individual, or adding a clause or condition to the covered transaction
with that entity.

#### Delinquency on Federal Debt

Any organization or individual that is indebted to the United States,
and has a judgment lien filed against it for a debt to the United
States, is ineligible to receive a Federal grant. Applicants are
required to indicate in their applications if they are delinquent on any
Federal debt. If the applicant discloses a delinquency, HHS may not
award the grant until the debt is satisfied or satisfactory arrangements
are made with the agency to which the debt is owed. In addition, once
the debt is repaid or satisfactory arrangements made, an OPDIV will
continue to take that delinquency into account when determining whether
the applicant would be responsible with respect to an HHS grant, if
awarded.

Anyone who has been judged to be in default on a Federal debt and who
has had a judgment lien filed against him or her should not be listed as
a participant in an application for an HHS grant until the judgment is
paid in full or is otherwise satisfied. No funds may be rebudgeted
following an award to pay such an individual. The OPDIV will disallow
costs charged to awards that provide funds to individuals in violation
of this requirement.

#### Lobbying

Applicants for (and recipients of) Federal grants, cooperative
agreements, contracts, and loans are prohibited by 31 U.S.C. 1352,
"Limitation on use of appropriated funds to influence certain Federal
contracting and financial transactions," from using appropriated Federal
funds to pay any person for influencing or attempting to influence any
officer or employee of an agency, a member of Congress, an officer or
employee of Congress, or an employee of a member of Congress with
respect to the award, extension, continuation, renewal, amendment, or
modification of any of these instruments. These requirements are
implemented for HHS in 45 CFR part 93, which also describes types of
activities, such as legislative liaison activities and professional and
technical services that are not subject to this prohibition.

Applicants for HHS grants with total costs expected to exceed \$100,000
are required to certify that they

-   have not made, and will not make, such a prohibited payment;

-   will be responsible for reporting the use of non-appropriated funds
    for such purposes; and

-   will include these requirements in consortium agreements, other
    subawards, and contracts under grants that will exceed \$100,000 and
    will obtain necessary certifications from those consortium
    participants and contractors.

Disclosure reporting is required after award as indicated in Part II of
this policy statement.

### Application Process

#### Types of Applications and Letters of Intent

Under the project period system, a project may be approved for a
multi-year period, but generally is funded in annual increments known as
"budget periods." This system provides the recipient with an indication
of the OPDIV's intent to non-competitively fund the project during the
approved project period as long as required information is submitted,
funds are available, and certain criteria are met. For some types of
projects, e.g., construction, an award covering multiple years is issued
at the outset at the fully funded amount. HHS uses the following types
of applications and requests for funding under the project period
system:

-   *New Application*---a request for financial assistance for a project
    or activity that is not currently receiving support, which must
    compete for support unless justified as a single-source application.

-   *Competing Continuation Application*---a request for funding to
    renew, by one or more additional budget periods (described as a
    "competitive segment"), a project period that would otherwise
    expire. This type of application is sometimes referred to as
    "renewal." These applications must compete for support in the same
    manner as new applications.

-   *Supplemental Application*---a request for an increase in support in
    a current budget period for expansion of the scope of the approved
    project or program or to meet an unforeseen increase in costs. The
    request may specify budgetary changes required for the remainder of
    the project period as well as for the current budget period.
    Supplemental applications requesting a programmatic expansion
    (change in scope) must undergo objective review and generally are
    required to compete for support; requests for administrative
    supplements may be awarded without objective review or competition.

-   *Revised (Amended) Application*---an unfunded application that the
    applicant has modified following objective review and has
    resubmitted for a subsequent review cycle.

-   *Non-Competing Continuation Application*---a request for funding,
    whether the OPDIV terms the request an application or a progress or
    performance report, for funding the second or subsequent budget
    period within an approved competitive segment. A non-competing
    continuation application does not compete with other applications
    for support.

Generally, funding opportunity announcements will invite the submission
of full applications at the outset. However, an OPDIV may require or
encourage submission of preliminary documents before submission of
applications for initial (new) support. If pre-applications are used,
they must be submitted as specified by the OPDIV in the funding
opportunity announcement. Pre-applications may be required as a means of
screening out, through an objective review process, those applications
with little or no chance for Federal funding before applicants incur
significant expenditures in preparing an application.

OPDIVs may request submission of LOIs preliminary to submission of
applications. LOIs generally are not required to include detailed
information about a proposed project or application. Instead, LOIs are
used to estimate the number of applications that may be submitted. When
used in this way, potential applicants are not required to submit them,
and, if an LOI is submitted, it is not binding and does not require the
respondent to submit an application.

#### Application Forms

Exhibit 2 lists the application forms used by the OPDIVs. The forms vary
by applicant or grant type and they may differ for non-competing
continuation applications and other applications. These forms and
associated instructions are available electronically at the specified
Web site and, as appropriate, at the Grants.gov APPLY site
(<http://www.grants.gov/Apply>). Questions about application forms and
instructions may be directed to the OPDIV to which the application will
be submitted.

  ------------------------------------------------------------------------------------------------------------------------
  Exhibit 2.                           
  Required Forms                       
  for Applications                     
  ----------------- ------------------ -----------------------------------------------------------------------------------
  Application title Form number        Use/availability

  Application for   SF 424             Face page for applications from State, local, and Indian tribal governmental
  Federal                              applicants for all types of grants, and nongovernmental applicants for construction
  Assistance                           and health services grants submitted through Grants.gov\
                                       <http://www.whitehouse.gov/omb/grants/grants_forms.html>

  Public Health     PHS 5161-1, with   All applications, including non-competing continuation applications, from State,
  Service Grant     budget and         local, and Indian tribal governmental applicants and non-governmental applicants
  Application for   assurances         for construction and health services projects\
  Use by State and  applicable to      <http://www.hhs.gov/forms/publicuse.html>
  Local Government  non-construction   
  Applicants and    (424-A and 424-B)  
  Nongovernmental   or construction    
  Applicants for    (424-C and 424-D)  
  Health Services                      
  Projects                             

  Research Grant    SF 424 (R&R)       Suite of forms for use as specified by the OPDIV when applying through Grants.gov
  Application                          

  Application for a PHS 398            New and competing continuation applications for research project grants and
  Public Health                        cooperative agreements, program projects, centers, career awards,
  Service Grant                        Kirschstein-National Research Service Awards institutional research training
                                       grants, research-related conference grants, and SBIR and STTR grants[^10]\
                                       Available at
                                       [http://grants.nih.gov/grants/forms.htm](http://grants1.nih.gov/grants/forms.htm)

  Application for   PHS 416-1          Kirschstein-National Research Service Award fellowships\
  Ruth L.                              [http://grants.nih.gov/grants/forms.htm](http://grants1.nih.gov/grants/forms.htm)
  Kirschstein                          
  National Research                    
  Service Award                        
  Individual                           
  Fellowship                           

  Public Health     PHS 2590           Non-competing continuation applications for research project grants and cooperative
  Service                              agreements, program projects, centers, career awards, Kirschstein-National Research
  Non-Competing                        Service Awards institutional research training grants, research-related conference
  Grant Progress                       grants (when applicable), and SBIR and STTR grants.\
  Report                               Available at
                                       [http://grants.nih.gov/grants/forms.htm](http://grants1.nih.gov/grants/forms.htm)

                                       
  ------------------------------------------------------------------------------------------------------------------------

#### Preparing an Application

Regardless of any preliminary documentation required or submitted, to be
considered for support, an applicant must be an eligible entity and must
submit a complete application that complies with OPDIV instructions. In
addition to indicating the substantive information required, OPDIVs may
specify page limitations or other formatting requirements, whether for
hard-copy or electronic applications.

A complete new or competing continuation application typically includes
a project description, detailed budget and budget justification,
biographical sketches of key personnel, and other information specified
in the funding opportunity announcement. The funding opportunity
announcement (or related application package) may provide specific
instructions for completion of these forms that differ from the standard
instructions for completion.

In preparing an application, an applicant should ensure that it
addresses requirements specified (or incorporated by reference) in the
funding opportunity announcement that relate to the project or program
narrative, public policy requirements, and the application budget.

The same project may not be submitted concurrently to two PHS OPDIVs, a
limitation that applies to the PHS OPDIVs only. Any such applications
will be returned to the applicant without review.

### Public Policy Requirements

Public policy requirements are requirements with a broader national
purpose than that of the Federal sponsoring program or award that an
applicant/recipient must adhere to as a prerequisite to and/or condition
of an award. Public policy requirements are established by statute,
regulation, or Executive order. In some cases they relate to general
activities, such as preservation of the environment, while, in other
cases they are integral to the purposes of the grant-supported project,
such as protecting the welfare or identity of subjects in research
projects. Some public policy requirements require an indication of
intent to comply with the requirement if an award is made, others
require submission of specific documentation before award (sometimes in
the form of a certification or assurance or an environmental
assessment), and still others require a demonstration of compliance that
is an integral part of the application review for technical or
scientific merit (e.g., the requirement in 45 CFR 46.111(a)(6) that,
when appropriate, the research plan must make adequate provision for
monitoring the data collected to ensure the safety of subjects).
Applicants and recipients should take particular note of these
requirements. If an applicant or recipient does not provide the required
information or the information is incomplete or is otherwise not
adequate, depending on the requirement the organization may be deemed
ineligible for award, the award may be delayed, an award may be
terminated, or other appropriate action may be taken by the OPDIV.

The signature of the authorized organizational representative on the
application indicates that the organization complies, or intends to
comply, with all applicable public policy requirements specified in the
funding opportunity announcement, generally by reference to another
document such as application instructions or a grants policy statement.
Some requirements (human subjects assurance, civil rights assurance,
environmental analysis) are in the form of separate documents that an
applicant must have on file with the applicable HHS office before an
award may be made. Other requirements may be satisfied by means of
"just-in-time" documentation submitted, at OPDIV request, by those
applicants being considered for award.

Part II contains general guidance to help the applicant/recipient
determine which public policy requirements apply to its activities after
award, including whether a requirement should be included in subawards
or contracts under the grant.

#### Research-Related Requirements

Just-in-time procedures may be used in relation to requirements for
submission of certification of IRB approval of the project's proposed
use of human subjects, verification of IACUC approval of the project's
proposed use of live vertebrate animals, and evidence of compliance with
the requirement for education in the protection of human research
participants. Applications from organizations with approved Animal
Welfare Assurances will be considered incomplete if they do not contain
the information concerning the use of vertebrate animals required as
part of the application (see application instructions for completing the
specific points that need to be addressed). In the case of apparent or
potential violation of the policy, the application may be referred back
to the applicant for further IACUC review.

The funding opportunity announcement will specify the timing and nature
of required just-in-time submissions. These requirements differ from any
need to describe the involvement of human subjects or animals in an
application, which is reviewed by the objective reviewers.

In addition, several OPDIVs have policies concerning the inclusion of
women, minorities, and children as subjects in their grant-supported
research. These policies, which implement Section 492B of the PHS Act,
42 U.S.C. 289 a-2, require that women and members of minority groups and
their subpopulations be included in OPDIV-supported research projects
involving human subjects, unless a clear and compelling rationale and
justification establishes that inclusion is inappropriate with respect
to the health of the subjects, the purpose of the research, or other
circumstances. When these policies apply (as specified in the funding
opportunity announcement), the applicant is required to address
inclusion of these groups in the application narrative, and the
applicant's plans will be assessed as part of the objective (peer)
review process. Failure to comply with this policy or to adequately
address use of human subjects and animals may adversely affect the score
for technical merit, which may result in the OPDIV not making an award.

#### National Environmental Policy Act 

NEPA, as amended, 42 U.S.C. 4331 *et seq*., establishes national policy
goals and procedures to protect and enhance the environment, including
protection against natural disasters. To comply with NEPA for its
grant-supported activities, HHS requires the environmental aspects of
construction grants (and certain non-construction projects as specified
by the OPDIV) to be reviewed and evaluated before final action on the
application.

If the OPDIV determines that NEPA applies (or may apply), the OPDIV will
address NEPA requirements in the funding opportunity announcement. If
the OPDIV has not indicated in the funding opportunity announcement that
NEPA applies, no environmental analysis is necessary, unless, in an
unusual situation, the applicant anticipates a significant environmental
consequence or, following receipt of an application, an OPDIV official
indicates the need for an environmental analysis. In those cases, an
environmental analysis must be provided with the application or as
requested by the OPDIV. An environmental analysis means a written review
that indicates the expected environmental effects resulting from the
proposed action, defines the current and future implications of those
effects, and lists any proposed actions or safeguards to avoid or reduce
any negative environmental effects. If NEPA applies, the application
must be accompanied by the applicant's own separately bound
environmental analysis to facilitate review and evaluation for
environmental concerns before approval or other action on the
application.

##### Public Disclosure

Section 102 of NEPA, 42 U.S.C. 4332, and EO 11514 (March 5, 1970)
provide for public comment and participation in the environmental impact
review process. If it is determined that there is an environmental
impact, applicants are required to publicly disclose the project in a
newspaper or other publicly available medium and to describe its
environmental impact concurrent with notification to the SPOC (see
"[Intergovernmental Review under Executive Order
12372](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part9.htm#_Intergovernmental_Review_Under%23_Intergovernmental_Review_Under)"
in Part I). An example of a suitable disclosure statement follows:

Notice is hereby given that the Uptown Community Health Center proposes
to construct additional space, partially utilizing Federal funds. The
proposed construction project is the addition of 2,700 square feet
connected to the existing Allen Building, which is located at 5333 Main
Street, Downtown, Ohio.

The Uptown Community Health Center has evaluated the environmental and
community impact of the proposed construction. There will be
construction noise and increased construction traffic during the
construction period. No significant permanent environmental impacts are
foreseen. All building permits and zoning approvals have been obtained.
In accordance with Executive Order 11514 (March 5, 1970), which
implements the National Environmental Policy Act of 1969, as amended,
any individual or group may comment on, or request information
concerning, the environmental implications of the proposed project.
Communications should be addressed to the Uptown Community Health
Center, and must be received by (date). The Federal grant application
may be reviewed at 5333 Main Street, during normal working hours.

#### Preservation of Cultural and Historic Resources

Under Section 106 of the National Historic Preservation Act (16 U.S.C.
470 *et seq*., agencies must consider the effect on historic properties
before making a decision on whether to fund a project. Historic
properties include any district, site, building, structure, or object
that is listed on, or is eligible for listing on, the National Register
of Historic Places (National Register). In addition, the Advisory
Council on Historic Preservation must be afforded a reasonable
opportunity to comment on such undertakings. The purchase, construction,
or alteration/renovation of a facility with Federal funds, whether that
activity is the purpose of the project or is one activity under a grant
with a broader purpose (e.g., alteration of a facility under a research
project), is an "undertaking" as that term is defined under 36 CFR
800.16(y). However, these are not the only activities that may result in
the need to comply with Section 106. The procedures to be followed by
Federal agencies in complying with Section 106 are set forth in the
Council's regulations at 36 CFR part 800.

Pursuant to the regulations at 36 CFR part 800, before deciding to make
an award, the OPDIV approving official for a grant-funded project or
program must determine the project's or program's effect on historic
properties in consultation with the involved State Historic Preservation
Officers, Tribal Historic Preservation Officers, representatives of the
local government, affected Indian tribes and Native Hawaiian
organizations, the applicant organization, and other interested parties.
In order for an OPDIV to carry out these responsibilities, applicants
(and recipients) must identify to the OPDIV any property listed or
eligible for listing on the National Register of Historic Places that
will be affected by the award. Generally this will be at the time of
application, but may not be known until after award as a result of a
planned post-award change.

The term "effect" is defined under 36 CFR 800.16(i) as an "alteration to
the characteristics of a historic property qualifying it for inclusion
in or eligibility for the National Register." The project's impact on
the property's use, character, location, and setting, including whether
it will have an adverse effect, are considered when determining its
effect on the historic property. The project or program will be
considered to have an adverse effect if it will endanger those qualities
that make the property eligible for inclusion in the National Register.

If the undertaking will have an adverse effect on a historic property,
the consultation process must proceed as provided under 36 CFR 800.6 in
the effort to develop either a memorandum of agreement or a programmatic
agreement detailing the steps necessary to avoid, minimize, or mitigate
the adverse effects. In cases where the consultation is terminated
without an agreement to resolve the adverse effects, the OPDIV will
follow the applicable requirements of 36 CFR 800.7. These requirements
must be satisfied before approval of the application or a post-award
change to an approved application.

Under the Council's regulations, applicants/recipients may initiate the
Section 106 compliance consultations when authorized to do so by the
OPDIV. If the OPDIV provides that authorization, it must notify the
involved State Historic Preservation Officers, Tribal Historic
Preservation Officers, and other consulting parties that the applicant
has been given that authority. The OPDIV remains legally responsible for
all findings and determinations made on its behalf. Each organization
that plans to use OPDIV funds for purchase, construction, or renovation
of a facility, other activity specified by the OPDIV, or activity deemed
by the applicant to have an effect on a historic property must ensure
that it has provided complete and accurate documentation to assist the
agency with meeting its Section 106 compliance responsibilities. Failure
to obtain this clearance and make this assurance will delay action on an
application or change request. The State Historic Preservation Liaison
Officer or the National Trust for Historic Preservation may be contacted
for additional details.

#### Protection of Wetlands

EO 11990 provides that federally funded construction and improvements
minimize the destruction, loss, or degradation of wetlands. The EO
provides that, in furtherance of Section 101(b)(3) of NEPA (42 U.S.C.
4331(b)(3)), Federal agencies, to the extent permitted by law, must
avoid undertaking or assisting with new construction located in wetlands
unless the head of the agency finds that there is no practicable
alternative to such construction, and that the proposed action includes
all practicable measures to minimize harm to wetlands that may result
from such use. In making this finding, the head of the agency may take
into account economic, environmental, and other pertinent factors. The
public disclosure requirement described above also pertains to early
public review of any plans or proposals for new construction in
wetlands.

#### Uniform Relocation Act and Real Property Acquisition Policies Act

The Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970 (the Uniform Relocation Act), 42 U.S.C. 4601 *et seq*.,
applies to all programs or projects undertaken by Federal agencies or
with Federal financial assistance that cause the displacement of any
person.

The HHS requirements for complying with the Uniform Relocation Act are
set forth in 49 CFR part 24. Those regulations include uniform policies
and procedures regarding treatment of displaced people. They encourage
entities to negotiate promptly and amicably with property owners so
property owners' interests are protected and litigation can be avoided.

### The Application Budget

Applicants generally will be required to prepare a detailed budget as
part of the application consistent with instructions in the funding
opportunity announcement and application instructions. Among other
things, applicants need to understand the types of costs that are
allowable under the program or award, the cost principles to which it
will be subject, differences between direct and indirect costs,
circumstances requiring establishment of an indirect cost rate or
research patient care cost rate, and any requirement for non-Federal
participation (in the form of matching or cost sharing).

In general, HHS discretionary grant awards provide for reimbursement of
actual, allowable program/project costs incurred. Except for those types
of awards for which HHS will not reimburse indirect costs as specified
below, program/project costs consist of allowable direct costs plus the
allocable portion of indirect costs of the organization, less applicable
credits (as described in Part II and in the cost principles). A "direct
cost" is any cost that can be specifically identified with a particular
project, program, or activity or that can be directly assigned to such
activities relatively easily and with a high degree of accuracy. Direct
costs include, but are not limited to, salaries, travel, equipment, and
supplies directly benefiting the grant-supported project or activity.
Most organizations also incur costs for common or joint objectives that,
therefore, cannot be readily identified with an individual project,
program, or organizational activity. These costs are identified as
"indirect costs" or "facilities and administrative costs." They
generally include facilities operation and maintenance costs,
depreciation, and administrative expenses. Organizations must have or
negotiate an indirect cost rate to support a request for reimbursement
of indirect costs (with limited exceptions specified below).

The various sets of government-wide (or, in the case of hospitals, HHS)
cost principles establish the general standards for the allowability,
including allocability, of costs and provide detailed guidance on the
cost accounting treatment of costs as direct or indirect costs.
Applicability of a particular set of cost principles depends on the type
of organization making the expenditure. For example, if a State
government recipient collaborates with a university as a contractor
under the grant, the State would be subject to the cost principles for
States, while the university would be subject to the cost principles for
institutions of higher education. The allowability of costs also is
subject to any requirements or limits established in the governing
statute, program regulations, or the terms and conditions of awards.
Because these considerations apply throughout the grants process, they
are addressed in detail in Part II.

#### Indirect Costs

If indirect costs are reimbursable under an award, applicants may
request indirect costs in their applications. Indirect costs should not
be requested in applications for the following types of awards:

-   Construction grants

-   Conference grants

-   Fellowships.

The following types of organizations may not request indirect costs:

-   Federal institutions

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-   International or foreign organizations if the grant will be
    performed entirely outside the territorial limits of the United
    States (indirect costs may be paid to the American University,
    Beirut, which is not considered a foreign organization, and the
    World Health Organization).

For other types of awards and organizations, OPDIVs will not reimburse
indirect costs unless the recipient has an indirect cost rate covering
the applicable activities and period. Indirect cost rates are negotiated
by DCA, DFAS in the Office of Acquisition Management and Policy, NIH
(responsible for negotiating indirect cost rates for for-profit entities
receiving awards from HHS), or other Federal agency with cognizance for
indirect cost rate negotiation. However, as indicated in OMB Circular
A-87, certain governmental organizations other than Indian tribal
governments are not required to submit their indirect cost rate
proposals to the Federal government, but must retain the documentation
related to their indirect cost requests for audit purposes. Further,
awarding offices will not require a recipient to establish an indirect
cost rate if the organization's total operations consist of a single
grant-supported project or if the organization appropriately and
consistently treats all costs as direct costs to projects and accounts
for them as such. In the latter case, the GMO must be satisfied that the
organization's accounting system can adequately identify and support all
costs as direct costs to the project or program. This includes being
able to identify and segregate costs on the basis of a process that
assigns costs commensurate with the benefits provided to individual
projects or programs.

If an organization is advised by the GMO of the need to establish a
rate, the GMO will refer the organization to the appropriate office.
Indirect cost proposals must be prepared in accordance with the
applicable cost principles and guidance provided by the cognizant office
or agency. Further information concerning the establishment of indirect
cost rates and the reimbursement of indirect costs may be obtained from
DCA or DFAS.

Even if an organization has an established indirect cost rate, under
training grants (including education grants and career awards) to all
types of entities other than State, local, or Indian tribal governmental
agencies, OPDIVs reimburse indirect costs at a fixed rate. Therefore,
when requesting indirect costs, these applicants should budget indirect
costs at a rate of 8 percent of modified total direct costs, exclusive
of tuition and fees, expenditures for equipment, and subawards and
contracts in excess of \$25,000. Training grant applications from State,
local, or Indian tribal governmental agencies may request full indirect
cost reimbursement. State universities and hospitals are not considered
governmental agencies for this purpose.

#### Matching or Cost Sharing

If the funding opportunity announcement specifies that matching or cost
sharing is required, it also will specify the following:

-   Whether the inclusion of matching or cost sharing in the application
    is an eligibility requirement or is an evaluation criterion

-   The nature of the requirement, e.g., whether it is a fixed
    percentage or the OPDIV cannot fund more than a specified percentage
    of costs

-   Required documentation, such as letters of commitment.

The terms "matching" and "cost sharing" are often used interchangeably.
However, "matching" usually refers to a statutorily specified
percentage, whether specified as a fixed or minimum percentage of
non-Federal participation in allowable program or project costs that
must be contributed by a recipient in order to be eligible for Federal
funding or a not-to-exceed percentage of Federal participation. "Cost
sharing" refers to any situation in which the recipient shares in the
costs of a project other than as statutorily required matching. This
includes situations in which contributions are voluntarily proposed by
an applicant and accepted by the OPDIV by inclusion in the approved
budget as shown in the NoA.

Unless restricted by statute or regulation, matching or cost sharing may
be provided as direct and/or indirect costs, consistent with the
recipient's accounting system---and its usual method of charging for
similar items---and any restrictions or limitations in the applicable
cost principles. Recipient contributions may be derived from any
non-Federal source; from Federal sources if received as fees, payments,
or reimbursements for the provision of a specific service, such as
patient care reimbursements received under Medicare or Medicaid; or from
other program income, if authorized by the OPDIV (see Part II).
Otherwise, unless there is specific statutory authority, Federal funds
may not be used to match HHS grant funds.

The source and amount of costs and/or the value of third-party in-kind
contributions proposed by the applicant to meet a matching or
cost-sharing requirement must be identified in the application budget.
The determination of allowability of costs for matching or cost-sharing
purposes is based on the same requirements, including the cost
principles, that apply to use of Federal funds. Also, the classification
of a contributed cost as either direct or indirect must be consistent
with the classification of other costs incurred by the recipient for the
same purpose in like circumstances. Guidance on the valuation of in-kind
contributions is found in 45 CFR 74.23, 45 CFR 92.24, and Part II of
this policy statement.

#### Research Patient Care Costs

HHS provides funds for research patient care costs under grants to
hospitals to cover the costs of routine services for inpatients or
ancillary services for inpatient or outpatient subjects/volunteers
involved in research studies. In order to receive reimbursement for
research patient care costs, any hospital that, as a direct recipient of
OPDIV funds, expects to incur more than \$100,000 in patient care costs
in any single budget period on a single OPDIV grant must either have in
place, or take steps to negotiate, a research patient care rate
agreement with the cognizant DCA office. Detailed information on
research patient care costs is included in Part II.

#### Third-Party Reimbursement 

Under health services delivery programs, OPDIV funding may serve as seed
money to allow recipients to develop necessary capabilities and the
ability to obtain funding from non-Federal sources or may be conditioned
on recipients maximizing their funding from other sources, with Federal
funding for the difference between those amounts and their costs of
operation. In addition to any required narrative discussion of applicant
plans to seek third-party reimbursement for delivery of health services
and establishment of fee schedules to charge beneficiaries according to
their ability to pay, the applicant may be required to show in the
application budget the amounts expected to be collected from third-party
payors (program income). More detailed discussion of program income is
included in Part II.

### Submitting an Application 

Many OPDIV programs accept applications electronically through
Grants.gov APPLY. Grants.gov provides a secure and reliable
government-wide single portal for applying for Federal grants
electronically, simplifying the grant application process and reducing
paperwork. For OPDIV programs allowing submission of applications
through Grants.gov, the OPDIV will post an application package at
Grants.gov APPLY that includes the funding opportunity announcement, the
required forms, and submission instructions. However, even if an OPDIV
accepts applications electronically, an applicant may choose to submit
its application in hard copy. Funding opportunity announcements also
will indicate the date and time by which a competing application must be
submitted in order to be considered as part of that competition, the
address to which the application must be submitted (which may be a
contractor), and, if hard copy, the number of copies. Generally, OPDIVs
will require submission of an original and two copies of an application.

All applications must include a DUNS number, which is obtained from Dun
& Bradstreet (D&B) at 1-866-705-5711 or at
<http://ccr.dnb.com/ccr/pages/CCRSearch.jsp>. To determine if an
organization already has a DUNS number or [to obtain a DUNS
number](http://www.grants.gov/RequestaDUNS), the organization should
contact D&B. There is no charge to obtain a DUNS number.

Before using Grants.gov APPLY, an applicant organization must register
with Central Contractor Registration (<http://www.ccr.gov/>) and the
credential provider. Central Contractor Registration can be accomplished
online or by telephone (1-888-227-2423). The DUNS number is required
before initiating registration with Central Contractor Registration.
Specific details about Central Contractor Registration and credential
provider registration associated with the use of Grants.gov are
available at
<http://www.grants.gov/GetStartedRegister?type=organization>.
Organizations are not required to register with Central Contractor
Registration if they submit applications by any means other than through
Grants.gov, e.g., in hard copy.

For funding opportunity announcements with common deadline dates for
application submission, to be considered timely, an application must be
sent on or before the deadline date. The established receipt or deadline
date may be waived only in extenuating circumstances such as extreme
weather (e.g., floods or hurricanes), widespread disruptions of mail
service, or disruptions of electronic or other services.

The deadline is the same for applications submitted electronically. For
applications submitted through Grants.gov, the OPDIV will determine
whether an application was submitted before the deadline based on the
time it is received and clocked in at the Grants.gov portal.
Applications may be sent through the United States Postal Service or
delivered by a courier delivery service. Some OPDIVs will not accept
applications hand-carried by individuals. For hard-copy applications, if
sent on time to the address specified in the funding opportunity
announcement (with documented proof of mailing) but received after the
deadline, an application can be accepted for review only if it is
received in time for orderly processing. If the receipt date falls on a
weekend or a Federal holiday, the deadline date is extended to the next
business day. If an application is sent to any address other than that
specified in the funding opportunity announcement, it may result in a
delay in processing or the application not being reviewed.

### Executive Order 12372 and Public Health System Reporting Requirements

Certain HHS program/activities are subject to the requirements of EO
12372, as amended, "Intergovernmental Review of Federal Programs," and
the HHS implementation at 45 CFR part 100, and to other
intergovernmental cooperation provisions. These requirements allow State
and local governments to provide input on applications submitted (or to
be submitted) for funding consideration. If EO 12372 might apply to a
program or applicants or applications under the program, the following
information will be included in the funding opportunity announcement:

-   Even if a program is covered by EO 12372, not all States participate
    in this process. To determine whether it must comply with a State
    process under\
    EO 12372, an applicant should check the information maintained by
    OMB at its Web site
    (<http://www.whitehouse.gov/omb/grants/spoc.html>). If the State
    does not participate, no SPOC contact will be listed. Applications
    from federally recognized Indian tribal governments are not subject
    to EO 12372 requirements, even under covered programs.

-   Before an award decision, the OPDIV must allow adequate time---60
    days from the established deadline date for receipt of applications
    for a new or other competing application, or 30 days from the
    established deadline date for receipt of the application for a
    non-competing continuation application---for completion (or
    expiration) of the State process.

The primary purpose of the Public Health System Reporting requirements
is to provide State and/or local health agencies with information on
proposed in-State grant activity by certain applicants applying for
funding under health care delivery programs. When applicable, the
applicant must prepare and submit a Public Health System Impact
Statement. Applicants are required to submit the following information
to the head of the appropriate State and local health agencies in the
areas to be impacted no later than the application receipt due date:

-   A copy of the application face page

-   A summary of the project, not to exceed one page, which describes
    the population to be served and the services to be provided, and
    describes the coordination planned with the appropriate State and
    local health agencies (the application abstract may be substituted
    for the one-page Public Health System Impact Statement).

Although these requirements are specific to health care delivery
programs, they are related to the EO 12372 requirements. The linkage
occurs when a State and/or local health official wants to review an
application, in whole or in part, submitted under these programs. In
that case, the official must contact the SPOC for a copy of the
application.

### Use of Application Information

Applicants are discouraged from submitting information considered
proprietary unless it is deemed essential for proper evaluation of the
application. However, if the application contains information that the
applicant organization considers to be trade secrets, information that
is commercial or financial, or information that is privileged or
confidential, the pages containing that information should be identified
as specified in the funding opportunity announcement or application
instructions.

When non-Federal reviewers are used, the funding opportunity
announcement or application instructions will specify that applicants
have the option of omitting specific salary rates or amounts for
individuals specified in the application budget and, if required by the
OPDIV, Social Security numbers for individuals. For hard-copy
applications, this can be accomplished by including the information in
the original, but omitting it from the application copies. The copies
may include summary salary information. For electronic applications, the
information must be supplied to the OPDIV as part of the submission. The
funding opportunity announcement will specify if the applicant should
indicate, in the application or in a separate form, whether it wants to
use that option. If the detailed information is an integral part of the
application, the OPDIV will ensure that the information is not shared
with reviewers.

The OPDIV will protect the information contained in an application from
unauthorized disclosure, consistent with the need for objective review
of the application and the requirements of the Freedom of Information
Act and the Privacy Act. However, if a grant is awarded as a result of
or in connection with an application, the Federal government has the
right to use or disclose the information to the extent authorized by
law. Post-award considerations concerning release of information and
access to research data are addressed in Part II of this policy
statement.

#### Freedom of Information Act

The Freedom of Information Act, 5 U.S.C. 552, provides individuals with
a right to access certain records in the possession of the Federal
government. The government may withhold information pursuant to the
exemptions and exclusions contained in the act. The exact language of
the exemptions can be found in the act. Additional guidance on the
exemptions and how they apply to certain documents can be found in the
HHS regulations implementing the FOIA (45 CFR part 5). (Also see the HHS
Web site <http://www.hhs.gov/foia/>.)

OPDIVs generally do not release trade secrets and commercial, financial,
and otherwise intrinsically valuable items of information that are
obtained from a person or organization and are privileged or
confidential; information that, if released, would adversely affect the
competitive position of the person or organization; and patent or other
valuable commercial rights of the person or organization.

OPDIVs generally will withhold the following types of records or
information related to an application in response to a FOIA request:

-   Pending competing grant applications

-   Unfunded new and competing continuations and competing supplemental
    applications

-   Evaluative portions of site visit reports and objective review
    summary statements, including scores.

If, after reviewing a FOIA request, an OPDIV has reason to believe that
information in its records could reasonably be considered releasable,
the appropriate OPDIV Freedom of Information office will notify the
applicant (recipient), through the PI, before the information is
released. The PI/PD will be given an opportunity to identify potentially
patentable or commercially valuable information that the PI/PD believes
should not be disclosed. After OPDIV consideration of the response, the
PI/PD and applicant (recipient) will be informed if the OPDIV does not
agree with the PI's/PD's position. If a document contains both
disclosable and nondisclosable information, the nondisclosable
information will be deleted and the balance of the document will be
disclosed. This restriction does not limit the Federal government's
right to use the information if it is obtained without restriction from
another source.

The HHS regulations implementing FOIA provide that only designated
Freedom of Information officers may deny requests for information.
Requests for information, the release of which is believed to be exempt
under FOIA, are referred to the OPDIV Freedom of Information officer
along with written documentation of the rationale for nondisclosure. If
the Freedom of Information officer determines that the requested
information is exempt from release under FOIA, the requester may appeal
that determination to the Deputy Assistant Secretary for Public Affairs
(Media), HHS. Additional information on the FOIA process is available at
OPDIV Web sites.

Post-award considerations concerning release of information and access
to research data are addressed in Part II of this policy statement.

#### Privacy Act

The Privacy Act of 1974, 5 U.S.C. 552a, and its implementing regulations
(45 CFR part 5b) provide certain safeguards for information about
individuals maintained in a system of records (i.e., information may be
retrieved by the individual's name or other identifying information).
These safeguards include the rights of individuals to determine what
information about them is maintained in Federal agencies' files (hard
copy or electronic) and how it is used; to have access to such records;
and to correct, amend, or request deletion of information in their
records that is inaccurate, irrelevant, or outdated.

Records maintained by OPDIVs with respect to grant applications, grant
awards, and the administration of grants may be subject to the
provisions of the Privacy Act. For example, OPDIVs that maintain or
access any such records by name of an individual, such as by the name of
the PI/PD, are subject to the Privacy Act.

Parties other than PIs/PDs may request the release of Privacy Act
records. Such requests are processed in the same manner as FOIA
requests. For example, information requested by co-investigators in
grant applications is released to them only when required under FOIA
because they have no right of access under the Privacy Act. When
releasing information about an individual to a party other than that
individual, OPDIVs will balance the individual's right to privacy with
the public's right to know as provided by the FOIA.

Records maintained by non-Federal parties ordinarily are not subject to
the requirements of 45 CFR part 5b.

### Objective Review of Applications

Applications under discretionary grant programs, whether received in
response to a funding opportunity announcement, solicited from a single
source, or received as unsolicited requests for funding, are subject to
objective review. Objective review is an advisory review of
discretionary grant applications conducted by a minimum of three
unbiased reviewers with expertise in the programmatic area for which
applications are submitted.

The review is intended to provide advice to the individuals responsible
for making award decisions. Objective review is essential to ensuring
selection of applications that best meet the needs of the program
consistent with published evaluation criteria and providing assurance to
the public that the evaluation process is impartial and fair.

Peer review is a form of objective review required by statute. It is an
assessment of scientific or technical merit of applications by
individuals with knowledge and expertise equivalent (peer) to that of
the individuals whose applications of support they are reviewing. The
statute may specify the types of reviewers or composition of review
groups and include other requirements related to the approval of
applications, e.g., review by a National Advisory Council or equivalent
body that performs a second level of review for programmatic
considerations that augments the results of the peer review process.

Application review criteria must be published as part of the funding
opportunity announcement. Typical review criteria may include the
approach to the proposed project or program, whether to meet a health
need or carry out an investigator-initiated research project; the
potential of the program or project to contribute to meeting the
objectives or purpose of the supporting program; the method used to
evaluate project or program results; resources of the applicant
organization, e.g., facilities, and the capabilities of its staff,
including the PI/PD; and reasonableness and appropriateness of the
budget. Reviewers also will review proposed involvement of human
subjects and vertebrate animals, as applicable, and assess compliance
with specified public policy requirements, e.g., inclusion of women and
minorities in research. IRB approval may be required before objective
review of a new or competing continuation application unless the OPDIV
has implemented just-in-time procedures.

Applications received in response to the same funding opportunity
announcement generally are scored individually and then ranked with
other applications reviewed by the same review group in their order of
relative programmatic, technical, or scientific merit. The highest
ranked applications are those that receive priority consideration for
award within available funding. Authorized program officials ("approving
officials") make final award decisions from among those applications
receiving a favorable objective review and, where applicable, National
Advisory Council recommendation. OPDIV approving officials also may
apply other factors, e.g., geographical distribution, as specified in
the funding opportunity announcement. The decision to fund an
application will be communicated to the applicant by issuance of a NoA.
The decision not to fund an application will be communicated by letter.
Depending on OPDIV procedures, the letter may include a summary of the
review ("summary statement") and may be sent to the PI/PD and/or to the
person who signed the application as the official authorized to obligate
the applicant. A copy of a letter transmitting a summary statement also
will be provided to the individual named as the PI/PD for the project
covered by the application if that individual is not the individual that
signed the application.

If an application has received a favorable objective review but is not
expected to be funded in the current cycle due to funding constraints,
the application may be held for one or more additional cycles and
compete with other applications submitted for that subsequent cycle as
long as the subsequent cycle(s) requirements remain unchanged from those
under which the application was originally submitted. If an application
is unsuccessful, under programs that have annual review cycles or
multiple reviews within a year, the applicant may submit a revised
application for review in a future review cycle. Some OPDIVs limit the
number of times an application may be revised and resubmitted (see Part
IV for any OPDIV limitations).

### Disposition of Applications

All incomplete applications, ineligible, or otherwise non-compliant
applications, and applications determined to be non-responsive to
funding opportunity announcement requirements will not be reviewed. An
applicant may withdraw an application from consideration at any time
before an award is issued.

An applicant whose application receives a favorable review will be
notified of additional information that it may be required to submit or
other actions it or the OPDIV may or must take. The process leading to
an award, including the business management review performed by the GMO,
is described in the next section, "Business Management Reviews and Other
Pre-Award Activities."

An unsuccessful applicant will be advised by letter (sent to the
individual signing the application on behalf of the organization) that
its application will not be held for further consideration or be funded.
The decision not to award a grant, or to award a grant at a particular
funding level, is discretionary and is not subject to appeal to any
OPDIV or HHS official or board.

### Business Management Reviews and Other Pre-Award Activities

Applications receiving a favorable objective review that an OPDIV is
considering for funding are reviewed for other considerations. These
include, as applicable, cost analysis of the project/program budget,
assessment of the applicant's management systems, ensuring continued
applicant eligibility, and compliance with any public policy
requirements, including those requiring just-in-time submissions. The
applicant may be asked to submit additional information (such as an
updated budget or "other support" information or verification of IACUC
review) or to undertake certain activities (such as negotiation of an
indirect cost rate) in anticipation of an award. However, even at this
point in the process, such requests do not guarantee that an award will
be made. Following review of all applicable information, the OPDIV
approving and business management officials will determine whether an
award can be made, if special conditions are required, and what level of
funding is appropriate.

Although these reviews and determinations occur before an awarding
office makes a new or competing extension award, recipients must
continue to comply with eligibility and public policy requirements and
maintain adequate management systems throughout the period of support.

#### Assurances of Compliance

##### Civil Rights

Before an awarding office may make an award to a domestic organization,
the authorized organizational representative must assure, by means of
the signature on the application, that the organization has on file with
OCR an Assurance of Compliance with the statutes enforced by OCR. The
assurance, Form HHS 690, is filed for the organization and is not
required for each application. If the application has been recommended
for funding and the applicant organization does not have an Assurance of
Compliance on file with OCR, it will receive, from the awarding office,
the required form and instructions for completion and submission.

Domestic organizations that receive funding from recipients as
subrecipients or contractors under grants rather than directly from HHS
also are required to file an HHS 690. The recipient is responsible for
determining whether those organizations have the required assurance on
file and, if not, ensuring that it is filed with OCR.

##### Human Subjects and Animal Welfare

Under just-in-time procedures, following objective review, applicant
organizations should proceed with IRB review for those applications that
have not yet received IRB approval and which the OPDIV has indicated may
be in a fundable range.

If, at the time of award, a recipient does not have an applicable
assurance approved by OHRP and certification of IRB review and approval,
the awarding office will place a restriction on the award so that no
human subjects research can be conducted or supported until the
assurance and certification of IRB review and approval have been
obtained and accepted.

The *PHS Policy on Humane Care and Use of Laboratory Animals* (the PHS
Policy) requires applicants proposing to use vertebrate animals in
HHS-supported activities to file a written Animal Welfare Assurance with
OLAW. An awarding office will not make an award for research involving
live vertebrate animals unless the applicant organization and all
performance sites are operating in accordance with an approved Animal
Welfare Assurance and provide verification that the IACUC has reviewed
and approved those sections of the application that involve use of
vertebrate animals, in accordance with the requirements of the PHS
policy. If an application is selected for award and the verification of
IACUC review has not been submitted, the awarding office will contact
the organization with instructions for negotiating an assurance or
submitting the IACUC verification.

#### Cost Analysis 

The GMO will ensure that a cost analysis is performed on any application
that requires a detailed budget. Cost analysis involves obtaining cost
breakdowns, validating cost data, evaluating specific elements of cost,
and examining data to determine the necessity for, and the
reasonableness and allowability of, the costs included in the
application budget. The extent of cost analysis depends on the
complexity of the project, prior experience with the applicant, and
other factors. Information on the applicable cost principles and on
allowable and unallowable costs is provided in Part II.

#### Assessment of Financial and Other Management Systems

In addition to considering the specific information provided in the
application, the GMO determines the adequacy of the applicant's
financial and business management systems, including property management
and procurement systems, that will support the expenditure of and
accountability for grant funds if an award is made.
Applicants/recipients are expected to have systems, policies, and
procedures in place by which they manage grant funds and grant-supported
activities. They may use their existing systems for this purpose as long
as organizational policies are consistently applied regardless of the
source of funds and systems meet the standards and requirements set
forth in 45 CFR part 74 or 92, as applicable (see "Financial
Management").

If an applicant has no prior experience with Federal grants or
cost-reimbursement contracts, the GMO may review the applicant's
financial management and other management systems before award, or
within a reasonable time after award, to determine their adequacy and
acceptability. For an applicant with prior OPDIV or other Federal
cost-reimbursement awards, the GMO may review recent audit reports and
other available information to determine whether the applicant's
management systems meet the established standards. The GMO will advise
the applicant if additional information is required. On the basis of the
review results, the GMO will determine the need for any corrective
action and may impose special conditions on the award. The OPDIV also
will oversee the recipient's systems as part of its routine post-award
monitoring.

## The Notice of Award

The NoA is the legal document issued to the receiving organization that
indicates an award has been made and that funds may be requested from
the designated HHS payment system or office. A NoA, showing the amount
of Federal funds authorized for obligation and any future-year
commitments, is issued for each budget period in the approved project
period (see "Project Period and Budget Period" below). Until an awarding
office has issued a NoA for the initial budget period, any costs
incurred by the applicant for the project are incurred at its own risk.
A revised NoA may be issued during a budget period to effect an action
resulting in a change in the period or amount of support or other change
in the terms and conditions of award. An awarding office generally will
not issue a revised NoA to reflect a recipient's post-award rebudgeting.

The NoA sets forth pertinent information about the grant, including, but
not limited to, the following:

-   Grant identification number ("grant number")

-   Statutory authority for the award and any applicable program
    regulations

-   Name of recipient organization

-   Name of the PI/PD

-   Approved project period and budget period start and end dates

-   Amount of Federal funds authorized for obligation by the recipient

-   Amount of matching or cost sharing (if applicable)

-   Amount of anticipated future-year commitments (if applicable)

-   Names of the cognizant OPDIV/awarding office, PO, GMO, and GMS

-   Applicable terms and conditions of award, either by reference or
    inclusion.

-   The HHS-assigned EIN (based on the IRS EIN), which must be used to
    request payment.

A recipient indicates acceptance of an award and its associated terms
and conditions by drawing or requesting funds from the designated HHS
payment system or office. For cooperative agreement awards, an awarding
office may require the recipient to formally accept the award by signing
and returning the NoA or separate document. When signature is required,
the authorized organizational representative must be the signatory of
the NoA. If a recipient cannot accept the award, including the legal
obligation to perform in accordance with award terms and conditions, the
organization should notify the GMO immediately upon receipt of the NoA.
If resolution cannot be reached, the GMO will void the grant. The
OPDIV's determination of applicable terms and conditions of award or a
GMO's denial of a request to change the terms and conditions is
discretionary and not subject to appeal. Once the award is accepted by
the recipient, the contents of the NoA are binding on the recipient
unless and until modified by a revised NoA signed by the GMO.

### Project Period and Budget Period

For most grants, HHS uses the project period system of funding. Under
this system, projects are programmatically approved for support in their
entirety, but are funded in annual increments called budget periods. The
total project period consists of the initial competitive segment, any
additional competitive segments authorized by approval of a competing
continuation application, and any non-competing extensions. A
competitive segment generally will be no longer than 5 years (exclusive
of non-competing extensions). A single award covering the entire period
of support generally is used if the project is solely for construction
(or major A&R of real property) or if the total planned period of
support will be less than 18 months.

The length of the project period (whether for one or more than one
competitive segment) is determined by the OPDIV on the basis of the
following:

-   Any statutory, regulatory, or administrative requirements

-   The length of time requested by the applicant

-   Any limitation on the length of the project period recommended by
    the objective or reviewers

-   The OPDIV's programmatic determination of the frequency of objective
    review necessary for managing the project, program, or activity

-   The OPDIV's funding principles as specified in the funding
    opportunity announcement.

Most NoAs document approval of a project period that extends beyond the
budget period for which funds are provided, indicating the OPDIV's
intention to provide continued financial support. The amounts shown for
subsequent years represent projections of future funding levels based on
the information available at the time of the initial award. Such
projected levels of future support are contingent on satisfactory
progress, the availability of funds, and the continued best interests of
the Federal government. They are not guarantees that the project or
program will be funded or will be funded at those levels, and they
create no legal obligation to provide funding beyond the ending date of
the current budget period as shown in the NoA.

Recipients are required to submit a non-competing continuation
application or annual progress report as a prerequisite to approval and
funding of each subsequent budget period (non-competing continuation
award) within an approved project period. A decision to fund the next
budget period will be formalized by the issuance of a NoA indicating the
new budget period and the amount of new funding. Part II explains this
process in greater detail.

Budget periods usually are 12 months long; however, shorter or longer
budget periods may be established for programmatic or administrative
reasons. The NoA will show the total approved budget for the applicable
budget period, including direct costs and, if applicable, indirect costs
as well as any required matching or cost sharing. SBIR and STTR awards
also may include a fee; however, no other HHS awards may include profit
or fee.

The initial and each subsequent NoA that provides funding sets forth the
amount awarded under that action, amounts previously awarded for that
budget period, and, after the initial budget period, any authorized
carryover (see Part II). The amount awarded also is shown generally with
a categorical (line item) budget breakdown. The recipient has certain
rebudgeting flexibility within the overall amount awarded as specified
in Part II. However, the total amount awarded (direct and indirect costs
and fee, where applicable) is the OPDIV's maximum financial obligation
to the recipient under that award; in other words, it is the ceiling on
the amount payable to the recipient under that award. Once an award is
made, the OPDIV is not obligated to make any supplemental or other award
or to provide additional funding for indirect costs or other purposes.

If an applicant/recipient waives reimbursement of the full indirect
costs to which it is otherwise entitled based on its negotiated rate,
the awarding office will either not award indirect costs or will award
only partial indirect costs, as appropriate. In general, regardless of
the type of recipient, the negotiated indirect cost rate(s) in effect at
the beginning of the competitive segment will be used to determine the
amount budgeted for indirect costs for each year of the competitive
segment. If the rate agreement does not extend to the end of the project
period, the last rate in effect will be used to establish the total cost
commitment for any remaining future years.

Under limited circumstances, the GMO may award indirect costs where none
were previously awarded or may increase the amount previously awarded.
If an award does not include an amount for indirect costs because the
applicant or recipient has not established a rate or did not submit a
timely rate proposal and the recipient subsequently establishes a rate,
the GMO may amend the award to provide an appropriate amount for
indirect costs if the amendment can be made using funds from the same
Federal fiscal year in which the award was made. However, the amount
will be limited to the indirect costs applicable to the period after the
effective date of the rate agreement. This provision does not affect
local governmental agencies that are not required to submit their
indirect cost proposals to the Federal government. They may charge
indirect costs to grants based on the rate computations they prepare and
keep on file for subsequent Federal review.

### Other Terms and Conditions

In addition to, or in lieu of, the standard terms and conditions of
award specified in the HHS GPS, the OPDIV may use terms and conditions
for program-specific or award-specific reasons. For example, if, on the
basis of a recipient's application or other available information, the
GMO finds---at the time of award or at any time subsequent to
award---that the recipient's management systems and practices are not
adequate to ensure the appropriate stewardship of grant funds or to
achieve the objectives of the award, the GMO may impose special, more
restrictive terms and conditions on the award in accordance with 42 CFR
52.9 and 45 CFR 74.14 or 92.12. For example, an OPDIV could require a
recipient to obtain prior approval for expenditures that ordinarily do
not require such approval or to provide more frequent reports. In
addition to closer monitoring, the OPDIV may assist the recipient with
taking any necessary corrective action.

## Payment

HHS grant payments may be made by one of several advance payment
methods, including SMARTLINK II/ACH, CASHLINE/ACH, or cash request, or
by cash request on a reimbursement basis, as specified in the NoA and as
described in this section. Payments under grants generally are made as
advance payments. Except as indicated in this section, grant payments
are made by the PMS, operated by HHS's DPM, in accordance with
Department of the Treasury and OMB requirements, as implemented by
45 CFR 74.22 and 92.21. These requirements are intended to minimize the
time elapsing between the transfer of funds from the Federal government
and disbursement by a recipient. Therefore, although the grant may be
financed by advance payments, the intent is that recipients draw funds
as needed.

Federal funds advanced to the recipient should be fully disbursed
(checks written, signed, and issued to the payees) by the close of
business the next work day after receipt of the funds. The potential for
excessive Federal cash on hand exists each time a recipient does not
disburse Federal funds timely. The recipient is responsible for
determining when the Federal funds have been deposited into its bank
account for each drawdown, ensuring that the funds are fully disbursed
by the close of business the next work day after they are received, and
immediately returning undisbursed Federal cash on hand to PMS. An OPDIV
may use reimbursement as the method of payment, in lieu of advance
payment, if cash management requirements are not met. Advances made by
recipients to subrecipients and contractors under grants must conform to
substantially the same standards of timing and amount that govern
advances to the recipient.

Operational guidance for recipients is contained in the *DHHS Manual for
Recipients Financed under the Payment Management System* (available
through the HHS Web site at
<http://www.dpm.psc.gov/doc/hhsrecmanual.pdf>). Inquiries regarding
payments should be directed to DPM at the address shown in Part III.

OPDIVs make payments under awards to foreign or international
organizations, if those organizations do not have a U.S. bank account,
and awards to agencies of the Federal government.

### SMARTLINK II/ACH

The SMARTLINK II/ACH method of advance payment makes direct deposit of
funds to a recipient's bank account and requires recipients to have
Internet access to submit a request for funds to PMS. SMARTLINK II/ACH
provides funds the day following the request with direct deposit using
the ACH process of the Federal Reserve Bank (Richmond, Virginia).

### CASHLINE/ACH

The CASHLINE/ACH method of advance payment provides for direct deposit
of funds to the recipient's bank account using a touch-tone telephone to
dial directly to a "voice-response" computer located at PMS.
CASHLINE/ACH makes funds available the day following the request with
direct deposit using the Federal Reserve Bank's ACH process.

### Cash Request

Recipients not eligible for an unrestricted advance of funds by
SMARTLINK II/ACH or CASHLINE/ACH must submit a cash request as specified
in the NoA. Cash requests usually are submitted monthly using SF 270,
Request for Advance or Reimbursement. The cash request may be on either
an advance or reimbursement basis, as specified by the awarding office.
Cash requests are used when a recipient's cash management must be
closely monitored (for example, recipients whose financial management
systems do not meet the standards specified in 45 CFR 74.21 or 92.20) or
under programs where reimbursement financing is appropriate. A recipient
also may be converted from an unrestricted advance payment method to a
cash request basis if, during post-award administration, the GMO
determines that the recipient is not complying with the cash management
requirements or other requirements of the award, including the
submission of complete and timely reports.

If the cash request is for an advance payment, the recipient may request
funds monthly on the basis of expected disbursements during the
succeeding month and the amount of Federal funds already on hand. A
request for reimbursement may be submitted more often, if authorized.
For timely receipt of cash, a recipient must submit the request through
the awarding office early enough for it to be forwarded to PMS at least
2 weeks before the cash is needed. PMS makes payment electronically
through the ACH process upon receipt of the approved payment request
from the awarding office.

## Post-Award Administration

The recipient, as the direct and primary recipient of HHS grant funds,
is responsible for managing the day-to-day operations of grant-supported
activities and is accountable to the OPDIV for the performance of the
project, program, or activity; the appropriate expenditure of grant
funds by all parties; and all other obligations of the recipient.
Recipients may use their established controls and policies, as long as
they are consistent with award requirements. HHS seeks to foster within
recipient organizations an organizational culture that is committed to
compliance with Federal and HHS grant regulations, policies, and
procedures. Actions to achieve this result should include a clear
delineation of the roles and responsibilities of the organization's
staff, both programmatic and administrative; written policies and
procedures; training; management controls and other internal controls;
performance assessment; administrative simplifications; and information
sharing.

In addition, to fulfill their role in regard to the stewardship of
Federal funds, OPDIVs monitor their awards to identify potential
problems and areas where technical assistance might be necessary. This
active monitoring is accomplished through review of recipient-generated
reports, including audit reports, and correspondence; site visits; and
other information available to the OPDIV. The names and telephone
numbers of the individuals responsible for monitoring the programmatic
and business management aspects of a project or activity will be
provided to the recipient at the time of award.

Monitoring will continue for as long as the OPDIV retains a financial
interest in the project, program, or activity as a result of property
accountability, audit, and other requirements that may continue for a
period of time after the grant is administratively closed out and the
OPDIV is no longer providing active grant support.

Post-award requirements are addressed in detail in Part II.

# Part II: Terms and Conditions of Award

## Overview of Terms and Conditions of Award

### General, Program-Specific, and Award-Specific Terms and Conditions

The terms and conditions of award include general administrative and
public policy requirements that apply to all recipients or certain
classes of awards or activities; program-specific-requirements; and, as
necessary, award-specific requirements. This part of the HHS GPS serves
as the general administrative and public policy terms and conditions of
HHS discretionary grant and cooperative agreement awards, as referenced
in NoAs. It addresses the applicability of those terms and conditions
based on the type of award, recipient, or grant-supported activity.

The HHS GPS is consistent with the requirements of 45 CFR parts 74 and
92, only some of which are repeated or highlighted here, and is not
intended to be all-inclusive. All awards or a specified subset of awards
also may be subject to additional requirements, such as those included
in appropriations acts and Executive orders. Notice of requirements not
specified in the HHS GPS generally will be provided in the NoA, but such
notice is not required for the award to be subject to the requirements
of pertinent statutes and regulations.

In addition to all of the applicable administrative requirements of 45
CFR part 74 or 92, as appropriate for the type of recipient, and other
general terms and conditions, each award also is subject to the
requirements of the authorizing program legislation and program
regulations, if any. These requirements will be specified or
incorporated by reference in the NoA. An individual award also may
contain award-specific terms and conditions included in full text. For
example, the GMO may include terms and conditions necessary to address
concerns about a recipient's management systems. For cooperative
agreement awards, the NoA will specifically address the substantial
programmatic involvement of Federal staff and any other special terms
(e.g., ownership of data and research results, and use of equipment)
appropriate for the cooperative agreement.

### Effect and Order of Precedence

Any waivers of or deviations from these terms and conditions must be
requested and approved in writing by the GMO. OPDIV determination of
applicable terms and conditions of award or a GMO's denial of a request
to change the terms and conditions is discretionary and not subject to
appeal.

A recipient indicates acceptance of an award and its associated terms
and conditions by requesting and accepting funds from PMS or the
designated HHS payment office for that award. If a recipient cannot
accept an award, including the legal obligation to perform in accordance
with its provisions, it should notify the GMO immediately upon receipt
of the NoA. If resolution cannot be reached, the GMO will void the
grant. Once an award is accepted by a recipient, the contents of the NoA
are binding on the recipient and the OPDIV unless and until modified by
a revised NoA signed by the GMO.

If there is a perceived conflict between or among statutory and
regulatory requirements, the terms and conditions in this part of the
HHS GPS, Part IV of the HHS GPS and award-specific terms and conditions,
or if the recipient has questions concerning award terms and conditions,
the recipient should request written clarification from the GMO. This
may be done at any time; however, if the inclusion of the term or
condition would cause the organization not to accept the award or to be
unable to comply, the question should be raised before award acceptance.
In the case of a conflict, statutes and regulations take precedence over
requirements or restatements of statutory or regulatory requirements in
the HHS GPS, and OPDIV or award-specific requirements take precedence
over Part II of the HHS GPS.

### Flow-Down of Requirements under Subawards and Contracts under Grants

The terms and conditions in the HHS GPS apply directly to the recipient
of HHS funds. The recipient is accountable for the performance of the
project, program, or activity; the appropriate expenditure of funds
under the award by all parties; and all other obligations of the
recipient, as cited in the NoA. In general, the requirements that apply
to the recipient, including public policy requirements, also apply to
subrecipients and contractors under grants, unless an exception is
specified.

## Public Policy Requirements 

This section addresses public policy requirements applicable to some or
all HHS applications and/or awards. These requirements are in addition
to the pre-award requirements specified in Part I or supplement the
coverage in Part I by indicating how a requirement applies following
award. The term "public policy" indicates that the requirement is based
on social, economic, or other objectives or considerations that may be
attached to the expenditure of Federal funds by recipients,
subrecipients (including consortium participants), or contractors under
grants, in general, or may relate to the expenditure of Federal funds
for specified activities, e.g., research. In addition to cross-cutting
requirements based in statutes, regulations, or Executive orders that
some or all Federal agencies must apply to their grant programs, HHS
recipients also are subject to requirements that apply to the use of
grant funds as contained in HHS annual appropriations acts. Some of
those requirements are included here because they have been included in
the appropriations acts for several years without change, but those
requirements may be changed or other requirements may be added in the
future.

As indicated in Part I, by signing the application, the authorized
organizational official certifies that the organization will comply with
applicable public policies. Once a grant is awarded, the recipient is
responsible for establishing and maintaining the necessary processes to
monitor its compliance and that of its employees and, as appropriate,
subrecipients and contractors under the grant with these requirements;
taking appropriate action to meet the stated objectives; and informing
the OPDIV of any problems or concerns. If a grant is awarded on the
basis of false or misrepresented information, or if a recipient does not
comply with these public policy requirements, the OPDIV or other
cognizant office may take any necessary and appropriate action with
respect to the recipient or the award.

Exhibit 3, which includes public policy requirements cited in Part I and
in this section, contains information to help the applicant/recipient
determine what public policy requirements and objectives apply to its
activities. The exhibit indicates, by exception, whether a requirement
applies to less than all OPDIVs meeting the threshold requirement; for
example, if a requirement applies to research awards, it applies to all
OPDIVs awarding research grants unless otherwise specified. The table
indicates---by "Y" for Yes or "NA" for Not Applicable---whether a given
public policy requirement normally would apply to the recipient and
under what conditions and whether it is required to be flowed down under
subawards or contracts under grants for routine goods and services.
However, even if the exhibit indicates that a requirement is not
applicable, that public policy requirement potentially could be
applicable in a specific situation, for example, if a contract under a
grant involves research activity. Therefore, this exhibit should be used
as general guidance only. The applicant/recipient should consult the
funding opportunity announcement and the NoA (if applicable) as well as
the statute, regulations, or other cited policies or documents for
complete information and should contact the GMO if there is any question
concerning the applicability of a particular public policy requirement
or objective.

+---------------+-------------+------------+------------+-------------+
| Exhibit 3.    |             |            |            |             |
| Public Policy |             |            |            |             |
| Requirements  |             |            |            |             |
+===============+=============+============+============+=============+
| Requirement   | Ap          | Recipient  | Su         | Contractor  |
|               | plicability |            | brecipient | under grant |
|               |             |            | (including | (routine    |
|               |             |            | consortium | good        |
|               |             |            | pa         | s/services) |
|               |             |            | rticipant) |             |
+---------------+-------------+------------+------------+-------------+
| A             | All types   | Y          | Y          | NA          |
| cknowledgment | of awards   |            |            |             |
| of Federal    |             |            |            |             |
| Funding       |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Activities    | All types   | Y          | Y          | Y           |
| Abroad        | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Age           | All         | Y          | Y          | Y           |
| D             | a           |            |            |             |
| iscrimination | pplications | (NA to     | (NA to     | (NA to      |
| Act of 1975   | from and    | foreign    | foreign    | foreign and |
|               | awards to   | and        | and        | int         |
|               | domestic    | int        | int        | ernational\ |
|               | entities    | ernational | ernational | org         |
|               |             | orga       | orga       | anizations) |
|               |             | nizations) | nizations) |             |
+---------------+-------------+------------+------------+-------------+
| Animal        | A           | Y          | Y          | Y           |
| Welfare       | pplications |            |            |             |
|               | and awards  |            |            |             |
|               | for         |            |            |             |
|               | activities  |            |            |             |
|               | involving   |            |            |             |
|               | w           |            |            |             |
|               | arm-blooded |            |            |             |
|               | animals     |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Certificates  | Research    | Y          | Y          | Y           |
| of            | awards      |            |            |             |
| Co            | (includes   |            |            |             |
| nfidentiality | research    |            |            |             |
|               | training in |            |            |             |
|               | each case   |            |            |             |
|               | specified   |            |            |             |
|               | as          |            |            |             |
|               | "research") |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Civil Rights  | All         | Y\         | Y\         | Y\          |
| Act of 1964   | a           | (NA to     | (NA to     | (NA to      |
| (Title VI)    | pplications | foreign    | foreign    | foreign and |
|               | from and    | and        | and        | int         |
|               | awards to   | int        | int        | ernational\ |
|               | domestic    | ernational | ernational | org         |
|               | entities    | orga       | orga       | anizations) |
|               |             | nizations) | nizations) |             |
+---------------+-------------+------------+------------+-------------+
| Clean Air and | Co          | Y          | Y          | Y           |
| Clean Water   | nstruction\ |            |            |             |
| Act           | grants      |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Co            | All         | Y          | Y          | Y           |
| nfidentiality | research    |            |            |             |
| of\           | awards and  |            |            |             |
| P             | awards to   |            |            |             |
| atient/Client | substance   |            |            |             |
| Records       | abuse       |            |            |             |
|               | programs    |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Controlled    | All types   | Y          | Y          | Y           |
| Substances    | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Drug-Free     | All covered | Y          | NA         | NA          |
| Workplace     | a           |            |            |             |
|               | pplications |            |            |             |
|               | and awards  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Education\    | All         | Y\         | Y\         | Y\          |
| Amendments of | a           | (NA to     | (NA to     | (NA to      |
| 1972\         | pplications | foreign    | foreign    | foreign and |
| (Title IX)    | from and    | and        | and        | in          |
|               | awards to   | inte       | int        | ternational |
|               | domestic    | rnational\ | ernational | org         |
|               | entities    | org        | orga       | anizations) |
|               |             | anizations | nizations) |             |
+---------------+-------------+------------+------------+-------------+
| Elimination   | All awards  | Y          | Y          | Y           |
| of\           | involving   |            |            |             |
| Architectural | c           |            |            |             |
| Barriers to   | onstruction |            |            |             |
| the           | or major    |            |            |             |
| Handicapped   | alteration  |            |            |             |
|               | and         |            |            |             |
|               | renovation  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Financial     | All         | Y\         | Y          | NA          |
| Conflict of   | a           | (NA to     |            |             |
| Interest      | pplications | Phase I of |            |             |
|               | and awards  | the        |            |             |
|               | for         | SBIR/STTR  |            |             |
|               | research    | programs   |            |             |
|               | except      | and to     |            |             |
|               | those for   | Federal    |            |             |
|               | Phase I of  | ins        |            |             |
|               | the         | titutions) |            |             |
|               | SBIR/STTR   |            |            |             |
|               | program and |            |            |             |
|               | awards to   |            |            |             |
|               | Federal     |            |            |             |
|               | insti       |            |            |             |
|               | tutions/PHS |            |            |             |
|               | OPDIVs^a^   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Flood         | C           | Y          | NA         | NA          |
| Insurance     | onstruction |            |            |             |
|               | awards      |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Hatch Act     | Awards to   | Y          | Y          | NA          |
|               | State or    |            |            |             |
|               | local       |            |            |             |
|               | governments |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Health        | All awards  | Y\         | Y\         | Y\          |
| Insurance     | to covered  | (if a      | (if a      | (if a       |
| Portability   | entities    | covered    | covered    | covered     |
| and           |             | entity)    | entity)    | entity)     |
| A             |             |            |            |             |
| ccountability |             |            |            |             |
| Act (HIPAA)   |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Historic      | All awards  | Y          | Y          | Y           |
| Properties/\  | that        |            |            |             |
| A             | include     |            |            |             |
| rchaeological | major or    |            |            |             |
| Sites         | minor A&R,  |            |            |             |
|               | co          |            |            |             |
|               | nstruction, |            |            |             |
|               | or any work |            |            |             |
|               | that will   |            |            |             |
|               | result in   |            |            |             |
|               | physical    |            |            |             |
|               | changes to  |            |            |             |
|               | real        |            |            |             |
|               | property    |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Human         | Research    | Y          | Y          | Y           |
| Embryonic     | awards      |            |            |             |
| Stem Cell     |             |            |            |             |
| Research      |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Human         | Research    | Y          | Y          | Y           |
| Subjects      | a           |            |            |             |
|               | pplications |            |            |             |
|               | and awards  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| In            | Research    | Y          | Y          | Y           |
| vestigational | awards      |            |            |             |
| New Drug      |             |            |            |             |
| A             |             |            |            |             |
| pplications/\ |             |            |            |             |
| In            |             |            |            |             |
| vestigational |             |            |            |             |
| Device        |             |            |            |             |
| Exceptions    |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Limited       | All types   | Y          | Y          | NA          |
| English       | of awards   |            |            |             |
| Proficiency   |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| National\     | A           | Y          | Y          | NA          |
| Environmental | pplications |            |            |             |
| Policy Act    | and awards  |            |            |             |
| (including    | for         |            |            |             |
| Public        | c           |            |            |             |
| Disclosure)   | onstruction |            |            |             |
|               | and major   |            |            |             |
|               | alteration  |            |            |             |
|               | and         |            |            |             |
|               | renovation  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Pro-Children  | All awards  | Y          | Y          | Y           |
| Act           | performed   |            |            |             |
|               | in          |            |            |             |
|               | facilities  |            |            |             |
|               | where       |            |            |             |
|               | children    |            |            |             |
|               | are served  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Protection    | All         | Y          | Y          | Y           |
| of\           | research    |            |            |             |
| Research      | awards/PHS  |            |            |             |
| Subjects'     | OPDIVs      |            |            |             |
| Identity      |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Protection of | C           | Y          | Y          | Y           |
| Wetlands      | onstruction |            |            |             |
|               | awards      |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Public Health | All types   | Y          | Y          | Y           |
| Security and  | of awards   |            |            |             |
| Bioterrorism  |             |            |            |             |
| Preparedness  |             |            |            |             |
| and Response  |             |            |            |             |
| Act           |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Recombinant   | A           | Y          | Y          | Y           |
| DNA Molecules | pplications |            |            |             |
| and Human     | and awards  |            |            |             |
| Gene Transfer | for         |            |            |             |
| Research      | research    |            |            |             |
+---------------+-------------+------------+------------+-------------+
| R             | All         | Y\         | Y\         | Y\          |
| ehabilitation | a           | (NA to     | (NA to     | (NA to      |
| Act of 1973   | pplications | foreign    | foreign    | foreign and |
| (Section 504) | from and    | and        | and        | int         |
|               | awards to   | int        | int        | ernational\ |
|               | domestic    | ernational | ernational | org         |
|               | or          | orga       | orga       | anizations) |
|               | ganizations | nizations) | nizations) |             |
+---------------+-------------+------------+------------+-------------+
| Research      | A           | Y          | N          | NA          |
| Misconduct    | pplications |            |            |             |
|               | and awards  |            |            |             |
|               | for         |            |            |             |
|               | research    |            |            |             |
|               | and         |            |            |             |
|               | research    |            |            |             |
|               | t           |            |            |             |
|               | raining/PHS |            |            |             |
|               | OPDIVs      |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Research on   | Research    | Y          | Y          | Y           |
| Human Fetal   | awards      |            |            |             |
| Tissue        |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Research on   | Research    | Y          | Y          | Y           |
| Tr            | awards      |            |            |             |
| ansplantation |             |            |            |             |
| of Fetal      |             |            |            |             |
| Tissue        |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Resource      | All awards  | Y          | Y          | Y           |
| Conservation  | to States   |            |            |             |
| and Recovery  | or agency   |            |            |             |
| Act           | of a        |            |            |             |
|               | political   |            |            |             |
|               | subdivision |            |            |             |
|               | of a State  |            |            |             |
|               | (which for  |            |            |             |
|               | this        |            |            |             |
|               | purpose     |            |            |             |
|               | includes    |            |            |             |
|               | State and   |            |            |             |
|               | local       |            |            |             |
|               | i           |            |            |             |
|               | nstitutions |            |            |             |
|               | of higher   |            |            |             |
|               | education   |            |            |             |
|               | or          |            |            |             |
|               | hospitals)  |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Restriction   | All types   | Y          | Y          | Y           |
| on Abortions  | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Restriction   | All types   | Y          | Y          | Y           |
| on\           | of awards   |            |            |             |
| Distribution  |             |            |            |             |
| of Sterile    |             |            |            |             |
| Needles       |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Safe Drinking | C           | Y          | Y          | Y           |
| Water Act     | onstruction |            |            |             |
|               | awards      |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Seat Belt Use | All types   | Y          | NA         | NA          |
|               | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Smoke-Free\   | All awards  | Y          | NA         | NA          |
| Workplace     |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Standards of  | All types   | Y          | NA         | NA          |
| Conduct       | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| Uniform       | All awards  | Y          | Y          | NA          |
| Relocation    |             |            |            |             |
| Assistance    |             |            |            |             |
| and Real      |             |            |            |             |
| Property      |             |            |            |             |
| Acquisition   |             |            |            |             |
| Policies Act  |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
| U.S. Flag Air | All types   | Y          | Y          | Y           |
| Carriers      | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| USA PATRIOT   | All types   | Y          | Y          | Y           |
| Act           | of awards   |            |            |             |
+---------------+-------------+------------+------------+-------------+
| ^a^ PHS       |             |            |            |             |
| OPDIVs        |             |            |            |             |
| awarding      |             |            |            |             |
| research      |             |            |            |             |
| grants        |             |            |            |             |
| include AHRQ, |             |            |            |             |
| CDC, FDA,     |             |            |            |             |
| HRSA, OPHS,   |             |            |            |             |
| and NIH.      |             |            |            |             |
+---------------+-------------+------------+------------+-------------+
|               |             |            |            |             |
+---------------+-------------+------------+------------+-------------+

### Standards of Conduct for Recipient Employees 

HHS requires recipients to establish safeguards to prevent employees,
consultants, members of governing bodies, and others who may be involved
in grant-supported activities from using their positions for purposes
that are, or give the appearance of being, motivated by a desire for
private financial gain for themselves or others, such as those with whom
they have family, business, or other ties. These safeguards must be
reflected in written standards of conduct. Except as provided below, HHS
does not require a recipient to establish separate standards of conduct
if it maintains such standards for its non-grant-supported activities,
as long as those standards are consistent with State and local laws and
cover, at a minimum, expected conduct in regard to financial interests,
gifts, gratuities and favors, nepotism, and such other areas for
governmental organizations as political participation and bribery.

The standards also must do the following:

-   Address the conditions under which outside activities,
    relationships, or financial interests are proper or improper.

-   Provide for advance notification of outside activities,
    relationships, or financial interests to a responsible
    organizational official.

-   Include a process for notification and review by the responsible
    official of potential or actual violations of the standards.

-   Specify the nature of penalties that the recipient may impose. These
    penalties would be in addition to any penalties that HHS or a
    cognizant Federal agency may impose for infractions that also
    violate the terms and conditions of award.

Recipients are not required to submit its general standards of conduct
to HHS for review or approval. However, a copy must be made available to
each of the recipient's officers; each employee and consultant working
on the grant-supported program, project, or activity; each member of the
governing board, if applicable; and, upon request, the OPDIV. The
recipient is responsible for enforcing its standards of conduct, taking
appropriate action on individual infractions, and, in the case of
financial conflict of interest, informing the GMO if the infraction is
related to a research award (see "Other Research-Related
Requirements---Financial Conflict of Interest" for the specific
regulatory requirements that apply to financial conflict of interest
under research grants).

If a suspension or separation action is taken by a recipient against a
PI/PD or other key personnel, the recipient must request prior approval
of the proposed replacement.

### Hatch Act

The Hatch Act restricts political activity of executive branch employees
of the federal government and District of Columbia government employees
(5 U.S.C. 7321--7328) and State or local officers or employees (5 U.S.C.
1501--1528). "State or local officer or employee" means an individual
employed by a State or local agency whose principal employment is in
connection with an activity that is financed in whole or in part by
loans or grants made by the United States or a Federal agency. (Certain
State educational or research institutions are excluded from this
definition.)

### Age Discrimination Act of 1975

The Age Discrimination Act of 1975, 42 U.S.C. 6101 *et seq*., prohibits
discrimination on the basis of age in any program or activity receiving
Federal financial assistance. The HHS implementing regulations are
codified at 45 CFR part 91.

### Civil Rights Act of 1964

Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d *et seq*.,
provides that no person in the United States will, on the grounds of
race, color, or national origin, be excluded from participation in, be
denied the benefits of, or be subjected to discrimination under any
program or activity receiving Federal financial assistance. The HHS
implementing regulations are codified at 45 CFR part 80.

### Education Amendments of 1972

Title IX of the Education Amendments of 1972, 20 U.S.C. 1681, 1682,
1683, 1685, and 1686, provides that no person in the United States will,
on the basis of sex, be excluded from participation in, be denied the
benefits of, or be subjected to discrimination under any educational
program or activity receiving Federal financial assistance. The HHS
implementing regulations are codified at 45 CFR part 86.

### Rehabilitation Act of 1973

Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, as
amended, provides that no otherwise qualified handicapped individual in
the United States will, solely by reason of the handicap, be excluded
from participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial
assistance. These requirements pertain to the provision of benefits or
services as well as to employment. The HHS implementing regulations are
codified at 45 CFR parts 84 and 85.

### Biological Agents and Toxins

#### USA PATRIOT Act

The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act)
amends 18 U.S.C. 175--175c. Among other things, it prescribes criminal
penalties for possession of any biological agent, toxin, or delivery
system of a type or in a quantity that is not reasonably justified by a
prophylactic, protective, bona fide research, or other peaceful purpose.
The act also establishes restrictions on access to specified materials.
"Restricted persons," as defined by the act, may not possess, ship,
transport, or receive any biological agent or toxin that is listed as a
select agent (see "[Public Health Security and Bioterrorism Preparedness
and Response
Act](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part4.htm#_Public_Health_Security%23_Public_Health_Security)"
in this subsection).

#### Public Health Security and Bioterrorism Preparedness and Response Act

The Public Health Security and Bioterrorism Preparedness and Response
Act of 2002, 42 U.S.C. 201 Note, is designed to provide protection
against misuse of select agents and toxins, whether inadvertent or the
result of terrorist acts against the U.S. homeland, or other criminal
acts (see 42 U.S.C. 262a). The act was implemented, in part, through
regulations published by CDC at [42 CFR part
73](http://www.cdc.gov/od/sap/docs/42cfr73.pdf), Select Agents and
Toxins. Copies of these regulations are available from the Import Permit
Program and the Select Agent Program, respectively, CDC, 1600 Clifton
Road, MS E-79, Atlanta, GA 30333; telephone: 404-498-2255. These
regulations also are available at
<http://www.cdc.gov/od/ohs/biosfty/shipregs.htm>.

Research involving select agents and recombinant DNA molecules also is
subject to the *NIH Guidelines for Research Involving DNA Molecules*
(see "[Guidelines for Research Involving DNA Molecules and Human Gene
Transfer
Research](http://www4.od.nih.gov/oba/rac/guidelines/guidelines.html)" in
this section).

### Human Subjects

HHS regulations for the protection of human subjects, in 45 CFR part 46,
implement Section 491(a) of the PHS Act, 42 U.S.C. 289(a), and provide a
systematic means, based on established, internationally recognized
ethical principles, to safeguard the rights and welfare of individuals
who participate as subjects in research activities supported or
conducted by HHS.

The Federal regulations require that each institution, domestic or
foreign, engaged in human subjects research provide OHRP with a
satisfactory assurance of compliance with the regulations, unless the
research is exempt under 45 CFR 46.101(b). An institution becomes
engaged in human subjects research when its employees or agents (1)
intervene or interact with living individuals for research purposes, or
(2) obtain individually identifiable private information for research
purposes (45 CFR 46.102(f)). For purposes of 45 CFR part 46, research
means a systematic investigation, including research, development,
testing, and evaluation, designed to develop or contribute to
generalizable knowledge. Activities that meet this definition constitute
research for purposes of this policy, whether or not they are conducted
or supported under a program that is considered research for other
purposes. For example, some demonstration and service programs may
include research activities.

The HHS regulations specify that departments and agencies cannot conduct
or support research covered by this policy unless the institution has an
assurance approved by OHRP, and only if the institution has certified to
the OPDIV that the research has been reviewed and approved by the IRB
provided for in the assurance and will be subject to continuing review
by the IRB. Under no condition will research covered by Section 46.03 of
the regulations be supported prior to receipt of the certification that
the research has been reviewed and approved by the IRB (45 CFR 46.103(b)
and (f)).

The regulations specify additional protections for research involving
human fetuses, pregnant women, and neonates (Subpart B); prisoners
(Subpart C); and children (Subpart D). The use of autopsy materials is
governed by applicable State and local law and is not directly regulated
by 45 CFR part 46.

#### Office for Human Research Protections' and Recipient Responsibilities

##### Assurances and Other OHRP Responsibilities

On behalf of the Secretary, HHS, OHRP negotiates assurances covering all
of an institution's federally supported research activities involving
human subjects.[^11] Applicants proposing to involve human subjects in
nonexempt research must file (or have previously filed) a written
assurance (FWA) with OHRP setting forth the commitment of the
institution to establish appropriate policies and procedures for the
protection of human subjects. For institutions proposing nonexempt
research involving human subjects and not currently holding an approved
assurance, OHRP will negotiate an FWA.

Each legally separate entity must file its own FWA even if the
institution does not operate its own IRB and designates another IRB
(registered with OHRP and agreeing to the designation) for that purpose.
Affiliated institutions or organizations that will serve as additional
performance sites for the grant-supported research also must file an
FWA.

OHRP also has responsibility for oversight of recipient compliance with
the HHS human subjects regulations. In carrying out this responsibility,
OHRP evaluates all written substantive allegations or indications of
non-compliance with the HHS regulations it receives from any source. All
compliance oversight evaluations are based on the HHS regulations and
the institution's assurance of compliance. Any corrective actions
imposed as a result of compliance oversight evaluations are intended to
remedy identified non-compliance and prevent recurrence. Because each
case is different, OHRP tailors corrective actions to foster the best
interests of human research subjects and, to the extent possible, of the
institution, research community, and HHS. Most compliance oversight
evaluations and resultant corrective actions are resolved at the OHRP
level. However, OHRP may recommend actions to be taken by other HHS
officials.

Detailed information about FWA preparation and negotiation and about
OHRP activities related to oversight and compliance, as well as copies
of the human subjects regulations, may be obtained from OHRP at the
address shown in Part III or from its home page at
[http://www.hhs.gov/ohrp](http://www.hhs.gov/ohrp/). OHRP also has
produced a publication, available through GPO,[^12] and an instructional
videotape, the OHRP Assurance Training Module, which is available on the
OHRP Web site.

##### Institutional Review Board Certification and Other Recipient Responsibilities

The recipient bears ultimate responsibility for protecting human
subjects under the award, including human subjects at all sites, and for
ensuring that an assurance approved by OHRP and certification of IRB
review and approval have been obtained before human subjects research
can be conducted at each collaborating site. HHS will not award a grant
for nonexempt research in which human subjects are involved unless the
applicant/recipient provides a certification to the OPDIV that the
research has been approved by an appropriate IRB, consistent with 45 CFR
part 46, within 12 months before the budget period start date.

It also is the recipient's responsibility to comply with prior-approval
requirements related to the addition of sites not included in the
approved application. The list of organizations with approved assurances
is available at the OHRP Web site
([http://www.hhs.gov/ohrp)](http://www.hhs.gov/ohrp/). Recipients may
not draw funds from the payment system, request funds from the paying
office, or make obligations against Federal funds for research involving
human subjects at any site engaged in nonexempt research for any period
not covered by both an OHRP-approved assurance and IRB approval
consistent with 45 CFR part 46. Costs associated with IRB review of
human research protocols are not allowable as direct charges under
grants unless such costs are not covered by the organization's indirect
cost rate.

Regardless of when the IRB review occurs (before objective review or
just-in-time as specified in Part I or before award of a non-competing
continuation award), the IRB should ensure that the research described
in the application is consistent with any corresponding protocols
reviewed and approved by the IRB. As specified in 45 CFR 46.111, the IRB
review must include a determination that, for research covered by the
regulations, the following conditions are met:

-   The procedures to be used will minimize risks to subjects.

-   Risks to subjects are reasonable in relation to expected benefits,
    if any, to subjects and the importance of the knowledge that may
    reasonably be expected to result.

-   Selection of subjects is equitable.

-   Informed consent is sought from each prospective subject or the
    subject's legally authorized representative and is appropriately
    documented in accordance with, and to the extent required by, the
    regulation.

-   When appropriate, the research plan makes adequate provision for
    monitoring the data collected to ensure the safety of subjects, the
    protection of privacy, and the confidentiality of data.

-   When some or all of the subjects are likely to be vulnerable to
    coercion or undue influence, such as children, prisoners, pregnant
    women, people with acute or severe physical or mental illness, or
    people who are economically or educationally disadvantaged,
    appropriate additional safeguards are included in the study to
    protect the rights and welfare of these subjects.

#### Protection of Research Subjects' Identities

HHS expects recipients and others involved in grant-supported research
to take appropriate actions to protect the confidentiality of
information about and the privacy of individuals participating in the
research. Investigators, IRBs, and other appropriate entities should
ensure that policies and procedures are in place to protect identifying
information and must oversee compliance with those policies and
procedures.

### Animal Welfare

As specified in Part I of the HHS GPS, the *PHS Policy on Humane Care
and Use of Laboratory Animals* requires applicants proposing to use
vertebrate animals in HHS-supported activities to file a written Animal
Welfare Assurance with OLAW. The PHS policy defines "animal" as "any
live, vertebrate animal used or intended for use in research, research
training, experimentation, biological testing, or related purposes." The
PHS policy implements and supplements the *U.S. Government Principles
for Utilization and Care of Vertebrate Animals used in Testing,
Research, and Training*. The PHS policy also requires the applicant to
establish appropriate policies and procedures for the humane care and
use of animals, based on the *Guide for the Care and Use of Laboratory
Animals*, and to comply with the Animal Welfare Act, as amended,
7 U.S.C. 2131 *et seq*., and its implementing regulations. This includes
appointing an IACUC with specified responsibilities. The PHS policy does
not affect applicable State or local laws or regulations that impose
more stringent standards for the care and use of laboratory animals.

Verification of the IACUC review of proposed research involving animals
may be filed at any time before award unless required earlier by the
OPDIV. Regardless of when the review occurs, the IACUC should ensure
that the research described in the application is consistent with any
corresponding protocols reviewed and approved by the IACUC. When
organizations collaborate and multiple recognized IACUCs may be
involved, only one of those IACUCs is required to review the research
project or evaluate a program facility. In such cases, organizations
must define their respective responsibilities to ensure compliance with
the policy. If both organizations have full Animal Welfare Assurances,
they may exercise discretion in determining which IACUC will review the
research protocol and under which organization's program the research
will be performed. An applicant/recipient without an animal care and use
program or IACUC may enter into an inter-organizational agreement to use
the IACUC of an organization with an assurance. Assured organizations
also have the option, with OLAW approval, to amend their Animal Welfare
Assurances to cover performance sites without such assurances. Foreign
organizations proposing activities involving vertebrate animals are
required to comply with the PHS policy or provide evidence that
acceptable standards for the humane care and use of animals will be met.

Information about preparing and submitting Animal Welfare Assurances and
copies of the PHS policy and other relevant materials are available from
OLAW (see [Part III for contact
information](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part14.htm#olaw)).

### Other Research-Related Requirements

#### Research Misconduct

The recipient is responsible for the actions of its employees and other
research collaborators, including third parties, involved in the
project. The recipient will inquire into and, if necessary, investigate
and resolve promptly and fairly all instances of alleged or apparent
research misconduct. 42 CFR part 93, "Public Health Service Policies on
Research Misconduct," [^13] specifies recipient responsibilities for
dealing with and reporting possible research misconduct. The regulation
is available from ORI on its home page
([http://www.ori.dhhs.gov](http://www.ori.dhhs.gov/)) and in hard copy
at the address shown in Part III.

The recipient must carry out its responsibilities with extra care if a
research misconduct inquiry has been initiated as specified in 42 CFR
93.307 or if the recipient or ORI has made a finding of research
misconduct. The recipient must report promptly to ORI any incident of
alleged or apparent research misconduct that it judges as warranting
investigation and must advise ORI of any decision to initiate an
investigation. The recipient also must notify ORI if it intends to close
a case at the inquiry or investigation stage based on an admission of
responsibility, settlement, or for any other reason. The regulations
also require that the recipient submit an annual report.

If a misconduct investigation has been initiated, the recipient must
take any necessary steps, in addition to its normal and ongoing
responsibilities under the grant, to protect the scientific integrity of
the project, protect human subjects and animals, provide reports to ORI,
and ensure the proper expenditure of funds and continuation of the
project during the investigation, if appropriate. ORI staff members are
available to help recipients with investigating and reporting on
research misconduct, and POs are available to provide technical
assistance and to work with recipients to protect funded projects from
the adverse effects of research misconduct.

If the recipient finds research misconduct by anyone working on an HHS
grant-supported project, whether at its organization or at a third-party
organization, the recipient must assess the effect of that finding on
the ability to continue that project, as originally approved, and must
promptly request OPDIV prior approval of any intended change of PI or
other key personnel (see "Prior Approval Requirements---OPDIV Prior
Approval"). In addition, the awarding office may impose sanctions, such
as withdrawal of approval of the PI/PD or other key personnel,
disallowance of costs associated with the invalid or unreliable
research, withholding a non-competing continuation award, suspension or
termination, in whole or in part, of the current award, or debarment.

If research misconduct has affected data validity or reliability, ORI or
the OPDIV may require the recipient and its employee/collaborator
authors to submit a correction or retraction of the data to a journal,
publish the corrected data, or both. If the recipient does not comply
with this requirement, the OPDIV may invoke its rights, under 45 CFR
part 74 or 92, to access the data (including copyrightable material
developed under the award), have the data reviewed, and submit the
correction.

The recipient must promptly report issues involving potential civil or
criminal fraud, such as false claims or misappropriation of Federal
funds, to the HHS OIG (see [Part
III](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part14.htm#oig)).

#### Financial Conflict of Interest

Recipients and investigators must comply with the requirements of 42 CFR
part 50, Subpart F, "Responsibility of Applicants for Promoting
Objectivity in Research for Which PHS Funding Is Sought." That subpart
promotes objectivity in research by establishing standards to ensure
that the design, conduct, and reporting of research funded under PHS
grants or cooperative agreements will not be biased by any conflicting
financial interest of an investigator. These requirements do not apply
to Phase I of the SBIR/STTR programs.

Under those requirements the organization must do the following:

-   Have a written and enforced administrative process to identify and
    manage, reduce, or eliminate conflicting financial interests with
    respect to research projects for which PHS funding is sought

-   Before spending any PHS funds awarded under a new award, inform the
    GMO of the existence of any conflicting financial interests it
    identified of the type covered by 42 CFR 50.605 and assure that the
    interest been managed, reduced, or eliminated in accordance with the
    regulations

-   Continue to make similar reports on subsequently identified
    conflicts within 60 days of identifying them

-   Make additional information available to the OPDIV, upon request, as
    to how it handled conflicting interests in accordance with the
    regulations.

As described in the regulations, examples of how financial conflicts of
interest might be addressed include the following:

-   Public disclosure of significant financial interests

-   Monitoring of research by independent reviewers

-   Modification of the research plan

-   Disqualification from participation in all or a portion of the
    research funded by PHS

-   Divestiture of significant financial interests

-   Severance of relationships that create actual or potential
    conflicts.

Recipients also must ensure that subawards in the form of consortium
agreements address whether the consortium participant's employees will
be subject to the financial conflict of interest requirements of the
consortium participant or to those of the recipient.

Some IRBs also consider investigator financial conflict of interest in
their deliberations, although they are not required to do so. If an IRB
considers the impact of potential financial (or other) conflicts of
interest on the research and the protection of human subjects, it should
refer to the organization's policies and procedures for identifying and
monitoring conflicts of interest.

Following are some strategies used by IRBs:

-   Make IRB members aware of the organization's conflict of interest
    policies and procedures

-   Include a statement in the informed consent form that all
    investigators comply with the organizational guidelines

-   Ask investigators to complete a short questionnaire about whether
    they---or any person responsible for the design, conduct, or
    reporting of research---have an economic interest in or act as an
    officer or a director of any outside entity whose financial interest
    could reasonably appear to be affected by the research

-   Instruct IRB members during their orientation on how to identify and
    respond to a perceived financial, academic, or other conflict of
    interest.

Suggestions for recipients to consider when implementing the
requirements of this regulation are available in an NIH publication,
[*Financial Conflict of Interest--Objectivity in Research: Institutional
Policy Review*](http://grants.nih.gov/grants/policy/coi/nih_review.htm),
available on the NIH Web site at
<http://grants.nih.gov/grants/policy/coi/nih_review.htm>.

#### Recombinant DNA and Human Gene Transfer Research

The *NIH Guidelines for Research Involving Recombinant DNA Molecules*
(NIH Guidelines) (April 2002 or latest revision) apply to (1) all
research projects that involve recombinant DNA and are conducted at or
sponsored by an organization that receives support for recombinant DNA
research, or (2) research projects involving testing in humans of
materials containing recombinant DNA developed with HHS funds, if the
organization that developed the materials sponsors or participates in
those projects. The NIH guidelines are available at
<http://www4.od.nih.gov/oba/rac/guidelines/guidelines.html>. As defined
by the NIH guidelines, recombinant DNA molecules are either (1)
molecules that are constructed outside of living cells by joining
natural or synthetic DNA segments to DNA molecules that can replicate in
a living cell or (2) molecules that result from the replication of those
described in (1).

The NIH guidelines apply to both basic and clinical research studies.
Recombinant DNA research involving select agents also is subject to
pertinent CDC and USDA regulations.[^14] Specific guidance for the
conduct of human gene transfer studies appears in Appendix M of the NIH
guidelines. Failure to comply with these requirements may result in
suspension or termination of an award for recombinant DNA research at
the organization, or a requirement for OPDIV prior approval of any or
all recombinant DNA projects at the organization. The recipient should
carefully review the NIH guidelines in their entirety to ensure
compliance with all of the requirements for projects involving
recombinant DNA techniques.

#### Human Embryonic Stem Cell Research and Cloning

HHS funds may not be used to support human embryo research under any
extramural award instrument. HHS funds may not be used for the creation
of a human embryo for research purposes or for research in which a human
embryo is destroyed, discarded, or knowingly subjected to risk of injury
or death greater than that allowed for research on fetuses *in utero*
under 45 CFR 46.204 and 46.207 and Subsection 498(b) of the PHS Act 42
U.S.C. 289g(b). The term "human embryo" includes any organism not
protected as a human subject under 45 CFR part 46, as of the date of
enactment of the governing appropriations act, that is derived by
fertilization, parthenogenesis, cloning, or any other means from one or
more human gametes or human diploid cells.

In addition to the statutory restrictions on human fetal research under
Subsection 498((b) of the PHS Act, HHS is prohibited, by a March 4,
1997, Presidential memorandum, from using Federal funds for cloning
human beings.

#### Research on Human Fetal Tissue 

Human fetal tissue is defined as tissue or cells obtained from a dead
human embryo or fetus after a spontaneous or induced abortion or
stillbirth. This definition does not include established human fetal
cell lines. Research involving the transplantation of human fetal tissue
must be conducted in accordance with applicable State and local laws and
with the following guidance.

The scientific and ethical challenges associated with research utilizing
human fetal tissue make it imperative that researchers and their
organizations be fully aware of and in compliance with the Federal
requirements, particularly Section 498B of the PHS Act, 42 U.S.C.
289g-2. The statute specifically prohibits any person from knowingly
acquiring, receiving, or transferring any human fetal tissue for
valuable consideration. The term "valuable consideration" is a concept
similar to profit and does not include reasonable payment for costs
associated with the collection, processing, preservation, storage,
quality control, or transportation of these tissues. Violation of this
statute carries criminal penalties that apply to both those that supply
and those that acquire human fetal tissue.

Sections 498A and 498B of the PHS Act, 42 U.S.C. 289g-1 and 289g-2,
contain additional legal requirements for research on the
transplantation of human fetal tissue for therapeutic purposes conducted
or supported by PHS. Under Section 498A, the recipient must adhere to
the following provisions:

-   The woman who donates the fetal tissue must sign a statement
    declaring that the donation is being made

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-   for therapeutic transplantation research,

-   without any restriction regarding the identity of individuals who
    may receive the transplantation, and

-   without the donor knowing the identity of the individual receiving
    the transplantation.

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```
-   The attending physician must sign a statement that he/she has

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```
-   obtained the tissue in accordance with the donor's signed statement
    and

-   fully disclosed to the donor his or her intent, if any, to use the
    tissue in research and any known medical risks to the donor or risks
    to her privacy associated with the donation that are in addition to
    risks associated with the woman's medical care.

> In the case of tissue obtained pursuant to an induced abortion, the
> physician's statement also must state that he/she

-   obtained the woman's consent for the abortion before requesting or
    obtaining consent for the tissue to be used;

-   did not alter the timing, method, or procedures used to terminate
    the pregnancy solely for the purpose of obtaining the tissue for
    research; and

-   performed the abortion in accordance with applicable State and local
    laws.

```{=html}
<!-- -->
```
-   The PI must sign a statement certifying that he/she is aware that
    the tissue is human fetal tissue obtained in a spontaneous or
    induced abortion, or pursuant to a stillbirth, and that the tissue
    was donated for research purposes. The PI also must certify that
    this information has been shared with others who have
    responsibilities regarding the research and, before eliciting
    informed consent from the transplantation recipient, will obtain
    written acknowledgment that the patient is aware of the
    aforementioned information.

-   The PI must certify in writing that he/she has had no part in any
    decisions as to the timing, method, or procedures used to terminate
    the pregnancy.

The recipient must certify that the physician's statement, the PI's
statement, and the acknowledgment of the transplantation recipient must
be available for audit by the HHS Secretary or designee.

Information for organizations conducting research on human fetal tissue,
including information on the governing Federal statutes, Sections 498A
and 498B of the PHS Act, 42 U.S.C. 289g-1 and 298g-2, is available on
the NIH Web site at
<http://grants.nih.gov/grants/guide/notice-files/not93-235.html>.

#### Transplantation of Human Fetal Tissue

If research on the transplantation of human fetal tissue is conducted
under the grant-supported project, the recipient must make available for
audit by the HHS Secretary or designee, the physician statements and
informed consents required by Subsections 498A(b)(2) and (c) of the PHS
Act, 42 U.S.C. 289g-1(b)(2) and (c) or must ensure HHS access to those
records, if maintained by an entity other than the recipient. This
requirement is in addition to the requirements concerning human subjects
in research.

In addition, FDA issued a letter on November 30, 2000, indicating that
it has jurisdiction over fetal cells and tissues intended for use in
humans. FDA requests that investigators contact it to determine whether
any planned or ongoing clinical research would require submission of an
IND application. Additional information and FDA contact information is
available at <http://www.fda.gov/cber/ltr/fetal113000.htm>.

#### Certificates of Confidentiality

Section 301(d) of the PHS Act, 42 U.S.C. 241, provides that the
Secretary may authorize people engaged in biomedical, behavioral,
clinical, or other research activities to protect the privacy of
research subjects by withholding the names and other identifying
characteristics of those subjects from individuals not engaged in the
research. Individuals that have authorization may not be compelled to
disclose subjects' identities in any Federal, State, or local civil,
criminal, administrative, legislative or other proceeding. CoCs may be
granted for studies collecting information that, if disclosed, could
have adverse consequences for subjects or damage their financial
standing, employability, insurability, or reputation. By protecting
researchers from being compelled to disclose information that would
identify research subjects, CoCs contribute to achieving research
objectives and promote participation in studies by helping to ensure
confidentiality and privacy to participants. Information on CoCs is
available on the NIH Web site at the CoC Kiosk at
<http://grants.nih.gov/grants/policy/coc/index.htm>. Requests for CoCs
should be submitted to the GMO, and, subject to OPDIV review and
approval, a certificate may be issued pursuant to Section 301(d).

#### Investigational New Drug Applications/Investigational Device Exceptions

To be eligible for funding, all clinical research involving INDs, drugs
approved for a different indication, or experimental combinations of
drugs must meet FDA IND regulations, FDA human subjects' protection
requirements, and HHS human subjects' requirements. As provided in the
FDA regulations, an IND or IDE also may apply to biologics or devices.
The FDA regulations are published in 21 CFR parts 50 and 312.

The official sponsor of the IND/IDE, whether a Federal agency, a
recipient, or a third party, is legally responsible for meeting the FDA
requirements. If the IND/IDE sponsor is a third party, such as a
pharmaceutical company or research organization under contract to a
recipient or to a pharmaceutical company, the legal responsibility for
monitoring the clinical trial and reporting to FDA rests with the
sponsor rather than the recipient. This generally will be the case for
larger, multi-site clinical trials. If the recipient is the IND/IDE
holder, commonly referred to as an "investigator-initiated IND/IDE," the
recipient or the investigator serves as the sponsor and assumes the
legal responsibility. In any case, the recipient is ultimately
responsible for ensuring compliance with the requirements for protection
of human subjects, including compliance with FDA's requirements.

Following the filing of an IND, FDA has a 30-day period in which to
review it. FDA may allow the IND to proceed or may defer approval of the
IND until changes it deems acceptable are made. FDA also may order a
clinical trial to be suspended or terminated, at any time, based on
information it receives about that clinical trial.

When HHS funds all, or part of, a clinical study involving an IND or an
IDE, the OPDIV must be aware of any significant communications with FDA
concerning the study. The recipient must report certain types of FDA
communications to the OPDIV within 72 hours of receiving a copy of or
upon being informed of the FDA communication (through the PI or another
person acting on behalf of the recipient), whichever occurs first. This
notification requirement applies to any of the following communications
from FDA with the sponsor of the IND or IDE:

-   Warning letters (whether sent to the recipient or to the commercial
    sponsor)

-   Notice of Initiation of Disqualification Proceedings and Notice of
    Opportunity to Explain

-   Notice of Opportunity for Hearing

-   Notice of Disqualification

-   Consent agreements

-   Clinical hold letters that pertain to breaches of good manufacturing
    practices, good clinical practices, or other major issue requiring
    significant changes in the protocol.

The notification should be made in writing, but also may be done by
telephone if a written notice would delay the notification. It should
include a statement of the action taken or contemplated and the
assistance needed to resolve the situation. These requirements apply to
the recipient even if the recipient or the funded PI is the sponsor.
Failure to comply with this requirement may result in HHS imposing a
corrective and/or enforcement action. FDA communications are considered
grant-related records for purposes of retention and access.

#### Controlled Substances

Grantees are prohibited from knowingly using appropriated funds to
support activities that promote the legalization of any drug or other
substance included in Schedule I of the schedule of controlled
substances established by section 202 of the Controlled Substances Act,
21 U.S.C. 812. This limitation does not apply if the recipient notifies
the GMO that there is significant medical evidence of a therapeutic
advantage to the use of such drug or other substance or that federally
sponsored clinical trials are being conducted to determine therapeutic
advantage.

If controlled substances are proposed to be administered as part of a
research protocol or if research is to be conducted on the drugs
themselves, applicants/recipients must ensure that the DEA requirements,
including registration, inspection, and certification, as applicable,
are met. Regional DEA offices can supply forms and information
concerning the type of registration required for a particular substance
for research use. The main registration office in Washington, DC, may be
reached at 800-882-9539. Information also is available from the National
Institute on Drug Abuse at 301-443-6300.

### Construction-Related Requirements

In addition to those requirements specified in "Requirements Related to
Construction, Modernization, and Other Designated Activities," the
following public policy requirements apply to grants that involve
construction or A&R.

#### Flood Insurance

The Flood Disaster Protection Act of 1973, as amended, 42 U.S.C. 4001
*et seq*., provides that no Federal financial assistance to acquire,
modernize, or construct property may be provided in identified
flood-prone communities in the United States, unless the community
participates in the National Flood Insurance Program and flood insurance
is purchased within 1 year of the identification. The flood insurance
purchase requirement applies to both public and private applicants for
HHS support. Lists of flood-prone areas that are eligible for flood
insurance are published in the *Federal Register* by FEMA.

#### Architectural Barriers

The Architectural Barriers Act of 1968, 42 U.S.C. 4151 *et seq*., as
amended, the Federal Property Management Regulations (see 41 CFR
102-76), and the Uniform Federal Accessibility Standards issued by GSA
(see 36 CFR 1191, Appendixes C and D) set forth requirements to make
facilities accessible to, and usable by, the physically handicapped and
include minimum design standards. All new facilities designed or
constructed with HHS grant support must comply with these requirements.
These minimum standards must be included in the specifications for any
HHS-funded new construction unless the recipient proposes to substitute
standards that meet or exceed these standards. Where HHS assistance is
provided for alteration or renovation (including modernization and
expansion) of existing facilities, the altered facility (or part of the
facility) must comply, including use of the minimum standards in the
specifications. The recipient is responsible for conducting inspections
to ensure compliance with these standards by any contractor performing
construction services under the grant.

#### Clean Air and Clean Water Act

42 U.S.C. 7606 and EO 11738 provide for the protection and enhancement
of the quality of the nation's air resources to promote public health
and welfare and for restoring and maintaining the chemical, physical,
and biological integrity of the nation's waters.

#### Safe Drinking Water Act

42 U.S.C. 300h-3 provides for the protection of underground sources of
drinking water that have an aquifer, which is the sole source of
drinking water. Specifically, no grant may be entered into for any
project that the EPA Administrator determines may contaminate such
aquifer.

### Health, Safety, and Related Requirements

#### Restriction on Funding Abortions

HHS funds may not be spent for an abortion.

#### Restriction on Distribution of Sterile Needles/Needle Exchange

Funds appropriated for HHS may not be used to carry out any program of
distributing sterile needles or syringes for the hypodermic injection of
any illegal drug.

#### Standards for Privacy of Individually Identifiable Health Information 

The "Standards for Privacy of Individually Identifiable Health
Information" (the Privacy Rule) implement the Health Insurance
Portability and Accountability Act (HIPAA) of 1996, 42 U.S.C. 1320d *et
seq*., which governs the protection of individually identifiable health
information. The Privacy Rule is administered and enforced by HHS's OCR
and is codified at 45 CFR parts 160 and 164. Not all HHS recipients are
subject to the Privacy Rule. The Privacy Rule applies only to "covered
entities," as defined by the rule, which include health plans and most
health-care providers.

The OCR Web site (<http://www.hhs.gov/ocr/hipaa>) provides information
on the Privacy Rule, including the complete text of the regulation and a
set of decision tools for determining whether a particular entity is
subject to the rule. An educational booklet, *Protecting Health
Information in Research: Understanding the HIPAA Privacy Rule*, is
available through OCR's Web site and at
<http://privacyruleandresearch.nih.gov/>. That Web site also includes
other educational materials approved by OCR and the HHS Office of the
General Counsel.

####  Confidentiality of Patient/Client Records

Section 543 of the PHS Act, 42 U.S.C. 290dd-2, requires that records of
substance abuse patients be kept confidential except under specified
circumstances and purposes. The covered records are those that include
the identity, diagnosis, prognosis, or treatment of any patient
maintained in connection with any program or activity relating to
substance abuse education, prevention, training, treatment,
rehabilitation, or research that is conducted, regulated, or directly or
indirectly assisted by any department or agency of the United States.
This requirement is implemented in 42 CFR part 2.

#### Drug-Free Workplace

The Drug-Free Workplace Act of 1988, 42 U.S.C. 701 *et seq*., requires
that all organizations receiving grants from any Federal agency agree to
maintain a drug-free workplace. The recipient must notify the awarding
office if an employee of the recipient is convicted of violating a
criminal drug statute. Failure to comply with these requirements may be
cause for debarment. HHS implementing regulations are set forth in
45 CFR part 82, "Governmentwide Requirements for Drug-Free Workplace
(Financial Assistance)."

#### Pro-Children Act

The Pro-Children Act of 1994, 20 U.S.C. 7183, imposes restrictions on
smoking in facilities where federally funded children's services are
provided. HHS grants are subject to these requirements only if they meet
the Act's specified coverage. The Act specifies that smoking is
prohibited in any indoor facility (owned, leased, or contracted for)
used for the routine or regular provision of kindergarten, elementary,
or secondary education or library services to children under the age of
18. In addition, smoking is prohibited in any indoor facility or portion
of a facility (owned, leased, or contracted for) used for the routine or
regular provision of federally funded health care, day care, or early
childhood development, including Head Start services to children under
the age of 18. The statutory prohibition also applies if such facilities
are constructed, operated, or maintained with Federal funds. The statute
does not apply to children's services provided in private residences,
facilities funded solely by Medicare or Medicaid funds, portions of
facilities used for inpatient drug or alcohol treatment, or facilities
where WIC coupons are redeemed. Failure to comply with the provisions of
the law may result in the imposition of a civil monetary penalty of up
to \$1,000 per violation and/or the imposition of an administrative
compliance order on the responsible entity. Any questions concerning the
applicability of these provisions to an HHS grant should be directed to
the GMO.

#### Smoke-Free Workplace

HHS strongly encourages recipients to provide smoke-free workplaces and
to promote the nonuse of tobacco products. HHS defines the term
"workplace" to mean office space (including private offices and other
workspace), conference or meeting rooms, corridors, stairways, lobbies,
rest rooms, cafeterias, and other public spaces.

#### Health and Safety

Recipients are responsible for meeting Federal, State, and local health
and safety standards and for establishing and implementing necessary
measures to minimize their employees' risk of injury or illness in
activities related to HHS grants. In addition to applicable Federal,
State, and local laws and regulations, the following regulations must be
followed when developing and implementing health and safety operating
procedures and practices for both personnel and facilities:

-   29 CFR 1910.1030, Bloodborne pathogens; 29 CFR 1910.1450,
    Occupational exposure to hazardous chemicals in laboratories; and
    other applicable occupational health and safety standards issued by
    the Occupational Health and Safety Administration and included in
    29 CFR part 1910. These regulations are available at
    <http://www.osha.gov/comp-links.html>.

-   Nuclear Regulatory Commission Standards and Regulations, pursuant to
    the Energy Reorganization Act of 1974 (42 U.S.C. 5801 *et seq*.).
    Copies may be obtained from the U.S. Nuclear Regulatory Commission,
    Washington, DC 20555-0001.

Recipients are not required to submit documented assurance of their
compliance with or implementation of these requirements. However, if
requested by the OPDIV, recipients should be able to provide evidence
that applicable Federal, State, and local health and safety standards
have been considered and have been put into practice.

### Acknowledgment of Federal Funding

As required by HHS appropriations acts, all HHS recipients must
acknowledge Federal funding when issuing statements, press releases,
requests for proposals, bid invitations, and other documents describing
projects or programs funded in whole or in part with Federal funds.
Recipients are required to state (1) the percentage and dollar amounts
of the total program or project costs financed with Federal funds and
(2) the percentage and dollar amount of the total costs financed by
nongovernmental sources.

### Activities Abroad

HHS recipients must ensure that project activities carried on outside
the United States are coordinated as necessary with appropriate
government authorities and that appropriate licenses, permits, or
approvals are obtained.

### Limited English Proficiency

Recipients of Federal financial assistance must take reasonable steps to
ensure that people with limited English proficiency have meaningful
access to health and social services and that there is effective
communication between the service provider and individuals with limited
English proficiency. To clarify existing legal requirements, HHS
published "Guidance to Federal Financial Assistance Recipients Regarding
Title VI Prohibition Against National Origin Discrimination Affecting
Limited English Proficient Persons." This guidance, which is available
at <http://www.hhs.gov/ocr/lep/revisedlep.html>, provides a description
of the factors that recipients should consider in determining and
fulfilling their responsibilities to individuals with limited English
proficiency under Title VI of the Civil Rights Act of 1964.

### Resource Conservation and Recovery Act

Under RCRA (42 U.S.C. 6901 *et seq.*), any State agency or agency of a
political subdivision of a State using appropriated Federal funds must
comply with 42 U.S.C. 6962. This includes State and local institutions
of higher education or hospitals that receive direct HHS awards. Section
6962 requires that preference be given in procurement programs to the
purchase of specific products containing recycled materials identified
in guidelines developed by EPA (40 CFR parts 247--254).

### Seat Belts

Pursuant to EO 13043 (April 16, 1997), Increasing the Use of Seat Belts
in the United States, HHS recipients are encouraged to adopt and enforce
on-the-job seat belt policies and programs for their employees when
operating vehicles, whether organizationally owned or rented or
personally owned.

## Cost Considerations

### General

This section addresses the general principles underlying the
allowability of costs, differentiates direct costs from indirect costs,
and highlights a number of specific costs and categories of cost. It is
not intended to be all-inclusive and should be used as a supplement to
the applicable cost principles.

### The Cost Principles

Cost principles establish general standards for the allowability of
costs, provide detailed guidance on the cost accounting treatment of
costs as direct or indirect costs, and set forth allowability principles
for selected items of cost. Applicability of a particular set of cost
principles depends on the type of organization making the expenditure.
For example, a non-profit organization receiving a subaward from a State
recipient would be subject to the cost principles for non-profit
organizations, while the State would be subject to the cost principles
for States, local governments, and Indian tribal governments.

The cost principles are set forth in the following documents and are
incorporated by reference in 45 CFR 74.27 and 92.22:

-   [OMB Circular
    A-21](http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html)---Cost
    Principles for Educational Institutions (2 CFR part 220)

-   [OMB Circular
    A-87](http://www.whitehouse.gov/omb/circulars/a087/a87_2004.html)---Cost
    Principles for State, Local, and Indian Tribal Governments[^15] (2
    CFR part 225)

-   [OMB Circular
    A-122](http://www.whitehouse.gov/omb/circulars/a122/a122_2004.html)---Cost
    Principles for Non-Profit Institutions[^16] (2 CFR part 230)

-   [45 CFR part 74, Appendix
    E](http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=45&PART=74&SECTION=91&YEAR=1999&TYPE=TEXT)---Principles
    for Determining Costs Applicable to Research and Development under
    Grants and Contracts with Hospitals

-   [48 CFR subpart 31.2 (Federal Acquisition Regulation)---Contract
    Cost Principles and Procedures---Contracts with Commercial
    Organizations](http://www.arnet.gov/far/current/html/Subpart_31_2.html)

Recipients can use their own accounting systems, policies, and
procedures to implement the cost principle requirements as long as the
standards prescribed in 45 CFR 74.21 or 92.20 for financial management
systems are met (see "Financial Management").

The cost principles address four tests in determining the allowability
of costs. The tests are as follows:

-   *Reasonableness (including necessity).* A cost is reasonable if, in
    its nature or amount, it does not exceed that which would be
    incurred by a prudent person under the circumstances prevailing at
    the time the decision was made to incur the cost. The cost
    principles elaborate on this concept and address considerations such
    as whether the cost is of a type generally necessary for the
    organization's operations or the grant's performance, whether the
    recipient complied with its established organizational policies in
    incurring the cost or charge, and whether the individuals
    responsible for the expenditure acted with due prudence in carrying
    out their responsibilities to the Federal government and the public
    at large as well as to the organization.

-   *Allocability.* A cost is allocable to a specific grant, function,
    department, or other component, known as a cost objective, if the
    goods or services involved are chargeable or assignable to that cost
    objective in accordance with the relative benefits received or other
    equitable relationship. A cost is allocable to a grant if it is
    incurred solely in order to advance work under the grant; it
    benefits both the grant and other work of the organization,
    including other grant-supported projects or programs; or it is
    necessary to the overall operation of the organization and is deemed
    to be assignable, at least in part, to the grant.

-   *Consistency.* Recipients must be consistent in assigning costs to
    cost objectives. They must be treated consistently for all work of
    the organization under similar circumstances, regardless of the
    source of funding, so as to avoid duplicate charges.

-   *Conformance.* This test of allowability---conformance with
    limitations and exclusions contained in the terms and conditions of
    award, including those in the cost principles---may vary by the type
    of activity, the type of recipient, and other characteristics of
    individual awards. "[Allowable Costs and
    Activities](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part5.htm#_Allowability_of_Costs/Activities%23_Allowability_of_Costs/Activities)"
    below provides information common to most HHS grants and, where
    appropriate, specifies some of the distinctions if there is a
    different treatment based on the type of grant or recipient.

These four tests apply regardless of whether the particular category of
costs is one specified in the cost principles or one governed by other
terms and conditions of an award. These tests also apply regardless of
treatment as a direct cost or an indirect cost. The fact that a proposed
cost is awarded as requested by an applicant does not indicate a
determination of allowability.

### Direct Costs and Indirect Costs

Direct costs are costs that can be identified specifically with a
particular award, project or program, service, or other organizational
activity or that can be directly assigned to such an activity with a
high degree of accuracy. Direct costs include, but are not limited to,
salaries, travel, equipment, and supplies directly benefiting the
grant-supported project or program. Indirect costs (also known as
"facilities and administrative costs") are costs incurred for common or
joint objectives that cannot be identified specifically with a
particular project, program, or organizational activity. Facilities
operation and maintenance costs, depreciation, and administrative
expenses are examples of costs that usually are treated as indirect
costs. The organization is responsible for presenting costs consistently
and must not include costs associated with its indirect rate as direct
costs.

### Reimbursement of Indirect Costs

HHS considers activities conducted by recipients that result in indirect
charges a necessary and appropriate part of HHS grants. OPDIVs reimburse
their share of those costs either as a fixed amount or through use of a
rate. The amount may be specified in statute, regulations, or policy or
be determined based on a rate negotiated by DCA, DFAS in the Office of
Acquisition Management and Policy, NIH (responsible for negotiating
indirect cost rates for for-profit entities receiving awards from HHS),
or other cognizant Federal agency and reflected in a formal rate
agreement. For certain governmental organizations, amounts claimed are
based on documentation retained by the governmental organization. State
and local governmental organizations also may be eligible for
reimbursement of costs associated with provision of central services as
provided in OMB Circular A-87.[^17] If an applicant is advised by the
GMO of the need to establish a rate prior to issuance of a NoA, the GMO
will indicate the responsible office to be contacted.

If reimbursement of indirect costs is allowable under an award, HHS will
not reimburse those costs unless the recipient has established an
indirect cost rate covering the applicable activities and period of time
unless indirect costs are reimbursed at a fixed rate (e.g., HHS indirect
cost reimbursement for training grants to other than governmental
recipients) or the applicant is not required to submit a proposal to the
Federal government as specified in OMB Circular A-87. The awarding
office uses the applicable indirect cost rate covering the award budget
period (or part thereof) in calculating the amount to be shown or to be
included on the NoA. If, on the basis of statute, regulation, or policy,
allowable indirect cost reimbursement is restricted to an amount less
than full indirect cost reimbursement, the difference between those two
amounts may be used to satisfy a recipient's matching or cost-sharing
requirement (see "Matching or Cost Sharing").

Indirect cost proposals must be prepared in accordance with the
applicable cost principles and guidance provided by the cognizant office
or agency. Further information concerning the establishment of indirect
cost rates and the reimbursement of indirect costs may be obtained from
DCA or DFAS (see Part III). DCA should be consulted to determine the
need to submit a Disclosure Statement (DS-2) pursuant to the
requirements of OMB Circular A-21.

If the GMO determines that a recipient does not have a currently
effective indirect cost rate, the award may not include an amount for
indirect costs unless the organization has never established an indirect
cost rate (usually a new recipient) and intends to establish one. In
such cases, the award shall include a provisional amount equaling
one-half of the amount of indirect costs requested by the applicant, up
to a maximum of 10 percent of direct salaries and wages (exclusive of
fringe benefits). If the recipient fails to provide a timely proposal,
indirect costs paid in anticipation of establishment of a rate will be
disallowed.

There are several other limited circumstances under which the GMO may
award indirect costs if none were previously awarded or may increase the
amount previously awarded. If an award does not include an amount for
indirect costs because the recipient did not submit a timely indirect
cost proposal and the recipient subsequently establishes a rate, the GMO
may amend the award to provide an appropriate amount for indirect costs
if the amendment can be made using funds from the same Federal fiscal
year in which the award was made. However, the amount will be limited to
the indirect costs applicable to the period after the effective date of
the rate agreement. This provision does not affect those local
governmental agencies that are not required to submit their indirect
cost proposals to the Federal government. They may charge indirect costs
to HHS grants based on the rate computations they prepare and keep on
file for subsequent Federal review.

Rebudgeting within the direct cost category may affect the amount of
eligible indirect cost reimbursement, depending on the direct cost base
on which indirect costs are calculated (for example, salaries and
wages). The recipient is expected to accommodate such changes within the
ceiling amount of the award. If permissible direct cost rebudgeting or
unobligated balances of Federal funds result in the need for a lesser
amount of indirect costs than awarded or a higher permanent rate results
in a need for additional indirect costs beyond those awarded, recipients
may rebudget between direct and indirect costs (in either direction) to
accommodate such an increase or decrease without OPDIV prior approval
unless it would constitute a change in the scope of the project (see
"Prior-Approval Requirements---OPDIV Prior Approval").

Generally, award amounts will not be adjusted based on a negotiated
indirect cost rate different from that used at the time of the award
(whether competitive segment or budget period).

If funds are available, a GMO may, but is not obligated to, amend an
award to provide additional funds for indirect costs, but only under the
following circumstances:

-   An error was made in computing the award. This includes situations
    in which a higher rate than the rate used in the grant award is
    negotiated and the date of the rate agreement for the higher rate is
    on or before 1 calendar month prior to the beginning date of the
    grant budget period.

-   The awarding office restores funds previously recaptured as part of
    a recipient's unobligated balance.

-   The recipient is eligible for additional indirect costs associated
    with additional direct costs awarded, e.g., a supplemental award.

For all recipients other than those subject to OMB Circular A-21, the
negotiated rate in effect at the beginning of each budget period will be
used as the basis for determining indirect costs for that budget period.
For recipients subject to OMB Circular A-21, the rate in effect at the
beginning of a competitive segment will be used to determine indirect
cost funding levels for the entire segment. If the rate agreement in
effect at the outset of the competitive segment does not cover the
entire competitive segment, then the rate in effect for the last year of
the negotiated agreement will be used to determine indirect cost funding
for the duration of the competitive segment. For all recipients, if the
rate in effect at the beginning of the competitive segment or budget
period, as applicable, was provisional and is superseded by a permanent
rate, whether higher or lower, the latter rate will be used to determine
indirect cost reimbursement. The award will not be adjusted downward,
based on a lower permanent indirect cost rate than a provisional rate
used in calculating the award, unless the indirect cost proposal that
served as the basis for the negotiation included unallowable costs. The
OPDIV also is not required to provide any additional funding to
accommodate this situation but may do so if an error was made in
computing the award as indicated above.

The recipient is responsible for establishing indirect cost rates for
its subrecipients if those subrecipients do not have a current,
applicable rate negotiated by a cognizant Federal agency.

### Applicable Credits

The term "applicable credits" refers to those receipt or negative
expenditure types of transactions that operate to offset or reduce
direct or indirect cost items. Typical examples are purchase discounts,
rebates or allowances, recoveries or indemnities on losses, and
adjustments for overpayments or erroneous charges. Additional
information concerning applicable credits is included in the cost
principles.

Applicable credits to direct charges made to HHS grants must be treated
as an adjustment on the recipient's FSR, whether those credits accrue
during or after the period of grant support. The awarding office will
notify the recipient of any additional actions that may be necessary.

### Allowable Costs and Activities

The governing cost principles address selected items of cost, some of
which are mentioned in this subsection for emphasis. This subsection is
not intended to be all-inclusive. The cost principles should be
consulted for the complete explanation of the allowability or
unallowability of costs they address. The allowability of costs under
individual OPDIV awards also may be governed by requirements specified
in the program legislation, regulations, or the specific terms and
conditions of the award, which will take precedence over the general
discussion provided here (see "Overview of Terms and Conditions of
Award---Effect and Order of Precedence"). Recipients that have questions
concerning the allowability of costs should contact the GMO.

If a cost is allowable, it is allocable as either a direct cost or an
indirect cost, depending on the recipient's accounting system. For some
costs addressed in this subsection, the text specifies whether the cost
is usually a direct cost or an indirect cost.

Unless otherwise indicated in the NoA, an award based on an application
that includes specific information concerning any direct costs or
activities that require OPDIV prior approval constitutes the prior
approval for those costs or activities. The recipient is not required to
obtain any additional approval for those costs/activities. If a cost or
activity requiring OPDIV prior approval is not included or fully
described in the approved application, the recipient must obtain
post-award prior approval as described in "Prior Approval
Requirements---OPDIV Prior-Approval").

Subrecipients and contractors under grants are subject to the
requirements of the cost principles otherwise applicable to their type
of organization and to any requirements placed on them by the recipient
to be able to comply with the terms and conditions of the award.

The cost principles do not address profit or fee. HHS policy allows the
payment of fee on SBIR/STTR grants, but HHS will not provide profit or
fee to any other type of recipient under any other grant program. A fee
may not be paid by a recipient to a subrecipient/consortium participant,
including a for-profit organization. However, a fee (profit) may be paid
to a contractor providing routine goods or services under a grant in
accordance with normal commercial practice.

Exhibit 4 describes selected cost items.

+---------+------------------------------------------------------------+
| Exhibit |                                                            |
| 4.      |                                                            |
| S       |                                                            |
| elected |                                                            |
| Items   |                                                            |
| of Cost |                                                            |
+=========+============================================================+
| Item    | Description                                                |
+---------+------------------------------------------------------------+
| Adve    | Allowable only for recruitment of staff or trainees,       |
| rtising | procurement of goods and services, disposal of scrap or    |
|         | surplus materials, and other specific purpose necessary to |
|         | meet the requirements of the grant-supported activity.     |
+---------+------------------------------------------------------------+
| Al      | Unallowable as an entertainment expense. Allowable if      |
| coholic | within the scope of an approved project.                   |
| Be      |                                                            |
| verages |                                                            |
+---------+------------------------------------------------------------+
| Alt     | A&R costs are allowable unless the program legislation,    |
| eration | implementing regulations, or other terms and conditions of |
| and     | the award specifically exclude such activity. See "Prior   |
| Ren     | Approval Requirements---OPDIV Prior-Approval" for A&R      |
| ovation | costs requiring GMO prior approval. A&R costs that do not  |
|         | exceed the prior approval thresholds specified in that     |
|         | section (or in Part IV, as applicable) generally are       |
|         | considered "minor A&R" and those exceeding that amount     |
|         | generally are considered "major A&R." Major A&R is         |
|         | allowable only if the authorizing statute specifically     |
|         | permits that type of activity, whether characterized as    |
|         | modernization, remodeling, or A&R (see "Construction" in   |
|         | this exhibit).                                             |
|         |                                                            |
|         | A&R must be consistent with the following criteria and     |
|         | documentation requirements:                                |
|         |                                                            |
|         | -   The building has a useful life consistent with program |
|         |     purposes and is architecturally and structurally       |
|         |     suitable for conversion to the type of space required. |
|         |                                                            |
|         | -   The A&R is essential to the purpose of the             |
|         |     grant-supported project or program.                    |
|         |                                                            |
|         | -   The space involved will be occupied by the project or  |
|         |     program.                                               |
|         |                                                            |
|         | -   The space is suitable for human occupancy before A&R   |
|         |     work is started except where the purpose of the A&R is |
|         |     to make the space suitable for some purpose other than |
|         |     human occupancy, such as storage.                      |
|         |                                                            |
|         | -   For minor A&R, if the space is rented, evidence is     |
|         |     provided that the terms of the lease are compatible    |
|         |     with the A&R proposed and cover the duration of the    |
|         |     project period.                                        |
|         |                                                            |
|         | -   If the A&R will affect a site listed in (or eligible   |
|         |     for inclusion in) the National Register of Historic    |
|         |     Places, the requirements specified in "Preservation of |
|         |     Cultural and Historic Resources" have been followed.   |
|         |                                                            |
|         | Routine maintenance and repair of the organization's       |
|         | physical plant or its equipment, which is allowable and is |
|         | ordinarily treated as an indirect cost, is not considered  |
|         | A&R.                                                       |
|         |                                                            |
|         | Work necessary to obtain an initial occupancy permit for   |
|         | the intended use is not an allowable A&R cost. Certain     |
|         | allowable costs of installing equipment, such as the       |
|         | temporary removal and replacement of wall sections and     |
|         | door frames to place equipment in its permanent location,  |
|         | or the costs of connecting utility lines, replacing        |
|         | finishes and furnishings, and installing any accessory     |
|         | devices required for the equipment's proper and safe       |
|         | utilization, may be considered either equipment costs or   |
|         | A&R costs, depending on the recipient's accounting system. |
|         |                                                            |
|         | A&R costs are not allowable under grants in support of     |
|         | scientific meetings (conference grants).                   |
+---------+------------------------------------------------------------+
| Animals | Allowable for the acquisition, care, and use of animals    |
|         | for use in research and research-related activities,       |
|         | contingent upon compliance with the applicable             |
|         | requirements of the *PHS Policy on Humane Care and Use of  |
|         | Laboratory Animals*. If the recipient operates an animal   |
|         | resource facility, charges for use of the facility should  |
|         | be determined in accordance with the *Cost Analysis and    |
|         | Rate Setting Manual for Animal Resource Facilities* (May   |
|         | 2000), available from NIH's National Center for Research   |
|         | Resources (NCRR)                                           |
|         | (<http://www.ncrr.nih.gov/newspub/CARS.pdf>) or from       |
|         | NCRR's Office of Science Policy and Public Liaison         |
|         | (e-mail: [info@ncrr.nih.gov](mailto:ospio@ncrr.nih.gov)).  |
+---------+------------------------------------------------------------+
| Audi    | Allowable for the production of an audiovisual.            |
| ovisual | "Audiovisual" means any product containing visual imagery, |
| Act     | sound, or both, such as motion pictures, films,            |
| ivities | videotapes, live or recorded radio or television programs  |
|         | or public service announcements, slide shows, filmstrips,  |
|         | audio recordings, multimedia presentations, or exhibits    |
|         | where visual imagery, sound, or both are an integral part. |
|         | "Production" refers to the steps and techniques used to    |
|         | create a finished audiovisual product, including, but not  |
|         | limited to, design, layout, scriptwriting, filming or      |
|         | taping, fabrication, sound recording, and editing.         |
|         |                                                            |
|         | A recipient with in-house production capability must       |
|         | determine whether it would be more efficient and           |
|         | economical to use that capability or to contract for the   |
|         | production of an audiovisual.                              |
|         |                                                            |
|         | If an audiovisual intended for members of the general      |
|         | public (i.e., people who are not researchers, health       |
|         | professions, or service delivery personnel or who are not  |
|         | directly involved in project activities as employees,      |
|         | trainees, or participants, such as clients, volunteers or  |
|         | patients) is produced under an HHS grant-supported project |
|         | or program, the recipient must submit two prints or tapes  |
|         | of the finished product along with its annual or final     |
|         | progress report. The costs of such prints or tapes are     |
|         | allowable costs.                                           |
|         |                                                            |
|         | Audiovisuals produced under a grant-supported project or   |
|         | program must bear an acknowledgment and disclaimer, such   |
|         | as the following:                                          |
|         |                                                            |
|         | The production of this \[type of audiovisual (motion       |
|         | picture, television program, etc.)\] was supported by      |
|         | Grant \[number of grant\] from \[name of OPDIV\]. Its      |
|         | contents are solely the responsibility of \[name of        |
|         | recipient\] and do not necessarily represent the official  |
|         | views of \[name of OPDIV\].                                |
+---------+------------------------------------------------------------+
| Audit   | Allowable (as specified in Section 230 of OMB Circular     |
| Costs   | A-133). The charges may be treated as a direct cost when   |
|         | the audit's scope is limited to a single HHS               |
|         | grant-supported project or program, as specified in 45 CFR |
|         | 74.26(d), or when it includes more than one project but    |
|         | the costs can be specifically identified with, and         |
|         | allocated to, each project on a proportional basis, and    |
|         | this practice is followed consistently by the recipient.   |
|         | Otherwise, charges for audits should be treated as         |
|         | indirect costs. In addition, a pass-through entity may     |
|         | charge an HHS award for the cost of a limited scope audit  |
|         | to monitor a subrecipient provided the subrecipient is not |
|         | required to have a single audit and the other conditions   |
|         | of Section 230(b) (2) of OMB Circular A-133 are met.       |
+---------+------------------------------------------------------------+
| Bad     | Unallowable.                                               |
| Debts   |                                                            |
+---------+------------------------------------------------------------+
| Bid and | Allowable as an indirect cost. See 45 CFR 74.27(b)(1) for  |
| P       | policy for non-profit organizations covered by OMB         |
| roposal | Circular A-122.                                            |
| Costs   |                                                            |
+---------+------------------------------------------------------------+
| Bonding | Allowable. See 45 CFR 74.21, 74.48(c) and 92.36 for        |
|         | policies and requirements concerning bonding.              |
+---------+------------------------------------------------------------+
| Books   | Allowable. If an organization has a library, books and     |
| and     | journals generally should be provided as part of normal    |
| J       | library services and treated as indirect costs.            |
| ournals |                                                            |
+---------+------------------------------------------------------------+
| Capital | See "Land or Building Acquisition" in this exhibit.        |
| expen   |                                                            |
| ditures |                                                            |
| for     |                                                            |
| land or |                                                            |
| bu      |                                                            |
| ildings |                                                            |
+---------+------------------------------------------------------------+
| Chi     | Allowable if within the scope of an approved project or    |
| ld-Care | program or as incidental costs of a project or program if  |
| Costs   | incurred to enable individuals to participate as subjects  |
|         | in research projects or to receive health services. Such   |
|         | costs also may be allowable as a fringe benefit for        |
|         | individuals working on a grant-supported project (see      |
|         | "Fringe Benefits" in this exhibit).                        |
+---------+------------------------------------------------------------+
| C       | Allowable. Such costs include local and long-distance      |
| ommunic | telephone calls, telegrams, express mail, postage,         |
| a-tions | messenger, and electronic or computer transmittal services |
|         | and usually are treated as indirect costs.                 |
+---------+------------------------------------------------------------+
| Com     | Allowable. May include hiring special consultants to       |
| pliance | research and document the historic value of proposed       |
| with    | performance sites and costs associated with preparation    |
| H       | and presentation of required materials to inform the       |
| istoric | public and others.                                         |
| Prese   |                                                            |
| rvation |                                                            |
| Requi   |                                                            |
| rements |                                                            |
+---------+------------------------------------------------------------+
| Constru | Allowable only when program legislation specifically       |
| ction/\ | authorizes new construction, modernization, or other       |
| Modern  | activities considered major A&R, and the OPDIV             |
| ization | specifically authorizes such costs in the NoA. When        |
|         | authorized, construction activities may include            |
|         | construction of a new facility or projects in an existing  |
|         | building that are considered to be construction, such as   |
|         | relocation of exterior walls, roofs, and floors;           |
|         | attachment of fire escapes; or completion of unfinished    |
|         | shell space to make it suitable for human occupancy.       |
+---------+------------------------------------------------------------+
| Con     | Allowable. A consultant is an individual retained to       |
| sultant | provide professional advice or services for a fee but      |
| S       | usually not as an employee of the requiring organization.  |
| ervices | The term "consultant" also includes a firm that provides   |
|         | paid professional advice or services. Recipients must have |
|         | written policies governing their use of consultants that   |
|         | are consistently applied regardless of the source of       |
|         | support. Such policies should include the conditions for   |
|         | paying consulting fees. The general circumstances of       |
|         | allowability of these costs, which may include fees and    |
|         | travel and subsistence costs, are addressed in the         |
|         | applicable cost principles under "professional services    |
|         | costs."                                                    |
|         |                                                            |
|         | In unusual situations, a person may be both a consultant   |
|         | and an employee of the same party, receiving compensation  |
|         | for some services as a consultant and for other work as a  |
|         | salaried employee as long as those separate services are   |
|         | not related to the same project and are not charged to the |
|         | same project. For example, consulting fees that are paid   |
|         | by an educational institution to a salaried faculty member |
|         | as extra compensation above that individual's base salary  |
|         | are allowable, provided the consultation is across         |
|         | departmental lines or involves a separate or remote        |
|         | operation and the work performed by the consultant is in   |
|         | addition to his or her regular departmental workload.      |
|         |                                                            |
|         | For employee consulting costs to be allowable under        |
|         | grant-supported projects (including subawards or contracts |
|         | under the grant), recipients, subrecipients, and           |
|         | contractors must establish written guidelines permitting   |
|         | such payments regardless of the source of funding and      |
|         | indicating the conditions under which the payment of       |
|         | consulting fees to employees is proper. Unless subject to  |
|         | OMB Circular A-21, the recipient, subrecipient, or         |
|         | contractor also must document that it would be             |
|         | inappropriate or infeasible to compensate the individual   |
|         | for those services through payment of additional salary.   |
|         | Under no circumstances can an individual be paid as a      |
|         | consultant and an employee under the same HHS grant.       |
|         |                                                            |
|         | Authorization for consulting fees paid to individuals      |
|         | serving as both employees and consultants of the same      |
|         | party must be provided in writing, on a case-by-case       |
|         | basis, by the head of the recipient, subrecipient, or      |
|         | contractor organization incurring the costs, or his/her    |
|         | designee. If the designee is personally involved in the    |
|         | project, the authorization may be given only by the head   |
|         | of the organization. This authorization must include a     |
|         | determination that the required conditions are present and |
|         | that there is no apparent or actual conflict of interest.  |
+---------+------------------------------------------------------------+
|         | Recipients, subrecipients, and contractors under grants    |
|         | are encouraged to obtain written reports from consultants  |
|         | unless such a report is not feasible given the nature of   |
|         | the consultation or would not be useful. Documentation     |
|         | maintained by the receiving organization should include    |
|         | the name of the consulting firm or individual consultant;  |
|         | the nature of the services rendered and their relevance to |
|         | the grant-supported activities, if not otherwise apparent  |
|         | from the nature of the services; the period of service;    |
|         | the basis for calculating the fee paid (e.g., rate per day |
|         | or hour worked or rate per unit of service rendered); and  |
|         | the amount paid. This information may be included in the   |
|         | consultant's invoice, in the report, or in another         |
|         | document.                                                  |
+---------+------------------------------------------------------------+
| Con     | Allowable in accordance with applicable program            |
| sumer/\ | regulations. When not specifically authorized by program   |
| P       | regulations, only the following costs are allowable with   |
| rovider | OPDIV prior approval:                                      |
| Board   |                                                            |
| Partic  | -   Reasonable and actual out-of-pocket costs incurred     |
| ipation |     solely as a result of attending a scheduled meeting,   |
|         |     including transportation, meals, babysitting fees, and |
|         |     lost wages.                                            |
|         |                                                            |
|         | -   The reasonable costs of necessary meals furnished by   |
|         |     the recipient to consumer or provider participants     |
|         |     during scheduled meetings if not reimbursed to         |
|         |     participants as per diem or otherwise.                 |
|         |                                                            |
|         | Where programmatic regulations permit such payments but    |
|         | establish a maximum annual income for eligibility for      |
|         | reimbursement of consumer/provider board members for wages |
|         | lost by reason of their participation in board activities, |
|         | the determination of eligibility will be made on the basis |
|         | of gross rather than net income.                           |
|         |                                                            |
|         | Members of consumer/provider boards are not considered     |
|         | employees or consultants of the recipient. Therefore, they |
|         | may not be compensated for their services other than as    |
|         | above, nor are they eligible for associated fringe         |
|         | benefits. Although not eligible for individual insurance   |
|         | coverage, board members may be covered by an               |
|         | organizational insurance policy while acting in their      |
|         | official capacities as board members.                      |
+---------+------------------------------------------------------------+
| Cont    | Contributions set aside for events whose occurrence cannot |
| ingency | be foretold with certainty as to time, intensity, or       |
| Funds   | assurance of their happening are unallowable under         |
|         | nonconstruction grants. Contingency funds do not include   |
|         | pension funds, self-insurance funds, and normal accruals   |
|         | for severance and post-retirement health costs (also see   |
|         | "Reserve Funds" in this exhibit). Construction grants may  |
|         | include a contingency fund in initial construction         |
|         | contract cost estimates to provide for unanticipated       |
|         | charges. These funds will be limited to 5 percent of       |
|         | construction and equipment costs before bids or proposals  |
|         | are received and must be reduced to 2 percent after a      |
|         | construction contract has been awarded.                    |
+---------+------------------------------------------------------------+
| Customs | Allowable under grants to domestic organizations when      |
| and     | performance will take place entirely within the United     |
| Import  | States, its possessions, or its territories, or when       |
| Duties  | foreign involvement in the project is incidental to the    |
|         | overall grant-supported project. Charges may include       |
|         | consular fees, customs surtaxes, value-added taxes, and    |
|         | other related charges. (Also see "Requirements for         |
|         | Specific Types of Recipients" of this part for the         |
|         | allowability of these costs.)                              |
+---------+------------------------------------------------------------+
| Deprec  | Allowable. Such costs usually are treated as indirect      |
| iation\ | costs. Depreciation or use charges on equipment or         |
| or Use  | buildings acquired under a federally supported project are |
| All     | not allowable.                                             |
| owances |                                                            |
+---------+------------------------------------------------------------+
| Donor   | Allowable for payment to volunteers or research subjects   |
| Costs   | who contribute blood, urine samples, and other body fluids |
|         | or tissues that are specifically project related.          |
+---------+------------------------------------------------------------+
| Drugs   | Allowable if within the scope of an approved project.      |
|         | Project funds may not be used to purchase drugs classified |
|         | by FDA as "ineffective" or "possibly effective" except in  |
|         | approved clinical research projects or in cases where      |
|         | there is no alternative other than therapy with "possibly  |
|         | effective" drugs. Recipient acquisition practices for      |
|         | drugs used in outpatient treatment must meet Federal       |
|         | requirements regarding cost-effectiveness and              |
|         | reasonableness as found in 42 CFR part 40, Subpart E, and  |
|         | OMB Circulars A-122 and A-87.                              |
+---------+------------------------------------------------------------+
| Dues or | Allowable as an indirect cost for organizational           |
| Mem     | membership in business, professional, or technical         |
| bership | organizations or societies. Payment of dues or membership  |
| Fees    | fees for an individual's membership in a professional or   |
|         | technical organization is allowable as a fringe benefit or |
|         | an employee development cost, if paid according to an      |
|         | established organizational policy consistently applied     |
|         | regardless of the source of funds.                         |
+---------+------------------------------------------------------------+
| Entert  | Unallowable. This includes the cost of amusements, social  |
| ainment | activities, and related incidental costs.                  |
| Costs   |                                                            |
+---------+------------------------------------------------------------+
| Eq      | Allowable for purchase of new, used, or replacement        |
| uipment | equipment as a direct cost or as part of indirect costs,   |
|         | depending on the intended use of the equipment. OPDIV      |
|         | prior approval may be required as specified in             |
|         | "Prior-Approval Requirements." Funds provided under a      |
|         | conference grant may not be used to purchase equipment.    |
|         |                                                            |
|         | For policies governing the classification, use,            |
|         | management, and disposition of equipment, see "Property    |
|         | Management." For policies governing the allowability of    |
|         | costs for rental of equipment, see "Rental or Lease of     |
|         | Facilities and Equipment" in this exhibit.                 |
+---------+------------------------------------------------------------+
| Federal | Only four types of costs---consultant fees, outpatient or  |
| (U.S.   | subject costs, salary or fringe benefits, and travel       |
| Gove    | costs---can be charged to HHS grants on behalf of Federal  |
| rnment) | employees, and only under the conditions specified.        |
| Em      | Recipients should advise any Federal employees with whom   |
| ployees | these types of arrangements may be made to consult with    |
|         | their employing agency concerning their ability to meet    |
|         | the required conditions.                                   |
|         |                                                            |
|         | Regardless of whether costs will be charged to the grant,  |
|         | special requirements apply when a Federal employee will be |
|         | involved in an HHS grant-supported activity in any         |
|         | capacity other than as an employee working on a grant to a |
|         | Federal institution, an outpatient, or a study subject.    |
|         | The requirements of that section do not apply to           |
|         | individuals that are classified as special government      |
|         | employees because of service on advisory groups or as a    |
|         | result of a formal consulting arrangement with a Federal   |
|         | agency. (See the HHS Standards of Conduct at [45 CFR part  |
|         | 73, Subpart                                                |
|         | J                                                          |
|         | ](http://a257.g.akamaitech.net/7/257/2422/14mar20010800/ed |
|         | ocket.access.gpo.gov/cfr_2002/octqtr/45cfr73.735-1001.htm) |
|         | for additional guidance.) See "Requirements for Specific   |
|         | Types of Recipients---Grants to Federal Institutions and   |
|         | Allowable Costs and Payments to (or on Behalf of) Federal  |
|         | Employees under Grants" for the allowability of payments   |
|         | made to, or on behalf of, Federal employees under HHS      |
|         | grants.                                                    |
+---------+------------------------------------------------------------+
| Fines   | Unallowable except when resulting from violations of, or   |
| and     | failure of the organization to comply with, Federal,       |
| Pe      | State, or local laws and regulations and incurred as a     |
| nalties | result of compliance with specific provisions of an award, |
|         | or when such payments are authorized in advance in writing |
|         | by the GMO.                                                |
+---------+------------------------------------------------------------+
| Fringe  | Allowable as part of overall employee compensation in      |
| B       | proportion to the amount of time or effort an employee     |
| enefits | devotes to the grant-supported project or program,         |
|         | provided such costs are incurred under formally            |
|         | established and consistently applied policies of the       |
|         | organization (see "Salaries and Wages" in this exhibit).   |
|         |                                                            |
|         | Tuition or tuition remission for regular employees is      |
|         | allowable as a fringe benefit. For organizations subject   |
|         | to OMB Circular A-21, tuition benefits for family members  |
|         | other than the employee are unallowable. For policies      |
|         | applicable to tuition remission for students working on    |
|         | grant-supported research projects, see "Salaries and       |
|         | Wages" in this exhibit.                                    |
+---------+------------------------------------------------------------+
| Fund    | Unallowable.                                               |
| raising |                                                            |
| Costs   |                                                            |
+---------+------------------------------------------------------------+
| Ha      | Allowable. Usually treated as an indirect cost.            |
| zardous |                                                            |
| Waste   |                                                            |
| D       |                                                            |
| isposal |                                                            |
+---------+------------------------------------------------------------+
| Ho      | Unallowable when the primary intent is to confer           |
| noraria | distinction on, or to symbolize respect, esteem, or        |
|         | admiration for, the recipient of the honorarium. A payment |
|         | for services rendered, such as a speaker's fee under a     |
|         | conference grant, is allowable.                            |
+---------+------------------------------------------------------------+
| H       | See "Research Patient Care" in this exhibit.               |
| ospital |                                                            |
| ization |                                                            |
+---------+------------------------------------------------------------+
| In      | Incentive payments to volunteers or patients participating |
| centive | in a grant-supported project or program are allowable.     |
| Costs   | Incentive payments to individuals to motivate them to take |
|         | advantage of grant-supported health care or other services |
|         | are allowable if within the scope of an approved project.  |
|         | See "Salaries and Wages" in this exhibit for incentive     |
|         | payments to employees.                                     |
+---------+------------------------------------------------------------+
| I       | Allowable to the extent expressly provided in the award    |
| ndemnif | for indemnification against liabilities to third parties   |
| ication | and any other loss or damage not compensated by insurance  |
|         | or otherwise. The Federal government is obligated to       |
|         | indemnify the institution only to the extent expressly     |
|         | provided for in the NoA.                                   |
+---------+------------------------------------------------------------+
| Inde    | Unallowable, including their proportionate share of        |
| pendent | indirect costs.                                            |
| R       |                                                            |
| esearch |                                                            |
| and     |                                                            |
| Deve    |                                                            |
| lopment |                                                            |
| Costs   |                                                            |
+---------+------------------------------------------------------------+
| In      | Allowable. Insurance usually is treated as an indirect     |
| surance | cost. In certain situations, however, where special        |
|         | insurance is required as a condition of the grant because  |
|         | of risks peculiar to the project, e.g., provision of       |
|         | health services, the premium may be charged as a direct    |
|         | cost if doing so is consistent with organizational policy. |
|         | If so, the insurance should be treated as a direct cost    |
|         | and assigned to individual grants based on the manner in   |
|         | which the insurer allocates the risk to the population     |
|         | covered by the insurance. Medical liability (malpractice)  |
|         | insurance is an allowable cost of research programs at     |
|         | educational institutions only if the research involves     |
|         | human subjects.                                            |
|         |                                                            |
|         | The cost of insuring equipment, whether purchased with     |
|         | grant funds or furnished as federally owned property,      |
|         | normally should be included in indirect costs but may be   |
|         | allowable as a direct cost if this manner of charging is   |
|         | the normal organizational policy.                          |
+---------+------------------------------------------------------------+
| I       | Allowable as an indirect cost for certain assets as        |
| nterest | specified in the applicable cost principles. Unallowable   |
|         | for hospitals.                                             |
+---------+------------------------------------------------------------+
| Inv     | Unallowable as a direct cost unless specifically           |
| ention, | authorized in the NoA. May be allowable as indirect costs  |
| Patent, | provided they are authorized under applicable cost         |
| or      | principles and are included in the negotiation of indirect |
| Li      | cost rates. Such costs include licensing or option fees,   |
| censing | attorney's fees for preparing or submitting patent         |
| Costs   | applications, and fees paid to the U.S. Patent and         |
|         | Trademark Office for patent application, patent            |
|         | maintenance, or recordation of patent-related information. |
+---------+------------------------------------------------------------+
| Land or | Not allowable unless acquisition or construction is        |
| B       | specifically authorized by program legislation and         |
| uilding | provided for in the NoA. Under those programs that have    |
| Acqu    | authority to permit recipients to acquire facilities,      |
| isition | considerations such as the type of program being supported |
|         | and the Federal interest in purchased property will be     |
|         | taken into account by the awarding office in determining   |
|         | whether property should be leased or purchased. For real   |
|         | property acquired with grant support, the cost of title    |
|         | insurance may be charged to the grant in proportion to the |
|         | Federal share of the acquisition cost. Filing fees         |
|         | incurred with the recordation in appropriate official      |
|         | records of the applicable jurisdiction of the Federal      |
|         | interest in the real property also may be charged to the   |
|         | grant. Use allowance or depreciation on buildings that     |
|         | were not acquired under a Federal project are allowable,   |
|         | usually as an indirect cost.                               |
+---------+------------------------------------------------------------+
| Leave   | Allowable for employees as a fringe benefit (see "Fringe   |
|         | Benefits" in this exhibit). See program guidance or Part   |
|         | IV for policy on leave for fellows and trainees.           |
+---------+------------------------------------------------------------+
| Legal   | Allowable. Generally treated as an indirect cost but,      |
| S       | subject to the limitations described in the applicable     |
| ervices | cost principles, may be treated as a direct cost for legal |
|         | services provided by individuals who are not employees of  |
|         | the recipient. Before a recipient incurs legal costs that  |
|         | are extraordinary or unusual, the recipient should make an |
|         | advance agreement regarding the appropriateness and        |
|         | reasonableness of such costs with the GMO. Legal costs     |
|         | incurred in defending or prosecuting claims, whether       |
|         | equitable or monetary, including administrative grant      |
|         | appeals, are unallowable charges, except as provided in    |
|         | the applicable cost principles.                            |
+---------+------------------------------------------------------------+
| Library | General library support is not allowable as a direct cost  |
| S       | but may be included in a recipient's indirect cost pool.   |
| ervices | These services are allowable as a direct cost when         |
|         | specifically required for the conduct of the project and   |
|         | when identifiable as an integral part of the               |
|         | grant-supported activity (e.g., in those programs designed |
|         | to develop and support such services).                     |
+---------+------------------------------------------------------------+
| L       | Generally unallowable, including costs of lobbying         |
| obbying | activities to influence the introduction, enactment, or    |
|         | modification of legislation by the U.S. Congress or a      |
|         | State legislature. Under certain circumstances, as         |
|         | provided in the applicable cost principles, costs          |
|         | associated with activities that might otherwise be         |
|         | considered "lobbying" that are directly related to the     |
|         | performance of a grant may be allowable. The recipient     |
|         | should obtain an advance understanding with the GMO if it  |
|         | intends to engage in these activities.                     |
+---------+------------------------------------------------------------+
| Meals   | Generally unallowable except for the following:            |
|         |                                                            |
|         | -   Subjects and patients under study                      |
|         |                                                            |
|         | -   Where specifically approved as part of the project or  |
|         |     program activity, e.g., in programs providing          |
|         |     children's services                                    |
|         |                                                            |
|         | -   When an organization customarily provides meals to     |
|         |     employees working beyond the normal workday, as a part |
|         |     of a formal compensation arrangement                   |
|         |                                                            |
|         | -   As part of a per diem or subsistence allowance         |
|         |     provided in conjunction with allowable travel          |
|         |                                                            |
|         | -   Under a conference grant, when meals are a necessary   |
|         |     and integral part of a conference, provided that meal  |
|         |     costs are not duplicated in participants' per diem or  |
|         |     subsistence allowances.                                |
|         |                                                            |
|         | Guest meals are not allowable. [(See "Consumer/Provider    |
|         | Board                                                      |
|         | Participation"](http://gran                                |
|         | ts.nih.gov/grants/policy/gps/7costs.htm#xconsum%23xconsum) |
|         | in this exhibit regarding the allowability of the cost of  |
|         | meals for consumer and provider board participants in      |
|         | grant-supported activities.)                               |
+---------+------------------------------------------------------------+
| Moving  | See "Recruitment Costs," "Relocation Costs," and           |
|         | "Transportation of Property" in this exhibit.              |
+---------+------------------------------------------------------------+
| NEPA    | Costs associated with evaluation of the environmental      |
| A       | effects of a proposed activity and producing the           |
| nalysis | Environmental Impact Statement (EIS) are allowable.        |
+---------+------------------------------------------------------------+
| O       | See "Salaries and Wages" in this exhibit.                  |
| vertime |                                                            |
+---------+------------------------------------------------------------+
| Pension | Allowable. For institutions of higher education and        |
| Plan    | non-profit organizations, the following applies:           |
| Costs   |                                                            |
|         | -   Such costs must be incurred according to the           |
|         |     established policies of the organization consistently  |
|         |     applied regardless of the source of funds.             |
|         |                                                            |
|         | -   The organization's policies must meet the test of      |
|         |     reasonableness.                                        |
|         |                                                            |
|         | -   The methods of cost allocation must be equitable for   |
|         |     all activities.                                        |
|         |                                                            |
|         | -   The amount assigned to each fiscal year must be        |
|         |     determined in accordance with generally accepted       |
|         |     accounting principles.                                 |
|         |                                                            |
|         | -   The cost assigned to a given fiscal year must be paid  |
|         |     or funded for all plan participants within 6 months    |
|         |     after the end of that fiscal year.                     |
|         |                                                            |
|         | State, local, or Indian tribal governments or hospitals    |
|         | may use the "pay-as-you-go" cost method\                   |
|         | (i.e., when pension benefits are paid by the recipient     |
|         | directly to, or on behalf of, retired employees or their   |
|         | beneficiaries) in lieu of the method described above.      |
|         | Under this method, the benefits may be charged in the      |
|         | recipient's fiscal year in which the payments are made to, |
|         | or on behalf of, retired employees or their beneficiaries, |
|         | provided that the recipient follows a consistent policy of |
|         | treating such payments as expenses in the year of payment. |
|         |                                                            |
|         | See the applicable cost principles for additional          |
|         | information on the allowability of costs associated with   |
|         | pension plans.                                             |
+---------+------------------------------------------------------------+
| Pr      | Allowable. Where authorized by the OPDIV as an expanded    |
| e-Award | authority (see Part IV of the HHS GPS), a recipient may,   |
| (       | at its own risk and without OPDIV prior approval, incur    |
| Pre-Agr | obligations and expenditures to cover costs up to (and     |
| eement) | including) 90 days before the beginning date of the        |
| Costs   | initial budget period of a new or competing continuation   |
|         | award if such costs                                        |
|         |                                                            |
|         | -   are necessary to conduct the project or program, and   |
|         |                                                            |
|         | -   would be allowable under the grant, if awarded.        |
|         |                                                            |
|         | However, even if authorized as an expanded authority, if a |
|         | specific expenditure would otherwise require prior         |
|         | approval, the cost or activity must meet the same tests of |
|         | allowability as if incurred after award.                   |
|         |                                                            |
|         | If not authorized as part of expanded authorities, the     |
|         | applicant/recipient must seek OPDIV prior approval before  |
|         | incurring pre-award costs. OPDIV prior approval is         |
|         | required for any costs to be incurred more than 90 days    |
|         | before the beginning date of the initial budget period of  |
|         | a new or competing continuation award.                     |
|         |                                                            |
|         | Recipients may incur pre-award costs before the beginning  |
|         | date of a non-competing continuation award without regard  |
|         | to the time parameters stated above and without prior      |
|         | approval. The incurrence of pre-award costs in             |
|         | anticipation of a competing or non-competing award imposes |
|         | no obligation on the OPDIV either to make the award or to  |
|         | increase the amount of the approved budget if an award is  |
|         | made for less than the amount anticipated and is           |
|         | inadequate to cover the pre-award costs incurred.          |
|         | Recipients are expected to be fully aware that pre-award   |
|         | costs result in borrowing against future support and that  |
|         | such borrowing must not impair the recipient's ability to  |
|         | accomplish the project or program objectives in the        |
|         | approved time frame or in any way adversely affect the     |
|         | conduct of the project or program.                         |
+---------+------------------------------------------------------------+
| Public  | Allowable only for costs specifically required by the      |
| Re      | award or for costs of communicating with the public and    |
| lations | the press about specific activities or accomplishments     |
| Costs   | under the grant-supported activity or other appropriate    |
|         | matters of public concern. Such costs may be treated as    |
|         | direct costs but should be treated as indirect costs if    |
|         | they benefit more than one sponsored agreement or if they  |
|         | benefit the grant and other work of the organization.      |
+---------+------------------------------------------------------------+
| Publi   | Allowable. Page charges for publication in professional    |
| cations | journals are allowable if the published paper reports work |
|         | supported by the grant and the charges are levied          |
|         | impartially on all papers published by the journal,        |
|         | whether or not by government-sponsored authors. The costs  |
|         | of reprints and publishing in other media, such as books,  |
|         | monographs, and pamphlets, also are allowable.             |
|         |                                                            |
|         | Publications and journal articles produced under an HHS    |
|         | grant-supported activity must bear an acknowledgment and   |
|         | disclaimer, as appropriate, as provided in "Intellectual   |
|         | Property---Publications."                                  |
+---------+------------------------------------------------------------+
| Recr    | Allowable subject to the conditions and restrictions       |
| uitment | contained in the applicable cost principles. These costs   |
| Costs   | may include help-wanted advertising costs, costs of travel |
|         | by applicants for interviews for prospective employment,   |
|         | and travel costs of employees while engaged in recruiting  |
|         | personnel. Grant funds may not be used for a prospective   |
|         | trainee's travel costs to or from the recipient            |
|         | organization for the purpose of recruitment. However,      |
|         | other costs incurred in connection with recruitment under  |
|         | training programs, such as advertising, may be allocated   |
|         | to a grant-supported project according to the provisions   |
|         | of the applicable cost principles (also see "Travel" and   |
|         | "Relocation Costs" in this exhibit).                       |
+---------+------------------------------------------------------------+
| Regis   | Allowable for attendance at conferences, symposiums, or    |
| tration | seminars if necessary to accomplish project or program     |
| Fees    | objectives.                                                |
+---------+------------------------------------------------------------+
| Rel     | Allowable---in other than change of grantee organization   |
| ocation | situations---when such costs are incurred incidental to a  |
| Costs   | permanent change of duty assignment (for an indefinite     |
|         | period or for a stated period of no less than 12 months)   |
|         | for an existing employee working on a grant-supported      |
|         | project, or when a new employee is recruited for work on   |
|         | the project, provided that the move is for the recipient's |
|         | benefit rather than the individual's and that payment is   |
|         | made according to established organizational policies      |
|         | consistently applied regardless of the source of funds.    |
|         | Relocation costs may include the cost of transporting the  |
|         | employee and his or her family, dependents, and household  |
|         | goods to the new location and certain expenses associated  |
|         | with the sale of the former home. If relocation costs have |
|         | been incurred in connection with the recruitment of a new  |
|         | employee, whether as a direct cost or an indirect cost,    |
|         | and the employee resigns for reasons within his or her     |
|         | control within 12 months after hire, the recipient must    |
|         | credit the grant account for the full cost of the          |
|         | relocation charged to the grant.                           |
|         |                                                            |
|         | When there is a change in the grantee organization, the    |
|         | personal relocation expenses of the PI/PD and others       |
|         | moving to the new recipient are not allowable charges.     |
+---------+------------------------------------------------------------+
| Rental  | Allowable subject to the limitations below. Rental costs   |
| or      | are allowable to the extent that the rates are reasonable  |
| Lease   | at the time of the decision to lease in light of such      |
| of      | factors as rental costs of comparable property, if any;    |
| Fac     | market conditions in the area; the type, life expectancy,  |
| ilities | condition, and value of the property leased; and available |
| and     | alternatives. Because of the complexity involved in        |
| Eq      | determining the allowable amount under certain types of    |
| uipment | leases, recipients are encouraged to consult the GMO       |
|         | before entering into leases that will result in direct     |
|         | charges to an award. In general, the rental costs for      |
|         | facilities and equipment applicable to each budget period  |
|         | should be charged to that period. However, see "Property   |
|         | Management" for an exception to this general rule.         |
|         |                                                            |
|         | Rental costs under leases that create a material equity in |
|         | the leased property, as defined in the applicable cost     |
|         | principles, are allowable only up to the amount that would |
|         | be allowed had the recipient purchased the property on the |
|         | date the lease agreement was executed. This would include  |
|         | depreciation or use allowances, maintenance, taxes, and    |
|         | insurance, but would exclude unallowable costs.            |
|         |                                                            |
|         | When a recipient transfers property to a third party       |
|         | through sale, lease, or otherwise and then leases the      |
|         | property back from that third party, the lease costs that  |
|         | may be charged to an HHS grant generally may not exceed    |
|         | the amount that would be allowed if the recipient          |
|         | continued to own the property.                             |
|         |                                                            |
|         | Rental costs under "less-than-arms-length" leases are      |
|         | allowable only up to the amount that would be allowed      |
|         | under the applicable cost principles had title to the      |
|         | property been vested in the recipient. A                   |
|         | less-than-arms-length lease is one in which one party to   |
|         | the lease agreement is able to control or substantially    |
|         | influence the actions of the other. Such leases include,   |
|         | but are not limited to, those between divisions of an      |
|         | organization; between organizations under common control   |
|         | through common officers, directors, or members; and        |
|         | between an organization and its directors, trustees,       |
|         | officers, or key employees (or the families of these       |
|         | individuals), directly or through corporations, trusts, or |
|         | similar arrangements in which they hold a controlling      |
|         | interest.                                                  |
+---------+------------------------------------------------------------+
| R       | The costs of routine and ancillary services provided by    |
| esearch | hospitals to individuals, including patients and           |
| Patient | volunteers, participating in research programs are         |
| Care    | allowable if included in the NoA or approved as a          |
|         | post-award change as specified in "Prior-Approval          |
|         | Requirements---OPDIV Prior Approval."                      |
|         |                                                            |
|         | "Routine services" include the regular room services,      |
|         | minor medical and surgical supplies, and the use of        |
|         | equipment and facilities for which a separate charge is    |
|         | not customarily made. "Ancillary services" are those       |
|         | special services for which charges customarily are made in |
|         | addition to routine services, e.g., x-ray, operating room, |
|         | laboratory, pharmacy, blood bank, and pathology. See       |
|         | "Research Patient Care Costs" for policy concerning        |
|         | reimbursement of these costs.                              |
|         |                                                            |
|         | The following otherwise allowable costs are not classified |
|         | as research patient care costs: items of personal expense  |
|         | reimbursement, such as patient travel; consulting          |
|         | physician fees; and any other direct payments to           |
|         | individuals, including inpatients, outpatients, subjects,  |
|         | volunteers, and donors.                                    |
+---------+------------------------------------------------------------+
| Reserve | Contributions to a reserve fund for self-insurance are     |
| Funds   | allowable as specified in the governing cost principles    |
|         | (also see "Contingency Funds" in this exhibit).            |
+---------+------------------------------------------------------------+
| Sab     | Sabbatical leave costs may be included in a fringe benefit |
| batical | rate or in the organization's indirect cost rate. Costs of |
| Leave   | leave of absence by employees for performance of graduate  |
| Costs   | work or sabbatical study, travel, or research are          |
|         | allowable as a direct charge provided the organization has |
|         | a uniform policy on sabbatical leave for people engaged in |
|         | research and the salary is proportional to the service     |
|         | rendered. Where sabbatical leave is included in fringe     |
|         | benefits for which a cost is determined for assessment as  |
|         | a direct charge, the aggregate amount of such assessments  |
|         | applicable to all work of the organization during the base |
|         | period must be reasonable in relation to the               |
|         | organization's actual practice under its sabbatical leave  |
|         | policy. Sabbatical leave paid by an individual's employer, |
|         | in combination with other compensation (e.g., partial      |
|         | salary from an HHS grant), may not exceed\                 |
|         | 100 percent of that individual's regular salary from his   |
|         | or her organization.                                       |
+---------+------------------------------------------------------------+
| S       | Allowable. Compensation for personal services covers all   |
| alaries | amounts, including fringe benefits, paid currently or      |
| and     | accrued by the organization for employee services rendered |
| Wages   | to the grant-supported project or program. Compensation    |
|         | costs are allowable to the extent that they are            |
|         | reasonable, conform to the established policy of the       |
|         | organization consistently applied regardless of the source |
|         | of funds, and reflect no more than the percentage of time  |
|         | actually devoted to the OPDIV-funded project or program.   |
|         | Where restricted by language in the HHS appropriations     |
|         | act, OPDIVs will not reimburse recipients for the direct   |
|         | salaries of individuals at a rate in excess of the level   |
|         | specified. Direct salary is exclusive of fringe benefits   |
|         | and indirect costs. If there is a salary limitation, it    |
|         | does not apply to consultant payments or to contracts for  |
|         | routine goods and services, but it does apply to           |
|         | subrecipients (including consortium participants).         |
|         | Specific considerations are addressed below.               |
+---------+------------------------------------------------------------+
| *       | Salary and wage amounts charged to grant-supported         |
| Payroll | projects or programs for personal services must be based   |
| Distri  | on an adequate payroll distribution system that documents  |
| bution* | such distribution in accordance with generally accepted    |
|         | practices of like organizations. Standards for payroll     |
|         | distribution systems are contained in the applicable cost  |
|         | principles (other than those for for-profit                |
|         | organizations). Briefly summarized, acceptable systems are |
|         | as follows:                                                |
+---------+------------------------------------------------------------+
|         | *Hospitals*                                                |
|         |                                                            |
|         | -   Monthly after-the-fact reports of the distribution of  |
|         |     time or effort for professional staff members.         |
|         |                                                            |
|         | -   Time and attendance and payroll distribution records   |
|         |     for non-professional employees.                        |
+---------+------------------------------------------------------------+
|         | *Non-profit organizations*                                 |
|         |                                                            |
|         | -   Monthly after-the-fact reports, including a signed     |
|         |     certification, by the employee, or by a responsible    |
|         |     supervisory official having first-hand knowledge of    |
|         |     the work performed, that the distribution of activity  |
|         |     represents a reasonable estimate of the actual work    |
|         |     performed by the employee during the period covered by |
|         |     the report. Each report must account for the total     |
|         |     activity required to fulfill the employee's            |
|         |     obligations to the organization as well as the total   |
|         |     activity for which he or she is compensated.           |
|         |                                                            |
|         | -   For non-professional employees, additional supporting  |
|         |     reports, indicating the total number of hours worked   |
|         |     each day, must be maintained in conformance with DoL   |
|         |     regulations implementing the Fair Labor Standards Act  |
|         |     (29 CFR part 516).                                     |
|         |                                                            |
|         | -   The distribution of salaries and wages must be         |
|         |     supported by personnel activity reports as described   |
|         |     above, except when a substitute system has been        |
|         |     approved, in writing, by the Federal cognizant agency  |
|         |     designated under OMB Circular A-122.                   |
|         |                                                            |
|         |     *State, local, and Indian tribal governments*          |
|         |                                                            |
|         | -   Time and attendance or equivalent records for all      |
|         |     employees.                                             |
|         |                                                            |
|         | -   Time distribution records for employees whose          |
|         |     compensation is chargeable to more than one grant or   |
|         |     other cost objective.                                  |
+---------+------------------------------------------------------------+
|         | *Educational institutions*                                 |
|         |                                                            |
|         | -   A plan confirmation system for professorial and other  |
|         |     professional staff members that is based on budgeted,  |
|         |     planned, or assigned work activity and that is updated |
|         |     to reflect any significant changes in work             |
|         |     distribution. This system must be incorporated into    |
|         |     the organization's official records and must identify  |
|         |     activity applicable to each sponsored agreement and to |
|         |     each category needed to identify indirect costs and    |
|         |     the functions to which they are allocable. At least    |
|         |     annually, the employee, PI/PD, or responsible          |
|         |     officials will verify, by suitable means, that the     |
|         |     work was performed and that the salaries and wages     |
|         |     charged to sponsored agreements, whether as direct     |
|         |     charges or in other categories of cost, are reasonable |
|         |     in relation to the work performed.                     |
|         |                                                            |
|         | -   A system, supported by after-the-fact activity         |
|         |     reports, that reflects the distribution of covered     |
|         |     employees' activity allocable to each grant and        |
|         |     includes identification and recording of significant   |
|         |     changes in work activity when initial charges were     |
|         |     based on estimates. The system also must specify each  |
|         |     category of activity needed to identify indirect costs |
|         |     and the functions to which they are allocable. For     |
|         |     professorial and other professional staff members, the |
|         |     activity reports will be prepared each academic term,  |
|         |     but at least every 6 months. For other employees,      |
|         |     unless the OPDIV agrees to alternate arrangements, the |
|         |     reports will be prepared at least monthly and will     |
|         |     coincide with one or more pay periods.                 |
|         |                                                            |
|         | -   A multiple confirmation records system, for            |
|         |     professorial and other professional staff members,     |
|         |     that is supported by records certifying costs          |
|         |     separately for direct costs and indirect costs, with   |
|         |     reports prepared each academic term, but at least      |
|         |     every 6 months, that confirm the activities as         |
|         |     allocable to direct or indirect costs.                 |
|         |                                                            |
|         | -   By mutual agreement, any other method meeting the      |
|         |     criteria specified in Section J.10 of OMB Circular     |
|         |     A-21.                                                  |
+---------+------------------------------------------------------------+
|         | *For-profit organizations*                                 |
|         |                                                            |
|         | HHS requires for-profit organizations to conform with      |
|         | industry standards to support salary and wage charges to   |
|         | HHS grants. Therefore, unless an alternate system is       |
|         | approved by the GMO, the recipient must maintain a         |
|         | time-and-effort reporting system for both professional and |
|         | other-than-professional staff reflecting daily             |
|         | after-the-fact reporting of hours expended on individual   |
|         | projects or indirect activities. The system must record    |
|         | both hours worked and hours absent. This information must  |
|         | be certified by an authorized organizational               |
|         | representative no less frequently than every pay period.   |
+---------+------------------------------------------------------------+
| *O      | Premiums for overtime generally are allowable; however,    |
| vertime | such payments are not allowable for faculty members at     |
| Pr      | institutions of higher education. If overtime premiums are |
| emiums* | allowable, the categories or classifications of employees  |
|         | eligible to receive overtime premiums should be determined |
|         | according to the formal policies of the organization       |
|         | consistently applied regardless of the source of funds.    |
+---------+------------------------------------------------------------+
| *Bo     | Allowable for employees as part of a total compensation    |
| nuses/\ | package, provided such payments are reasonable and are     |
| In      | made according to a formal policy of the recipient that is |
| centive | consistently applied regardless of the source of funds.    |
| Pa      |                                                            |
| yments* |                                                            |
+---------+------------------------------------------------------------+
| *Pa     | For investigators with university and clinical practice    |
| yments\ | plan appointments, compensation from both sources may be   |
| for     | considered the base salary if the following criteria are   |
| Dual    | met:                                                       |
| Appoin  |                                                            |
| tments* | -   Clinical practice compensation must be guaranteed by   |
|         |     the university.                                        |
|         |                                                            |
|         | -   Clinical practice effort must be shown on the          |
|         |     university appointment form and must be paid through   |
|         |     the university.                                        |
|         |                                                            |
|         | -   Clinical practice effort must be included and          |
|         |     accounted for on the university's effort report.       |
+---------+------------------------------------------------------------+
| *Compe  | Tuition remission and other forms of compensation paid as, |
| nsation | or in lieu of, wages to students (including fellows and    |
| of      | trainees) under research grants are allowable, provided    |
| St      | the following conditions are met:                          |
| udents* |                                                            |
|         | -   The individual is performing activities necessary to   |
|         |     the grant.                                             |
|         |                                                            |
|         | -   Tuition remission and other forms of compensation are  |
|         |     consistently provided, in accordance with established  |
|         |     institutional policy, to students performing similar   |
|         |     activities conducted in non-sponsored as well as in    |
|         |     sponsored activities.                                  |
|         |                                                            |
|         | -   During the academic period, the student is enrolled in |
|         |     an advanced degree program at a recipient or           |
|         |     affiliated institution and the activities of the       |
|         |     student in relation to the federally sponsored         |
|         |     research project are related to the degree program.    |
|         |                                                            |
|         | -   The tuition or other payments are reasonable           |
|         |     compensation for the work performed and are            |
|         |     conditioned explicitly upon the performance of         |
|         |     necessary work.                                        |
|         |                                                            |
|         | -   It is the institution's practice to similarly          |
|         |     compensate students in non-sponsored as well as        |
|         |     sponsored activities.                                  |
|         |                                                            |
|         | Charges for tuition remission and other forms of           |
|         | compensation paid to students as, or in lieu of, salaries  |
|         | and wages are subject to the reporting requirements in     |
|         | Section J.10 of OMB Circular A-21, or an equivalent method |
|         | for documenting the individual's effort on the research    |
|         | project. Tuition remission may be charged on an average    |
|         | rate basis.                                                |
|         |                                                            |
|         | Payments made for educational assistance (e.g.,            |
|         | scholarships, fellowships, and student aid costs) are      |
|         | allowable only when the purpose of the grant is to provide |
|         | training to selected participants and the charge is        |
|         | approved by the OPDIV. These costs are unallowable charges |
|         | to research grant funds even when they would appear to     |
|         | benefit the research project.                              |
+---------+------------------------------------------------------------+
| Service | Allowable. The costs to a user of organizational services  |
| Charges | and central facilities owned by the recipient, such as     |
|         | central laboratory and computer services, are allowable    |
|         | and must be based on organizational fee schedules          |
|         | consistently applied regardless of the source of funds.    |
+---------+------------------------------------------------------------+
| Se      | Allowable only to the extent that such payments are        |
| verance | required by law, are included in an employer-employee      |
| Pay     | agreement, are part of an established policy effectively   |
|         | constituting an implied agreement on the part of the       |
|         | organization, or meet the circumstances of the particular  |
|         | employment. The amount of severance pay to be provided     |
|         | should be determined according to established              |
|         | organizational policy consistently applied regardless of   |
|         | the source of funds and should be reasonable, taking into  |
|         | consideration the practice of similar types of             |
|         | organizations and the extent of the organization's         |
|         | dependence on Federal funds. The applicable cost           |
|         | principles should be consulted regarding the different     |
|         | treatment of severance pay in regular and mass termination |
|         | situations.                                                |
+---------+------------------------------------------------------------+
| S       | Allowable as cost-of-living allowances for trainees and    |
| tipends | fellows if permitted by a program's statute authorizing or |
|         | implementing regulations. The specific amounts may be      |
|         | established by policy. Generally, these payments are made  |
|         | according to a pre-established schedule based on the       |
|         | individual's experience and level of training. (See        |
|         | "Traineeships, Fellowships, and Similar Awards Made to     |
|         | Organizations on Behalf of Individuals---Allowable         |
|         | Costs.") A stipend is not a fee-for-service payment and is |
|         | not subject to the cost accounting requirements of the     |
|         | cost principles. Stipends are not allowable under research |
|         | grants even when they appear to benefit the research       |
|         | project.                                                   |
+---------+------------------------------------------------------------+
| Suba    | Allowable to carry out a portion of the programmatic       |
| wards/\ | effort or for the acquisition of routine goods or services |
| Co      | under the grant. Such arrangements may be in the form of   |
| ntracts | consortium agreements or commercial contracts and may      |
| under   | require OPDIV approval (see "Prior-Approval                |
| Grants  | Requirements").                                            |
+---------+------------------------------------------------------------+
| S       | Allowable.                                                 |
| upplies |                                                            |
+---------+------------------------------------------------------------+
| Taxes   | Allowable. Such costs include taxes that an organization   |
|         | is required to pay as they relate to employment, services, |
|         | travel, rental, or purchasing for a project. Recipients    |
|         | must avail themselves of any tax exemptions for which      |
|         | activities supported by Federal funds may qualify. State   |
|         | sales and use taxes for materials and equipment are        |
|         | allowable only when the State does not grant a refund or   |
|         | exemption on such taxes.                                   |
+---------+------------------------------------------------------------+
| Term    | Unallowable except as follows. If a grant is terminated or |
| ination | suspended, the recipient may not incur new obligations     |
| or      | after the effective date of the termination or suspension  |
| Sus     | and must cancel as many outstanding obligations as         |
| pension | possible. The awarding office will allow full credit to    |
| Costs   | the recipient for the Federal share of otherwise allowable |
|         | costs if the obligations were properly incurred before     |
|         | suspension or termination---and not in anticipation of     |
|         | it---and, in the case of termination, are not cancelable.  |
|         | The GMO may authorize other costs in, or subsequent to,    |
|         | the notice of termination or suspension. See 45 CFR        |
|         | 74.62(c) and 92.43.                                        |
+---------+------------------------------------------------------------+
| Toys    | Allowable for the purchase of items such as toys and games |
| and     | to allow patients to participate in research protocols or, |
| Nursery | if age appropriate, in programs or projects serving        |
| Items   | children.                                                  |
+---------+------------------------------------------------------------+
| T       | Allowable only if considered equipment as provided below.  |
| railers | A "trailer" is defined as a portable vehicle built on a    |
| and     | chassis that is designed to be hauled from one site to     |
| Modular | another by a separate means of propulsion and that serves, |
| Units   | wherever parked, as a dwelling or place of business. A     |
|         | "modular unit" is a prefabricated portable unit designed   |
|         | to be moved to a site and assembled on a foundation to     |
|         | serve as a dwelling or a place of business. The            |
|         | determination of whether costs to acquire trailers or      |
|         | modular units are allowable charges to HHS grant-supported |
|         | projects depends on whether such units are classified as   |
|         | real property or equipment. The classification will depend |
|         | on whether the recipient's intended use of the property is |
|         | permanent or temporary.                                    |
|         |                                                            |
|         | A trailer or modular unit is considered real property when |
|         | the unit and its installation are designed or planned to   |
|         | be installed permanently at a given location so as to seem |
|         | fixed to the land as a permanent structure or appurtenance |
|         | thereto. Units classified as real property may not be      |
|         | charged to an HHS grant-supported project unless           |
|         | authorizing legislation permits construction or            |
|         | acquisition of real property and the specific purchase is  |
|         | approved by the OPDIV.                                     |
|         |                                                            |
|         | A trailer or modular unit is considered equipment when the |
|         | unit and its installation are designed or planned to be    |
|         | used at any given location for a limited time only. Units  |
|         | classified as equipment may be charged to HHS              |
|         | grant-supported projects only if the terms and conditions  |
|         | of the award do not prohibit the purchase of equipment and |
|         | OPDIV prior approval is obtained, as appropriate.          |
|         |                                                            |
|         | A trailer or modular unit properly classified as real      |
|         | property or as equipment at the time of acquisition        |
|         | retains that classification for the life of the item,      |
|         | thereby determining the appropriate accountability         |
|         | requirements under 45 CFR 74.32 or 74.34 or 92.31 or       |
|         | 92.32, as applicable.                                      |
+---------+------------------------------------------------------------+
| Trainee | Allowable if permitted by statute, regulation, or program  |
| Costs   | policy, as defined in the authorizing document, and        |
|         | included in the NoA.                                       |
+---------+------------------------------------------------------------+
| Transpo | Allowable for freight, express, cartage, postage, and      |
| rtation | other transportation services relating to goods either     |
| of      | purchased, in process, or delivered, including instances   |
| P       | when equipment or other property is moved from one         |
| roperty | recipient to another. In a change-of-grantee situation,    |
|         | the cost of transportation may be charged to the grant at  |
|         | either the original or the new organization, depending on  |
|         | the circumstances and the availability of funds in the     |
|         | appropriate active grant account.                          |
+---------+------------------------------------------------------------+
| Travel  | Allowable as a direct cost where such travel will provide  |
|         | direct benefit to the project or program.                  |
+---------+------------------------------------------------------------+
| *Emp    | Consistent with the organization's established travel      |
| loyees* | policy, costs for employees working on the grant-supported |
|         | project or program may include associated per diem or      |
|         | subsistence allowances and other travel-related expenses,  |
|         | such as mileage allowances if travel is by personal        |
|         | automobile.                                                |
|         |                                                            |
|         | Domestic travel is travel performed within the recipient's |
|         | own country. For U.S. and Canadian recipients, it includes |
|         | travel within and between any of the 50 States of the      |
|         | United States and its possessions and territories and also |
|         | travel between the United States and Canada and within     |
|         | Canada.                                                    |
+---------+------------------------------------------------------------+
|         | Foreign travel is defined as any travel outside of Canada  |
|         | and the United States and its territories and possessions. |
|         | However, for an organization located outside Canada and    |
|         | the United States and its territories and possessions,     |
|         | foreign travel means travel outside that country.          |
|         |                                                            |
|         | In all cases, travel costs are limited to those allowed by |
|         | formal organizational policy; in the case of air travel,   |
|         | the lowest reasonable commercial airfares must be used.    |
|         | For-profit recipients' allowable travel costs may not      |
|         | exceed those established by the FTR, issued by GSA,        |
|         | including the maximum per diem and subsistence rates       |
|         | prescribed in those regulations. This information is       |
|         | available at [http://www.gsa.gov](http://www.gsa.gov/). If |
|         | a recipient organization has no formal travel policy,      |
|         | those regulations will be used to determine the amount     |
|         | that may be charged for travel costs.                      |
+---------+------------------------------------------------------------+
|         | Recipients are strongly encouraged to take advantage of    |
|         | discount fares for airline travel through advance purchase |
|         | of tickets if travel schedules can be planned in advance   |
|         | (such as for national meetings and other scheduled         |
|         | events).                                                   |
|         |                                                            |
|         | Recipients must comply with the requirement that U.S. flag |
|         | air carriers be used by domestic recipients to the maximum |
|         | extent possible when commercial air transportation is the  |
|         | means of travel between the United States and a foreign    |
|         | country or between foreign countries. This requirement     |
|         | must not be influenced by factors of cost, convenience, or |
|         | personal travel preference. The cost of travel under a     |
|         | ticket issued by a U.S. flag air carrier that leases space |
|         | on a foreign air carrier under a code-sharing agreement is |
|         | allowable if the purchase is in accordance with GSA        |
|         | regulations on U.S. flag air carriers and code shares (see |
|         | [http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/\      |
|         | 110304_FTR_R                                               |
|         | 2QA53_0Z5RDZ-i34K-pR.pdf](http://www.gsa.gov/gsa/cm_attach |
|         | ments/GSA_DOCUMENT/110304_FTR_R2QA53_0Z5RDZ-i34K-pR.pdf)). |
|         | (A code-sharing agreement is an arrangement between a U.S. |
|         | flag carrier and a foreign air carrier in which the U.S.   |
|         | flag carrier provides passenger service on the foreign air |
|         | carrier's regularly scheduled commercial flights.)         |
+---------+------------------------------------------------------------+
| *P      | If patient care, including research patient care, or other |
| atients | direct health or social services are approved activities   |
| or      | of the grant-supported project or program, the costs of    |
| Service | transporting individuals participating in the program or   |
| Benefic | project to the site where services are being provided,     |
| iaries* | including costs of public transportation, are allowable.   |
|         | The purchase of motor vehicles for this purpose also may   |
|         | be allowable.                                              |
+---------+------------------------------------------------------------+
|         |                                                            |
+---------+------------------------------------------------------------+

### Cost Transfers

Cost transfers by recipients between grants, whether as a means to
compensate for cost overruns or for other reasons, generally are
unallowable; however, cost transfers by recipients (or subrecipients or
cost-type contractors) may sometimes be necessary to correct bookkeeping
or clerical errors. Recipients (and subrecipients and contractors)
should have systems in place to detect such errors within a reasonable
time frame. Untimely discovery of errors could be an indication of poor
internal controls.

Permissible cost transfers should be made promptly after the error
occurs but no later than 90 days following occurrence unless a longer
period is approved in advance by the GMO. The transfer must be supported
by documentation, pursuant to 45 CFR 74.53 or 92.42, that fully explains
how the error occurred and a certification of the correctness of the new
charge by a responsible official of the recipient, subrecipient, or
contractor. An explanation merely stating that the transfer was made "to
correct error" or "to transfer to correct project" is not sufficient.
This information need not be submitted to the GMO but is subject to
audit. If the transfer affects a previously submitted FSR, a revised FSR
must be submitted.

Frequent errors in recording costs may indicate the need for accounting
system improvements, enhanced internal controls, or both. If such errors
occur, organizations are encouraged to evaluate the need for
improvements and to make whatever improvements are deemed necessary to
prevent reoccurrence. An awarding office also may require a recipient to
take corrective action by imposing additional terms and conditions on an
award.

### Cost Overruns and Rate of Expenditure

Transfers of costs from one project to another or from one competitive
segment to the next solely to cover cost overruns are not allowable. The
GMO monitors expenditure rates under individual awards during each
budget period and within the overall project period. Although HHS allows
its recipients certain flexibilities with respect to rebudgeting, HHS
expects the rate and types of expenditures to be consistent with the
approved project/program and budget and may question or restrict
expenditures that appear inconsistent with these expectations. In
addition, recipients are expected to monitor their fund drawdowns and
amounts reported on financial reports (e.g., PMS 272) to ensure that
they do not exceed the amount authorized on the NoA.

The GMO may review recipient cash drawdowns to determine whether they
indicate any pattern of accelerated or delayed expenditures. Expenditure
patterns are of particular concern because they may indicate a
deficiency in the recipient's financial management system or internal
controls. Accelerated or delayed expenditures may result in an inability
to complete the approved project or program within the approved budget
and period of performance. In these situations, the GMO may seek
additional information from the recipient and may make any necessary and
appropriate adjustments.

### Allocation of Costs

When salaries or other activities are supported by two or more sources,
issues arise as to how the direct costs should be allocated among the
sources of support. In general, a cost that benefits two or more
projects or activities in proportions that can be determined without
undue effort or cost should be allocated to the projects on the basis of
the proportional benefit.

A cost that benefits two or more projects or activities in proportions
that cannot be determined because of the interrelationship of the work
involved may be allocated or transferred to the benefiting projects on
any reasonable basis as long as the costs charged are allowable,
allocable, and reasonable under the applicable cost principles and the
recipient's financial management system includes adequate internal
controls. Costs may be assigned entirely to one project, with written
prior approval from the GMO, under the following conditions only:

-   The projects are scientifically and technically related.

-   The projects are under the direction of the same PI/PD.

-   The projects have been funded by the same OPDIV or OPDIV component.

-   There is no change in the scope of the individual grants involved.

-   The relating of costs will not be detrimental to the conduct of work
    approved under each individual award.

-   The relatedness will not be used to circumvent the terms and
    conditions of an individual award.

### Services Provided by Affiliated Organizations

A number of universities and other organizations have established
closely affiliated, but separately incorporated, organizations to
facilitate the administration of research and other programs supported
by Federal funds. Such legally independent entities are often referred
to as "foundations," although this term does not necessarily appear in
the name of the organization. Typically, the parent organization
provides considerable support services, in the form of administration,
facilities, equipment, accounting, and other services, to its
foundation, and the latter, acting in its own right as a recipient,
includes the cost of these services in its indirect cost proposal.

Costs incurred by an affiliated, but separate, legal entity in support
of a recipient foundation (foundation) are allowable for reimbursement
under HHS grants only if at least one of the following conditions is
met:

-   The foundation is charged for, and is legally obligated to pay for,
    the services provided by the parent organization.

-   The affiliated organization is subject to State or local law that
    prescribes how Federal reimbursement for the costs of the parent
    organization's services will be expended and requires that a State
    or local official acting in his or her official capacity approves
    such expenditures.

-   There is a valid written agreement between the affiliated
    organizations whereby the parent organization agrees that the
    foundation may retain Federal reimbursement of parent organization
    costs. The parent organization may either direct how the funds will
    be used or permit the foundation that discretion.

If none of the above conditions is met, the costs of the services
provided by the parent organization to the foundation are not allowable
for reimbursement under an HHS grant. However, the services may be
acceptable for cost-sharing (matching) purposes.

## Matching or Cost Sharing

All required matching or cost sharing, whether required by statute or
regulation, will be shown as part of the total approved budget in the
NoA and becomes an award requirement enforceable through the NoA. The
costs that the recipient incurs in fulfilling its matching or
cost-sharing requirement are subject to the same requirements, including
the cost principles, that are applicable to the use of Federal funds,
including prior approval requirements and other rules for allowability
described in 45 CFR 74.23 and 45 CFR 92.24. Third-party in-kind
contributions must meet the requirements specified 45 CFR 74.23 and 45
CFR 92.24.

If a recipient does not meet the specified level of matching or cost
sharing as reflected in the NoA, an OPDIV may take one or more of the
following actions:

-   Make a downward adjustment in the Federal award amount

-   Take an enforcement action affecting the current or future awards to
    that recipient (see "Enforcement Actions")

-   If the amount in the NoA exceeds the statutory (or implementing
    regulatory requirement) for matching, where justified, reduce the
    matching to no less than the statutory or regulatory requirement

-   If the amount in the NoA exceeds a regulatory cost-sharing
    requirement, where justified and authorized by the regulation,
    reduce the cost sharing to no less than the regulatory requirement.

If a recipient provides matching or cost sharing that exceeds that
required by the NoA, the excess amount is not subject to the
requirements of 45 CFR part 74 or 92 unless the amount is used to offset
otherwise unallowable matching or cost-sharing amounts.

When satisfying a matching or cost-sharing requirement by not claiming
the full indirect cost reimbursement to which the recipient is otherwise
entitled, the recipient should reduce its charge to the grant to reflect
the amount claimed. The amount of the reduction qualifies as matching or
cost sharing. The recipient should include an explanation in the
"Remarks" section of the Financial Status Report (see
"Reporting---Financial Reporting").

### Valuation of Donated Goods and Services

#### Donated Supplies, Equipment, Space, or Land

Donated supplies may include such items as expendable property, office
supplies (unless treated as an indirect cost), laboratory supplies, or
workshop and classroom supplies. The value assigned to donated supplies
must be reasonable and cannot exceed the fair market value of the
supplies at the time of donation.

The value of donated equipment cannot exceed the fair market value of
equipment of the same age and condition at the time of donation. The
value of loaned equipment cannot exceed its fair rental value. If any
part of the donated property was acquired with Federal funds, only the
non-Federal share of the property may be counted as matching or cost
sharing.

If a third party donates equipment, buildings, or land and title passes
to a recipient or subrecipient, the treatment of the donated property
depends upon the purpose of the grant or subgrant as follows:

-   If the purpose of the grant or subgrant is to assist the recipient
    with the acquisition of property, the market value of that property
    at the time of donation may be counted as matching.

-   If the purpose of the grant or subgrant is other than to assist with
    the acquisition of property, the following applies:

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-   With GMO approval, the market value at the time of donation of the
    donated equipment or buildings and the fair rental rate of the
    donated land may be counted as matching or cost sharing. In the case
    of a subgrant, the terms of the grant award may require that the
    approval be obtained both from the GMO and from the recipient. In
    either case, approval may be given only if purchase of the equipment
    or rental of the land would be allowable as a direct cost.

-   If any part of the donated property was acquired with Federal funds,
    only the non-Federal share of the property may be counted as
    matching or cost sharing.

-   Unless GMO approval is obtained, no amount may be counted for
    donated land and only depreciation or use allowances may be counted
    for donated equipment and buildings. The depreciation or use
    allowances for such property are not treated as third party in-kind
    contributions. Instead, they are treated as costs incurred by the
    recipient or subrecipient. The allowances are computed and allocated
    (usually as indirect costs) in accordance with the cost principles
    in the same way as depreciation or use allowances for purchased
    equipment and buildings. The amount of depreciation or use
    allowances for donated equipment and buildings is based on the
    property's market value at the time it was donated.

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-   If a recipient or subrecipient donates real property for a
    construction or facilities acquisition project, the current market
    value of that property may be counted as matching or cost sharing.
    If any part of the donated property was acquired with Federal funds,
    only the non-Federal share of the property may be counted as
    matching or cost sharing.

The value of donated space cannot exceed the fair rental value of
comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.

The awarding office may require that the market value of land or
buildings or the fair rental rate of land or of space in a building be
established by an independent property appraiser or by a GSA
representative and certified by a responsible official of the recipient,
subrecipient, or contractor.

#### Volunteer Services

Rates for donated services used to satisfy a matching or cost-sharing
requirement must be consistent with those paid for similar work in the
organization. In those instances in which the required skills are not
found in the recipient's organization, rates must be consistent with
those paid for similar work in the labor market in which the recipient
would compete for the kind of services involved. When an employer other
than the recipient furnishes the services of an employee, the services
must be valued at the employee's regular rate of pay. Only the amount
representing an amount consistent with the function performed are
allowable, e.g., if a doctor serves as a receptionist, only the amount
that would be allowable for a receptionist is allowable as a
contribution to the grant. Fringe benefits consistent with those that
would be paid by the employing organization that are reasonable,
allowable, and allocable may be included in the valuation.

### Using Program Income to Meet a Matching or Cost-Sharing Requirement

Costs financed by program income may not count toward satisfying a
matching or cost-sharing requirement unless they are expressly permitted
by the NoA (see "Financial Management---Program Income").

### Documentation

The basis for determining the valuation of personal services, materials,
equipment, buildings, and land must be verifiable from the records of
the recipient, subrecipient, or contractor under the grant. Volunteer
services, to the extent feasible, should be supported by the same level
of documentation used by the recipient for its own employees, including
time and attendance records.

## Prior-Approval Requirements

HHS anticipates that the recipient may need to modify its award budget
or other aspects of its approved application during performance to
accomplish the award's programmatic objectives. In general, recipients
are allowed a certain degree of latitude to rebudget within and between
budget categories to meet unanticipated needs and to make other types of
post-award changes. In some cases, OPDIV prior written approval may be
required. When OPDIV prior approval is required, the requirement applies
whether the costs/activities are proposed in the application or in a
separate request following award. If an application includes general
language about a cost or activity that requires OPDIV prior approval,
approval of the application does not necessarily mean that the
prior-approval requirement has been satisfied. The recipient is still
required to obtain any applicable OPDIV prior approval when specific
details are known.

This section addresses the post-award prior-approval requirements
related to making certain direct cost budget modifications or
undertaking specified activities. Other post-award changes may be made
without OPDIV prior approval as long as they are within the limits
established by HHS (see "Expanded Authorities" in this section) or may
be subject to different procedures as specified in other parts of the
HHS GPS (e.g., as specified in "Property Management---Nonexempt
Property," the OPDIV must approve any proposal to convey, transfer,
assign, mortgage, lease, or in any other manner encumber the property
while the recipient remains accountable to the OPDIV for the use of the
property). Also, prior approval of costs considered indirect costs is
governed by the procedures of the cognizant agency rather than those of
the OPDIV.

The post-award changes that are considered changes to budgets or program
plans and require OPDIV approval and the changes that may be made under
the recipient's authority are outlined below. If OPDIV approval is
required, it must be requested of, and obtained from, the GMO in advance
of the change or obligation of funds as specified in "Requesting OPDIV
Prior Approval" in this section.

### OPDIV Prior Approval 

OPDIV prior-approval requirements are summarized in Exhibit 5, which is
provided for guidance only. For the post-award prior-approval
requirements specified in the exhibit, approval is required whether or
not the change has a budgetary impact except as indicated (e.g., if
provided as an expanded authority). The circumstances under which prior
approval is required also are summarized in the exhibit. Supplementary
policy or procedural information related to certain of these categories
follows the exhibit. Recipients also should see Part IV of this HHS GPS
for OPDIV-specific prior-approval requirements that apply to specific
types of grants and types of recipients. Any questions about the need
for prior approval for an activity or cost under a specific OPDIV award
should be directed to the GMO.

+--------+----------------------------------------+-------------------+
| E      |                                        |                   |
| xhibit |                                        |                   |
| 5.     |                                        |                   |
| S      |                                        |                   |
| ummary |                                        |                   |
| of     |                                        |                   |
| A      |                                        |                   |
| ctions |                                        |                   |
| Req    |                                        |                   |
| uiring |                                        |                   |
| OPDIV  |                                        |                   |
| Prior  |                                        |                   |
| Ap     |                                        |                   |
| proval |                                        |                   |
+========+========================================+===================+
| OPDIV  | Under the following circumstances      |                   |
| prior  |                                        |                   |
| ap     |                                        |                   |
| proval |                                        |                   |
| is     |                                        |                   |
| re     |                                        |                   |
| quired |                                        |                   |
| for    |                                        |                   |
+--------+----------------------------------------+-------------------+
| A&R    | Rebudgeting into A&R costs in a single |                   |
|        | budget period that would exceed the    |                   |
|        | lesser of \$150,000 (or amount         |                   |
|        | specified by the OPDIV in Part IV of   |                   |
|        | the HHS GPS) or 25 percent of the      |                   |
|        | total approved budget (direct and      |                   |
|        | indirect costs) for a budget period    |                   |
|        | (also see "Allowable Costs and         |                   |
|        | Activities").                          |                   |
|        |                                        |                   |
|        | Any single A&R project exceeding       |                   |
|        | \$150,000 (or amount specified by the  |                   |
|        | OPDIV in Part IV of the HHS GPS).      |                   |
|        |                                        |                   |
|        | Aggregate costs that would exceed the  |                   |
|        | lesser of \$150,000 (or amount         |                   |
|        | specified by the OPDIV in Part IV of   |                   |
|        | the HHS GPS) or 25 percent of the      |                   |
|        | total costs reasonably expected to be  |                   |
|        | awarded by the awarding office for a   |                   |
|        | project period (or competitive segment |                   |
|        | under programs that entertain          |                   |
|        | competing continuation applications).  |                   |
+--------+----------------------------------------+-------------------+
| Car    | If not provided as an expanded         |                   |
| ryover | authority. Also see "Carryover of      |                   |
| of     | Unobligated Balances" below for        |                   |
| unobl  | potential OPDIV actions if provided as |                   |
| igated | an expanded authority.                 |                   |
| ba     |                                        |                   |
| lances |                                        |                   |
+--------+----------------------------------------+-------------------+
| Change | All instances. Recipients must notify  |                   |
| of     | the awarding office of other changes   |                   |
| g      | in organizational status. See "Change  |                   |
| rantee | of Grantee Organization" below.        |                   |
| organi |                                        |                   |
| zation |                                        |                   |
+--------+----------------------------------------+-------------------+
| Change | All instances. See "Change in Scope"   |                   |
| in     | below for a discussion of the          |                   |
| scope  | post-award changes that may indicate a |                   |
|        | change in scope: transfer of           |                   |
|        | substantive programmatic work to a     |                   |
|        | third party; significant rebudgeting;  |                   |
|        | incurrence of research patient care    |                   |
|        | costs; purchase of a unit of general-  |                   |
|        | or special-purpose equipment exceeding |                   |
|        | \$25,000.                              |                   |
+--------+----------------------------------------+-------------------+
| C      | For PIs/PDs, replacement; absence for  |                   |
| hanges | any continuous period of 3 months or   |                   |
| in     | more; reduction of time devoted to     |                   |
| status | project by 25 percent or more from     |                   |
| of PI, | level in approved application.         |                   |
| PD, or |                                        |                   |
| other  | For other key personnel, substitution  |                   |
| key    | for named personnel.                   |                   |
| per    |                                        |                   |
| sonnel | See "Change in Status, including       |                   |
| named  | Absence, of PI/PD and Other Key        |                   |
| in the | Personnel" below.                      |                   |
| NoA    |                                        |                   |
+--------+----------------------------------------+-------------------+
| C      | All instances when purchase proposed;  |                   |
| onstru | any proposal to convey, transfer,      |                   |
| ction, | assign, mortgage, lease, or in any     |                   |
| land,  | other manner encumber real property    |                   |
| or     | acquired with OPDIV grant funds.       |                   |
| bu     |                                        |                   |
| ilding |                                        |                   |
| acqui  |                                        |                   |
| sition |                                        |                   |
+--------+----------------------------------------+-------------------+
| Cost   | All instances unless provided as an    |                   |
| prin   | expanded authority (not available for  |                   |
| ciples | construction, land, or building        |                   |
| pr     | acquisition or indemnification of      |                   |
| ior-ap | third parties).                        |                   |
| proval |                                        |                   |
| requir |                                        |                   |
| ements |                                        |                   |
+--------+----------------------------------------+-------------------+
| Dev    | All instances. Includes undertaking    |                   |
| iation | any activities disapproved or          |                   |
| from   | restricted as a condition of the       |                   |
| award  | award.                                 |                   |
| terms  |                                        |                   |
| and    |                                        |                   |
| cond   |                                        |                   |
| itions |                                        |                   |
+--------+----------------------------------------+-------------------+
| F      | All instances.                         |                   |
| oreign |                                        |                   |
| com    |                                        |                   |
| ponent |                                        |                   |
| added  |                                        |                   |
| to a   |                                        |                   |
| grant  |                                        |                   |
| to a   |                                        |                   |
| do     |                                        |                   |
| mestic |                                        |                   |
| organi |                                        |                   |
| zation |                                        |                   |
+--------+----------------------------------------+-------------------+
| Ind    | All instances.                         |                   |
| emnifi |                                        |                   |
| cation |                                        |                   |
| of     |                                        |                   |
| third  |                                        |                   |
| p      |                                        |                   |
| arties |                                        |                   |
+--------+----------------------------------------+-------------------+
| Need   | All instances whether or not           |                   |
| for    | additional time is needed, including   |                   |
| addi   | extension of a final budget period of  |                   |
| tional | a project period with additional       |                   |
| OPDIV  | funds. See "Need for Additional OPDIV  |                   |
| f      | Funding" below.                        |                   |
| unding |                                        |                   |
+--------+----------------------------------------+-------------------+
| N      | All instances unless authority to      |                   |
| o-cost | approve a one-time extension of up to  |                   |
| ext    | 12 months without a change in scope is |                   |
| ension | provided as an expanded authority. See |                   |
|        | "Need for Additional Time to Complete  |                   |
|        | Project- or Program-Related Activities |                   |
|        | ('No-Cost Extension')" below.          |                   |
+--------+----------------------------------------+-------------------+
| Pre    | All instances before the effective     |                   |
| -award | date of the initial budget period of a |                   |
| costs  | new or competing continuation award    |                   |
|        | unless the authority to approve        |                   |
|        | pre-award costs up to (and including)  |                   |
|        | 90 days before the beginning date is   |                   |
|        | provided as an expanded authority. In  |                   |
|        | either case, the costs are incurred at |                   |
|        | the applicant's/recipient's own risk.  |                   |
+--------+----------------------------------------+-------------------+
| Re     | For States, local governments, and     |                   |
| search | tribal governments, all instances.\    |                   |
| p      | For institutions of higher education,  |                   |
| atient | non-profit organizations, and          |                   |
| care   | commercial organizations, any instance |                   |
| costs  | in which such costs were not part of   |                   |
|        | the approved budget shown in the NoA   |                   |
|        | or a recipient wants to rebudget out   |                   |
|        | of the approved research patient care  |                   |
|        | category.                              |                   |
+--------+----------------------------------------+-------------------+
| Ret    | All instances.                         |                   |
| ention |                                        |                   |
| of     |                                        |                   |
| re     |                                        |                   |
| search |                                        |                   |
| grant  |                                        |                   |
| funds  |                                        |                   |
| when   |                                        |                   |
| career |                                        |                   |
| award  |                                        |                   |
| made   |                                        |                   |
+--------+----------------------------------------+-------------------+
| Tr     | All instances unless provided as an    |                   |
| ansfer | expanded authority to States, local    |                   |
| of     | governments, or tribal governments.    |                   |
| a      | (The training allowance does not       |                   |
| mounts | include trainee travel, which HHS does |                   |
| for    | not consider to be a trainee cost, and |                   |
| tr     | other training-related expenses.)      |                   |
| aining |                                        |                   |
| allo   |                                        |                   |
| wances |                                        |                   |
| (sti   |                                        |                   |
| pends, |                                        |                   |
| tu     |                                        |                   |
| ition, |                                        |                   |
| and    |                                        |                   |
| fees)  |                                        |                   |
| to     |                                        |                   |
| other  |                                        |                   |
| budget |                                        |                   |
| cate   |                                        |                   |
| gories |                                        |                   |
+--------+----------------------------------------+-------------------+
| Tr     | All instances.                         |                   |
| ansfer |                                        |                   |
| of     |                                        |                   |
| funds  |                                        |                   |
| b      |                                        |                   |
| etween |                                        |                   |
| constr |                                        |                   |
| uction |                                        |                   |
| and    |                                        |                   |
| non    |                                        |                   |
| constr |                                        |                   |
| uction |                                        |                   |
| work   |                                        |                   |
+--------+----------------------------------------+-------------------+
| Tr     | All instances if the recipient is a    |                   |
| ansfer | governmental entity or, for recipients |                   |
| of     | subject to 45 CFR part 74, the grant   |                   |
| subst  | is a construction grant; otherwise     |                   |
| antive | considered an indicator of change in   |                   |
| progra | scope. See "Transfer of Substantive    |                   |
| mmatic | Programmatic Work" below.              |                   |
| work   |                                        |                   |
+--------+----------------------------------------+-------------------+
|        |                                        |                   |
+--------+----------------------------------------+-------------------+

#### Carryover of Unobligated Balances

Recipients should be aware of the difference between unliquidated
obligations and unobligated balances. Unliquidated obligations are
commitments of the recipient and are considered to be obligations and,
therefore, should not be reported as unobligated balances.

To ensure the timely use of unobligated balances, recipients must use
the "first-in/first-out" principle for recognizing and recording
obligations and expenditures of those funds. Upon receipt of the annual
FSR, the GMO will compare the total of any unobligated balance shown and
the funds awarded for the current budget period with the OPDIV share of
the approved budget for the current budget period. If the funds
available exceed the OPDIV share of the approved budget for the current
budget period, the GMO may select one of the following options:

-   In response to a written request from the recipient, revise the
    current NoA to authorize the recipient to spend the excess funds for
    additional approved purposes (approval is intended to cover only
    prospective costs, not costs already incurred by the recipient)

-   Offset the current award or a subsequent award by an amount
    representing some or all of the excess

-   For awards subject to expanded authorities, restrict the recipient's
    authority to automatically carry over unobligated balances in the
    future, use the balance to reduce or offset OPDIV funding for a
    subsequent budget period, or use a combination of these actions.

#### Change of Grantee Organization

OPDIV prior approval is required for the transfer of the legal and
administrative responsibility for a grant-supported project or program
from one legal entity to another before the expiration of the approved
project period (competitive segment for grants where there may a
competing continuation for the same project). For other changes in
organizational status, e.g., a name change, the recipient must notify
the awarding office as specified in "Changes in Organizational Status."

A change of grantee organization may be accomplished under most OPDIV
grants, including construction grants, if any of the following
conditions are met and the OPDIV determines that the purpose and scope
of the approved grant will not change and the transfer is consistent
with Federal appropriations law requirements:

-   The grant to be transferred has been terminated at the original
    organization in accordance with 45 CFR 74.61 or 92.43.

-   A non-competing continuation award that is within an approved
    project period has been withheld for a reason other than project
    performance, e.g., the recipient's management of the grant or
    non-compliance with award terms and conditions.

-   The original recipient has agreed to relinquish responsibility for
    an active project before the expiration of the approved project
    period. This includes any proposed change of grantee as a result of
    a PI on a research project transferring from one organization to
    another organization. The project under the same PI may be supported
    at a new organization for a period up to the remainder of the
    previously approved project period in an amount not to exceed that
    previously recommended for direct costs (plus applicable indirect
    costs) for the remainder of the approved project period.

A request for a change of grantee organization (change of grantee) must
be submitted to the GMO before the anticipated start date at the new
organization and preferably several months in advance. Failure to
provide timely notification may result in disapproval of the request or
a delay in processing. As part of the request, the original organization
must submit PHS 3734, "Official Statement Relinquishing Interests and
Rights in a Public Health Service Research Grant," or equivalent form as
specified by the OPDIV, and, if the request involves a research grant, a
"Final Invention Statement and Certification." The request also must
include an application from the proposed recipient organization. (The
relinquishing organization must submit a final FSR to the awarding
office no later than 90 days after the end of HHS support.)

The application from the proposed recipient should include the
following, as applicable:

-   Face page

-   Budget pages (current and future years)

-   Updated biographical sketches for the PI/PD and existing key
    personnel and biographical sketches for any proposed new key
    personnel

-   Statement indicating whether the overall plans/aims or objectives
    have changed from the original submission, and, if so, how

-   For research grants

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-   Updated "other support" pages, if necessary

-   Resources page

-   Checklist page

-   Certification of IRB/IACUC approval, if applicable

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-   Detailed list of any equipment purchased with grant funds being
    transferred to the new organization (inclusion of this list in the
    transfer application from the new organization indicates its
    acceptance of title to that equipment).

The OPDIV may request additional information necessary to accomplish its
review of the request. Acceptance of a relinquishing statement by the
OPDIV does not guarantee approval of a transfer application for the
continued funding of a project.

A change of grantee request normally will be permitted only when all of
the permanent benefits attributable to the original grant can be
transferred, including equipment purchased in whole or in part with
grant funds. In reviewing a request to transfer a grant, an OPDIV will
consider whether there is a continued need for the grant-supported
project or program and whether there will be any a change in scope of
the previously approved project. A change of grantee may be made without
objective review, provided the PI/PD plans no change in scope and the
facilities and resources at the new organization will allow for
successful performance of the project or program. If the change involves
a change in scope, the request may not be processed as a change of
grantee, will require objective review, and may be subject to a
different process, e.g., treated as an exception to competition. A
change of grantee that involves the transfer of a grant to or between
foreign organizations or international organizations also may require
special OPDIV approval, e.g., approval by an Advisory Council or Board.
If these conditions or other programmatic or administrative requirements
are not met, the OPDIV may require objective review or may disapprove
the request and, if appropriate, terminate the award.

The OPDIV will accomplish a change of grantee organization by issuing a
revised NoA to the original recipient reflecting the revised budget and
project period end dates, deletion of any future-year support, and
deobligation of remaining funds, if applicable. (A deobligation of funds
will be based on the estimated grant expenditures through the
relinquishment date, as determined from the relinquishing statement.)
Concurrently, the new recipient will receive a NoA reflecting the
balance reported on the relinquishing statement or, if the change of
grantee organization occurs on the anniversary date of the project, the
NoA to the new recipient will reflect the previously committed direct
cost level plus applicable indirect costs. This amount is subject to
change as a result of the closeout of the original grant and may be
adjusted downward. If a change of grantee involves the transfer of
equipment purchased with grant funds, the transfer may be accomplished
as part of the original recipient's relinquishment of the grant or HHS
may transfer title to equipment to the new organization using its right
to transfer title (see "Property Management").

#### Change in Scope

In general, the PI/PD may make changes in the methodology, approach, or
other aspects of the project/program objectives. However, the recipient
must obtain prior approval from the GMO for a proposed change in scope.
A change in scope occurs when the recipient proposes to change (or
changes) the objectives, aims, or purposes identified in the approved
application, such as shifting the research emphasis from one disease
area to another, changing the service area, applying a new technology
(e.g., changing assays from those approved to a different type of
assay), changing the approved design under a construction grant,
eliminating a primary care delivery site, or making budget changes that
cause a project to change substantially from that which was approved.
Also see the indicators specified below. The recipient must make the
initial determination of whether a proposed change would be considered a
change in scope and should consult with the GMO as necessary.

In addition to explicit changes in the objectives, aims, or purposes
identified in the approved grant application, post-award changes that
are clear indicators of a change in scope or that are likely to be
considered a change in scope include, but are not limited to, the
following:

-   Any change from the approved use of animals or human subjects.

-   Transfer of the performance of substantive programmatic work to a
    third party through a subaward, contract, or any other means, if the
    authority for such activities is not included in the approved
    application. If the third party is a foreign component, this type of
    action always requires OPDIV prior approval.

-   Significant rebudgeting, whether or not the particular expenditures
    require prior approval. Significant rebudgeting occurs when, under a
    grant with a Federal share exceeding \$100,000, cumulative transfers
    among direct cost budget categories for the current budget period
    exceed 25 percent of the total approved budget (which includes
    direct and indirect costs, whether chargeable to Federal funds or
    required matching or cost sharing) for that budget period or
    \$250,000, whichever is less.

-   Incurrence of research patient care costs if costs in that category
    were not previously approved by the OPDIV or if a recipient wants to
    rebudget funds out of the research patient care category.

-   Purchase of a unit of general-purpose or special-purpose equipment
    exceeding \$25,000.

#### Change in Status, including Absence, of Principal Investigator/Project Director and Other Key Personnel

The recipient is required to notify the GMO in writing if the PI/PD or
key personnel specifically named in the NoA will withdraw from the
project entirely, be absent from the project during any continuous
period of 3 months or more, or reduce time devoted to the project by 25
percent or more from the level that was approved at the time of award
(for example, a proposed change from 40 percent effort to 30 percent or
less effort). The OPDIV must approve any alternate arrangement proposed
by the recipient, including any replacement of the PI/PD or key
personnel named in the NoA.

The request for approval of a substitute PI/PD/key person should include
a justification for the change, the biographical sketch of the
individual proposed, other sources of support (if applicable), and any
budget changes resulting from the proposed change. If the arrangements
proposed by the recipient, including the qualifications of any proposed
replacement, are not acceptable to the OPDIV, the grant may be suspended
or terminated. If the recipient wants to terminate the project because
it cannot make suitable alternate arrangements, it must notify the GMO,
in writing, of its wish to terminate, and the GMO will forward closeout
instructions.

The requirement to obtain OPDIV prior approval for a change in status
pertains only to the PI/PD and those key personnel the OPDIV names in
the NoA regardless of whether the applicant organization designates
others as key personnel for its own purposes.

[]{#__RefHeading___Toc155580230 .anchor}*Need for Additional OPDIV
Funding*

A request for additional funding for a current budget period to meet
increased costs that are within the scope of the approved application,
but that were unforeseen when the new or competing continuation
application (or progress report for non-competing continuation support)
was submitted, is a non-competing supplemental application. Such
requests must be submitted, in writing, directly to the GMO and are not
required to compete with other applications for funding. Other
recipient-initiated requests for supplemental funding during a current
budget period are considered to change the scope of the approved project
or program and are required to compete for funding with other
applications.

A request for a non-competing extension of the final budget period of a
project period with a minimal amount of additional funds should be
submitted to the GMO, in writing, at least 30 days before the project
period is scheduled to expire. Such requests usually are for a period of
up to 12 months, based on a need to provide continuity of project or
program activities while a competing continuation application is being
reviewed or to permit orderly phase-out of activities for which there
will be no further HHS support. The request must specify the proposed
revised ending date and must include justification for both the
extension and the additional funds requested.

#### Need for Additional Time to Complete Project- or Program-Related Activities ("No-Cost Extension")

Unless provided as an expanded authority, OPDIV prior approval is
required for any extension of up to 12 months. All extensions that would
exceed 12 months, whether as part of an initial request or a subsequent
request that would result in an aggregate period of that duration,
require special justification. The OPDIV will not approve any extension
request if the primary purpose of the proposed extension is to permit
the use of unobligated balances of funds. All terms and conditions of
the award apply during the extended period.

#### Significant Rebudgeting

The base used for determining significant rebudgeting excludes carryover
balances but includes any amounts awarded as competing or non-competing
supplements. For example, the significant rebudgeting threshold has been
reached if, under a grant in which the Federal share for a budget period
is \$100,000, the total approved budget is \$300,000 and cumulative
changes within that budget period exceed \$75,000. Once the significant
rebudgeting threshold is reached, the recipient must request and receive
OPDIV prior approval for the changes that cause the recipient to exceed
the threshold.

The OPDIV will determine if there has been a change in scope and do one
of the following:

-   Modify the award, as appropriate, to reflect an approved change in
    scope

-   Advise the recipient that the change is not approved and specify the
    consequences of having rebudgeted to that extent without prior
    approval

-   Advise the recipient that each subsequent budget change in that
    budget period---regardless of type or dollar value---requires OPDIV
    prior approval.

The calculation generally begins anew with each subsequent budget period
unless the OPDIV has concerns with the overall extent of the recipient's
rebudgeting and, on the basis of a high-risk designation, uses an
alternate condition in an award.

#### Transfer of Substantive Programmatic Work

The transfer of substantive programmatic work does not include
contracting for routine goods or services used in or in support of a
grant. Subgranting is allowable only if authorized by statute or
regulation and specified in the NoA. Unless the program is intended as a
pass-through program (i.e., one in which the recipient's role is to
select subrecipients that are expected to provide the services that are
the purpose of the grant, coordinate and oversee their activities, and
provide the administrative support needed to meet OPDIV requirements),
the recipient is expected to perform a substantive role in the project
or program. In the case of a pass-through program, prior approval for
the transfer of substantive programmatic work generally is not required.
In all other cases, prior approval is required to ensure that the
recipient is not acting as a conduit to another party (that may not be
eligible to receive OPDIV funding directly) and remains eligible for the
award.

When prior approval is required, the request must include the following
information:

-   A description of the activities or functions involved

-   A justification for their performance by a third party

-   A breakdown of and justification for the estimated costs, including
    the manner in which indirect costs, if any, will be reimbursed

-   The method to be used to select the subaward and the type of
    contract/agreement expected to be awarded

-   The kinds of entities to be solicited (if selection has already
    taken place, identification of the organization and the reasons for
    selection).

#### Requesting OPDIV Prior Approval

All requests for OPDIV prior approval other than a request for carryover
of an unobligated balance must be made in writing (which includes
submission by e-mail) to the GMO no later than 30 days before the
proposed change. Requests for carryover of unobligated balances should
be initiated once the actual unobligated balance is known (generally
during the period allowed for preparation and submission of the FSR).
Requests for carryover of unobligated balances must include only
prospective costs and activities, i.e., ones that will be incurred or
undertaken following OPDIV review and approval of the request.
Prior-approval requests must be signed by both the PI/PD and the
authorized organizational representative. Failure to make a timely
request and obtain required OPDIV prior approval from the GMO may result
in the disallowance of costs, termination of the award, or other
enforcement action within the OPDIV's authority.

All requests must include the name of the recipient; the name of the
initiating PI/PD; the PI/PD's telephone number, fax number, and e-mail
address; and comparable identifying information for the authorized
organization official. E-mail requests must be clearly identified as
prior-approval requests, must reflect the complete grant number in the
subject line, and should be sent by or through the authorized
organizational representative to the GMO that signed the NoA. If the
entire message of the request cannot be included in the body of the
e-mail, the request should be submitted to the GMO in hard copy.

The OPDIV will review the request and the GMO will provide a response to
the authorized organizational representative, with a copy to the PI/PD,
indicating the final disposition of the request. Only responses provided
by the GMO are to be considered valid. Recipients that proceed on the
basis of actions by unauthorized officials do so at their own risk, and
HHS is not bound by such responses.

Whenever a recipient contemplates rebudgeting or other post-award
changes and is uncertain about the need for prior approval, the
recipient is strongly encouraged to consult, in advance, with the GMO.

Under a subaward or contract under a grant, the prior-approval authority
usually is the recipient. However, the recipient may not approve any
action or cost that is inconsistent with the purpose or terms and
conditions of the HHS grant. If an action by a subrecipient or
contractor will result in a change in the project/program scope or
budget requiring OPDIV approval, the recipient must obtain that approval
from the OPDIV before giving its approval to the subrecipient or
contractor.

### Expanded Authorities

OPDIVs may waive certain direct cost-related and other prior-approval
requirements and provide authority for the recipient to undertake these
activities and expenditures without the need for OPDIV prior approval.
These operating authorities are termed "expanded authorities." Exhibit 6
presents a summary of the expanded authorities that may be provided by
an OPDIV. Procedures for implementing several of these authorities
follow the exhibit. The recipient should consult Part IV for detailed
applicability of expanded authorities to specific award instruments and
types of recipients.

Certain grants or recipients are not eligible for expanded authorities,
including those that require closer monitoring or technical assistance.
In addition, one or more of these authorities may be overridden by a
special term or condition of the award. The NoA will indicate the
applicability of expanded authorities by reference to the HHS GPS and
the OPDIV supplement in Part IV, or through specific terms and
conditions of the award. Therefore, recipients must review the NoA to
determine whether and to what extent they are permitted to use expanded
authorities.

When using expanded authorities, recipients must ensure that they
exercise proper stewardship over Federal funds and that costs charged to
awards are allowable, allocable, reasonable, necessary, and consistently
applied regardless of the source of funds. HHS may disallow the costs if
it determines, through audit or otherwise, that the costs do not meet
the tests of allowability, including allocability, reasonableness,
necessity, and consistency.

Several expanded authorities have specific deadlines for submission of
reports or for timely notification to the awarding office. Recipients
should be aware that a consistent pattern of failure to adhere to those
deadlines for reporting or notification will be grounds for excluding
that recipient from expanded authorities.

  ----------------------------------- -----------------------------------
  Exhibit 6. Summary of Expanded      
  Authorities                         

  May exercise as expanded authority  Except

  Carryover of unobligated balances   If the NoA indicates otherwise
  from one budget period to the next  
  successive budget period            

  Cost-related prior approvals for    If the scope would change
  direct cost items, including        
  research patient care costs and     
  equipment                           

  Extension of final budget period of If the recipient already has given
  a project period without additional itself one extension of up to 12
  funds                               months

  Pre-award costs up to (and          If the NoA indicates otherwise
  including) 90 days before the       
  beginning date of the initial       
  budget period of a new or competing 
  continuation award                  

  Transfer of performance of          If the transfer would be to a
  substantive programmatic work to a  foreign component or it would
  third party (by subaward or a       result in a change in scope
  contract under the grant)           

                                      
  ----------------------------------- -----------------------------------

#### Carryover of Unobligated Balances

Under expanded authorities, OPDIV prior approval is not required to
carry forward an unobligated balance from one budget period to the
subsequent budget period. However, if the GMO determines that some or
all of the unobligated funds are not necessary to complete the project
or perform the program activity, the GMO may restrict the recipient's
authority to automatically carry over unobligated balances in the
future, use the balance to reduce or offset OPDIV funding for a
subsequent budget period, or use a combination of these actions. The
GMO's decision about the disposition of the reported unobligated balance
will be reflected in the NoA.

#### Extension of Final Budget Period of a Previously Approved Project Period

The recipient may extend the final budget period of a previously
approved project period one time for a period of up to 12 months beyond
the original expiration date shown in the NoA if

-   no additional funds are required to be obligated by the awarding
    office; and

-   the originally approved scope will not change; and

-   any one of the following applies:

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-   additional time beyond the established expiration date is required
    to ensure adequate completion of the originally approved project or
    program, or

-   continuity of grant support is required while a competing
    continuation application is under review, or

-   the extension is necessary to permit an orderly phase-out of a
    project or program that will not receive continued support.

The fact that funds remain at the expiration of the grant is not, in
itself, sufficient justification for an extension without additional
funds.

The recipient must notify the awarding office, in writing, of the
extension 10 days before the expiration date of the project period. Upon
notification, the awarding office will revise the project period ending
date and provide an acknowledgment to the recipient. All terms and
conditions of the award apply during the extended period and, by
extending the final budget period of the project period, the recipient
agrees to update all required certifications and assurances, including
those pertaining to human subjects and animal welfare, in accordance
with applicable regulations and policies. A recipient may not extend a
project period previously extended by the awarding office. Any
additional project period extension beyond the one-time extension of up
to 12 months requires OPDIV prior approval.

## Financial Management 

### Financial Management System

Recipients are required to meet the standards and requirements for
financial management systems set forth or referenced in 45 CFR 74.21 or
92.20, as applicable. The adequacy of the financial management system is
integral to the ability of the recipient to account for the expenditure
of grant funds. These standards are intended to ensure that Federal
funds are handled in a responsible manner that includes adequate
internal controls, cash management consistent with Department of the
Treasury requirements (see "HHS Grants Process---Payment").

States may expend and account for funds in accordance with State laws
and procedures that apply to the expenditure of and the accounting for
the State's own funds as long as those procedures are sufficient to
permit preparation of required reports and tracing of expenditures to a
level adequate to establish that award funds have not been used in
violation of any applicable statutory restrictions or prohibitions.

All other types of recipients must use financial systems that enable the
recipient to do the following:

-   Provide accurate, current, and complete financial information about
    Federal awards and, for subawards, reasonable procedures for
    ensuring that subrecipients provide financial reports in sufficient
    time to allow preparation of OPDIV-required reports.

-   Maintain records that adequately identify the sources of funds for
    federally assisted activities and the purposes for which the award
    was used, including authorizations, obligations, unobligated
    balances, assets, liabilities, outlays or expenditures, and any
    program income. Accounting records must be supported by source
    documentation such as canceled checks, paid bills, payrolls, and
    time and attendance records.

-   Maintain effective control over and accountability for all cash,
    real and personal property, and other assets under the award;
    adequately safeguard those assets; and ensure that they are used
    only for authorized purposes.

-   Compare actual expenditures or outlays with the approved budget for
    the award.

-   Determine the allowability of costs in accordance with the
    applicable Federal cost principles, program regulations, and other
    requirements cited in the NoA. This includes the ability to readily
    identify unobligated balances, accelerated or delayed expenditures,
    and cost transfers.

-   Minimize the time elapsing between any advance payment under this
    award and the disbursement of the funds for direct program costs and
    the proportionate share of any allowable indirect or facilities and
    administrative costs, and ensure that the timing and amount of any
    payments to subrecipients conform to this standard.

Recipients must notify the GMO when financial management problems are
discovered. Deficiencies in a recipient's financial management system,
whether reported by the recipient or identified by the OPDIV, may result
in the imposition of special award conditions, use of the reimbursement
payment method, or other increased monitoring by the awarding office.

### Program Income

#### Accountability and Alternatives for Use

Program income is gross income---earned by a recipient, subrecipient, or
a contractor under a grant---directly generated by the grant-supported
activity or earned as a result of the award. Program income includes,
but is not limited to, income from fees for services performed; charges
for the use or rental of real property, equipment, or supplies acquired
under the grant; the sale of commodities or items fabricated under an
award; charges for research resources; and license fees and royalties on
patents and copyrights.

The requirements for accountability for the various types of income
under HHS grants are specified in this section. However, the NoA governs
the disposition of royalties and other income earned from a copyrighted
work, patents, patent applications, trademarks, or inventions. Generally
such income is not subject to the requirements of this section.

Accountability refers to whether the OPDIV specifies how the income is
to be used and whether the income needs to be reported to the OPDIV and
for what length of time. Program income earned during the project period
must be reported by the recipient as discussed in this section.

Each NoA will indicate the alternative for disposition of program
income. For non-research grants, if no alternative is specified, the
program income must be used under the deductive alternative. The default
alternative for research grants (except for awards to commercial
organizations under programs *other than* the Small Business Innovation
Research and Small Business Technology Transfer programs) is the
addition alternative as provided in 45 CFR 74.24(d). Regardless of the
alternative applied, program income may be used only for allowable costs
in accordance with the applicable cost principles and the terms and
conditions of the award. Subawards and contracts under grants are
subject to the terms of the subaward or contract with regard to any
income generated, but the terms specified by the recipient must be
consistent with the requirements of the NoA.

Program income earned during the period of grant support---other than
income earned as a result of copyrights, patents, or inventions (see
"Intellectual Property---Rights in Data") or as a result of the sale of
real property, equipment, or supplies ("Property Management")---must be
retained by the recipient and, as specified in the NoA, may be used in
one or a combination of the ways indicated in Exhibit 7. Unless
otherwise specified in the terms and conditions of the award, recipients
are not accountable for program income earned after the period of grant
support.

  ---------------------------------------------------------------------------
  Exhibit 7. Use 
  of Program     
  Income         
  Alternatives   
  -------------- ------------------------------------------------------------
  Alternative    Use of program income

  Additive       Added to funds committed to the project or program and used
                 to further eligible project or program objectives

  Deductive      Deducted from total allowable costs of the project or
                 program to determine the net allowable costs on which the
                 Federal share of costs will be based

  Combination    Uses all program income up to (and including) \$25,000 as
                 specified under the additive alternative and any amount of
                 program income exceeding \$25,000 under the deductive
                 alternative

  Matching       Used to satisfy all or part of the non-Federal share of a
                 project or program

                 
  ---------------------------------------------------------------------------

Exhibit 8 summarizes the accountability requirements related to the
timing of earning and use of program income.

  ---------------------- ------------------------ -----------------------
  Exhibit 8. Summary of                           
  Accountability                                  
  Requirements for                                
  Program Income                                  

  If program income is   and that income is ...   then the recipient
  earned...                                       is...

  During the project     Received and expended    Required to use program
  period                 during the project       income as provided in
                         period                   the NoA

  During the project     Received and expended    Required to adjust the
  period                 after the project period final FSR to reflect
                                                  receipt and use of the
                                                  income as directed by
                                                  the GMO

  During the project     Received during the      \(1\) Required to use
  period                 project period but       income as provided in
                         expended after the       the NoA and adjust
                         project period because   final FSR accordingly
                         (1) earned during the    (if earned during the
                         final budget period of   final budget period of
                         the project period or    the project period) or
                         (2) with GMO approval    (2) use the income
                                                  under addition
                                                  alternative and report
                                                  as specified by the GMO

  After the project      Received and expended    Not accountable for
  period                 after the project period that program income
                                                  unless specifically
                                                  provided in the NoA
  ---------------------- ------------------------ -----------------------

#### Reporting of Program Income 

The amount of program income earned and the amount expended must be
reported on the FSR (SF 269---Long Form). Any costs associated with the
generation of the gross amount of program income that are not charged to
the grant should be deducted from the gross program income earned, and
the net program income should be the amount reported. Program income
subject to the additive alternative must be reported on lines 10r and
10s, as appropriate, of the FSR; program income subject to the deductive
alternative must be reported on lines 10c and 10q of the FSR; and
program income subject to the matching alternative must be reported on
lines 10g and 10q of the FSR.

Income earned from the sale of equipment must be reported on the FSR for
the period in which the proceeds are received in accordance with the
reporting requirements for the program income alternative specified.
Amounts due the OPDIV for unused supplies must be reflected as a credit
to the grant on line 10c of the FSR.

Reporting requirements for accountable income accrued after grant
support ends will be specified in the NoA.

### Interest Earned on Advances of Grant Funds

The Treasury and OMB policies also establish requirements for recipients
to account for interest earned on advances of grant funds and provide
for use of the reimbursement method if cash management requirements are
not met. Except as provided in 45 CFR 74.22(k), any HHS recipient
subject to the requirements of 45 CFR part 74 that receives advance
payments must maintain those advances in an interest-bearing account.

Interest earned on advances of Federal funds must be handled as follows:

-   *Nongovernmental recipients*. Any interest earned by nongovernmental
    recipients on advances of Federal funds under all Federal grant
    awards and subawards that, in the aggregate, exceeds \$250 per year
    (based on the recipient's or subrecipient's fiscal year) must be
    remitted annually to PMS (as the government-wide agent for
    collection). Recipients with electronic funds transfer (EFT)
    capability should use an electronic medium to remit interest.

-   *Governmental recipients other than States*. Except as provided in
    45 CFR 92.21(i), any interest earned by local governments or Indian
    tribal governments on advances of Federal funds under all Federal
    grant awards and subawards that, in the aggregate, exceeds \$100 per
    year (based on the recipient's or subrecipient's fiscal year) must
    be remitted promptly, and at least quarterly, to PMS.

-   *State governments*. State governments operating under
    Treasury-State agreements are subject to the payment and receipt of
    interest as specified in their agreements. All other State
    recipients are expected to follow sound financial management
    practices that minimize the potential for excessive Federal cash on
    hand and to comply with the cash management requirements of 45 CFR
    92.20 and 21.

## Property Management

Generally, recipients may use their own property management policies and
procedures for property purchased, constructed, or fabricated as a
direct cost using HHS grant funds, provided they observe the
requirements in 45 CFR 74.31 through 74.37 or 92.31 through 92.34, as
applicable. State governments may use and manage equipment acquired
under a grant in accordance with State laws and procedures as specified
in 45 CFR 92.32. Unless otherwise indicated, the following requirements
for use and management of equipment and supplies do not apply to State
governments. See "Intellectual Property" for requirements related to
that type of property.

These property management requirements do not apply to equipment for
which only depreciation or use allowances are charged or to equipment
acquired primarily for sale or rental rather than for use. When
acquiring replacement equipment, the recipient may use the equipment to
be replaced as a trade-in or may sell the equipment and use the proceeds
to offset the costs of the replacement equipment subject to the approval
of the OPDIV.

The dollar threshold for determining the applicability of several of the
requirements in 45 CFR part 74 or 92 is based on the unit acquisition
cost of an item of equipment. As defined in 45 CFR 74.2, the cost of an
item of equipment includes necessary modifications and attachments that
make it usable for the purpose for which it was acquired or fabricated.
When such accessories or attachments are acquired separately and serve
to replace, enhance, supplement, or otherwise modify the equipment's
capacity and when they individually meet the definition of equipment,
required OPDIV prior approval for equipment must be observed for each
item (see "Prior-Approval Requirements"). However, the aggregate
acquisition cost of a piece of equipment will be used to determine the
applicable provisions of 45 CFR 74.34 or 92.32. Fixed equipment that is
part of a construction grant also is subject to these requirements. If
property is fabricated from individual component parts, each component
must itself be classified as equipment if it meets the definition of
equipment. In this case, the aggregate acquisition cost of the resulting
piece of equipment will determine the appropriate accountability
requirements in 45 CFR 74.34 or 92.32.

In general, title to equipment and supplies acquired by a recipient or
subrecipient with HHS funds vests in the recipient or subrecipient upon
acquisition, subject to the property management requirements of 45 CFR
74.31, 74.34, 74.35, and 74.37 or of 45 CFR 92.32 and 92.33.

Recipients (and subrecipients, as applicable) are required to be prudent
in the acquisition of property under a grant-supported project. It is
the recipient's responsibility to conduct a prior review of each
proposed property acquisition to ensure that the property is needed and
that the need cannot be met with property already in the possession of
the organization. If prior approval is required for the acquisition, the
recipient must ensure that appropriate approval is obtained in advance
of the acquisition. The recipient also must follow appropriate
procurement procedures in acquiring property as specified in
"Procurement Management."

Recipients of HHS grants other than Federal institutions cannot be
authorized to use Federal supply sources except that States may acquire
hardware and software from Federal Supply Schedules consistent with the
terms and conditions of those schedules.

Recipients of HHS grants must not use equipment acquired with grant
funds to provide services for a fee to compete unfairly with private
companies that provide equivalent services, unless the NoA provides
otherwise.

### Exempt Property

Under the Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6306,
HHS may permit non-profit institutions of higher education and
non-profit organizations whose primary purpose is the conduct of
scientific research to obtain title to equipment and supplies acquired
under grants for support of basic or applied scientific research without
further obligation to the Federal government. However, an OPDIV has the
right to require transfer of title to equipment with an acquisition cost
of \$5,000 or more to the Federal government or to an eligible third
party named by the OPDIV under the conditions specified in 45 CFR
74.34(h). An OPDIV may exercise this right within 120 days of the
completion or termination of an award or within 120 days of receipt of
an inventory, as provided in 45 CFR 74.34(h)(2), whichever is later.

### Nonexempt Property

All other equipment and supplies acquired under all other HHS
grant-supported projects by any other type of non-State recipient are
subject to the full range of acquisition, use, management, and
disposition requirements of 45 CFR 74.34 and 74.35 or of 45 CFR 92.32
and 92.33. Property acquired or used under an HHS grant-supported
project, including any federally owned property, also is subject to the
requirements for internal control specified in 45 CFR 74.21 or 92.20.
Pursuant to 45 CFR 74.37, for recipients subject to those regulations,
equipment (and intangible property and debt instruments) acquired with,
or improved with, HHS funds may not be encumbered without OPDIV
approval.

### Equipment Management System

The recipient's management system for equipment must meet the
requirements of 45 CFR 74.34(f) or 92.32, which include the following:

-   Records that adequately identify (according to the criteria
    specified in the regulations) items of equipment owned or held by
    the recipient and state the current location of each item

-   A physical inventory of the equipment, at least once every 2 years,
    to verify that the items in the records exist and either are usable
    and needed or are surplus (a statistical sampling basis is
    acceptable)

-   Control procedures and safeguards to prevent loss, damage, and theft

-   Adequate maintenance procedures to keep the equipment in good
    condition

-   Proper sales procedures when the recipient is authorized to sell the
    equipment.

For items of equipment having a unit acquisition cost of \$5,000 or
more, an OPDIV has the right to require transfer title to the equipment
to the Federal government or to an eligible third party named by the
OPDIV under the conditions specified in 45 CFR 74.34(h) and 92.32,
respectively. This right applies to nonexempt property acquired by all
types of recipients, including State governments and Federal
institutions, under all types of grants under the stipulated conditions.

### Sale of Equipment and Supplies

For equipment and supplies purchased under HHS grants for basic or
applied research by non-profit institutions of higher education or
non-profit organizations whose principal purpose is the conduct of
scientific research, the recipient is exempt from any requirement to
account for proceeds from their sale; however, OPDIVs have certain
rights with respect to such property as specified in "Exempt Property"
in this section.

All other types of grants and recipients are subject to the requirements
in 45 CFR 74.34 or 92.32, if title to the equipment vests in the
recipient rather than in the OPDIV. These requirements also apply to
donated property used to meet a matching or cost-sharing requirement. If
the grant-supported project or program for which equipment was acquired
is still receiving OPDIV funding at the time of sale, the recipient must
credit the OPDIV share of the proceeds to the grant and use that amount
under the deductive alternative for program income. If the recipient is
no longer receiving OPDIV grant support, the amount due should be paid
in accordance with instructions from the OPDIV.

If there is a residual inventory of unused supplies exceeding \$5,000 in
aggregate fair market value upon termination or completion of the grant
and if the supplies are not needed for other federally sponsored
programs or projects, the recipient may either retain them for use on
other than federally sponsored activities or sell them, but, in either
case, the recipient must compensate the OPDIV for its share as a credit
to the grant.

These grants and recipients also are subject to the requirements in 45
CFR 74.35 or 92.33 with respect to the use or sale of unused supplies.
If the recipient retains the supplies for use on other than federally
sponsored activities, an amount is due the OPDIV as if they were sold.

### Revocable License

In some cases, federally owned tangible personal property may be made
available to a recipient under a revocable license agreement. The
revocable license agreement between the OPDIV and the recipient provides
for recipient use of the property for the period of grant support under
the following conditions:

-   Title to the property remains with the Federal government.

-   The OPDIV reserves the right to require the property to be returned
    to the Federal government should it be determined to be in the best
    interests of the Federal government to do so.

-   The use to which the recipient puts the property does not
    permanently damage it for Federal government use.

-   The property is controlled and maintained in accordance with the
    requirements of the NoA.

### Debt Instruments

Under certain programs and when authorized in the NoA, recipients may be
allowed or required to enter into financing arrangement with third
parties. Under such circumstances, the NoA will address the OPDIV's
role; provisions to be included in agreements with third parties; the
recipient's role with respect to the third parties, including
responsibilities and liabilities in the event of non- or late payment by
a third party; and the recipient's accountability during and after the
project period.

### Real Property

#### Acquisition, Use, and Management

Real property may be acquired only when authorized by statute and when
specifically provided for in the NoA. In addition, activities under
individual grants that constitute major renovation of real property or
purchase of a trailer or modular unit that will be used as real property
may be charged to HHS grants only with specific statutory authority and
GMO approval.

Real property constructed or acquired under an HHS grant is subject to
the requirements of 45 CFR 74.30 through 74.32 and 74.37 or of 45 CFR
92.31, as applicable, regarding use, transfer of title, and disposition,
unless alternate requirements are specified in the governing statute.
For example, the governing statute for a construction grant program may
contain usage and disposition requirements that are in addition to or
different from the usage and disposition requirements of the governing
regulations. To the extent statutory provisions differ from the
requirements of 45 CFR part 74 or 92, including those described in this
subsection, the statutory provisions, as reflected in the NoA, apply. In
addition, statutory provisions or implementing program regulations may
specify the duration of the recipient's accountability obligations
(e.g., 20 years) or allow for waivers.

Real property constructed or renovated with HHS grant support may not be
conveyed, transferred, assigned, mortgaged, leased, or in any other
manner encumbered by the recipient, except as expressly authorized in
writing by OPDIV. If the recipient defaults in any way on a mortgage,
the recipient must immediately notify the GMO by telephone and in
writing. If the mortgagor intends to foreclose, the recipient must
notify the GMO in writing at least 30 days before the foreclosure action
is initiated.

The mortgage agreement must specifically allow, in the case of default,
that HHS or its designee may assume the role of mortgagor and continue
to make payments. If HHS (or its designee) chooses not to assume the
role of mortgagor in the case of default, the recipient must pay HHS an
amount equal to the share of the sales proceeds otherwise due the
recipient multiplied by the HHS share of the property. Any assignment of
the property and mortgage responsibilities to any party other than HHS
is subject to prior approval of the mortgagor.

#### Disposition

The recipient is accountable to the OPDIV for use of grant-supported
real property as long as it owns the property or until it requests
disposition instructions from the OPDIV. See Part IV to determine if an
OPDIV has statutory or regulatory provisions that specify a different
accountability period.

For disposition of property acquired on an amortized acquisition basis,
the formulas in 45 CFR 74.32 and 92.31 do not apply in determining the
Federal share. In cases of amortized acquisition, the Federal share will
be determined by multiplying the amount of mortgage principal already
repaid at the time of disposition by the average Federal participation
(taken from the FSR) plus the increase in value over the purchase price
multiplied by the average Federal participation plus the Federal
participation in the down payment. The computation of the Federal share
of real property acquired with long-term debt financing must be computed
for each year of grant support in which Federal funds are used to meet
all or a portion of the down payment, the principal on the mortgage, or
both.

If a real estate transaction funded in whole or in part by HHS requires
the use of a real estate appraisal (including, but not limited to,
appraisals to determine the Federal share of real property and
appraisals to determine required insurance levels), the appraisal must
be performed by appraisers certified or licensed by the applicable State
in accordance with the requirements established by Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended (P.L. 101-73).

#### Notice of Federal Interest

To protect the Federal interest in real property that has been
constructed or has undergone major renovation with HHS grant funds,
recipients must record an NFI in the appropriate official records of the
jurisdiction in which the property is located. Recordation must occur
when construction or renovation begins. Fees charged for recording or
modifying the NFI may be charged to the grant. A copy of the NFI must be
provided to the awarding office.

#### Insurance

Immediately upon completion of construction, a nongovernmental recipient
must, at a minimum, provide the same type of insurance coverage as it
maintains for other property it owns, consistent with the minimum
coverage specified below. "Completion of construction" means either the
point at which the builder turns the facility over to the recipient
(e.g., the date of the final acceptance of the building) or the date of
beneficial occupancy, whichever comes first.

If title to real property acquired with HHS grant funds vests in the
recipient, the following minimum insurance coverage is required:

-   *Title insurance policy that insures the fee interest in the real
    property for an amount not less than the full appraised value of the
    property.* When the Federal participation in the construction of
    real property covers only a portion of a building, title insurance
    should cover the total cost of the facility to prevent liens on the
    unsecured portion from having an adverse impact on the portion with
    a Federal interest. If the recipient already owns the land (for
    example, land in the middle of a campus setting on which a building
    is being constructed), in lieu of a title insurance policy, the
    recipient may provide evidence satisfactory to the OPDIV, such as
    legal or title opinion, that it has good and merchantable title free
    of all mortgages or other foreclosable liens to all land, rights of
    way, and easements necessary for the project. In instances where a
    recipient is given land by the State, if the State recently acquired
    the land in a land swap transaction, the recipient should obtain
    title insurance. However, if the State has owned the land for a
    considerable period of time, title insurance would not be necessary;
    a copy of the State documents giving the land to the recipient would
    be sufficient. If the recipient must buy the land on which to build,
    a legal opinion would not be sufficient; title insurance must be
    obtained in order to protect the Federal interest in the building to
    be constructed.

-   *Physical destruction insurance policy that insures the full
    appraised value of the facility from risk of partial and total
    physical destruction.* When the Federal participation in the
    construction or renovation of real property covers only a portion of
    a building, the insurance should cover the total cost of the
    facility, because any damage to the building could make the building
    unusable and could thus affect the Federal interest. The insurance
    policy is to be maintained for the duration of the Federal interest
    in the property. The cost of insurance coverage after the period of
    grant support must be borne by a source other than the grant that
    provided the funds for the construction or renovation. The grant
    account will not remain active for this purpose.

Governmental recipients may follow their own insurance requirements.
Federally owned property provided to a recipient for use need not be
insured by the recipient.

Within 5 days of completion or beneficial occupancy, the recipient must
submit, to the GMO, a written statement signed by the authorized
organizational representative assuring that the recipient has purchased
the required insurance policies on the OPDIV-funded facility and will
maintain the insurance coverage at the full appraised value of the
facility throughout the period of Federal interest as specified in the
NoA.

The OPDIV may waive one or both of the requirements above if the
recipient shows that it is effectively self-insured against the risks
involved. The term "effectively self-insured" means that the recipient
has sufficient funds to pay for any damage to the facility, including
total replacement if necessary, or to satisfy any liens placed against
the facility. If a recipient claims self-insurance, it must provide the
OPDIV an assurance that it has sufficient funds available to replace or
repair the facility or to satisfy all liens. This certification should
state the source of the funds, such as the organization's endowment or
other special funds set aside specifically for this purpose.

## Intellectual Property

It is HHS policy that the results and accomplishments of the activities
that it funds should be made available to the public. PIs/PDs and
recipient organizations are expected to make the results and
accomplishments of their activities available to the research community
and to the public at large. If the outcomes of the research result in
inventions, the provisions of the Bayh-Dole Act of 1980, as implemented
in 37 CFR part 401, apply.

As long as recipients comply with the provisions of the Bayh-Dole Act,
as amended by the Technology Transfer Commercialization Act of 2000
(P.L. 106-404), and 37 CFR part 401, they have the right to retain title
to any invention conceived or first actually reduced to practice using
HHS grant funds. The principal objectives of these laws and the
implementing regulation are to promote commercialization of federally
funded inventions, while ensuring that inventions are used in a manner
that promotes free competition and enterprise without unduly encumbering
future research and discovery.

The regulation requires the recipient to develop and commercialize the
technology or use patent and licensing processes to transfer
grant-supported technology to industry for development. Alternatively,
unpatented research products or resources may be made available through
licensing to vendors or other investigators. Sharing of copyrightable
outcomes of research may be in the form of journal articles or other
publications.

The importance of each of these outcomes is reflected in the specific
policies pertaining to rights in data, sharing of research data and
unique research resources, and inventions and patents described in this
section.

### Rights in Data

In general, recipients own the rights in data resulting from a
grant-supported project or program. However, the NoA may indicate
alternative rights, e.g., under a cooperative agreement or based on
specific programmatic considerations as stated in the applicable program
announcement or solicitation. Except as otherwise provided in the NoA,
any publications, data,[^18] or other copyrightable works developed
under an HHS grant may be copyrighted without OPDIV prior approval.
Rights in data also extend to students, fellows, or trainees under
awards whose primary purpose is educational, with the authors free to
copyright works without OPDIV approval. In all cases, whether HHS funded
all or part of the project or program resulting in the data, the Federal
government must be given a royalty-free, nonexclusive, and irrevocable
license for the Federal government to reproduce, publish, or otherwise
use the material and to authorize others to do so for Federal purposes,
e.g., to make it available in government-sponsored databases for use by
other researchers. The specific scope of OPDIV rights with respect to a
particular grant-supported effort will be addressed in the NoA. Data
developed by a subrecipient also are subject to this policy.

### Access to Research Data

HHS handles requests for the release of research data from certain types
of recipients as FOIA requests (see 45 CFR 74.36). The term "research
data" is defined as the recorded factual material commonly accepted in
the scientific community as necessary to validate research findings. It
does not include preliminary analyses; drafts of scientific papers;
plans for future research; peer reviews; communications with colleagues;
physical objects (e.g., laboratory samples, audio or video tapes); trade
secrets; commercial information; materials necessary to be held
confidential by a researcher until publications in a peer-reviewed
journal; information that is protected under the law (e.g., intellectual
property); personnel or medical files and similar files, the disclosure
of which would constitute an unwarranted invasion of personal privacy;
or information that could be used to identify a particular person in a
research study.

As required by 45 CFR 74.36, recipients that are institutions of higher
education, hospitals, or non-profit organizations must release research
data first produced in a project supported in whole or in part with
Federal funds that are cited publicly and officially by a Federal agency
in support of an action that has the force and effect of law (i.e.,
regulations and administrative orders). If the data are publicly
available, HHS directs the requester to the public source. Otherwise,
the OPDIV FOI coordinator handles the request, consulting with the
affected recipient and the PI. This requirement also provides for
assessment of a reasonable fee to cover grantee costs and (separately)
the HHS costs of responding.

This requirement to release research data does not apply to commercial
organizations or to research data produced by State or local
governments. However, if a State or local governmental recipient
contracts with an educational institution, hospital, or non-profit
organization, and the contract results in covered research data, those
data are subject to the disclosure requirement.

### Publications

As a means of sharing knowledge, HHS encourages recipients to arrange
for publication of the results and accomplishments of HHS-supported
activities. OPDIV prior approval is not required for publishing the
results of an activity under a grant. Recipients also may assert
copyright in scientific and technical articles based on data produced
under the grant and transfer it to the publisher or others where
necessary to effect journal publication or inclusion in proceedings
associated with professional activities. Any such transfer is subject to
the royalty-free, non-exclusive and irrevocable license to the Federal
government and any agreement should note explicitly that the assignment
is subject to the government license.

Journal or other copyright practices are acceptable unless the copyright
policy prevents the recipient from making copies for its own use (as
provided in 45 CFR 74.36 and 92.34). The recipient should account for
royalties and other income earned from a copyrighted work as specified
by the OPDIV (see Part IV and the NoA).

For each publication that results from HHS grant-supported activities,
recipients must include an acknowledgment of grant support using one of
the following statements:

> "This publication was made possible by Grant Number \_\_\_\_\_\_\_\_
> from \_\_\_\_\_\_\_\_\_."
>
> "The project described was supported by Grant Number \_\_\_\_\_\_\_\_
> from \_\_\_\_\_\_\_\_."

Recipients also must include a disclaimer stating the following:

> "Its contents are solely the responsibility of the authors and do not
> necessarily represent the official views of the \[name of OPDIV, OPDIV
> component, or HHS\]."

If the recipient plans to issue a press release concerning the outcome
of HHS grant-supported activities, it should notify the OPDIV in advance
to allow for coordination. One copy of each publication resulting from
work performed under an HHS grant-supported project must accompany the
annual or final progress report submitted to the OPDIV.

### Patents and Inventions

The Bayh-Dole Act of 1980 (P.L. 96-517; 35 U.S.C. 200--212) and the
related EO 12591 (April 10, 1987) provide incentives for the practical
application of research or results of other activities supported through
Federal funding agreements. To be able to retain rights and title to
inventions made with Federal funds, so-called "subject" inventions, the
recipient must comply with a series of regulations that ensure the
timely transfer of the technology to the private sector, while
protecting limited rights of the Federal government.

The regulations apply to any subject invention---defined as any
invention either conceived or first actually reduced to practice in the
performance of work under the Federal award---and to all types of
recipients of Federal funding. This includes non-profit entities and
small businesses or large businesses receiving funding through grants,
cooperative agreements, or contracts as direct recipients of funds or as
subrecipients or subcontractors under those awards.

HHS recipients may retain intellectual property rights to subject
inventions provided they do the following:

-   Report all subject inventions to the OPDIV

-   Make efforts to commercialize the subject invention through patent
    or licensing

-   Formally acknowledge the Federal government's support in all patents
    that arise from the subject invention

-   Formally grant the Federal government a limited use license to the
    subject invention.

Subawards and contracts under an award also must reflect the objectives
of the Bayh-Dole Act and the Technology Transfer Commercialization Act
of 2000 to ensure that inventions made are used in a manner to promote
free competition and enterprise without unduly encumbering future
research and discovery.

#### Royalties and Licensing Fees from Copyrights, Inventions, and Patents

HHS recipients do not have to report program income resulting from
royalties or licensing fees from sale of copyrighted material unless the
NoA provides otherwise. The NoA may include additional terms and
conditions if commercialization of an invention is an anticipated
outcome of a research project.

Pursuant to the regulations implementing the Bayh-Dole Act (37 CFR
401.14(h)), HHS requires reporting of income resulting from HHS-funded
inventions and patents. Specifically, as part of the annual invention
utilization report, recipients must report income generated by all
subject inventions to which title has been elected, including inventions
that have been patented and those that are licensed but not patented
(see "Invention Reporting" in this section).

#### Invention Reporting

Exhibit 9 summarizes recipient responsibilities for invention reporting
as specified in 37 CFR part 401. Recipients should refer to 37 CFR part
401 (available on the Interagency Edison site:
[https://s-edison.info.nih.gov/iEdison/)](https://s-edison.info.nih.gov/iEdison/)
for a complete discussion of the regulations.

  -------------------------------------------------------------------------------------------------------
  Exhibit 9.                                                                              
  Extramural Invention                                                                    
  Reporting Compliance                                                                    
  Responsibilities                                                                        
  -------------------- -------------------- --------------------------------------------- ---------------
  Action required      When action\         Discussion                                    37 CFR part 401
                       must be taken                                                      reference

  Employee Agreement                                                                      
  to Disclose All                                                                         
  Inventions                                                                              

  The PI/PD (employee) At time of           Recipients and subrecipients must have        401.14(f)(2)
  must sign an         employment.          policies in place regarding ownership of      
  agreement to abide                        intellectual property.                        
  by the terms of the                                                                     
  Bayh-Dole Act and                                                                       
  the HHS GPS as they                                                                     
  relate to                                                                               
  intellectual                                                                            
  property rights.                                                                        

  Invention Report and                                                                    
  "Disclosure"                                                                            

  The recipient must   Within 2 months of   There is no single format for disclosing the  401.14(a)(2)\
  submit to the OPDIV  the inventor's       invention to the Federal government. The      401.14(c)(1)
  a report of any      initial report of    report must identify inventor(s), OPDIV grant 
  subject invention.   the invention to the number, and date of any public disclosure.    
  This includes a      recipient.                                                         
  written description                                                                     
  (the so-called                                                                          
  "invention                                                                              
  disclosure") of the                                                                     
  invention.                                                                              

  Rights to                                                                               
  Subrecipient                                                                            
  Inventions                                                                              

  Subrecipients retain Within 2 months of   The recipient cannot require ownership of a   401.14(g)(1)\
  rights to any        the inventor's       subrecipient's subject inventions as a term   401.14(g)(2)
  subject inventions   initial report of    of the agreement.                             
  they make.           the invention to the                                               
                       subrecipient. (The                                                 
                       subrecipient has the                                               
                       same invention                                                     
                       reporting                                                          
                       obligations as the                                                 
                       recipient.)                                                        

  Election of Title to                                                                    
  Invention                                                                               

  The recipient must   Within 2 years of                                                  401.14(b)\
  notify the OPDIV of  the initial                                                        401.14(c)(2)\
  its decision to      reporting of the                                                   401.14(f)(1)
  retain or waive      invention to the                                                   
  title to invention   OPDIV.                                                             
  and patent rights.                                                                      

  Confirmatory License                                                                    

  For each invention,  Promptly after                                                     401.14(f)(1)
  the recipient must   election of title to                                               
  provide a use        the invention.                                                     
  license to the OPDIV                                                                    
  for each invention.                                                                     

  Patent Application                                                                      

  The recipient must   Within 1 year after  Initial patent application is defined as a    401.14(c)(3)\
  inform the OPDIV of  election of title,   non-provisional U.S. application. The patent  401.2(n)
  the filing of any    unless there is an   application number and filing date must be    
  non-provisional      extension.           provided.                                     
  patent application.                                                                     
  The patent                                                                              
  application must                                                                        
  include a Federal                                                                       
  government support                                                                      
  clause.                                                                                 

  Assignment of Rights                                                                    
  to Third Party                                                                          

  If the recipient is  As needed.           Recipients that are for-profit entities       401.14(k)
  a non-profit                              (including small businesses) do not need to   
  organization, it                          seek approval.                                
  must seek OPDIV                                                                         
  approval to assign                                                                      
  invention or U.S.                                                                       
  patent rights to any                                                                    
  third party,                                                                            
  including the                                                                           
  inventor(s).                                                                            

  Issued Patent                                                                           

  The recipient must   When the patent is   The patent issue date, number, and evidence   401.5(f)(2)
  notify the OPDIV     issued.              of Federal government support clause must be  
  that a patent has                         provided.                                     
  been issued.                                                                            

  Extension of Time to                                                                    
  Elect Title or File                                                                     
  Patent                                                                                  

  The recipient may    As needed.           Request for extension of time must be made.   401.14(c)(4)
  request an extension                      Such requests are preapproved.                
  of up to 2 years for                                                                    
  election of title,                                                                      
  or 1 year for filing                                                                    
  a patent                                                                                
  application.                                                                            

  Change in Patent                                                                        
  Application Status                                                                      

  The recipient must   At least 30 days     This notification allows the OPDIV to         401.14(f)(3)
  notify the OPDIV of  before any pending   consider continuing the patent action.        
  changes in patent    patent office                                                      
  status.              deadline.                                                          

  Invention                                                                               
  Utilization Report                                                                      

  The recipient must   Annually.            This report gives an indication of whether    401.14(h)
  submit information                        the objectives of the law are being met.      
  about the status of                       Specific reporting requirements can be found  
  commercialization of                      in *i*-Edison                                 
  any invention for                         (<https://s-edison.info.nih.gov/iEdison/>).   
  which title has been                                                                    
  elected.                                                                                

  Annual Invention                                                                        
  Statement                                                                               

  The recipient must   Generally part of    For PHS OPDIVs, the information is requested  PHS 398 and PHS
  indicate any         the competing        as a checklist item on the PHS 398            2590; SF 424
  inventions made      application or       application or through the SF 424 (R&R), as   (R&R)
  during the previous  non-competing grant  applicable, and on the non-competing grant    
  budget period on all progress reports.    progress report (PHS 2590).                   
  grant awards.                                                                           

  Final Invention                                                                         
  Statement and                                                                           
  Certification                                                                           

  The recipient must   Within 90 days after Required information is specified on the HHS  401.14(f)(5)
  submit to the GMO a  the project period   568 form. If no inventions occurred during    
  summary of all       (competitive         the project period, a negative report must be 
  inventions made      segment) ends.       submitted.                                    
  during the entire                                                                       
  term of each grant                                                                      
  award.                                                                                  

                                                                                          
  -------------------------------------------------------------------------------------------------------

A recipient's failure to comply with any of these or other regulations
cited in 37 CFR part 401 may result in the loss of patent rights or an
enforcement action.

The Bayh-Dole Act includes provisions for the recipient to assign
invention rights to third parties. Recipients that are non-profit
organizations must request OPDIV approval for the assignment. If the
assignment is approved and the rights are assigned to a third party,
invention and patent reporting requirements apply to the third party.
The recipient should review existing agreements with third parties and
revise them, as appropriate, to ensure that they are consistent with the
terms and conditions in the NoA and that the objectives of the Bayh-Dole
Act are adequately represented in the assignment.

Any invention made using funds awarded for educational purposes, e.g.,
training grants or certain types of career development awards, is not
considered a subject invention and therefore is not subject to invention
reporting requirements (as provided in 45 CFR part 74 and 37 CFR
401.1(b)). The recipient should seek the advice of the GMO to verify
whether any invention made under a career development award should be
considered a subject invention.

All issues or questions regarding extramural technology transfer policy
and reporting of inventions and their utilization should be referred to
the GMO or other designated individual.

### Sharing Research Tools

HHS believes that sharing of data and other research tools produced or
developed by investigators under HHS grants, such as cell lines, certain
types of animals (e.g., transgenic mice), and computer programs, is
essential for expedited translation of research results into knowledge,
products, and procedures to improve human health. HHS endorses the
sharing of final research data and research tools to serve these and
other important scientific goals and expects and supports the timely
release and sharing of final research data and research tools from
HHS-supported studies for use by other researchers. "Timely release and
sharing" is defined as no later than the acceptance for publication of
the main findings from the final data set or after submission to the
OPDIV. Restricting the availability of unique resources can impede the
advancement of further research.

For any subaward, including a consortium agreement, that may result in
research data or tools, the recipient must include a provision requiring
third-party data or research tools to be made available to the recipient
and, as appropriate, the OPDIV upon request, to allow for sharing.

HHS recognizes that data sharing may be complicated or limited, in some
cases, by organizational policies, local IRB rules, and local, State and
Federal laws and regulations, including the Privacy Rule. The rights and
privacy of individuals who participate in HHS-sponsored research must be
protected at all times. Thus, data intended for broader use should be
free of identifiers that would permit linkages to individual research
participants and variables that could lead to deductive disclosure of
the identity of individual subjects. Investigators also must exercise
great care to ensure that resources involving human cells or tissues do
not identify original donors or subjects, either directly or through
identifiers such as codes linked to the donors or subjects.

To facilitate the availability of research tools developed with OPDIV
funds, investigators may distribute the materials through their own
laboratory or organization or submit them, if appropriate, to a
repository. Investigators are expected to submit unique biological
information, such as DNA sequences or crystallographic coordinates, to
the appropriate data banks so that they can be made available to the
broad scientific community. When distributing unique resources,
investigators are to include pertinent information on the nature,
quality, or characterization of the materials.

In addition to sharing data and research resources with the research
community, upon request of the OPDIV, the recipient also must provide a
copy of documents or a sample of any material developed under an HHS
grant award. The recipient may charge a nominal fee to cover shipping
costs for providing this material. Income earned from these charges must
be treated as program income.

Organizations that believe they will be unable to comply with these
requirements should promptly contact the GMO to discuss the
circumstances, obtain information that might enable compliance, and
reach an understanding in advance of an award.

## Procurement Management

Recipients may acquire a variety of commercially available goods or
services in connection with a grant-supported project or program. States
may follow the same policies and procedures they use for procurements
from non-Federal funds. All other recipients must follow the
requirements in 45 CFR 74.40 through 74.48 or 92.36, as applicable, for
the purchase of goods or services through contracts under grants. The
requirements for third-party activities involving transfer of
substantive programmatic work are addressed under "Subawards" in this
section.

A contract under a grant must be a written agreement between the
recipient and the third party. The contract must, as appropriate, state
the activities to be performed; the time schedule; the policies and
requirements that apply to the contractor, including those required by
45 CFR 74.48 or 92.36(i) and other terms and conditions of the grant
(these may be incorporated by reference where feasible); the maximum
amount of money for which the recipient may become liable to the third
party under the agreement; and the cost principles to be used in
determining allowable costs in the case of cost-type contracts. The
contract must not affect the recipient's overall responsibility for the
direction of the project or program and accountability to the Federal
government. Therefore, the agreement must reserve sufficient rights and
control to the recipient to enable it to fulfill its responsibilities.

When a recipient enters into a service-type contract in which the term
is not concurrent with the budget period of the award, the recipient may
charge the costs of the contract to the budget period in which the
contract is executed even though some of the services will be performed
in a succeeding period if the following conditions are met:

-   The awarding office has been made aware of this situation either at
    the time of application or through post-award notification.

-   The project has been recommended for a project period extending
    beyond the current year of support.

-   The recipient has a legal commitment to continue the contract for
    its full term.

However, costs will be allowable only to the extent that they are for
services provided during the period of OPDIV support. To limit liability
if continued OPDIV funding is not forthcoming, it is recommended that
recipients insert a clause in such contracts of \$100,000 or less
stipulating that payment beyond the end of the current budget period is
contingent on continued Federal funding. The contract provisions
prescribed by 45 CFR 74.48 and 92.36(i)(2) specify termination
provisions for contracts in excess of \$100,000.

In general, the rental costs for facilities and equipment applicable to
each budget period should be charged to that period. Recipients are
encouraged to consult the GMO before entering into leases that will
result in direct charges to the grant project.

### Approval Requirements

The procurement standards in 45 CFR 74.44 and 92.36(g) allow OPDIVs to
require approval of specific procurement transactions under the
following circumstances (and provide a mechanism for governmental
recipients to be exempt from this type of review):

-   A recipient's procurement procedures or operations do not comply
    with the procurement standards required by those regulations.

-   The procurement is expected to exceed the "simplified acquisition
    threshold" (currently \$100,000) (formerly the "small purchase
    threshold") established by the Federal Property and Administrative
    Services Act, as amended, and is to be awarded without competition,
    or only one bid or proposal is received in response to a
    solicitation.

-   A procurement that will exceed the simplified acquisition threshold
    specifies a "brand name" product.

-   A proposed award over the simplified acquisition threshold is to be
    awarded to other than the apparent low bidder under a sealed-bid
    procurement.

-   A proposed contract modification changes the scope of a contract or
    increases the contract amount by more than the amount considered to
    be a simplified acquisition.

When OPDIV prior approval is required, the recipient must make available
sufficient information to enable review. This may include, at OPDIV
discretion, pre-solicitation technical specifications or documents, such
as requests for proposals or invitations for bids, or independent cost
estimates. Approval may be deferred pending submission of additional
information by the recipient or may be conditioned on the receipt of
additional information. Any resulting OPDIV approval does not constitute
a legal endorsement of the business arrangement by the Federal
government nor does such approval establish the OPDIV as a party to the
contract or any of its provisions.

### Requirements for Using Small Businesses, Minority-Owned Firms, and Women-Owned Businesses

Recipients must make positive efforts to use small businesses,
minority-owned firms, and women-owned businesses as sources of goods and
services whenever possible. Recipients are required to take the
following steps to implement this policy:

-   Place qualified small, minority-owned, and women-owned business
    enterprises on solicitation lists

-   Ensure that small, minority-owned, and women-owned business
    enterprises are solicited whenever they are potential sources

-   Consider contracting with consortia of small, minority-owned, or
    women-owned business enterprises when an intended contract is too
    large for any one such firm to handle on its own or, if economically
    feasible, divide larger requirements into smaller transactions for
    which such organizations might compete

-   Make information on contracting opportunities available and
    establish delivery schedules that encourage participation by small,
    minority-owned, and women-owned business enterprises

-   Use the services and assistance of the SBA and DoC's Minority
    Business Development Agency, as appropriate

-   If subcontracts are to be let, require the prime contractor to take
    the affirmative steps listed above.

### Subawards

This section includes the requirements for a grant involving subawards,
including consortium agreements in which the recipient collaborates with
one or more other organizations in carrying out the grant-supported
activity. Subrecipients should be selected by the recipient using its
established policies. HHS does not require that subawards comply with
the procurement standards and requirements outlined above.

The recipient is accountable to the OPDIV for the performance of the
project, the appropriate expenditure of grant funds by all parties, and
all other obligations of the recipient, as specified in the HHS GPS. In
general, the requirements that apply to the recipient, including the
intellectual property and program income requirements of the award, also
apply to subrecipients. The recipient is responsible for including the
applicable requirements of the HHS GPS in its subaward agreements.

The recipient must enter into a formal written agreement with each
subrecipient that addresses the arrangements for meeting the
programmatic, administrative, financial, and reporting requirements of
the grant, including those necessary to ensure compliance with all
applicable Federal regulations and policies. At a minimum, the subaward
agreement must include the following:

-   Identification of the PI/PD and individuals responsible for the
    programmatic activity at the subrecipient organization along with
    their roles and responsibilities.

-   Procedures for directing and monitoring the programmatic effort.

-   Procedures to be followed in providing funding to the subrecipient,
    including dollar ceiling, method and schedule of payment, type of
    supporting documentation required, and procedures for review and
    approval of expenditures of grant funds.

-   If different from those of the recipient, a determination of
    policies to be followed in such areas as travel reimbursement and
    salaries and fringe benefits (the policies of the subrecipient may
    be used as long as they meet HHS requirements).

-   Incorporation of applicable public policy requirements and
    provisions indicating the intent of the subrecipient to comply,
    including submission of applicable assurances and certifications.

-   For research subawards, inclusion of the following:

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-   Statement specifying whether the financial conflict of interest
    requirements of the collaborating organization or those of the
    recipient apply.

-   Provision addressing ownership and disposition of data produced
    under the agreement.

-   Provision making the sharing of data and research tools and the
    inventions and patent policy applicable to the subrecipient and its
    employees in order to ensure that the rights of the parties to the
    agreement are protected and that the recipient can fulfill its
    responsibilities to the OPDIV. This provision must include a
    requirement to report inventions to the recipient and specify that
    the recipient has the right to request and receive data from the
    subrecipient on demand.

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-   Provisions regarding property (other than intellectual property),
    program income, publications, reporting, record retention, and audit
    necessary for the recipient to fulfill its obligations to the OPDIV.

## Changes in Organizational Status

Recipients must give HHS advance notice of the following types of
changes in organizational status:

-   *Merger*---legal action resulting in the unification of two or more
    legal entities. When such an action involves the transfer of HHS
    grants, the procedures for recognizing a successor-in-interest will
    apply. When the action does not involve the transfer of HHS grants,
    the procedures for recognizing a name change normally will apply.

-   *Successor-in-interest*---process whereby the rights to and
    obligations under an HHS grant are acquired incidental to the
    transfer of all of the assets of the recipient or the transfer of
    that part of the assets involved in the performance of the grant. A
    successor-in-interest may result from legislative or other legal
    action, such as a merger or other corporate change.

-   *Name change*---action whereby the name of an organization is
    changed without otherwise affecting the rights and obligations of
    that organization as a recipient.

If the change would be considered a change of grantee organization as
described in "Prior-Approval Requirements---OPDIV Prior Approval," the
recipient must obtain that approval rather than simply notifying the
OPDIV of its intent.

Advance notification is required to ensure that the recipient still is
able to meet its legal and administrative obligations to HHS and
payments are not interrupted. Recipients are encouraged to contact the
GMO of the lead OPDIV awarding office to explain the nature of the
change in organizational status and receive guidance on whether it will
be treated as a name change or successor-in-interest. The lead awarding
office ordinarily will be the OPDIV with which the organization has the
most HHS grants. If there is no advance consultation, HHS reserves the
right to review the material provided, seek clarification or additional
information, and make an independent determination.

A recipient's formal request for a change in organizational status
should be submitted as soon as possible so that HHS can determine
whether the organization will continue to meet the grant program's
eligibility requirements and take the necessary action to reflect the
change in advance of the change in status.

For a successor-in-interest, a letter signed by the authorized
organizational representative of the current recipient (transferor) and
the successor-in-interest (transferee) must be sent to the lead awarding
office, following consultation with the GMO of that office. The letter
must do the following:

-   Stipulate that the transfer will be properly effected in accordance
    with applicable law.

-   Indicate that the transferor relinquishes all rights and interests
    in all of the affected grants.

-   Request that the HHS awarding office (offices) modify its (their)
    records to reflect the transferee as the recipient of record.

-   State the effective date of the transfer.

-   Provide the transferee's Entity Identification Number and DUNS
    number.

-   Include verification of the transferee's compliance with applicable
    requirements (e.g., research misconduct).

-   Include a list of all affected HHS grants (active and pending) with
    the following information for each:

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-   Complete grant number.

-   Name of PI/PD.

-   Current budget period and project period.

-   Total direct costs (as originally recommended) plus applicable
    indirect costs for each remaining budget period. If the
    successor-in-interest will occur during a budget period rather than
    on the anniversary date, the transferor also must provide estimated
    levels of current-year direct and indirect costs remaining as of the
    effective date of the transfer. The estimate may be reported on the
    official statement relinquishing interests and rights in the grant
    (e.g., PHS 3734 is available at
    <http://www.hhs.gov/forms/publicuse.html> or an equivalent
    relinquishing statement) for each affected grant or may be itemized
    by grant number as an attachment to the letter.

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-   Include a complete application face page for each affected grant
    showing the transferee as the applicant organization. Each face page
    must be signed by both the PI/PD and the authorized organizational
    representative at the transferee organization.

-   Include a copy of the current negotiated indirect cost rate
    agreement for the transferee.

In order to be recognized as the successor-in-interest, the "new"
(transferee) organization must meet each grant program's eligibility
requirements. Upon review and acceptance of this information, the
awarding office will revise the NoA to show the transferee as the
recipient of record.

For name changes, the recipient's written notification to the lead
awarding office must include the effective date of the change. Revised
face pages are not required for name changes because name changes are
processed with the next award action (e.g., non-competing continuation
award), and the organization will submit a face page with the
information submitted as part of that action.

## Federally Sponsored Surveys

Recipients may use HHS grant funds to collect information through
surveys or questionnaires under the following conditions:

-   When the collection of information is not a primary objective of the
    grant but is incidental to, or is an integral part of, a
    grant-supported activity.

-   When the collection of information is a primary objective of the
    grant, but such information is not intended primarily for the use of
    the Federal government or a party designated by the Federal
    government. (Contracts are used for this purpose unless a grant is
    specifically required by legislation.)

When information is collected according to either of the two conditions
above, recipients are prohibited from representing to their respondents
that the information is being collected for, or in association with, the
Federal government unless OPDIV approval has been obtained and, when
required, OMB report clearance procedures as contained in OMB
regulations implementing the PRA at 5 CFR part 1320, Controlling
Paperwork Burdens on the Public, have been followed. (When OMB approval
is required, the OPDIV, rather than the recipient, is responsible for
obtaining the necessary clearance.)

OMB clearance is required whenever HHS sponsors the use of a reporting
form or plan to collect identical kinds of information or data from 10
or more people. Information collection is considered to be sponsored by
HHS when one or more of the following circumstances exist:

-   The OPDIV authorizes the recipient of a grant to represent to
    respondents that the information is being collected for, or in
    association with, an OPDIV.

-   The recipient of a grant uses the report form or plan to collect
    information that an OPDIV has requested for the planning, operation,
    or evaluation of its program.

-   The terms and conditions of a grant award provide for OPDIV approval
    of the study design, questionnaire content, or data collection
    procedure.

-   The terms and conditions of a grant award provide for either
    submission of the data for individual respondents or the preparation
    and submission of special requested tabulations to the OPDIV.

-   Any information collection under a cooperative agreement.

HHS and OMB approval may also be required if the use of a report form or
plan presents a relatively high risk of unwarranted invasion of privacy.

Collection of the following types of information is not subject to the
clearance requirements under OMB regulations at 5 CFR part 1320:

-   Health professions data as described in Section 708 of the PHS Act,
    as amended

-   Tests or examinations given individuals for determining knowledge,
    abilities, or aptitudes of the person tested and the collection of
    information for identification or classification in connection with
    such tests

-   Information from patients that is to be used exclusively for
    research on or direct treatment of a clinical disorder; for the
    interpretation of biological analyses of body fluids, tissues, or
    other specimens; or for identification or classification of such
    specimens (see 5 CFR part 1320 for additional exemptions from
    clearance requirements).

## Monitoring

Recipients are responsible for managing the day-to-day operations of
grant-supported activities using their established controls and
policies, as long as they are consistent with HHS requirements. However,
to fulfill their role in regard to the stewardship of Federal funds,
OPDIVs monitor their grants to identify potential problems and areas
where technical assistance might be necessary. This active monitoring is
accomplished through review of reports and correspondence from the
recipient, audit reports, site visits, and other information available
to the OPDIV. The names and telephone numbers of the individuals
responsible for monitoring the programmatic and business management
aspects of a project or activity will be provided to the recipient as
part of the NoA.

During post-award administration, the GMO monitors expenditures for
conformance with cost policies. The GMO's monitoring includes, among
other things, responding to prior-approval requests and reviewing
financial reports, audit reports, and other periodic reports. The GMO
also may use audit findings as the basis for final cost adjustments. The
PO's monitoring includes review of progress reports, prior-approval
requests, and other correspondence (written or telephonic), and site
visits.

Monitoring of a project or activity will continue for as long as the
OPDIV retains a financial interest in the project or activity as a
result of property accountability, audit, and other requirements that
may continue for a period of time after the grant is administratively
closed out and the OPDIV is no longer providing active grant support.

## Reporting

HHS requires that recipients periodically submit financial and progress
reports. Other required reports may include annual invention utilization
reports, research misconduct reports, property reports, lobbying
disclosures (as required by 45 CFR 93.110(c)), audit reports, reports to
the appropriate payment points (in accordance with instructions received
from the payment office), and specialized programmatic reports.

Unless otherwise indicated in the NoA, the GMO is generally the receipt
point for most required reports, including non-competing continuation
applications, annual and final progress reports, FSRs, final invention
statements and certifications, property reports, and lobbying disclosure
statements. Generally, an original and two copies of progress reports
must be submitted. Submission of these reports to individuals other than
the GMO may result in delays in processing of the non-competing
continuation award or the submission being considered delinquent. Also
see Part IV of the HHS GPS.

Recipients are allowed a specified period of time in which to submit
required financial and final progress reports (see 45 CFR 74.51, 74.52,
92.40, and 92.41 and the discussion in this subsection). Failure to
submit complete, accurate, and timely reports may indicate the need for
closer monitoring by HHS or may result in possible award delays or
enforcement actions, including conversion to a reimbursement payment
method or withholding a non-competing continuation award (also see
"Overdue Reports" in this section).

### Financial Reporting

Reports of expenditures are required as documentation of the financial
status of grants according to the official accounting records of the
recipient. Financial or expenditure reporting is accomplished using the
FSR (SF 269 or SF 269A); the recipient must use the long form (SF 269)
to report program income earned and used.

The FSR generally is required annually, unless otherwise indicated in
the NoA. If an FSR is required annually and the award is operating under
an authorized no-cost extension, an FSR must be submitted for each 12
months of activity, regardless of the overall length of the extended
budget period. For example, if the budget period would have ended on
July 31, 2006, but is extended to July 31, 2007, the recipient must
submit two FSRs---one for the period August 1, 2005-July 31, 2006 and
one for the period August 1, 2006-July 31, 2007. When required annually,
the report must be submitted for each budget period no later than 90
days after the close of the budget period or applicable 12-month period.

If FSRs are required more frequently than annually, the NoA will specify
both the frequency and due date. Some OPDIVs provide for electronic
submission to the OPDIV. See Part IV for OPDIV-specific information
concerning financial reporting, including the means of submission.

For some awards, in lieu of the annual FSR, the OPDIV will use the
quarterly FCTR, submitted to PMS to monitor the financial aspects of
grants. The GMO may review the report for patterns of cash expenditures,
including accelerated or delayed drawdowns, and to assess whether
performance or financial management problems exist. For these awards, an
FSR generally is required only at the end of a competitive segment. It
must be submitted within 90 days after the end of the competitive
segment and must report on the cumulative support awarded for the entire
segment. An FSR must be submitted at this time whether or not a
competing continuation award is made. If no further award is made, this
report will serve as the final FSR.

Before submitting FSRs, recipients must ensure that the information
submitted is accurate, complete, and consistent with the recipient's
accounting system. The authorized organizational representative's
signature on the FSR certifies that the information in the FSR is
correct and complete and that all outlays and obligations are for the
purposes set forth in grant documents, and represents a claim to the
Federal government. Filing a false claim may result in the imposition of
civil or criminal penalties (see "Fraud, Waste, and Abuse" in Part I of
the HHS GPS).

In some cases, the recipient may have to revise or amend a previously
submitted FSR. When the revision results in a balance due to the OPDIV,
the recipient must submit a revised FSR whenever the overcharge is
discovered, no matter how much time has lapsed since the original due
date of the report. Revised expenditure reports representing additional
expenditures by the recipient that were not reported to the OPDIV within
the 90-day time frame may be submitted to the GMO with an explanation
for the revision. The explanation also should indicate why the revision
is necessary and describe what action is being taken by the recipient to
preclude similar situations in the future. This should be done as
promptly as possible, but not later than 1 year from the due date of the
original report, i.e., 15 months following the end of the budget period.
If an adjustment is to be made, the awarding office will advise the
recipient of actions it will take to reflect the adjustment. The OPDIV
will not accept any revised report received after that date and will
return it to the recipient.

### Progress Reporting

Progress reports generally are required annually as part of the
non-competing continuation award process. However, the OPDIV may require
these reports more frequently. Progress reports must be submitted to,
and approved by, the OPDIV to non-competitively fund each additional
budget period within a previously approved project period (competitive
segment). When used in lieu of a non-competing continuation application,
the progress report typically includes an updated budget in addition to
other required information.

The form/format to be used and the information to be included in the
progress report are specified in the NoA or in specific OPDIV guidance,
e.g., non-competing continuation guidance. Some OPDIVs have implemented
procedures for the electronic transmission of progress reports. See Part
IV for OPDIV-specific information on electronic procedures for
submitting progress reports.

Progress reports must be submitted directly to the awarding office. Late
submission or receipt of an incomplete grant progress report will result
in delaying the issuance and funding of the non-competing continuation
award and may result in a reduced award amount.

The progress report for the final budget period of a competitive segment
for which a competing continuation application is submitted will be part
of that application; however, if an award is not made or the recipient
does not submit an application for continued support, a final progress
report is required.

The OPDIV will specify the requirements for progress reporting under
construction grants or grants supporting both construction activities,
including acquisition or modernization, and nonconstruction activities.

### Other Reporting

Each competing continuation grant application and progress report (when
used in lieu of a non-competing continuation application) must indicate
whether or not any subject inventions were made during the preceding
budget period. If inventions were made, the recipient must indicate
whether they have been reported. The recipient also must submit an
annual invention utilization report for all subject inventions to which
title has been elected and inventions that have been licensed but not
patented (research tools). The utilization report provides a way to
evaluate the extent of commercialization of subject inventions,
consistent with the objectives of the Bayh-Dole Act.

Bayh-Dole regulations allow recipients to report inventions
electronically (37 CFR 401.16). Electronic reporting is available
through an Internet-based system called Interagency Edison
([https://s-edison.info.nih.gov/*i*-Edison/](https://s-edison.info.nih.gov/iEdison/)).
Recipients should make all reasonable efforts to submit invention
reports using *i*-Edison, where possible. The system supports
confidential transmission of required information and provides a utility
for generating reports and reminders of pending reporting deadlines.
Further information about the system, including instructions for
creating an account needed to submit reports electronically, is
available on the *i*-Edison site.

Title to federally owned property remains vested in the Federal
government. Annually, recipients must submit to the OPDIV an inventory
listing federally owned property in the recipient's custody. Upon
completion of the award or when the property is no longer needed, the
recipient must report the property to the awarding office for further
agency utilization. If the OPDIV has no further need for the property,
it must be declared excess and reported to GSA, unless the OPDIV has
statutory authority to dispose of the property by alternative methods
(e.g., the authority provided by the Federal Technology Transfer Act, 15
U.S.C. 3710(I) to donate research equipment to educational and
non-profit organizations in accordance with EO 12821, "Improving
Mathematics and Science Education in Support of the National Education
Goals"). The OPDIV will issue appropriate instructions to the recipient.

### Overdue Reports

Failure to submit required reports within the time allowed may result in
suspension or termination of an active grant, withholding a
non-competing continuation award, or other enforcement actions,
including withholding of payments or converting to the reimbursement
method of payment. Continued failure to submit required reports may
result in the imposition of special award provisions or cause other
eligible projects or activities involving that recipient or the
individual responsible for the delinquency to not be funded.

If at any time the recipient provides an acceptable explanation
regarding the late submission of a report, the OPDIV may waive the
reporting requirement or set a new due date. However, once a report
becomes overdue, such action will be taken by the OPDIV only if the
reasons for the recipient's inability to submit the report on time are
legitimately beyond its control or if the purposes for which the report
is to be used can be accomplished through other means. Failure to meet a
new date may result in the OPDIV taking action as described above.

Submission of a required report does not necessarily fulfill the
recipient's obligation. Such reports must also meet the content
requirements in regulations or other grant terms. Where reports need to
be revised in order to be accepted, the recipient must provide a revised
report by the due date indicated or immediate fund cutoff or other
enforcement actions may be taken with regard to the delinquency.

## Record Retention and Access

Recipients generally must retain financial and programmatic records,
supporting documents, statistical records, and all other records that
are required by the terms of a grant, or may reasonably be considered
pertinent to a grant, for a period of 3 years from the date the annual
FSR is submitted. For awards where the FSR is submitted at the end of
the competitive segment, the 3-year retention period will be calculated
from the date the FSR for the entire competitive segment is submitted.
Those recipients must retain the records pertinent to the entire
competitive segment for 3 years from the date the FSR is submitted. See
45 CFR 74.53 and 92.42 for exceptions and qualifications to the 3-year
retention requirement (e.g., if any litigation, claim, financial
management review, or audit is started before the expiration of the
3-year period, the records must be retained until all litigation,
claims, or audit findings involving the records have been resolved and
final action taken). Those sections also specify the retention period
for other types of grant-related records, including indirect cost
proposals and property records. See 45 CFR 74.48 and 92.36 for record
retention and access requirements for contracts under grants.

## Audit Requirements

An audit is a systematic review or appraisal made to determine whether
internal accounting and other control systems provide reasonable
assurance of the following:

-   Financial operations are properly conducted.

-   Financial reports are timely, fair, and accurate.

-   The entity has complied with applicable laws, regulations, and terms
    and conditions of award.

-   Resources are managed and used economically and efficiently.

-   Desired results and objectives are being achieved effectively.

Recipients (other than Federal institutions) and subrecipients are
subject to the audit requirements of OMB Circular A-133, as implemented
by 45 CFR 74.26 and 92.26, or the audit requirements stated in 45 CFR
74.26(d) and in the HHS GPS (for types of organizations to which OMB
Circular A-133 does not directly apply). In general, OMB Circular A-133
requires a State government, local government, or non-profit
organization (including institutions of higher education) that expends
\$500,000 or more per year under Federal grants, cooperative agreements,
and/or procurement contracts to have an annual audit by a public
accountant or a Federal, State, or local governmental audit
organization. The audit must meet the standards specified in generally
accepted government auditing standards (GAGAS).

A for-profit organization is required to have a non-Federal audit if,
during its fiscal year, it expended a total of \$500,000 or more under
one or more HHS awards (as a direct recipient and/or as a subrecipient).
Title 45, part 74.26(d) of the CFR incorporates the thresholds and
deadlines of OMB Circular A-133 but provides for-profit organizations
two options regarding the type of audit that will satisfy the audit
requirements. The recipient either may have (1) a financial-related
audit (as defined in, and in accordance with, the Government Auditing
Standards \[commonly known as the "Yellow Book"\], (GPO stock
020-000-00-265-4) of all the HHS awards, or (2) an audit that meets the
requirements of OMB Circular A-133. Foreign recipients are subject to
the same audit requirements as for-profit organizations specified in
45 CFR 74.26(d).

When a recipient procures audit services, the procurement must comply
with the procurement standards of 45 CFR part 74 or 92, as applicable,
including obtaining competition and making positive efforts to use
small, minority-owned, and women-owned business enterprises. Recipients
should ensure that comprehensive solicitations made available to
interested firms include all audit requirements and specify the criteria
to be used for selection of the firm. Recipients' written agreements
with auditors must specify the rights and responsibilities of each
party.

OMB Circular A-133 explains in detail the scope, frequency, and other
aspects of the audit. Some highlights of this circular are as follows:

-   Covered organizations expending \$500,000 or more per year in
    Federal awards are required to have an audit made in accordance with
    the circular. However, if the awards are under one program, the
    organization can have either a single organization-wide audit or a
    program-specific audit of the single program, subject to the
    provisions of Section 235 of the circular. OPDIV research awards may
    not be considered a single program for this purpose. Covered
    organizations expending less than \$500,000 in any year are exempt
    from these audit requirements in that year but must have their
    records available for review by the OPDIV.

-   The data collection form and copies of the reporting package must be
    submitted to the FAC at the following address:

> Federal Audit Clearinghouse\
> Bureau of the Census\
> 1201 E. 10th Street\
> Jeffersonville, IN 47132

-   The reporting package must contain the following:

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-   Financial statements and Schedule of Expenditures of Federal Awards

-   Independent auditor's report, including an opinion on the financial
    statements and the Schedule of Expenditures of Federal Awards, a
    report on compliance and internal control over financial reporting,
    and a report on compliance with requirements applicable to each
    major program and on internal control over such compliance
    requirements

-   A schedule of findings and questioned costs

-   If applicable, a summary of prior audit findings and a corrective
    action plan.

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-   An audit under OMB Circular A-133 is in lieu of a financial audit of
    individual Federal awards. However, Federal agencies may request
    additional audits necessary to carry out their responsibilities
    under Federal laws or regulations. Any additional audits will build
    upon work performed by the independent auditor.

If the schedule of findings and questioned costs discloses an audit
finding related to an HHS award or if the schedule of prior audit
findings reports the status of any audit finding relating to an HHS
award, the FAC will provide copies of the audit report to NEARC, OIG,
HHS. NEARC will, in turn, distribute them within HHS for further action,
as necessary.

Recipients must follow a systematic method for ensuring timely and
appropriate resolution of audit findings and recommendations, whether
discovered as a result of a Federal audit or a recipient-initiated
audit. Recipients usually are allowed 30 days from the date of request
to respond to the responsible audit resolution official (Action
Official) concerning audit findings. Failure to submit timely responses
may result in cost disallowance or other actions by HHS or the OPDIV. At
the completion of the audit resolution process, the recipient will be
notified of the Action Official's final decision. The recipient may
appeal this decision if the adverse determination is of a type covered
by the OPDIV or HHS grant appeals procedures (see "Grant Appeals
Procedures"). Refunds owed to the Federal government as a result of
audit disallowances must be made in accordance with instructions issued
by the Action Official.

It is imperative that recipients submit required OMB Circular A-133
audits within the time limits specified in the circular. If recipients
are delinquent in complying with the provisions of the circular, HHS or
the OPDIV will impose sanctions that may result in the loss of Federal
funds. No audit costs will be allowed either as indirect costs or direct
costs to Federal awards if the required audits have not been completed
or have not been conducted in accordance with the provisions of OMB
Circular A-133.

## Enforcement Actions

A recipient's failure to comply with the terms and conditions of award,
including confirmed instances of research misconduct, may cause an OPDIV
to take one or more enforcement actions, depending on the severity and
duration of the non-compliance. The OPDIV will undertake any such action
in accordance with applicable statutes, regulations, and policies. The
OPDIV generally will afford the recipient an opportunity to correct the
deficiencies before taking enforcement action unless public health or
welfare concerns require immediate action. However, even if a recipient
is taking corrective action, the OPDIV may take proactive steps to
protect the Federal government's interests, including placing special
conditions on awards or precluding the recipient from obtaining future
awards for a specified period, or may take action designed to prevent
future non-compliance, such as closer monitoring. If the OPDIV takes an
enforcement action as a result of research misconduct or will more
closely monitor an award through the use of special conditions, the
OPDIV will share this information with other HHS components.

### Modification of the Terms and Conditions of Award

During grant performance, the GMO may include special conditions in the
award to require correction of identified financial or administrative
deficiencies. When the special conditions are imposed, the GMO will
notify the recipient of the nature of the conditions, the reason why
they are being imposed, the type of corrective action needed, the time
allowed for completing corrective actions, and the method for requesting
reconsideration of the conditions. (See 45 CFR 74.14 or 92.12.)

The OPDIV also may withdraw approval of the PI/PD or other key personnel
if there is a reasonable basis to conclude that they are no longer
qualified or competent to perform. In that case, the OPDIV may request
that the recipient designate a new PI/PD or other key personnel.

The decision to modify the terms of an award---by imposing special
conditions, by withdrawing approval of the PI/PD or other key personnel,
or otherwise---is discretionary on the part of the OPDIV.

### Withholding a Non-Competing Continuation Award

An OPDIV may decide not to make a non-competing continuation award
within the current competitive segment for one or more of the following
reasons:

-   Adequate Federal funds are not available to support the project.

-   A recipient failed to show satisfactory progress in achieving the
    objectives of the project.

-   A recipient failed to meet the terms and conditions of a previous
    award.

-   For whatever reason, continued funding would not be in the best
    interests of the Federal government.

If a non-competing continuation award is denied (withheld) because the
recipient failed to comply with the terms and conditions of a previous
award, the recipient may appeal that determination.

Depending on the nature of the deficiency, an OPDIV also may temporarily
withhold payment or convert the grant from an advance payment method to
a reimbursement method.

### Suspension or Termination

If a recipient has failed to materially comply with the terms and
conditions of award, the OPDIV may suspend the grant, pending corrective
action, or may terminate the grant for cause. The regulatory procedures
that pertain to suspension and termination are specified in 45 CFR 74.61
and 74.62 and in 45 CFR 92.43.

The OPDIV generally will suspend (rather than immediately terminate) a
grant and allow the recipient an opportunity to take appropriate
corrective action before making a termination decision. The OPDIV may
decide to terminate the grant if the recipient does not take appropriate
corrective action during the period of suspension.

The OPDIV may terminate---without first suspending---the grant if the
deficiency is so serious as to warrant immediate termination or if
public health or welfare concerns require immediate action. Termination
for cause may be appealed under the OPDIV and HHS grant appeals
procedures.

A grant also may be terminated, partially or totally, by the recipient
or by the OPDIV with the consent of the recipient. If the recipient
decides to terminate a portion of a grant, the OPDIV may determine that
the remaining portion of the grant will not accomplish the purposes for
which the grant was originally awarded. In any such case, the recipient
will be advised of the possibility of termination of the entire grant
and will be allowed to withdraw its termination request. If the
recipient does not withdraw its request for partial termination, the
OPDIV may initiate procedures to terminate the entire grant for cause.

See "Selected Items of Cost" for the allowability of termination costs.
Allowability of these costs does not vary whether a grant is terminated
for cause by the OPDIV, terminated at the request of the recipient, or
terminated by mutual agreement.

Other options available to an OPDIV include suspension or debarment
under 45 CFR part 76. Suspension under 45 CFR part 76 (see
Eligibility---Suspension and Debarment" in Part I) is a distinct action
from "suspension" described above in conjunction with termination.

## Closeout

The OPDIV will close out a grant as soon as possible after expiration if
the grant will not be extended or after termination, as provided in
45 CFR 74.71 through 74.73 and in 45 CFR 92.50. Closeout includes
ensuring timely submission of all required reports and adjustments for
amounts due the recipient or the OPDIV. Closeout of a grant does not
automatically cancel any requirements for property accountability,
record retention, or financial accountability. Following closeout, the
recipient remains obligated to return funds due as a result of later
refunds, corrections, or other transactions, and the Federal government
may recover amounts based on the results of an audit covering any part
of the period of grant support.

Unless the GMO grants an extension, recipients must submit a final FSR,
final progress report, and Final Invention Statement and Certification
within 90 days of the end of grant support. Failure to submit timely and
accurate final reports may affect future funding to the organization or
awards with the same PI/PD.

### Final Financial Status Report

A final FSR is required for

-   any grant that is terminated,

-   any grant that is transferred to a new recipient, or

-   any award at the end of the project period (or if comprised of
    multiple competitive segments, at the end of each competitive
    segment).

The final FSR must cover the entire project period (competitive segment)
or as much of the project period (competitive segment) as has been
funded before termination or transfer. Final FSRs must have no
unliquidated obligations and must indicate the exact balance of
unobligated funds. Unobligated funds must be returned to the OPDIV or
must be reflected by an appropriate accounting adjustment in accordance
with instructions from the GMO or from the payment office. For those
organizations receiving their funds through PMS, final reports, as
specified by PMS, must be submitted to that office. It is the
recipient's responsibility to reconcile reports submitted to PMS and to
the OPDIV. Reconciliation consists of ensuring that disbursements equal
obligations and drawdowns or making any adjustments as necessary, e.g.,
for an overpayment. Withdrawal of the unobligated balance following
expiration or termination of a grant is not considered an adverse action
and is not subject to appeal.

When the submission of a revised final FSR results in additional claims
by the recipient, the OPDIV will consider the approval of such claims
subject to the following minimum criteria:

-   The recipient must indicate why the revision is necessary and
    explain and implement internal controls that will preclude similar
    occurrences in the future.

-   The charge must represent otherwise allowable costs under the
    provisions of the grant.

-   There must be an unobligated balance for the budget period
    sufficient to cover the claim.

-   The funds must still be available for use.

-   The OPDIV must receive the revised FSR within 12 months of its
    original due date.

### Final Progress Report

A final progress report is required for any grant that is terminated and
at the end of the project period. The final progress report should
follow specific OPDIV instructions and be submitted to the GMO, but
minimally will include a summary of progress toward the achievement of
the originally stated aims, a list of significant results (positive or
negative), and a list of publications. If the recipient submits a
competing continuation application, the final progress report
requirement will be met by the information included in that application.

### Final Invention Statement and Certification

For research grants, the recipient must submit a Final Invention
Statement and Certification (HHS 568), whether or not the funded
activity results in any subject inventions. The HHS 568 must list all
inventions that were conceived or first actually reduced to practice
during the course of work under the grant, and it must be signed by the
PI/PD and an authorized organizational representative. The completed
form to be submitted to the GMO should cover the period from the
original effective date of support through the date of expiration or
termination of the award. If there were no inventions, the form should
indicate "None." Copies of the HHS 568 are available on the *i*-Edison
Web site at <https://s-edison.info.nih.gov/iEdison/>.

## Debt Collection

An OPDIV may administratively recover funds paid to a recipient in
excess of the amount to which the recipient is finally determined to be
entitled under the terms and conditions of the award, including misspent
funds or unallowable costs incurred. If the recipient does not pay back
the funds in accordance with the demand by the OPDIV, which specifies
the period of time for repayment, the OPDIV may collect the debt by

-   making an administrative offset against payments that would be due
    under other grant awards,

-   withholding advance payments that would otherwise be due, or

-   taking any other action permitted by statute.

Several Federal statutes governing debt collection and the Federal
Claims Collection Standards (31 CFR parts 900-904) require the OPDIV to
collect debts due to the Federal government and, except where prohibited
by law, to charge interest on all delinquent debts owed to the OPDIV by
recipients (also see HHS claims collection regulations at 45 CFR part
30). Debts may result from cost disallowances, recovery of funds,
unobligated balances, or other circumstances.

Unless otherwise specified in law, regulation, or the terms and
conditions of the award, debts are considered delinquent 30 days after
notification to the recipient of the indebtedness. The interest on
delinquent debts will be computed from the original notification date to
the recipient of the indebtedness. The interest rate applied will be the
current value of funds rate or the private consumer rate of interest
fixed by Treasury, whichever is higher. A higher rate may be charged if
necessary to protect the interests of the Federal government.

Penalties and administrative collection costs also will be charged in
accordance with the act and the implementing HHS regulations, as
follows:

-   A penalty charge of 6 percent a year will be assessed on debts that
    are more than 90 days overdue. Penalty charges will accrue from the
    date the debt became overdue until the indebtedness is paid.

-   Delinquent debtors will be assessed charges to cover the Federal
    government's administrative costs of collecting overdue debts. From
    time to time, HHS will publish a notice in the *Federal Register*
    setting forth the amounts to be assessed for administrative
    collection costs.

If a recipient appeals an adverse monetary determination under 45 CFR
part 16 or specific OPDIV appeal procedures, collection will be
suspended pending a final decision on the appeal. If the determination
is sustained (either fully or partially), interest will be charged
beginning with the date of the original notification to the recipient of
the indebtedness.

## Appeals

HHS permits recipients to appeal to the DAB certain post-award adverse
administrative decisions made by HHS officials (see 45 CFR part 16). In
addition, some OPDIVs have implemented OPDIV-specific appeal procedures
(see Part IV). In general, a recipient may appeal the following OPDIV
actions:

-   Termination, in whole or in part, of a grant for failure of the
    recipient to carry out its approved project in accordance with the
    applicable law and the terms and conditions of award or for failure
    of the recipient otherwise to comply with any law, regulation,
    assurance, term, or condition applicable to the grant

-   Determination that an expenditure not allowable under the grant has
    been charged to the grant or that the recipient has otherwise failed
    to discharge its obligation to account for grant funds

-   Denial (withholding) of a non-competing continuation award for
    failure to comply with the terms of a previous award

-   Determination that a grant is void (i.e., a decision that an award
    is invalid because it was not authorized by statute or regulation or
    because it was fraudulently obtained).

The formal notification of an adverse determination will contain a
statement of the recipient's appeal rights. As the first level in
appealing an adverse determination, the recipient must submit a request
for review to the HHS or OPDIV official specified in the notification,
detailing the nature of the disagreement with the adverse determination
and providing supporting documents in accordance with the procedures
contained in the notification. A recipient may not submit an appeal
directly to the DAB where OPDIV appeal procedures are in place. In those
instances, the DAB will review only those appeals that have been
reviewed and acted on by the OPDIV.

In addition to the adverse determinations indicated, the DAB is the
single level of appeal for disputes related to the establishment of
indirect cost rates, research patient care rates, and certain other cost
allocations used in determining amounts to be reimbursed under HHS
grants (e.g., cost allocation plans negotiated with State or local
governments and computer, fringe benefit, and other special rates).

HHS encourages its OPDIVs and recipients to try to resolve disputes by
using alternative dispute resolution (ADR) techniques. ADR often is
effective in reducing the cost, delay, and contentiousness involved in
appeals and other traditional ways of handling disputes. ADR techniques
include mediation, neutral evaluation, and other consensual methods.
Information about ADR is available from the HHS Dispute Resolution
Specialist at the Departmental Appeals Board, U.S. Department of Health
and Human Services, Washington, DC 20201.

## Requirements for Specific Types of Grants

### Conference Grants

This section addresses requirements for grants that support domestic and
international conferences, which may be supported by grants or
cooperative agreements. If no specific or alternative requirement for
conference grants is stated below or elsewhere in this HHS GPS, the
requirements applicable to all other types of grants apply. Questions
concerning conference grants or the allowability of conference activity
under other types of OPDIV grants should be directed to the GMO.

#### Definitions

Definitions of key terms are as follows:

-   Scientific meeting (conference)---a gathering, symposium, seminar,
    workshop, or any other organized, formal event where people assemble
    to coordinate, exchange, and disseminate information or to explore
    or clarify a defined subject, problem, or area of knowledge.

-   International conference---a meeting so designated by its sponsor or
    one to which open invitations are issued on an equal basis to
    potential participants in two or more countries other than the
    United States or Canada. The meeting may be held in any country,
    including the United States.

-   Domestic conference---a meeting held in the United States or Canada
    primarily for U.S. or U.S.-Canadian participation (even if foreign
    speakers are invited).

#### Representation

Appropriate representation of women, individuals who are members of
racial/ethnic minority groups, people with disabilities, and other
individuals who have been traditionally underrepresented must be
included in all aspects of planning, organization, and implementation of
OPDIV-sponsored or -supported meetings. "Appropriate representation" is
based on the availability of individuals from these groups known to be
working in a particular field of endeavor. If appropriate representation
is not apparent, the OPDIV will not make an award until the applicant
has submitted acceptable documentation of its compliance.

#### Funding

Awards in support of a single conference will be made for a project
period commensurate with the time involved in planning and conducting
the conference and post-conference follow-up, usually 1 year. A
conference grant made to a permanently sponsoring organization for
conferences held annually or biennially on a recurring topic may be
awarded for up to a total of 5 years and will be funded annually, based
on the availability of funds. Continued funding beyond the first year
will be contingent on a report of satisfactory progress. A change in
conference focus is considered a change in scope and requires OPDIV
prior approval.

#### Acknowledgment of Support and Disclaimer

Conference grant materials, including promotional materials, the agenda,
and any Internet sites that advertise the conference, must acknowledge
that HHS provided support for the conference, whether in whole or in
part. That acknowledgment must be accompanied by a disclaimer indicating
that information provided or views expressed at the conference, whether
orally or in writing, or in any documents resulting from the conference,
do not necessarily reflect the official views of the OPDIV providing the
support or imply endorsement by the Federal government.

Use of the following language fulfills this requirement:

> "Funding for this conference was made possible \[*in part, if
> applicable*\] by \[*insert grant or cooperative agreement number*\]
> from \[*insert name of OPDIV*\]. The views expressed in written
> conference materials or publications and by speakers and moderators do
> not necessarily reflect the official policies of the Department of
> Health and Human Services nor does mention of trade names, commercial
> practices, or organizations imply endorsement by the U.S. Government."

#### Use of HHS and OPDIV Logos

Generally, the NoA will indicate the conditions for use of the HHS or
OPDIV logo in conference materials. If not specified in the NoA, a
recipient must obtain prior approval to use an HHS or OPDIV logo.
Unauthorized use of the HHS or OPDIV name or logo may result in
imposition of civil monetary penalties (as provided in 42 CFR part
1003).

#### Allowable and Unallowable Costs

Grant funds may be awarded to provide general support of domestic or
international conferences held in the United States or Canada. Grant
funds may not be used to provide general support for international
conferences held outside the United States or Canada. Grant funds may be
awarded to support only specific aspects of an international conference
held outside the United States or Canada. An example of a specific
aspect would be a selected symposium, panel, or workshop.

This section highlights allowable and unallowable costs under conference
grants. No costs other than those specified in Exhibit 10 as allowable,
including any qualifications on their allowability, are permitted under
conference grants. Exhibit 11 addresses areas for which
applicants/recipients frequently seek clarification about allowability.

+---------------+------------------------------------------------------+
| Exhibit 10.   |                                                      |
| Allowable     |                                                      |
| Costs under   |                                                      |
| Conference    |                                                      |
| Grants        |                                                      |
+===============+======================================================+
| Grant funds\  | Under the following circumstances                    |
| may be used   |                                                      |
| for           |                                                      |
+---------------+------------------------------------------------------+
| Conference    | Necessary recording of proceedings, simultaneous     |
| services      | translation, and subsequent transcriptions.          |
+---------------+------------------------------------------------------+
| Consultant    | Consultant fees, including travel and supporting     |
| services      | costs (per diem or, where applicable, subsistence).  |
+---------------+------------------------------------------------------+
| Equipment     | Rental of necessary equipment.                       |
| rental        |                                                      |
+---------------+------------------------------------------------------+
| Federal       | See "Requirements for Specific Types of              |
| employees     | Recipients--Grants to Federal Institutions and       |
|               | Payments to (or on Behalf of) Federal Employees      |
|               | under Grants."                                       |
+---------------+------------------------------------------------------+
| Meals         | When certain meals are an integral and necessary     |
|               | part of a conference (i.e., a working meal where     |
|               | business is transacted), grant funds may be used for |
|               | such meals, as qualified under "Travel" in this      |
|               | exhibit.                                             |
+---------------+------------------------------------------------------+
| Publication   | When grant funds are awarded to pay for either the   |
| costs         | entire or partial cost of publication of proceedings |
|               | or a book or pamphlet, costs of special plates,      |
|               | charts, diagrams, printing, distribution, mailing,   |
|               | postage, and general handling, unless otherwise      |
|               | specified in the NoA.                                |
+---------------+------------------------------------------------------+
| Registration  | Registration fees paid by the recipient to other     |
| fees          | organizations on behalf of attendees, provided such  |
|               | fees cover only those allowable costs properly       |
|               | chargeable to the grant.                             |
+---------------+------------------------------------------------------+
| Salaries      | In accordance with the policy of the recipient, all  |
|               | or part of the salaries of professional personnel,   |
|               | clerical assistants, editorial assistants, and other |
|               | non-professional staff in proportion to the time or  |
|               | effort directly related to the conference.           |
+---------------+------------------------------------------------------+
| Speakers'     | Speakers' fees for services rendered.                |
| fees          |                                                      |
+---------------+------------------------------------------------------+
| Supplies      | Purchase of supplies for the conference if the       |
|               | supplies are received and used during the project    |
|               | period.                                              |
+---------------+------------------------------------------------------+
| Travel        | Travel of staff, speakers, participants, and         |
|               | attendees, if identified in the application and      |
|               | approved at the time of award. Travel expenses for   |
|               | employees of the recipient are governed by the       |
|               | recipient's travel policies, consistently applied    |
|               | regardless of the source of funds. Any U.S. foreign  |
|               | travel restrictions that are in effect at the time   |
|               | of the award will be followed, such as               |
|               |                                                      |
|               | -   limitations or restrictions on countries to      |
|               |     which travel will be supported or budgetary or   |
|               |                                                      |
|               | -   other limitations on availability of funds for   |
|               |     foreign travel.                                  |
|               |                                                      |
|               | Proposed per diem or subsistence allowances must be  |
|               | reasonable and limited to the days of attendance at  |
|               | the conference plus the actual travel time to reach  |
|               | the conference location by the most direct route.    |
|               | Local mileage costs only may be paid for local       |
|               | participants. Where meals and/or lodgings are        |
|               | furnished without charge or at a nominal cost (e.g., |
|               | as part of the registration fee), the proposed per   |
|               | diem or subsistence allowance must take this into    |
|               | consideration. Transportation costs for attendees    |
|               | and participants at the conference may not exceed    |
|               | coach class fares. In all cases, U.S. flag carriers  |
|               | will be used where possible.                         |
+---------------+------------------------------------------------------+

  ---------------- ------------------------------------------------------
  Exhibit 11.      
  Selected         
  Unallowable      
  Costs under      
  Conference       
  Grants           

  Item             Description

  A&R              Not allowable under any circumstances.

  Entertainment    Costs of amusement, diversion, social activities,
  and personal     ceremonials, and related incidental costs, such as bar
  expenses         charges, tips, personal telephone calls, and laundry
                   charges of participants or guests, are unallowable.
                   However, meals may be allowable as provided under
                   "Meals" in Exhibit 10.

  Equipment        Not allowable under any circumstances.
  purchase         

  Honoraria        Honoraria or other payments given for the purpose of
                   conferring distinction or to symbolize respect,
                   esteem, or admiration may not be paid from grant
                   funds.

  Indirect costs   Not allowable under any circumstances.

  Local            With the exception of local mileage as indicated under
  participants'    "Travel" in Exhibit 10, grant funds may not be used to
  expenses         pay per diem or expenses for local participants in the
                   conference.

  Membership dues  Not allowable under any circumstances.

  Research patient Not allowable under any circumstances.
  care             

                   
  ---------------- ------------------------------------------------------

#### Intellectual Property: Publications, Copyright, and Public Disclosure

If a recipient publishes material developed in whole or in part with HHS
funds, the material may be distributed free of charge. If the recipient
charges for the material, the sales proceeds are considered program
income and must be accounted for as specified in the NoA and reported on
the FSR.

Unless otherwise provided in the terms and conditions of the award, the
recipient is free to arrange for copyright of any publication resulting
from an OPDIV-supported conference. However, any such copyrighted
publication is subject to a nonexclusive, irrevocable, royalty-free
license to the Federal government to reproduce, translate, publish, and
dispose of the material and to authorize others to use the work for
government purposes. Copyright does not extend to any materials prepared
by Federal employees as part of their official duties.

The recipient should notify conference participants that any
presentation or discussion constitutes public disclosure of information.
Once information is disclosed publicly, it may adversely impact the
degree to which any intellectual property rights could be protected.

#### Reporting and Record Retention

Recipients are responsible for submitting the following reports to the
OPDIV upon completion or termination of a grant in support of a
conference.

##### Progress/Final Report

For single conferences, a final report of the conference must be
submitted in accordance with OPDIV instructions to the awarding office
within 90 days after the end of the project period.

With the approval of the OPDIV, copies of proceedings or publications
resulting from a conference may be substituted for the final report,
provided they contain the information specified for inclusion in the
final report.

##### Financial Status Report

An FSR is required from the recipient within 90 days after the end of
the project period. Records of expenditures and any program income
generated must be maintained in accordance with the provisions of 45 CFR
74.53 or 92.42.

### Construction and Modernization of Facilities

This section applies to the following OPDIV grant-supported activities:

-   Construction of new facilities, which includes the installation of
    fixed equipment, but excludes the cost of land and off-site
    improvements

-   Modernization of existing facilities, which includes alteration,
    renovation, remodeling, improvement, expansion, or repair; provision
    of equipment necessary to make the building suitable for use by a
    particular program; and the modernization, or completion, of shell
    space. This may be under a grant for this purpose or as A&R under
    another type of grant.

To provide support for construction or modernization that is considered
"major", an OPDIV must have specific statutory authority allowing
construction or modernization. Even if an OPDIV has this authority, a
recipient may not incur costs for construction or modernization unless
the OPDIV specifically authorizes such costs.

In addition, an applicant/recipient may propose to undertake an A&R
project under a non-construction grant. HHS characterizes A&R projects
as "minor" or "major," depending on the type of activity proposed and
the cost of the project and the threshold set by the HHS GPS or the
OPDIV (see "Cost Considerations---Allowable Costs and Activities,"
"Prior-Approval Requirements---OPDIV Prior Approval," and Part IV). An
OPDIV may support a major A&R project only if it has specific statutory
authority allowing modernization. Generally, an A&R project that is
under the OPDIV threshold is treated as minor A&R; however, depending on
the activity proposed, it may be considered modernization (which cannot
be supported unless the OPDIV has the required statutory authority). The
requirements that apply to minor A&R projects are addressed in
"Allowable Costs and Activities."

Except where indicated, the requirements in this section apply to HHS
grant-supported construction or modernization (hereafter,
"construction") in lieu of the requirements stated elsewhere in Part II
of the HHS GPS for construction or modernization. Other activities under
the award would be subject to those other policies. However, there may
be areas of overlap, e.g., a rebudgeting action that causes a minor A&R
project to become a major A&R project.

#### Funding

Construction grants usually involve a single award, covering more than 1
year, made on the basis of an application for the entire construction
project. Incremental funding (budget periods) within a project period
normally is not used for construction grants.

#### Allowable and Unallowable Costs and Activities

Exhibits 12 and 13 indicate types of costs and activities generally
allowable and unallowable under HHS construction grants. The
allowability and unallowability of costs and activities apply to the use
of Federal funds and funds expended by the grantee to satisfy cost
sharing or matching requirements (see "Matching or Cost Sharing"). The
lists are not all-inclusive. Program guidelines and other terms and
conditions of the award should be consulted for the specific costs
allowable under a particular program or grant.

  -----------------------------------------------------------------------
  Exhibit 12.          
  Allowable Costs and  
  Activities under     
  Construction Grants  
  -------------------- --------------------------------------------------
  Item                 Description

  Acquisition and      Allowable.
  installation of      
  fixed equipment      

  Architectural and    Allowable.
  engineering services 

  Bid advertising      Allowable.

  Bid guarantees and   Bid guarantees and performance and payment bonds
  performance and      are allowable as provided in 45 CFR 74.48 or
  payment bonds        92.36(h).

  Contingency fund     Applicants for construction grants may include a
                       project contingency amount with the initial cost
                       estimates for construction contracts to provide
                       for unanticipated charges. This amount will be
                       limited to 5 percent of construction costs before
                       bids are received and must be reduced to 2 percent
                       after a construction contract has been awarded.

  Filing fees for      Allowable.
  recording the NFI    

  Force account        If the grantee's own construction and maintenance
                       staffs are used in carrying out modernization
                       activities (i.e., force account), the associated
                       costs are allowable provided the grantee can
                       document that a force account is less expensive
                       than if the project were competitively bid and can
                       substantiate all costs with appropriate receipts
                       for the purchase of materials and certified pay
                       records for the labor involved. This requires
                       OPDIV prior approval.

  Compliance with the  Allowable. May include hiring special consultants
  National Historic    to research and document the historic value of
  Preservation Act     proposed performance sites and costs associated
                       with preparation and presentation of required
                       materials to inform the public and others.

  Incentive costs for  Allowable consistent with contract type as
  contractors          specified in the solicitation of bids or proposals
                       and in the contract. Incentive costs must be
                       reasonable and appropriately documented, e.g.,
                       that conditions to earn the incentive were met. In
                       addition to an incentive fee provision,
                       incentive-type contracts may also contain a
                       penalty provision. Other types of bonus payments
                       are not allowable.

  Inspection fees      Allowable.

  Insurance            Costs of title insurance, physical-destruction
                       insurance, and liability insurance are generally
                       allowable. Physical destruction and liability
                       insurance are usually treated as F&A costs but may
                       be treated as direct costs in accordance with the
                       established policy of the recipient, consistently
                       applied regardless of the source of funds. Title
                       insurance, if required, may be charged to the
                       grant in proportion to the amount of OPDIV
                       participation in the property (see "Real Property
                       ---Insurance ").

  Legal fees           Legal fees related to obtaining a legal opinion
                       regarding title to a site are allowable.

  Pre-award costs      Costs incurred before award for architect's fees
                       and consultant's fees necessary to the planning
                       and design of the project are allowable if the
                       project is subsequently approved and funded.

  Project management   Allowable.

  Relocation expenses  Allowable.

  Sidewalks necessary  Allowable.
  for use of facility  

  Site clearance.      Site clearance costs are allowable as long as they
                       are reflected in the bid.

  Site survey and soil Allowable.
  investigation        

  NEPA analysis        Costs associated with evaluation of the
                       environmental effects of proposed construction
                       activity and producing the Environmental Impact
                       Statement (EIS) are allowable.

  Threat-risk          Costs incurred for a site-specific or
  assessment.          project-specific assessment of security risk by a
                       qualified professional are allowable. The
                       threat-risk assessment identifies and quantifies
                       potential threats, both internal and external to
                       the building, its contents, the personnel working
                       in it, and the general public. The analysis also
                       includes a thorough examination and evaluation of
                       the physical aspects of the proposed facility,
                       along with operational issues.
  -----------------------------------------------------------------------

  -----------------------------------------------------------------------
  Exhibit 13. Unallowable Costs and Activities under Construction Grants

  Bonus payments other than earned incentive payments to contractors
  under formal incentive arrangements are unallowable.

  Construction of shell space designed for completion at a future date.

  Consultant fees not related to actual construction.

  Damage judgment suits.

  Equipment purchased through a conditional sales contract.

  Indirect/F&A costs.

  Fund-raising expenses.

  Land acquisition.

  Legal services not related to site acquisition.

  Movable equipment.

  Off-site improvements such as parking lots are not allowable.

  -----------------------------------------------------------------------

#### Prior-Approval Requirements

Recipients must obtain OPDIV prior approval for the following types of
recipient-initiated project or budget changes:

-   A revision that would result in a change in scope of the project,
    including proposed modifications that would materially alter the
    costs of the project, space utilization, or financial layout,
    resulting in changes in the previously approved procurement method
    or contract. Modifications that would materially alter the costs
    include significant rebudgeting actions, whether or not the
    particular expenditure requires prior approval and increase in the
    amount of Federal funds needed to complete the project.

-   Any other applicable change as specified in "Prior-Approval
    Requirements."

-   Change in the use of the facility (see "Use of Facility and
    Disposition" in this section).

The request for approval must include sufficient information to allow
the OPDIV to review the circumstances and need for the proposed change.
After receipt of OPDIV prior approval, the recipient may make or
authorize the approved modifications of the construction contract. Other
less substantive modifications to construction contracts may be made
without OPDIV prior approval. However, copies of all change orders to
construction contracts must be retained as grant-related records (see
"Record Retention and Access").

#### Procurement Requirements

Construction activity usually is carried out through one or more
contracts under the grant. Therefore, the circumstances of the
procurement are critical to the successful completion of the
grant-supported project. All construction work must be procured by the
methods described in 45 CFR 74.40 through 74.48 or in 92.36, as
applicable.

#### Equal Employment Opportunity, Labor Standards, and Other Contract Requirements

Equal employment opportunity and labor standards requirements for
federally assisted construction and modernization must be specified in
the information provided to potential bidders/offerors on construction
contracts under HHS grants and must be included in the resulting
contract documents (see 45 CFR part 74, Appendix A, and 45 CFR
92.36(i)). The Davis-Bacon Act or the Copeland "Anti-Kickback" Act apply
only if specifically required by the program's authorizing statute. The
NoA will indicate if they apply.

##### Equal Employment Opportunity Requirements

Construction contracts (and subcontracts) awarded under HHS grants are
subject to the requirements of EO 11246 (September 24, 1965), as
amended, as implemented in 41 CFR part 60-1 by OFCCP, DoL. The recipient
is required to include the "Equal Opportunity Clause" at 41 CFR
60-1.4(b) in any construction contract under the grant. The contractor
must be directed to include this clause in any applicable subcontracts.

In addition, recipients and construction contractors under HHS grants
are required to comply with the solicitation and contract requirements
for affirmative action specified in 41 CFR part 60-4 for contracts in
specified geographical areas that will exceed \$10,000. These
requirements are specified in EO 11246 ("Notice of Requirement for
Affirmative Action to Ensure Equal Employment Opportunity") and EO 11246
("Standard Federal Equal Employment Opportunity Construction Contract
Specifications").

The OFCCP regulations also require that the recipient notify the
applicable OFCCP regional, area, or field office when it expects to
award a construction contract that will exceed \$10,000.

Further information about these requirements and the full text of these
regulations are available at <http://www.dol.gov/esa/ofcp_org.htm>

##### Labor Standards Requirements

*Preservation of Open Competition and Government Neutrality toward
Government Contractors' Labor Relations on Federal and Federally Funded
Construction Projects.* Pursuant to EO 13202, as amended by EO 13208
(April 6, 2001), executive agencies issuing grants, providing Federal
assistance, or entering into cooperative agreements for construction
projects (including major and minor A&R) must ensure that bid
specifications, project agreements, or other controlling documents for
construction services contracts awarded by recipients of grants,
cooperative agreements, or other financial assistance do *not* do the
following:

-   Require or prohibit bidders, offerors, contractors, or
    subcontractors to enter into or adhere to agreements with one or
    more labor organizations, on the same or other related construction
    projects. It does not prohibit contractors or subcontractors from
    voluntarily entering into such agreements.

-   Otherwise discriminate against bidders, offerors, contractors, or
    subcontractors for becoming, refusing to become, or remaining
    signatories, or otherwise adhering to agreements with one or more
    labor organizations, on the same or other related construction
    projects.

*Non-segregated Facilities.* Pursuant to 41 CFR 60-1.8, for any contract
for construction services that will exceed \$10,000, the grantee must
require each prospective contractor to submit a certification that the
contractor

-   does not, and will not, maintain any facilities it provides for its
    employees in a segregated manner;

-   does not or will not permit its employees to perform their services
    at any location, under the contractor's control, where segregated
    facilities are maintained; and

-   will obtain a similar certification before awarding any covered
    subcontract.

*Contract Work Hours and Safety Standards.* Contractors and
subcontractors providing construction services under HHS grants with
contracts or subcontracts exceeding \$100,000 are subject to the
requirements of the Contract Work Hours and Safety Standards Act, 40
U.S.C. 3701--3708, concerning the payment of overtime and the
maintenance of healthful and safe working conditions if the statute
authorizing the grant provides wage standards for the project to be
funded by the grant.

Under this act, wages paid any laborer or mechanic employed by the
contractor or subcontractor must be computed on the basis of a standard
workweek of 40 hours. For all work in excess of the standard workweek,
mechanics and laborers must be compensated at a rate not less than
one-and-a-half times the basic rate of pay. If this requirement is
violated, the contractor or subcontractor is liable to the employee for
the unpaid wages and may be liable to the Federal government for
liquidated damages. The OPDIV or the recipient may withhold otherwise
payable funds to satisfy any such liability. The statute also specifies
penalties for intentional violation of these requirements.

Further, pursuant to standards issued by the Secretary of Labor, a
contractor or subcontractor under an HHS grant (with contracts or
subcontracts exceeding \$100,000) must not require any laborer or
mechanic employed in the performance of the contract to work in
surroundings or under working conditions that are unsanitary, hazardous,
or dangerous to an individual's health or safety. Violation of these
requirements may be cause for debarment from future Federal contracts or
financial assistance.

##### Other Requirements

*Liquidated Damages.* Invitations for bids must stipulate a time for
completion of the project, expressed either in calendar days or as a
fixed date, for each prime contract to be awarded under the project. At
the option of the grantee, a liquidated damages provision may be
included in the contract, allowing for assessment of damages when the
contractor has not completed the construction or modernization by the
date specified in the contract. Liquidated damages must be real and
justified and must be approved by the OPDIV before solicitation. Where
damages are assessed, any amounts paid belong to the recipient.

*Disposition of Unclaimed Wages.* During or after the period of
performance of an HHS-assisted contract for construction services, if it
is discovered that an employee is entitled to wages but cannot be
located for the purposes of payment (or for some reason refuses to
accept payment), the grantee may eventually have to repay the Federal
government.

The recipient should notify the GMO that an escrow account has been
established in the affected employee's name and should maintain the
account for 2 years (or longer if required by State or local law)
following the completion of the contract. Upon the expiration of this
period, any amounts still unclaimed will be disbursed by refunding to
the OPDIV either the entire amount, if the construction or modernization
project was\
100 percent funded by the OPDIV, or an amount representing the
percentage of OPDIV participation in the project. If the project was
funded by more than one HHS program at differing rates, the refund
should be based on an average percentage calculated by weighting each
program's rate of participation by the dollar amount of that program's
contribution.

If the contractor has made a reasonable effort to locate the employee by
having mail forwarded and contacting the employee's union, the recipient
need not repeat such attempts. If there is reason to believe that the
contractor's efforts to locate employees that are due wages were not
thorough, the recipient should attempt to locate the employees. Doing so
will reduce the likelihood of future claims against the recipient. If
any wages held in escrow are paid to an employee or an employee's legal
representative while the account is maintained, a complete report must
be made to the GMO when the account is closed.

#### Use of Facility and Disposition

HHS awards for construction or modernization generally require that a
facility be used for the programmatic purpose of the award as long as
needed for that purpose (see the NoA or Part IV). During that time, the
recipient must use the facility for the originally authorized purpose
unless it obtains prior approval from the OPDIV to use the facility for
an alternate purpose. If, during the required usage period, the facility
is no longer used for the original intended purpose, the OPDIV may, for
recipients covered by 45 CFR part 74, provide prior approval for
alternate use as specified in 45 CFR 74.32; direct the recipient to sell
the property or allow it to retain title and recover the OPDIV share; or
direct that title be transferred to a third party named by the OPDIV
(see "Property Management---Real Property").

> The usage obligation may also be transferred to facilities of
> substantially comparable or greater monetary value or utility to carry
> out the original purpose for which the grant was awarded. In this
> event, the remaining usage obligation must be released from the
> original facility constructed with grant funds and transferred to the
> new facility. The recipient remains subject to all other requirements
> imposed by the NoA or successor document (if the change occurs
> following the period of grant support). The OPDIV will monitor
> compliance with these requirements through periodic facility use
> certifications or reports, site visits, and other appropriate means
> for the duration of the required usage period. After the required
> usage period, the organization has no further accountability to the
> OPDIV concerning the use of the property or any sales proceeds.

If, during the required usage period, the facility is no longer used for
the original intended purpose and the OPDIV did not provide prior
approval for an alternate use, the recipient must comply with
disposition requirements. The OPDIV may recover its share of the
construction or modernization costs. For disposition of property
acquired on an amortized acquisition basis, the formulas in 45 CFR 74.32
and 92.31 do not apply in determining the Federal share. In cases of
amortized acquisition, the Federal share will be determined by
multiplying the amount of mortgage principal already repaid at the time
of disposition by the average Federal participation (taken from the FSR)
plus the increase in value over the purchase price multiplied by the
average Federal participation plus the Federal participation in the down
payment. The computation of the Federal share of real property acquired
with long-term debt financing must be computed for each year of grant
support in which Federal funds are used to meet all or a portion of the
down payment, principal on the mortgage, or both.

### Traineeship, Fellowship, and Similar Awards Made to Organizations on Behalf of Individuals

Applicants/recipients should consult the funding opportunity
announcement and any program guidance or guidelines for application
instructions; eligibility requirements, including citizenship and
sponsorship requirements; and other program-specific requirements
related to required forms, allowable costs, and reporting requirements.
Detailed requirements for the Kirschstein-National Research Service
Awards program are found at
<http://grants1.nih.gov/training/extramural.htm>. Some of the
administrative requirements that pertain to fellowships under that
program are described below. See Part IV for other programs.

#### Initiation of Support

The OPDIV will notify the individual of the intention to make an award
and confirm the plans for the start of fellowship support. The
fellowship award notice allows the individual to begin the fellowship
immediately on or after the issue date, but permits up to 6 months for
the individual to make final arrangements, such as the completion of
degree requirements, final coordination with the sponsor, and, if
necessary, a move to the sponsoring institution. The fellow must start
the period of training under the award by the latest activation date as
shown on the award notice, i.e., 6 months from the award issue date. The
activation period may be extended in unusual circumstances. Written
requests for extensions should be submitted by the fellow and must be
countersigned by the sponsor and the authorized organizational
representative.

An activation notice must be submitted to the awarding office as of the
day the fellow begins training. A payback agreement may also be required
to be completed and submitted (see Part IV or the program guidelines). A
stipend may not be paid until the forms are submitted and the fellow
begins training. If necessary for payroll purposes, the activation
notice and payback agreement may be submitted up to 30 days before the
start date. However, any change in the planned activation start date
must be reported immediately to the sponsoring institution's business
office and to the OPDIV. If an award is conditioned upon completion of
degree requirements, the fellow must submit, with the activation notice,
proof of completion by the degree-granting institution.

Fellowship support generally is approved for consecutive years of
training. The initial award usually is for 12 months. Subsequent periods
of approved fellowship training are consecutive with the first year of
support and are usually in 12-month increments (budget periods). Awards
for less than 12 months will be prorated accordingly. If a fellow
decides not to activate the award, or to terminate early, he or she
should notify the recipient organization's business office, the sponsor,
and the OPDIV immediately, in writing. The OPDIV will make any necessary
adjustments in the stipend and other costs, including the institutional
allowance.

#### Payment

Payment is as follows:

-   *Domestic organizations*. Non-Federal sponsoring organizations
    receive an award for the stipend, institutional allowance, and
    tuition and fees (when applicable). The organization directly pays
    the fellow and disburses all other awarded costs.

-   *Federal laboratories.* Fellows training at Federal laboratories are
    paid stipends directly by the OPDIV. Reimbursement to the fellow for
    appropriate expenditures from the institutional allowance also is
    paid by the OPDIV.

-   *Foreign organizations.* Fellows training at foreign sites receive
    stipends directly from the OPDIV. However, the institutional
    allowance is awarded to and disbursed by the sponsoring
    organization.

#### Allowable Costs

Exhibit 14 lists and describes allowable costs of fellowships.

+---------+------------------------------------------------------------+
| Exhibit |                                                            |
| 14.     |                                                            |
| Al      |                                                            |
| lowable |                                                            |
| Costs   |                                                            |
| of      |                                                            |
| Fell    |                                                            |
| owships |                                                            |
+=========+============================================================+
| Item    | Description                                                |
+---------+------------------------------------------------------------+
| Stipend | A stipend is provided as a subsistence allowance for       |
|         | fellows to help defray living expenses during the training |
|         | experience. It is not provided as a condition of           |
|         | employment with either the Federal government or the       |
|         | sponsoring organization. Stipends must be paid in          |
|         | accordance with stipend levels established by the OPDIV,   |
|         | which are based on a 12-month full-time training           |
|         | appointment. In the event of early termination, the        |
|         | stipend will be prorated according to the amount of time   |
|         | spent in training, and the OPDIV will issue a revised NoA. |
|         | No departure from the standard stipend provided by the     |
|         | OPDIV under the fellowship may be negotiated by the        |
|         | sponsoring institution with the fellow.                    |
|         |                                                            |
|         | Stipend levels are updated nearly every year. When         |
|         | increases are approved, they are published and posted on   |
|         | the OPDIV Web site. The awarding office will adjust        |
|         | fellowship awards on their anniversary dates to include    |
|         | the currently applicable stipend amount.                   |
+---------+------------------------------------------------------------+
| Instit  | An institutional allowance is generally provided to help   |
| utional | support the costs of training. The specific levels of      |
| al      | allowance for support, including those for individuals     |
| lowance | training at Federal laboratories, for-profit               |
|         | organizations, or foreign organizations, are published by  |
|         | the OPDIV and posted on its Web site. Costs for tuition    |
|         | and fees, where appropriate, will be awarded independent   |
|         | of the institutional allowance.                            |
+---------+------------------------------------------------------------+
|         | The institutional allowance is a fixed amount.             |
|         | Expenditures under institutional allowances are not        |
|         | subject to OPDIV prior-approval requirements, and the      |
|         | institution is not required to account for these           |
|         | expenditures on an actual cost basis. Except for fellows   |
|         | at Federal training sites, consistent with OPDIV policy    |
|         | governing the type of expenditures appropriate for the     |
|         | institutional allowance, the sponsoring organization       |
|         | authorizes the expenditure of the institutional allowance  |
|         | on behalf of the fellow according to the organization's    |
|         | policy. The organization is entitled to expend up to the   |
|         | full institutional allowance upon official activation of   |
|         | the award. However, if an individual fellow is not in a    |
|         | training status for more than 6 months of the award year,  |
|         | only one-half of that year's institutional allowance may   |
|         | be charged to the grant. The NoA will be revised and the   |
|         | balance must be refunded to the OPDIV.                     |
|         |                                                            |
|         | The type of sponsoring institution dictates what costs may |
|         | be charged to this category and how the funds are to be    |
|         | administered.                                              |
+---------+------------------------------------------------------------+
| *Non-   | The allowance is intended to defray expenses for the       |
| Federal | individual fellow such as supplies, equipment, travel to   |
| public  | meetings, and health insurance and to otherwise offset,    |
| and     | insofar as possible, appropriate administrative costs of   |
| private | training. Funds are paid directly to and administered by   |
| non     | the sponsoring organization.                               |
| -profit |                                                            |
| organi  |                                                            |
| zations |                                                            |
| (d      |                                                            |
| omestic |                                                            |
| and     |                                                            |
| fo      |                                                            |
| reign)* |                                                            |
+---------+------------------------------------------------------------+
| *       | The allowance is intended to cover the costs of meeting    |
| Federal | travel, health insurance, and books. Funds are             |
| labora  | administered by the OPDIV.                                 |
| tories* |                                                            |
+---------+------------------------------------------------------------+
| *For    | The allowance is intended to cover the costs of meeting    |
| -profit | travel, health insurance, and books. Funds are paid        |
| instit  | directly to the sponsoring organization for disbursement   |
| utions* | to the fellow.                                             |
+---------+------------------------------------------------------------+
| []      | The following are guidelines for the use of the            |
| {.mark} | institutional allowance:                                   |
+---------+------------------------------------------------------------+
| []      | -   *Travel.* Payment for travel to meetings is            |
| {.mark} |     appropriate when it is necessary for the individual's  |
|         |     training and when the costs are incurred within the    |
|         |     period of grant-supported training. For fellows at     |
|         |     Federal laboratories, reimbursement of travel costs    |
|         |     must be in accordance with current Federal travel      |
|         |     regulations. Funds may not be expended to cover the    |
|         |     costs of travel between the fellow's place of          |
|         |     residence and the domestic training organization,      |
|         |     except that the sponsoring organization may authorize  |
|         |     the cost of a one-way travel allowance in an           |
|         |     individual case of extreme hardship.                   |
+---------+------------------------------------------------------------+
|         | -   *Extraordinary costs.* Additional funds may be         |
|         |     requested by the organization when the training of a   |
|         |     fellow involves extraordinary costs for travel to      |
|         |     field sites remote from the sponsoring organization or |
|         |     accommodations for fellows who are disabled, as        |
|         |     defined by the Americans with Disabilities Act. The    |
|         |     funds requested for extraordinary costs must be        |
|         |     reasonable in relationship to the total dollars        |
|         |     awarded under a fellowship and must be directly        |
|         |     related to the approved training activity. Such        |
|         |     additional funds will be provided only in exceptional  |
|         |     circumstances that are fully justified and explained   |
|         |     by the organization.                                   |
+---------+------------------------------------------------------------+
|         | -   *Health insurance.* A fellow's health insurance is an  |
|         |     allowable cost only if applied consistently to all     |
|         |     people in a similar training status regardless of the  |
|         |     source of support. Family health insurance is an       |
|         |     allowable cost for fellows who have families and are   |
|         |     eligible for family health insurance coverage at the   |
|         |     sponsoring organization. Self-only health insurance is |
|         |     an allowable cost for fellows without families. Health |
|         |     insurance can include coverage for costs such as       |
|         |     vision and/or dental care if consistent with           |
|         |     organizational policy.                                 |
+---------+------------------------------------------------------------+
| Tuition | Costs associated with tuition and fees are allowable only  |
| and     | if they are required for specific courses in support of    |
| fees    | the training. The recipient should consult the OPDIV       |
|         | guidelines or Part IV for specific guidance on the         |
|         | reimbursement of tuition and fees.                         |
+---------+------------------------------------------------------------+
| Travel  | For fellows at foreign training sites, in addition to the  |
| to      | institutional allowance, awards may include a single       |
| foreign | economy or coach round-trip travel fare. No allowance is   |
| t       | provided for dependents. U.S. flag air carriers must be    |
| raining | used to the maximum extent possible when commercial air    |
| sites   | transportation is the means of travel between the United   |
|         | States and a foreign country or between foreign countries. |
|         | This requirement will not be influenced by factors of      |
|         | cost, convenience, or personal travel preference.          |
+---------+------------------------------------------------------------+
| E       | Since fellowships are not provided as a condition of       |
| mployee | employment with either the Federal government or the       |
| b       | sponsoring organization, recipients may not seek funds, or |
| enefits | charge fellowship awards, for costs that normally would be |
|         | associated with employee benefits (for example, FICA,      |
|         | workers compensation, and unemployment insurance).         |
+---------+------------------------------------------------------------+
|         |                                                            |
+---------+------------------------------------------------------------+

#### Supplementation of Stipends, Compensation, and Other Income

##### Stipend Supplementation

Fellows receive stipends to defray living expenses. Stipends may be
supplemented by an organization from non-Federal funds provided this
supplementation does not require any additional obligation from the
fellow. An organization can determine the amount of stipend
supplementation, if any, it will provide according to its own formally
established policies governing stipend support. These policies must be
consistently applied to all individuals in a similar status regardless
of the source of funds. Federal funds may not be used for stipend
supplementation unless specifically authorized under the terms of the
program from which funds are derived. Under no circumstances may OPDIV
funds be used for supplementation. An individual may use Federal
educational loan funds or VA benefits when permitted by those programs
as described in this section.

##### Compensation

Fellows may seek part-time employment incidental to their training
program to offset further their expenses. Funds characterized as
compensation may be paid to fellows only when there is an
employer-employee relationship, the payments are for services rendered,
and the situation otherwise meets the conditions for compensation of
students as detailed in "Selected Items of Cost." In addition,
compensation must be in accordance with organizational policies applied
consistently to both federally and non-federally supported activities
and must be supported by acceptable accounting records that reflect the
employer-employee relationship agreement. Under these conditions, the
funds provided as compensation (salary, fringe benefits, and/or tuition
remission) for services rendered, such as teaching or laboratory
assistance, are not considered stipend supplementation; they are
allowable charges to Federal grants, including HHS grants. However, the
OPDIV expects that compensation from HHS grants will be for limited
part-time employment apart from the normal training activities.
Compensation may not be paid from a grant that supports the same
activity that is part of the fellow's planned training experience as
approved in the fellowship application. Under no circumstances may the
conditions of stipend supplementation or the services provided for
compensation interfere with, detract from, or prolong the fellow's
approved training program. Fellowship sponsors must approve all
instances of employment on HHS grants to verify that the circumstances
will not detract from or prolong the approved training program.

##### Concurrent Benefits

A fellowship under the Kirschstein-National Research Service Awards may
not be held concurrently with another federally sponsored fellowship or
similar Federal award that provides a stipend or otherwise duplicates
provisions of the fellowship award.

##### Educational Loans or GI Bill

An individual may accept concurrent educational remuneration from the VA
(GI Bill) and Federal educational loan funds. Such funds are not
considered supplementation or compensation.

##### Taxability of Stipends

Section 117 of the Internal Revenue Code applies to the tax treatment of
scholarships and fellowships. Degree candidates may exclude from gross
income (for tax purposes) any amount used for course tuition and related
expenses such as fees, books, supplies, and equipment required for
courses of instruction at a qualified educational organization.
Non-degree candidates are required to report as gross income any monies
paid on their behalf for stipends or any course tuition and fees
required for attendance. The taxability of stipends in no way alters the
relationship between fellows and sponsoring organizations. Stipends are
not considered salaries. In addition, recipients of fellowships are not
considered to be in an employee-employer relationship with the OPDIV or
the sponsoring organization solely as a result of the fellowship award.
The interpretation and implementation of the tax laws are the domain of
the IRS and the courts. HHS takes no position on what the status may be
for a particular taxpayer, and it does not have the authority to
dispense tax advice. Individuals should consult their local IRS office
about the applicability of the law to their situation and for
information on their tax obligations.

##### Form 1099

Although stipends are not considered salaries, this income is still
subject to Federal and, sometimes, State income tax. Such income may be
reported by the sponsoring organization on IRS Form 1099, Statement of
Miscellaneous Income. Normally, the business office of the sponsoring
organization will be responsible for annually preparing and issuing IRS
Form 1099 for fellows paid through the organization (fellows at domestic
non-Federal organizations). Sponsoring organizations are not required to
issue a Form 1099, but it is a useful form of documentation of income
received and a reminder to the fellow that some tax liability may exist.
Fellows are reminded that, even if the sponsoring organization does not
issue a Form 1099, they still are required to report stipends as income.
The OPDIV will issue a Form 1099 for each fellow training at a Federal
or foreign laboratory and receiving a stipend check from the U.S.
Treasury.

#### Reporting Requirements

The submission of the forms described in this section is critical to
establishing and paying stipends and other costs and determining payback
service, if applicable. All of these forms generally are available in
PDF-fillable and RTF formats at the OPDIV Web site or
[http://grants.nih.gov/grants/forms.htm](http://grants1.nih.gov/grants/forms.htm).
The awarding office may provide copies of applicable forms with---or
reference the Web site in---the NoA.

##### Activation Notice

Immediately upon the initiation of training, the individual must
complete and sign a fellowship activation notice (e.g., PHS 416-5),
obtain the signature of the authorized organizational representative,
and forward the notice along with a payback agreement (where required)
to the awarding office. For fellows paid directly by the OPDIV, the
activation notice is required at the start of each award year. The form
should not be submitted before the fellow actually begins training.
Stipend checks are issued when both the activation notice and the
payback agreement (where required) are received by the awarding office.
For fellows whose stipend is paid through the organization, the
activation notice is required for the initial year only. The activation
notice may be submitted up to 30 days before the individual begins
training if necessary for payroll purposes. However, the organization
must not release any funds until the individual has started training.
Furthermore, if the individual does not begin training on the day
indicated, the organization must notify the awarding office immediately.
Competing continuation awards must be activated on the day following the
end of the last budget period of the previous award.

##### Payback Agreement

A payback agreement (e.g., PHS 6031), where required, must be signed by
each person who is to receive a fellowship. Recipients should consult
the OPDIV program guidelines or Part IV for guidance regarding the
submission of a payback agreement.

##### Termination Notice

The termination notice (e.g., PHS 416-7) (along with the activation
notice and the award notice) is the basis for validating the total
period of fellowship support and establishing the amount of payback
obligation, if any. A reminder of this reporting requirement may be sent
to the fellow by the awarding office before the scheduled termination
date. For early terminations, the completed form will be required
immediately upon receipt of notification from the fellow or an
authorized organizational representative. The lack of timely and
accurate information on this form could adversely affect the payback
process.

##### Progress Reports

Progress reports must be submitted for non-competing continuation
support. Progress report forms and instructions generally are available
from the OPDIV Web site or at
[http://grants.nih.gov/grants/forms.htm](http://grants1.nih.gov/grants/forms.htm).
Report form pages are available in PDF-fillable and RTF formats.
Inadequate or incomplete progress reports may be returned to the fellow
for revision and may result in a delay of continued support. A final
progress report is required as part of the termination notice.

##### Financial Status Report

An annual or final FSR is not required on fellowship awards.

#### Changes in the Project/Activity

Fellowship awards are made for training at a specific organization under
the guidance of a particular sponsor. OPDIV approval is required for a
transfer of the award to another organization, a change in sponsor, or a
project/activity change. As part of the approval process, if a fellow
sponsored by a domestic non-Federal organization requests a transfer to
another domestic non-Federal organization before the end of the current
award year, the initial organization may be requested to continue to pay
the stipend until the end of the current year. Disposition of the
institutional allowance is negotiable between the two sponsoring
organizations. No activation notice is required from the new sponsoring
organization.

Transfers involving Federal or foreign sponsoring organizations require
unique administrative procedures and approvals. Because each transfer
varies depending on individual circumstances, the sponsoring
organization should contact the awarding office for specific guidance.

Any proposed change in the individual's specified area of training must
be reviewed and approved in writing by the OPDIV to ensure that the
training continues to fall within the area of the original reviewed
application. When the sponsor is going to be absent for more than 3
months, an interim sponsor must be named by the organization and
approved in writing by the OPDIV.

#### Consecutive Support

If a fellow switches from one grant mechanism to another (e.g., from an
institutional research training grant to a fellowship or from one OPDIV
or OPDIV component to another), the requirement for payback service
incurred is deferred until the total period of support is completed. All
fellowship applications are reviewed to determine if previous fellowship
support has been provided.

#### Termination

An OPDIV may terminate a fellowship before its normal expiration date if
it determines that the recipient has materially failed to comply with
the terms and conditions of the award or to carry out the purpose for
which it was made. If an award is terminated for cause, the OPDIV will
notify the fellow in writing of the determination, the reasons for the
determination, the effective date, and the right to appeal the decision.

The OPDIV also may terminate an award at the request of the sponsoring
organization or the recipient. The awarding office must be notified
immediately if a sponsoring organization wants to terminate an
individual fellow or the fellow decides to terminate training before the
scheduled expiration date. If a fellowship is terminated early, the
stipend must be prorated according to the amount of time spent in
training, and the award notice will be revised. The balance of any
institutional allowance (at least one-half) must be refunded if the
training has been for 6 months or less.

#### Copyright

Except as otherwise provided in the conditions of the award, when a
publication or similar copyrightable material is developed from work
supported by HHS, the author is free to arrange for copyright without
approval of the OPDIV. Such copyrighted materials are subject to a
royalty-free, nonexclusive, and irrevocable license to the Federal
government to reproduce them, translate them, publish them, and use and
dispose of them, and to authorize others to do so for Federal government
purposes.

#### Inventions and Patents

Fellowships funded primarily for educational purposes are not subject to
invention reporting requirements nor does the OPDIV have any rights to
inventions under those awards (as specified in 37 CFR 401.1(b)).
Kirschstein-National Research Service Award fellows training at HHS
represent an exception to this policy. Those fellows are subject to the
provisions of EO 10096 and the OPDIV determines the disposition of
rights to any invention conceived or actually reduced to practice during
the period of the fellowship.

#### Disposition of Professional Fees

Fees resulting from clinical practice, professional consultation, or
other comparable activities performed pursuant to the purpose of the
award must be assigned to the sponsoring organization for disposition in
accordance with established organizational policy. The term
"professional fees" does not apply to honoraria, fees for scholarly
writing, delivery of occasional outside lectures, or service in an
advisory capacity to public or private non-profit organizations, which,
if permitted by organizational policy, may be retained by the fellow.

## Requirements for Specific Types of Recipients

### Grants to Foreign Organizations, International Organizations, and Domestic Grants with Foreign Components and Subawards to Foreign Organizations

Most of the policies contained in this HHS GPS apply to grants made to
foreign organizations and international organizations (hereafter
"foreign grants"), including the requirements of 45 CFR part 74 or
45 CFR part 92, as applicable to the type of foreign organization, and
the cost principles incorporated by reference in those regulations. If
an applicant/recipient would be unable to comply with these
requirements, the authorized organizational representative should
contact the GMO. Specific exceptions and modifications of the HHS GPS
requirements for foreign grants, and highlights of other policies, are
set forth in this section. This section also includes policies that
apply to domestic grants with a foreign component.

#### Public Policy Requirements 

All public policy requirements included in "Public Policy Requirements"
in Part I apply to foreign grants, with the following exceptions:

-   *Civil rights.* None of the civil rights requirements specified in
    "Public Policy Requirements" apply to foreign grants.

-   *Debarment and suspension.* Applicants and recipients that are
    foreign governments or governmental entities, public international
    organizations, or foreign-government-owned or -controlled (in whole
    or in part) entities are not subject to the debarment or suspension
    certification requirement or to debarment or suspension under 45 CFR
    part 76. All other foreign organizations and international
    organizations are subject to these requirements.

-   *Drug-free workplace.* Foreign applicants and recipients may be
    exempted from the drug-free workplace requirements of 45 CFR part 83
    based on a documented finding by the OPDIV that application of those
    requirements is inconsistent with U.S. international obligations or
    the laws and regulations of a foreign government.

-   *Environmental requirements.* Receipt of a grant does not make a
    foreign applicant/recipient subject to environmental requirements
    that would not otherwise apply to it.

#### Funding and Payment

The application budget, requests for funds, and financial reports must
be stated in U.S. dollars using the currency rate in effect at the time
of submission. Once an award is made, the OPDIV may adjust for currency
exchange fluctuations as part of the non-competing continuation award
process. This may result in an upward or downward adjustment from the
total approved budget for that budget period based on the net change
from the prior year's award.

Awards to foreign organizations and international organizations
generally are paid by the OPDIV's servicing finance office rather than
through PMS unless the recipient is serviced by a U.S. owned- or -based
bank. All payments will be in U.S. dollars at the rate of exchange
current at the time of payment. Foreign recipients are strongly
encouraged to use U.S. banks to ensure that payments arrive on time.

Payments are made by U.S. Treasury check. If paid by the OPDIV, grants
normally will be paid on a predetermined quarterly advance basis,
usually in four equal installments, unless the total amount of the award
is \$25,000 or less. If the amount advanced to an organization based on
the predetermined quarterly advance is insufficient to meet the grant's
cash requirements, the recipient must make a written request to the GMO
for any additional funds needed. If payments are made by PMS, they are
made on the same basis as for domestic grants (see "HHS Grants
Process---Payment").

#### Allowable Costs

The costs that are generally allowable under grants to domestic
organizations also are allowable under foreign grants, with the
following exceptions:

-   *A&R.* Major A&R costs are unallowable under foreign grants and
    domestic grants with foreign components. Minor A&R costs are
    allowable (see "Cost Considerations---Allowable Costs and
    Activities" and "Prior-Approval Requirements").

-   *Audit costs.* Costs of financial-related audits are allowable (see
    "Audit" in this section).

-   *Customs and import duties.* These costs, which include consular
    fees, customs surtax, value-added taxes, and other related charges,
    are unallowable under foreign grants and domestic grants with
    foreign components.

-   *Indirect costs.* With the exception of the American University of
    Beirut, which is not considered a foreign organization, and the
    World Health Organization, indirect costs will not be reimbursed.

-   *Research patient care costs.* Research patient care costs are
    allowable only in exceptional circumstances as determined by the
    OPDIV.

#### Prior-Approval Requirements

Foreign grants generally are included in expanded authorities.

A change in the performance site within a foreign country or performance
in a country other than that specified in the approved application
requires OPDIV prior approval. The transfer of work by a domestic
recipient to a foreign component also requires OPDIV prior approval.

A change of grantee organization that involves the transfer of a grant
to or between foreign organizations or international organizations
requires OPDIV approval and, where applicable, the associated National
Advisory Council or Board. OPDIV approval also is required for the
transfer of a grant from a foreign organization to a domestic
organization.

#### Audit

Foreign recipients are subject to the same audit requirements as
for-profit organizations (specified in 45 CFR 74.26(d)).

#### Subawards

Subawards to foreign entities that are considered financial assistance
arrangements (rather than acquisition of goods or services) require
special oversight by recipients. The recipient must do the following:

-   Ensure that appropriate OPDIV approval is obtained for a foreign
    subaward; i.e., that the OPDIV approves of the intent to subaward
    (subgrant) as defined in 45 CFR 74.2 and 45 CFR 92.3 (see "Prior
    Approval Requirements---OPDIV Prior Approval"). The recipient does
    not have to obtain GMO approval of the selected subrecipient or the
    agreement between the recipient and subrecipient.

-   Determine whether the subaward recipient is subject to OMB Circular
    A-133 audit requirements (generally the case only if the subaward
    recipient has direct awards from HHS because HHS has adopted A-133
    as the standard audit requirement for foreign recipients).

-   Determine appropriate means of oversight, including review of
    reports, or on-site reviews, or alternatives to an A-133 audit if
    one will not be available during the period of the subaward, as part
    of seeking OPDIV approval, and indicate how it will monitor foreign
    subawards.

-   Provide adequate evidence during its own A-133 audit and in reports
    to the OPDIV that it is meeting its subrecipient monitoring
    responsibilities.

### Grants to Federal Institutions and Allowable Costs and Payments to (or on Behalf of) Federal Employees under Grants

Most of the policies contained in this HHS GPS apply to grants made to
Federal institutions. If an applicant/recipient would be unable to
comply with these requirements, the authorized Federal official should
contact the GMO. Specific exceptions and modifications of the HHS GPS
requirements for Federal recipients, and highlights of other policies,
are set forth in this section.

#### Eligibility

Federal institutions are eligible to receive certain types of grants
from PHS OPDIVs. This includes, but is not necessarily limited to,
grants for research, training, and demonstration projects. Federal
institutions must meet the eligibility requirements of the grant program
from which support is sought. However, in no case may an awarding office
issue a grant award to any component of its own OPDIV.

Although the performance site may be at a level lower than the agency or
department, when an award is made to an eligible Federal institution,
the Federal agency or department will be the designated recipient and
must assume responsibility for the project. Federal institutions must
also ensure that their own authorizing legislation will allow them to
receive a PHS grant and be able to comply with the award terms and
conditions.

A document certifying both the assumption of responsibility and
authority to receive a grant must be submitted at the time of each new
and competing continuation application. The certification must be signed
by the head of the responsible Federal department or independent agency
or a designee who reports directly to the department or agency head. (In
the case of the Department of Defense, the Departments of the Army,
Navy, and Air Force are considered the Federal department and their
Secretaries as the responsible Department head.)

The certification requirement does not apply to VA hospitals, Bureau of
Prisons (Department of Justice) hospitals, IHS hospitals, or other PHS
OPDIVs applying for grants. Generally an award to a PHS OPDIV other than
to an IHS hospital will be considered only if a project cannot be
supported within the mission of the applicant OPDIV or organizational
segment, the activity cannot be performed elsewhere, its non-pursuit
would have an adverse or potentially important impact on the OPDIV
mission, and a grant is determined to be the appropriate means of
carrying out the activity.

#### Payment

Grants to DoD normally will be paid by U.S. Treasury check after
submission of the appropriate interagency form. Payments to all other
Federal departments and agencies generally will be accomplished by
transfers of funds between appropriations.

#### Allowable Costs under Grants to Federal Institutions

Allowable costs under grants to Federal institutions will be determined
by the established policies of the institution, consistently applied to
both its own activities and to grant-supported activities, and by the
requirements shown in Exhibit 15. In the absence of a governing
organizational policy, the cost principles for State, local, and Indian
tribal governments ([OMB Circular
A-87](http://www.whitehouse.gov/omb/circulars/a087/a87_2004.html)) will
apply.

+-----------------+----------------------------------------------------+
| Exhibit 15.     |                                                    |
| Allowable Costs |                                                    |
| under Grants to |                                                    |
| Federal         |                                                    |
| Institutions    |                                                    |
+=================+====================================================+
| These costs are | If                                                 |
| allowable\      |                                                    |
| only as         |                                                    |
| specified       |                                                    |
+-----------------+----------------------------------------------------+
| Indirect costs  | Indirect costs will not be provided to Federal     |
|                 | institutions.                                      |
+-----------------+----------------------------------------------------+
| Institutional   | Institutional allowances may be requested by       |
| allowances      | Federal institutions sponsoring a predoctoral or   |
| under           | postdoctoral fellow.                               |
| fellowships     |                                                    |
+-----------------+----------------------------------------------------+
| Federal (U.S.   | No salary or fringe benefit payments may be made   |
| Government)     | from HHS grant funds to support career,            |
| employees       | career-conditional, or other Federal employees     |
|                 | (civilian or uniformed services) with permanent    |
|                 | appointments provided for under existing position  |
|                 | ceilings of a Federal institution receiving a      |
|                 | grant. While the level of effort required for the  |
|                 | project must be allowed by the recipient as part   |
|                 | of the individuals' official duties, salary costs  |
|                 | associated with an individual participating in an  |
|                 | official capacity as a Federal employee under a    |
|                 | grant to that Federal institution are not          |
|                 | allowable costs under an HHS grant. See "Payments  |
|                 | to (or on behalf of) Federal Employees under       |
|                 | Grants" for the conditions under which salary and  |
|                 | fringe benefits may be paid for Federal employees  |
|                 | working on a grant-supported project when the      |
|                 | recipient is a non-Federal organization or a       |
|                 | Federal institution other than the one that        |
|                 | employs the individual.                            |
|                 |                                                    |
|                 | Project-related travel costs of such employees are |
|                 | allowable as long as they consistent with the FTR. |
|                 | See Exhibit 16 in this section.                    |
+-----------------+----------------------------------------------------+
| Payments to     | Payments to individuals specifically hired to      |
| temporary       | assist in the performance of the grant are         |
| employees       | allowable.                                         |
+-----------------+----------------------------------------------------+
|                 |                                                    |
+-----------------+----------------------------------------------------+

#### Equipment Accountability

HHS will consider all nonexpendable personal property acquired under a
grant awarded to a Federal institution as federally owned, subject to 45
CFR 92.32. Upon completion of the award, or when the property is no
longer needed, the recipient must request disposition instructions from
the OPDIV.

#### Procurement Requirements

Procurement under grants to Federal institutions is governed by the FAR
and the recipient agency's FAR supplement.

#### Intellectual Property

Inventions resulting from grants supporting the activities of Federal
employees under grants to Federal institutions must be reported
simultaneously to the OPDIV and to the employing agency under the terms
of EO 10096, as amended, and are subject to the licensing requirements
of 37 CFR part 401. (See <https://s-edison.info.nih.gov/iEdison/> for
reporting requirements.) In cases where the VA is involved with the
invention but is not the recipient, and the recipient chooses not to
elect title or pursue practical application of an invention, the
recipient must note VA's involvement on its notice to the OPDIV and
provide a courtesy copy of the OPDIV notification to the appropriate VA
office. The OPDIV will notify the recipient and the VA whether the OPDIV
has an interest in taking title and/or continuing the pursuit of
practical application of the invention.

#### Reporting Requirements

Federal institutions must submit annual FSRs and progress reports.

#### Allowable Costs and Payments to (or on Behalf of) Federal Employees under Grants

Exhibit 16 lists and describes allowable costs and payments to Federal
employees under grants.

+--------+-------------------------------------------------------------+
| E      |                                                             |
| xhibit |                                                             |
| 16.    |                                                             |
| All    |                                                             |
| owable |                                                             |
| Costs  |                                                             |
| and    |                                                             |
| Pa     |                                                             |
| yments |                                                             |
| to (or |                                                             |
| on     |                                                             |
| Behalf |                                                             |
| of)\   |                                                             |
| F      |                                                             |
| ederal |                                                             |
| Emp    |                                                             |
| loyees |                                                             |
| under  |                                                             |
| Grants |                                                             |
+========+=============================================================+
| Item   | Description                                                 |
+--------+-------------------------------------------------------------+
| G      | Only four types of costs---consultant fees, outpatient or   |
| eneral | subject costs, salary or fringe benefits (when the employee |
|        | is not an employee of a recipient Federal institution or is |
|        | a part-time VA employee as described in this exhibit), and  |
|        | travel costs---can be charged to OPDIV grants on behalf of  |
|        | Federal employees, whether by a recipient or subrecipient,  |
|        | and under the conditions specified only.                    |
|        | Applicants/recipients should advise any Federal employees   |
|        | with whom these types of arrangements may be made to        |
|        | consult with their employing agency concerning their        |
|        | ability to meet the required conditions.                    |
|        |                                                             |
|        | The applicant/recipient must submit, as part of the grant   |
|        | application or subsequent request, any letters or           |
|        | documentation specified below, and that documentation must  |
|        | be deemed acceptable by the GMO before the Federal employee |
|        | may be involved in a project.                               |
|        |                                                             |
|        | These limitations do not apply to individuals that are      |
|        | classified as special government employees because of       |
|        | service on advisory groups or as a result of a formal       |
|        | consulting arrangement with a Federal agency. (See the HHS  |
|        | Standards of Conduct at [45 CFR part 73, Subpart            |
|        | J](http://a257.g.akamaitech.net/7/257/2422/14mar20010800/e  |
|        | docket.access.gpo.gov/cfr_2002/octqtr/45cfr73.735-1001.htm) |
|        | for additional guidance.)                                   |
+--------+-------------------------------------------------------------+
| Cons   | These costs are allowable only for medical personnel of the |
| ultant | Uniformed Services of the United States (excluding PHS      |
| fees   | Commissioned Officers) and when all of the following        |
|        | conditions are present:                                     |
|        |                                                             |
|        | -   The employees are providing the kind and extent of      |
|        |     medical services approved in the grant award.           |
|        |                                                             |
|        | -   Adequate numbers of qualified civilian personnel are    |
|        |     not available to provide these services, and eligible   |
|        |     Federal medical personnel are hired only in addition to |
|        |     those qualified civilian medical personnel, if any, who |
|        |     are available.                                          |
|        |                                                             |
|        | The applicant/recipient organization provides prior written |
|        | authorization from the proposed consultant's commanding     |
|        | officer that he or she is authorized to work on the         |
|        | grant-supported activity during non-duty hours or while on  |
|        | authorized leave, and can be paid for his or her efforts.   |
+--------+-------------------------------------------------------------+
| Outp   | These costs are allowable when the employee is an           |
| atient | outpatient or subject under study in connection with        |
| or     | grant-supported activities.                                 |
| s      |                                                             |
| ubject |                                                             |
| costs  |                                                             |
+--------+-------------------------------------------------------------+
| Salary | Salary payments may be made from OPDIV grant funds to       |
| or     | career, career-conditional, or other Federal employees      |
| fringe | (civilian or uniformed services) with permanent             |
| be     | appointments provided under existing position ceilings of a |
| nefits | Federal institution only if prior approval is obtained from |
|        | an authorized official of the employee's agency and the     |
|        | employee is one of the following:                           |
|        |                                                             |
|        | -   A PHS Commissioned Officer or a civil service employee  |
|        |     carrying out duties for which specific statutory        |
|        |     authorization exists permitting direct Federal          |
|        |     assistance in lieu of cash under the grant, or where    |
|        |     the government is reimbursed for services rendered      |
|        |     subject to restrictions applicable to such personnel,   |
|        |     including the applicable Federal standards of conduct   |
|        |     (for HHS, 45 CFR part 73).                              |
|        |                                                             |
|        | -   A PHS Commissioned Officer on LWOP if the               |
|        |                                                             |
|        | ```{=html}                                                  |
|        | <!-- -->                                                    |
|        | ```                                                         |
|        | -   recipient has obtained written prior approval from the  |
|        |     OPDIV;                                                  |
|        |                                                             |
|        | -   total amount of salary paid from OPDIV grant funds is   |
|        |     proportional to the time devoted to the project and     |
|        |     does not exceed the total annual amount of pay and      |
|        |     allowances the individual would have received if not in |
|        |     LWOP status; and                                        |
|        |                                                             |
|        | -   parties concerned have made a prior determination that  |
|        |     there is no possibility of dual compensation and there  |
|        |     is no actual or apparent conflict of interest or other  |
|        |     violation of the applicable standards of conduct.       |
+--------+-------------------------------------------------------------+
|        | -   A civil service employee participating in a grant to a  |
|        |     non-Federal organization and all of the following       |
|        |     conditions are met:                                     |
|        |                                                             |
|        | ```{=html}                                                  |
|        | <!-- -->                                                    |
|        | ```                                                         |
|        | -   The individual is participating as part of an approved  |
|        |     IPA assignment in a role other than as PI/PD. IPA       |
|        |     assignments generally do not exceed 2 years and may not |
|        |     exceed 4 years of continuous duration (5 U.S.C. 3372).  |
|        |     Based on this statutory time restriction, the           |
|        |     involvement of the civil service employee should be     |
|        |     limited in scope. Therefore, the proposed PI/PD for an  |
|        |     HHS grant may not be participating through an IPA. On a |
|        |     case-by-case basis, the OPDIV may determine that        |
|        |     certain other key personnel on the project are          |
|        |     sufficiently critical to its long-term success that     |
|        |     participation through an IPA is not appropriate.        |
+--------+-------------------------------------------------------------+
|        | -   Before making any payment from HHS grant funds to such  |
|        |     an employee, the recipient must certify that the        |
|        |     employee is on an IPA assignment and must provide       |
|        |     adequate documentation, as determined by OPDIV, of the  |
|        |     IPA assignment and information about its nature and     |
|        |     duration.                                               |
|        |                                                             |
|        | -   The level of effort required for the project must be    |
|        |     allowed by the employing agency as part of the          |
|        |     individual's official duties. Salary payments from      |
|        |     OPDIV grant funds must be proportional to the time an   |
|        |     individual devotes to the grant-supported project. The  |
|        |     total salary support may not exceed the normal level of |
|        |     compensation from Federal salary if the individual were |
|        |     not participating in the grant.                         |
|        |                                                             |
|        | -   The parties concerned have made a prior determination   |
|        |     that there is no possibility of dual compensation and   |
|        |     there is no actual or apparent conflict of interest or  |
|        |     other violation of the applicable standards of conduct. |
+--------+-------------------------------------------------------------+
| Sa     | In accordance with the established policies and salary      |
| laries | structure of the VANPC, if the PI is a part-time VA         |
| under  | employee, grant funds may be used to pay the differential   |
| re     | between the individual's VA part-time salary and the salary |
| search | level for a full-time VANPC commitment in proportion to the |
| grants | level of effort devoted to the project. Therefore, if the   |
| to     | PI has a part-time appointment with the VANPC, an           |
| VANPCs | appropriate portion of the individual's salary that would   |
|        | otherwise be supported by the non-profit VANPC may be       |
|        | charged to the grant. An HHS grant may not be the source of |
|        | funding for an increase in an investigator's salary         |
|        | regardless of the type of entity with which the             |
|        | investigator holds an appointment (e.g., university, VA, or |
|        | VANPC).                                                     |
+--------+-------------------------------------------------------------+
| Travel | These costs are allowable if the employee is                |
| costs  |                                                             |
|        | -   performing allowable reimbursable services as specified |
|        |     under "Salary or Fringe Benefits" above, or             |
|        |                                                             |
|        | -   attending an OPDIV grant-supported conference           |
|        |                                                             |
|        | ```{=html}                                                  |
|        | <!-- -->                                                    |
|        | ```                                                         |
|        | -   during non-duty hours,                                  |
|        |                                                             |
|        | -   while in a preexisting LWOP status or one that          |
|        |     continues beyond the conference, or                     |
|        |                                                             |
|        | -   while on detail to a State or local government,         |
|        |     educational institution, or other non-profit            |
|        |     organization.                                           |
|        |                                                             |
|        | Such payments must be made in accordance with established   |
|        | organizational policy, consistently applied regardless of   |
|        | the source of funds, and the parties concerned must take    |
|        | reasonable steps to ensure that there is no actual or       |
|        | apparent conflict of interest.                              |
+--------+-------------------------------------------------------------+
|        |                                                             |
+--------+-------------------------------------------------------------+

### Grants to For-Profit Organizations

#### General

For-profit organizations generally are subject to the same requirements
specified in the HHS GPS for non-profit organizations, including those
relating to personal property title and management. However, some of the
terms and conditions for grants to for-profit (commercial) organizations
vary from the standard terms and conditions included in the HHS GPS. In
addition, the terms and conditions of the SBIR and STTR programs vary
from those otherwise applicable to for-profit organizations. This
section addresses separately the policies applicable to for-profit
organizations generally and those that apply to SBIR and STTR awards
specifically. It also highlights several policies that apply equally to
for-profit and non-profit recipients. If an exception is not stated
below or in the NoA, the public policy requirements cited in the "Public
Policy Requirements" section of this HHS GPS, including the requirements
for the protection of human subjects and animal welfare, apply.

#### Allowable Costs and Payment of Fee

No cost principles are specifically applicable to grants to for-profit
organizations. Therefore, the cost principles for commercial
organizations set forth in the FAR (48 CFR Subpart 31.2) generally are
used to determine allowable costs under HHS grants to for-profit
organizations. As provided in those costs principles, allowable travel
costs may not exceed those established by the FTR (available at
[http://www.gsa.gov](http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=13095&contentType=GSA_DOCUMENT)).
In addition, as provided in 45 CFR 74.27(a), HHS does not allow
for-profit organizations to be reimbursed for IR&D (self-sponsored)
costs. The cost principles in 45 CFR part 74, Appendix E, are used to
determine allowable costs under HHS grants to proprietary hospitals.

Except for grants awarded under the SBIR/STTR programs, no profit or fee
will be provided to a for-profit organization, whether as a recipient or
subrecipient. A profit or fee under a grant is not a cost, but is an
amount in excess of actual allowable direct and indirect costs. In
accordance with normal commercial practice, a profit/fee may be paid to
a contractor under an HHS grant providing routine goods or services to
the recipient.

#### Intellectual Property

Intellectual property requirements set forth in 37 CFR part 401 apply to
for-profit organizations, whether small businesses or large businesses.
However, invention reporting requirements for for-profit organizations
differ somewhat from those for non-profit organizations. When the
recipient is a for-profit organization, assignment of invention rights
to a third party does not require OPDIV approval. To the extent
authorized by 35 U.S.C. 205 (the Patent Act, as amended), the Federal
government will not make public any information disclosing a Federal
government-supported invention.

#### Audit

The requirements for non-Federal audits of for-profit organizations are
specified in 45 CFR 74.26(d). A for-profit organization is required to
have a non-Federal audit if, during its fiscal year, it expended a total
of \$500,000 or more under one or more HHS awards (as a direct recipient
and/or as a subrecipient). Title 45, part 74.26(d), of the CFR
incorporates the thresholds and deadlines of OMB Circular A-133 but
provides for-profit organizations two options regarding the type of
audit that will satisfy the audit requirements:

-   A financial-related audit, as defined in, and in accordance with,
    the Government Auditing Standards, of all its HHS awards. The
    standards, commonly known as the "Yellow Book" (GPO stock
    020-000-00-265-4), are available at
    <http://www.gao.gov/govaud/ybk01.htm>. The Government Auditing
    Standards audits must be completed and submitted within 30 days
    after receipt of the auditor's report or 9 months after the end of
    the audit period (i.e., the end of the organization's fiscal year),
    whichever is earlier.

-   An audit that meets the requirements of OMB Circular A-133. OMB
    Circular A-133 is available at
    <http://www.whitehouse.gov/omb/circulars/a133/a133.html>.

Within 30 days after receipt of the auditor's report(s), or 9 months
after the end of the audit period, i.e., the end of the organization's
fiscal year, whichever is earlier, the audit must be submitted to the
following office:

National External Audit Review Center\
HHS Office of Audit Services\
323 West 8th Street\
Lucas Place\
Room 514\
Kansas City, MO 64105.

For-profit organizations expending less than \$500,000 a year are not
required to have an annual audit for that year but must make their
grant-related records available to the OPDIV or other designated
officials for review or audit.

#### Small Business Innovation Research and Small Business Technology Transfer Programs

Certain OPDIVs are required by statute to reserve a portion of its
annual extramural budget for projects under the SBIR and STTR programs.
These programs primarily are intended to encourage private-sector
commercialization of technology and to increase small business
participation in federally funded R&D.

Both the SBIR and STTR programs consist of the following three phases;
however, individual projects may not be eligible for all three phases:

-   *Phase I.* The objective of this phase is to establish the technical
    merit and feasibility of proposed research or R&D efforts and to
    determine the quality of performance of the applicant (small
    business concern or SBC) before providing further Federal support in
    Phase II.

-   *Phase II.* The objective of this phase is to continue the research
    or R&D efforts initiated in Phase I. Funding will be based on the
    results of Phase I and the scientific and technical merit and
    commercial potential of the Phase II application. Only Phase I
    recipients are eligible to receive Phase II funding. Unless
    submitted as a Fast-Track application ([see
    below](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part13.htm#NIH_Fast_Track_application_process%23NIH_Fast_Track_application_process)),
    Phase II applications may be submitted only after the Phase I award
    is made. OPDIVs expect non Fast-Track Phase II applications to be
    submitted within the first six receipt dates following expiration of
    the Phase I budget period, i.e., normally 2 years beyond the
    expiration date of the Phase I award.

-   *Phase III.* The objective of this phase, where appropriate, is for
    the SBC to pursue, with non-Federal funds, the commercialization of
    the results of the research or R&D funded in Phases I and II.

There are two major differences between the SBIR and STTR programs:

-   The STTR program requires that the SBC formally partner with a
    single, non-profit research institution in the collaborative conduct
    of a project that has potential for commercialization. To be
    eligible for an STTR award, at least\
    40 percent of the research must be performed by the SBC and at least
    30 percent of the research must be performed by a domestic
    non-profit research institution through a formal, cooperative
    arrangement. Such organizations include universities, non-profit
    hospitals, and other non-profit research organizations as well as
    Federally Funded Research and Development Centers. (The same
    requirement applies to Phase I and to Phase II.) STTR grants are
    awarded to the SBC, which will receive all of the funding for the
    project and disperse the appropriate funding to the research
    institution. The SBIR program does not have this requirement;
    therefore, the SBC may conduct the entire SBIR project without
    outside collaboration.

-   The SBIR program requires that the primary employment of the PI
    (greater than 50 percent of the individual's time) be with the SBC
    at the time of award and during the conduct of the project. The STTR
    program does not have this requirement, i.e., the PI may have his or
    her primary employment with an organization other than the SBC,
    including the collaborating research institution. However, there
    must be an official relationship between the PI and the SBC. As an
    eligibility criterion, the PI also is required to devote at least 10
    percent of his or her time to the STTR project.

The Fast-Track application process expedites award decisions and funding
of SBIR and STTR Phase II applications for scientifically meritorious
projects that have a high potential for commercialization. The
Fast-Track process allows Phase I and Phase II grant applications to be
submitted and reviewed together. Typically, Fast-Track applications will
receive a single rating. An OPDIV determines whether to allow SBCs to
use the Fast-Track review option. Therefore, before submitting
applications for Fast-Track review, applicants are strongly encouraged
to consult with OPDIV program staff. SBIR/STTR Phase I and Phase II
applications submitted concurrently without prior consultation with the
OPDIV may be redirected for review under the OPDIV's normal review
procedures. For additional information on the submission of Fast-Track
applications, see the OPDIV's SBIR/STTR program solicitations.

##### Qualification as a Small Business Concern

Each organization receiving a grant under the SBIR/STTR programs must
qualify as a U.S.-owned SBC---an entity that, at the time of the Phase I
and Phase II awards, meets all of the following criteria:

-   The entity is organized for profit and has a place of business
    located in the United States, operates primarily within the United
    States, or makes a significant contribution to the U.S. economy
    through payment of taxes or use of American products, materials, or
    labor.

-   It is in the legal form of an individual proprietorship,
    partnership, limited liability company, corporation, joint venture,
    association, trust, or cooperative. If the entity is a joint
    venture, there can be no more than 49 percent participation by
    foreign business entities.

-   As provided by the express terms of 13 CFR 121.702(a), it is at
    least 51 percent owned and controlled by one or more individuals who
    are citizens of, or permanent resident aliens in, the United States.
    In the case of a joint venture, each party to the venture must be 51
    percent owned and controlled by one or more individuals who are
    citizens of, or permanent resident aliens in, the United States.
    Under these regulations, corporations or artificial entities cannot
    quality as individuals who are U.S. citizens. Further, indirect
    ownership of the entity by a U.S. citizen does not satisfy the
    requirements of 13 CFR 121.702(a).

```{=html}
<!-- -->
```
-   *Example 1.* An entity applying for an SBIR/STTR grant is 100
    percent owned by Company A. Company A is 100 percent owned by U.S.
    citizens. The entity is not eligible for support under the SBIR/STTR
    program because it is not 51 percent directly owned and controlled
    by citizens of, or permanent resident aliens in, the United States.

-   *Example 2.* An entity applying for an SBIR/STTR grant is 51 percent
    owned by U.S. citizens of and permanent resident aliens in the
    United States and 49 percent owned by a corporation. The entity is
    eligible for support under the SBIR/STTR program, assuming it meets
    the other eligibility criteria (e.g., size), because 51 percent of
    the ownership rests directly with U.S. citizens and permanent
    resident aliens of the United States.

```{=html}
<!-- -->
```
-   The entity, including its affiliates, cannot have more than 500
    employees. In accordance with 13 CFR 121.103, affiliation exists
    when, either directly or indirectly, (1) one concern controls or has
    the power to control the other, or\
    (2) a third party or parties controls or has the power to control
    both. One of the circumstances that would lead to a finding that an
    organization is controlling or has the power to control another
    organization involves sharing common office space, employees, and/or
    other facilities (e.g., laboratory space). The research and
    analytical work performed by the recipient under an SBIR/STTR award
    is to be conducted in research space occupied by, available to, and
    under the control of, the recipient. However, when required by the
    project activity, access to special facilities or equipment in
    another organization is permitted, as in cases where the SBIR
    recipient has entered into a consortium arrangement with another
    organization for a specific, limited portion of the research
    project. See 13 CFR 121.3-2(a) and 13 CFR 121.3-2(t) for additional
    information concerning this criterion.

All appropriate factors will be considered in determining whether an
entity qualifies for an SBIR/STTR award, including common ownership,
common management, and contractual relationships.

##### Place of Performance

For both Phase I and Phase II SBIR/STTR awards, the research or R&D
project activity must be performed in its entirety in the United States.
(The United States is defined as the 50 States, the territories and
possessions of the United States, the Commonwealth of Puerto Rico, the
Federated States of Micronesia, the Republic of Palau, the Republic of
the Marshall Islands, and the District of Columbia.)

In those rare instances where the study design requires use of a foreign
site (e.g., to conduct testing of specific patient populations), the
investigator must thoroughly justify in the application the need for use
of a foreign site. Similarly, in those rare instances where it may be
necessary to purchase materials from other countries, investigators must
thoroughly justify the request. The OPDIV will consider these instances
on a case-by-case basis, and they should be discussed with cognizant
OPDIV staff before submitting an application. Whether the request is
approved or disapproved, it will be explicitly addressed in the NoA if
an award is made. Whenever possible, work outside the United States,
which is necessary to the completion of the project, should be supported
by funding other than SBIR/STTR grants.

##### Minimum Level of Effort

Generally, under SBIR Phase I awards, a minimum of two-thirds or 67
percent of the research or analytical effort must be carried out by the
SBC. In addition, payments, in the aggregate, to consultants, consortium
participants and contractors for portions of the scientific/technical
effort generally may not exceed 33 percent of the total requested
amount.

Generally, under SBIR Phase II awards, a minimum of one-half or 50
percent of the research or analytical effort must be carried out by the
SBC. In addition, payments, in the aggregate, to consultants, consortium
participants, and contractors for portions of the scientific/technical
effort generally may not exceed 50 percent of the total requested
amount.

For STTR awards (both Phase I and Phase II), at least 40 percent of the
work is to be performed by the SBC and at least 30 percent of the work
is to be performed by the single, non-profit research institution. The
basis for determining the percentage of work to be performed by each of
the cooperating parties is the total of direct and F&A costs
attributable to each party, unless otherwise described and justified in
the "Contractual Arrangements" portion of the "Research Plan" section of
the grant application.

##### Public Policy Requirements 

The requirements concerning disclosure of financial conflicts of
interest (see "[Public Policy Requirements---Other Research-Related
Requirements---Financial Conflict of
Interest](http://grants1.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part4.htm#_Financial_Conflict_of)")
do not apply to applications or awards under Phase I of the SBIR/STTR
programs.

##### Allowable Costs and Fee

*Profit or Fee.* A reasonable profit or fee may be paid to an SBC
receiving an award under Phase I or Phase II of the SBIR and STTR
programs. The profit or fee is not considered a "cost" for purposes of
determining allowable use, program income accountability, or audit
thresholds. The profit or fee may be used by the SBC for any purpose,
including additional effort under the SBIR/STTR award. It is intended to
provide a reasonable profit consistent with normal profit margins for
for-profit organizations for R&D work. Fee amounts may not exceed 8
percent of total costs (direct plus indirect) exclusive of fee, unless
there is compelling justification and the request is approved by the
OPDIV. Regardless, total costs and fee must be accommodated within the
statutory limitations on the size of awards under the SBIR/STTR programs
(see Part IV for allowable fee percentage). The profit or fee should be
drawn from PMS in increments proportional to the drawdown of funds for
direct and indirect costs. The profit or fee applies solely to the SBC
receiving the SBIR/STTR award and not to any other participant; however,
in accordance with normal commercial practice, the SBC may pay a profit
or fee to a contractor providing routine goods or services to the SBC
under the grant.

For multi-year awards, i.e., those where the approved project period
will exceed 1 year, the overall fee negotiated will be divided into the
number of years in the project period and the resulting amount added to
each budget period as a "fixed fee." The fee paid is not subject to the
cost principle tests of allowability and it will not be adjusted
downward based on actual allowable costs incurred. However, in the event
of a termination or the withholding a non-competing continuation award
for failure to make satisfactory progress, non-compliance with the terms
and conditions of a previous award or absence of an appropriation, the
recipient is not entitled to any fee amount in excess of the negotiated
percentage applied to the period for which grant support has been
provided.

*Indirect Costs.*

-   *Phase I.* If the applicant SBC has a currently effective indirect
    cost rate with a Federal agency, that rate should be used when
    calculating proposed indirect costs for an application. (However,
    the rate must be adjusted for IR&D expenses, which are not allowable
    under HHS awards.) If the applicant SBC does not have a currently
    effective negotiated indirect cost rate with a Federal agency, the
    applicant should propose estimated indirect costs at a rate not to
    exceed 40 percent of the total direct costs. However, SBCs are
    reminded that only actual indirect costs are to be charged to
    projects. (If awarded at a rate of 40 percent or less, the rate used
    to charge actual indirect costs to projects cannot exceed the
    awarded rate unless the SBC negotiates an indirect cost rate with a
    Federal agency.) OPDIVs will not negotiate indirect cost rates for
    Phase I awards.

-   *Phase II.* If the applicant SBC has a currently effective
    negotiated indirect cost rate with a Federal agency, that rate
    should be used when calculating proposed indirect costs for an
    application. (However, the rate must be adjusted for IR&D expenses,
    which are not allowable under HHS awards.) If the applicant SBC does
    not have a currently effective negotiated indirect cost rate with a
    Federal agency, the applicant should propose an estimated indirect
    cost rate in the application. If the requested indirect cost rate is
    25 percent of total direct costs or less, no further justification
    is required at the time of award, and indirect costs will be awarded
    at the requested rate. However, SBCs are reminded that only actual
    indirect costs may be charged to projects. If awarded at a rate of
    25 percent or less of total direct costs, the rate used to charge
    actual indirect costs to projects cannot exceed the awarded rate
    unless the SBC negotiates an indirect cost rate with DFAS.
    DFAS---the office authorized to negotiate indirect cost rates with
    SBCs receiving HHS SBIR/STTR awards---will negotiate indirect cost
    rates for SBCs receiving Phase II awards that requested a rate
    greater than 25 percent of total direct costs.

> Upon request, the applicant SBC should provide DFAS with an indirect
> cost proposal and supporting financial data for its most recently
> completed fiscal year. If financial data are not available for the
> most recently completed fiscal year, the applicant should submit a
> proposal showing estimated rates with supporting documentation.
> Further information about DFAS is available at its Web site or by
> telephone (see Part III of the HHS GPS).

##### Market Research

HHS will not support market research, including studies of the
literature that lead to a new or expanded statement of work, under the
grant. For purposes of the SBIR/STTR programs, "market research" is the
systematic gathering, editing, recording, computing, and analyzing of
data about problems relating to the sale and distribution of the subject
of the proposed research. It includes various types of research, such as
the size of potential markets and potential sales volume, the
identification of consumers most apt to purchase the products, and the
advertising media most likely to stimulate their purchases. However,
"market research" does not include activities under a research plan or
protocol that include a survey of the public as part of the objectives
of the project to determine the impact of the subject of the research on
the behavior of individuals.

##### Intellectual Property

Rights to data, including software developed under the terms of any
funding agreement resulting from an HHS award, must remain with the
recipient except that any such copyrighted material is subject to a
royalty-free, nonexclusive and irrevocable license to the Federal
government to reproduce, publish, or otherwise use the material, and to
authorize others to do so for Federal purposes. In addition, under the
SBIR/STTR programs, in contrast to awards to for-profit organizations
under other support mechanisms, such data must not be released outside
the Federal government without the recipient's permission for a period
of 4 years from completion of the project under which the data were
generated.

The STTR program requires that the small business recipient and the
single, non-profit research institution execute an agreement allocating
between the parties intellectual property rights and rights, if any, to
carry out follow-on research, development, or commercialization of the
subject research. (A model agreement, "Allocation of Rights in
Intellectual Property and Rights to Carry Out Follow-On Research,
Development, or Commercialization," is available at the NIH Web site at
[http://grants.nih.gov/grants/funding/sbir.htm](http://grants1.nih.gov/grants/funding/sbir.htm).)
By signing the face page of the grant application, the SBC's AOO
certifies that the agreement with the research institution will be
effective at the time the grant award is made. A copy of the agreement
must be furnished upon request to the awarding office.

SBIR/STTR recipients are covered by 37 CFR part 401 with respect to
inventions and patents.

*Data Sharing.* Applicants for SBIR Phase II funding of \$500,000 or
more of direct costs in any single year must comply with the HHS policy
on data sharing consistent with the Small Business Act. If the final
data would not be amenable to sharing, e.g., proprietary data, the SBC
should explain that in the application. In addition, as indicated under
"Intellectual Property" in this subsection, whether or not the award
meets the threshold for data sharing, the OPDIV will not release data
outside the Federal government without the recipient's permission for a
period of 4 years from completion of the project under which the data
were generated. The entire policy may be found at
<http://grants.nih.gov/grants/policy/data_sharing/index.htm>.

# Part III: Points of Contact

Exhibit 17 lists pertinent offices and officials, along with their
addresses and telephone numbers.

+-----------------------------+----------------------------------------+
| Exhibit 17. Points of       |                                        |
| Contact                     |                                        |
+=============================+========================================+
| **Office or Official**      | **Address and telephone numbers**      |
+-----------------------------+----------------------------------------+
| Office of the Inspector     | Department of Health and Human         |
| General (OIG)               | Services\                              |
|                             | OIG Hotline\                           |
| [http://www.oig.hhs.go      | Attn: HOTLINE\                         |
| v](http://www.oig.hhs.gov/) | 330 Independence Avenue, SW\           |
|                             | Washington, DC 20201                   |
|                             |                                        |
|                             | 800-HHS-TIPS (1-800-447-8477)          |
|                             |                                        |
|                             | e-mail: HHSTips@org.hhs.gov            |
+-----------------------------+----------------------------------------+
|                             | For questions concerning A-133 audit   |
|                             | requirements:                          |
|                             |                                        |
|                             | National External Audit Resources\     |
|                             | Office of Audit Services\              |
|                             | 323 West 8th Street\                   |
|                             | Lucas Place, Room 514\                 |
|                             | Kansas City, MO 64105                  |
|                             |                                        |
|                             | 800-374-6714 (voice)\                  |
|                             | 816-374-6727 (fax)                     |
|                             |                                        |
|                             | <http://harvester.census.gov/sac>      |
+-----------------------------+----------------------------------------+
| Office for Human Research   | The Tower Building\                    |
| Protections (OHRP)          | 1101 Wootton Parkway, Suite 200\       |
|                             | Rockville, MD 20852                    |
| <http://www.hhs.gov/ohrp>   |                                        |
|                             | 866-447-4777 (toll free)\              |
|                             | 240-453-6900 (local)                   |
|                             |                                        |
|                             | e-mail: <ohrp@osophs.dhhs.gov>         |
+-----------------------------+----------------------------------------+
| Office of Laboratory Animal | 6705 Rockledge Drive\                  |
| Welfare (OLAW)              | Rockledge I, Suite 360, MSC-7982\      |
|                             | Bethesda, MD 20892-7982                |
| <http://grants.ni           |                                        |
| h.gov/grants/olaw/olaw.htm> | 301-496-7163                           |
|                             |                                        |
|                             | e-mail:\                               |
|                             | <olaw@od.nih.gov> (for general         |
|                             | questions, copies of documents, or     |
|                             | compliance issues)                     |
|                             |                                        |
|                             | <assurance.olaw@od.nih.gov> (for       |
|                             | questions or information about         |
|                             | assurances)                            |
+-----------------------------+----------------------------------------+
| Office of Research          | The Tower Building\                    |
| Integrity (ORI)             | 1101 Wootton Parkway, Suite 750\       |
|                             | Rockville, MD 20852                    |
| [http://ori.dhhs            |                                        |
| .gov](http://ori.dhhs.gov/) | 240-453-8200                           |
|                             |                                        |
|                             | e-mail:                                |
|                             | [askORI@osophs.dh                      |
|                             | hs.gov](mailto:askori@osophs.dhhs.gov) |
+-----------------------------+----------------------------------------+
| Departmental Appeals Board  | Department of Health and Human         |
| (DAB)                       | Services\                              |
|                             | Departmental Appeals Board, MS 6132\   |
| <http://www.hhs.gov/dab/>   | Alternative Dispute Resolution and     |
|                             | Civil Remedies Divisions\              |
|                             | 330 Independence Avenue, SW\           |
|                             | Room G-644\                            |
|                             | Washington, DC 20201                   |
|                             |                                        |
|                             | Note: DAB does not receive courier     |
|                             | deliveries at this address.            |
|                             |                                        |
|                             | 202-565-0200 (Chair and Appellate and  |
|                             | ADR Divisions)\                        |
|                             | 202-565-9462 (Civil Remedies Division) |
|                             |                                        |
|                             | e-mail: DAB@hhs.gov                    |
+-----------------------------+----------------------------------------+
| Office for Civil Rights     | Office of Program Operations\          |
| (OCR)                       | 200 Independence Avenue, SW\           |
|                             | Room 509 F\                            |
| <http://www.hhs.gov/ocr>    | Washington, DC 20201                   |
|                             |                                        |
|                             | 800-368-1019                           |
|                             |                                        |
|                             | e-mail: <OCRMail@hhs.gov>              |
+-----------------------------+----------------------------------------+
| Program Support Center\     | P.O. Box 6021\                         |
| Financial Management        | Rockville, MD 20852                    |
| Service\                    |                                        |
| Division of Payment         | 301-443-9193\                          |
| Management (DPM)            | 301-443-3586 (fax)                     |
|                             |                                        |
| [http://www.dpm.psc.go      | e-mail: <info@psc.dhhs.gov>            |
| v](http://www.dpm.psc.gov/) |                                        |
|                             |                                        |
| <http://ww                  |                                        |
| w.dpm.psc.gov/Contact.aspx> |                                        |
| (Find Account               |                                        |
| Representative              |                                        |
+-----------------------------+----------------------------------------+
| Division of Cost Allocation |                                        |
| (DCA)                       |                                        |
|                             |                                        |
| <http://rates.psc.gov/>     |                                        |
+-----------------------------+----------------------------------------+
| Mid-Atlantic Field Office   | 330 Independence Avenue, SW\           |
|                             | Cohen Building, Room 10-67\            |
| (Services Alabama,          | Washington, DC 20201                   |
| Delaware, District of       |                                        |
| Columbia, Florida, Georgia, | 202-401-2808                           |
| Kentucky, Maryland,         |                                        |
| Mississippi, North          |                                        |
| Carolina, Pennsylvania,     |                                        |
| South Carolina, Tennessee,  |                                        |
| Virginia and West Virginia) |                                        |
+-----------------------------+----------------------------------------+
| Northeastern Field Office   | 26 Federal Plaza\                      |
|                             | Room 41-122\                           |
| (Services Connecticut,      | New York, NY 10278                     |
| Maine, Massachusetts, New   |                                        |
| Hampshire, New Jersey, New  | 212-264-2069                           |
| York, Rhode Island,         |                                        |
| Vermont, Puerto Rico, the   |                                        |
| Virgin Islands, Canada and  |                                        |
| Europe)                     |                                        |
+-----------------------------+----------------------------------------+
| Central States Field Office | 1301 Young Street\                     |
|                             | Room 702\                              |
| (Services Arkansas,         | Dallas, TX 75202                       |
| Illinois, Indiana, Iowa,    |                                        |
| Kansas, Louisiana,          | 214-767-3261                           |
| Michigan, Minnesota,        |                                        |
| Missouri, Nebraska, New     |                                        |
| Mexico, Ohio, Oklahoma,     |                                        |
| Texas and Wisconsin)        |                                        |
+-----------------------------+----------------------------------------+
| Western Field Office        | 50 United Nations Plaza\               |
|                             | Room 347\                              |
| (Services Alaska, Arizona,  | San Francisco, CA 94102                |
| California, Colorado,       |                                        |
| Hawaii, Idaho, Montana,     | 415-437-7820                           |
| Nevada, North Dakota,       |                                        |
| Oregon, South Dakota, Utah, |                                        |
| Washington, Wyoming,        |                                        |
| Australia, and Asia)        |                                        |
+-----------------------------+----------------------------------------+
| Office of Acquisition       | 6100 Executive Boulevard, Room 6B05\   |
| Management and Policy       | MSC-7540\                              |
| (OAMP)\                     | Bethesda, MD 20892-7540                |
| Division of Financial       |                                        |
| Advisory Services (DFAS)\   | 301-496-4401\                          |
| http://oa                   | 301-402-0177                           |
| mp.od.nih.gov/dfas/dfas.asp |                                        |
+-----------------------------+----------------------------------------+

# Appendix A: Abbreviations

Following are abbreviations of terms used throughout this document. They
are included in a single location as an aid to the reader.

  ------------- ---------------------------------------------------------
  A&R           alteration and renovation

  ACH           Automated Clearinghouse

  AHRQ          Agency for Healthcare Research and Quality

  CDC           Centers for Disease Control and Prevention

  CFR           Code of Federal Regulations

  CoC           certificate of confidentiality

  DAB           Departmental Appeals Board

  DCA           Division of Cost Allocation, HHS

  DEA           Drug Enforcement Administration

  DFAS          Division of Financial Advisory Services, NIH

  DoC           Department of Commerce

  DoD           Department of Defense

  DoL           Department of Labor

  DPM           Division of Payment Management, HHS

  EIN           Entity Identification Number

  EO            Executive Order

  F&A           facilities and administrative (costs)

  FAC           Federal Audit Clearinghouse

  FAR           Federal Acquisition Regulation

  FCTR          Federal Cash Transactions Report (SF 272)

  FDA           Food and Drug Administration

  FEMA          Federal Emergency Management Agency

  FOIA          Freedom of Information Act

  FSR           Financial Status Report (SF 269 or 269A)

  FTR           Federal Travel Regulation

  FWA           Federal-Wide Assurance

  GMO           Grants Management Officer

  GMS           Grants Management Specialist

  GPO           Government Printing Office

  GSA           General Services Administration

  HHS           Department of Health and Human Services

  HRSA          Health Resources and Services Administration

  IACUC         Institutional Animal Care and Use Committee

  IDE           investigational device exception

  IHS           Indian Health Service

  IND           Investigational new drug

  IPA           Intergovernmental Personnel Act

  IR&D          independent research and development

  IRB           Institutional Review Board

  IRS           Internal Revenue Service

  LOI           Letter of intent

  LWOP          leave without pay

  NEARC         National External Audit Review Center, OIG

  NEPA          National Environmental Policy Act

  NFI           Notice of Federal Interest

  NIH           National Institutes of Health

  NoA           Notice of Award (Notice of Grant Award)

  OCR           Office for Civil Rights, HHS

  OFCCP         Office of Federal Contract Compliance Programs, DoL

  OG            Office of Grants

  OHRP          Office for Human Research Protections

  OIG           Office of the Inspector General

  OLAW          Office of Laboratory Animal Welfare, NIH

  OMB           Office of Management and Budget

  ONR           Office of Naval Research

  OPDIV         Operating Division

  OPHS          Office of Public Health and Science

  ORI           Office of Research Integrity

  PA            program announcement

  PD            Program Director/Project Director

  PHS           Public Health Service

  PI            Principal Investigator

  P.L.          Public Law

  PMS           Payment Management System

  PO            Project Officer/Program Official

  PRA           Paperwork Reduction Act

  RA            Review Administrator

  R&D           research and development

  RFA           Request For Applications

  SAMHSA        Substance Abuse and Mental Health Services Administration

  SBA           Small Business Administration

  SBC           small business concern

  SBIR          Small Business Innovation Research Program

  SF            Standard Form

  SPOC          State Single Point of Contact

  STTR          Small Business Technology Transfer Program

  U.S.C.        United States Code

  USDA          United States Department of Agriculture

  VA            Department of Veterans Affairs

  VANPC         VA-Affiliated Non-Profit Research Corporation
  ------------- ---------------------------------------------------------

# Appendix B: Glossary

This glossary defines terms commonly used in the HHS GPS. These
definitions are included for purposes of clarity in this document and
are not intended to replace controlling definitions found in applicable
statutes and regulations. The policy associated with these definitions
is found in Part II of the HHS GPS, unless otherwise indicated.

+--------------+-------------------------------------------------------+
| accrual      | An accounting method in which revenues and expenses   |
| basis        | are identified with specific periods of time, such as |
|              | a month or year, and are recorded when they are       |
|              | earned or incurred without regard to the date of      |
|              | receipt or payment of cash; distinguished from cash   |
|              | basis.                                                |
+--------------+-------------------------------------------------------+
| acquisition  | The net invoice price of property or supplies,        |
| cost         | including the cost of modifications, attachments,     |
|              | accessories, or auxiliary apparatus necessary to make |
|              | the property usable for the purpose for which it was  |
|              | acquired. Other charges, such as the cost of          |
|              | installation, transportation, taxes, duty, and        |
|              | protective in-transit insurance, are included or      |
|              | excluded from the unit acquisition cost in accordance |
|              | with the recipient's regular accounting practices.    |
|              | The term does not include costs for rental of         |
|              | property or alteration and rental of real property.   |
+--------------+-------------------------------------------------------+
| ad           | The general practices that are common to the          |
| ministrative | administration of grants, such as financial           |
| requirements | accountability, reporting, equipment management, and  |
|              | retention of records.                                 |
+--------------+-------------------------------------------------------+
| advance      | A payment made to a recipient upon its request either |
| payment      | before cash disbursements are made by the recipient   |
|              | or through the use of predetermined payment           |
|              | schedules. Most HHS advance payments are made by the  |
|              | Payment Management System (PMS), the HHS centralized  |
|              | grant payment system.                                 |
+--------------+-------------------------------------------------------+
| allocable    | A cost that is allocable to a particular cost         |
| cost         | objective (i.e., a specific function, grant project,  |
|              | service, department, or other activity) in accordance |
|              | with the relative benefits received. A cost is        |
|              | allocable to a Federal award where it is treated      |
|              | consistently with other costs incurred for the same   |
|              | purpose in like circumstances and (1) is incurred     |
|              | specifically for the award, (2) benefits both the     |
|              | award and other work and can be distributed in        |
|              | reasonable proportion to the benefits received, or    |
|              | (3) is necessary for the overall operation of the     |
|              | organization.                                         |
+--------------+-------------------------------------------------------+
| allowable    | A cost incurred by a recipient that is                |
| cost         |                                                       |
|              | \(1\) reasonable for the performance of the award;\   |
|              | (2) allocable;\                                       |
|              | (3) in conformance with any limitations or exclusions |
|              | set forth in the Federal cost principles applicable   |
|              | to the organization incurring the cost or in the NoA  |
|              | as to the type or amount of cost;\                    |
|              | (4) consistent with regulations, policies, and        |
|              | procedures of the recipient that are applied          |
|              | uniformly to both federally supported and other       |
|              | activities of the organization;\                      |
|              | (5) accorded consistent treatment as a direct or      |
|              | indirect cost;\                                       |
|              | (6) determined in accordance with generally accepted  |
|              | accounting principles; and\                           |
|              | (7) not included as a cost in any other federally     |
|              | supported award (unless specifically authorized by    |
|              | statute).                                             |
+--------------+-------------------------------------------------------+
| alteration   | Work that changes the interior arrangements or other  |
| and          | physical characteristics of an existing facility or   |
| renovation   | installed equipment so that it can be used more       |
|              | effectively for its currently designated purpose or   |
|              | adapted to an alternative use to meet a programmatic  |
|              | requirement. Alteration and renovation may include    |
|              | work referred to as improvements, conversion,         |
|              | rehabilitation, remodeling, or modernization, but is  |
|              | distinguished from construction and large-scale       |
|              | permanent improvements.                               |
+--------------+-------------------------------------------------------+
| alternative  | A process in which mediation or other techniques are  |
| dispute      | used to avoid or resolve disputes. Alternative        |
| resolution   | dispute resolution is intended to reduce cost, delay, |
|              | and contentiousness in the resolution process as well |
|              | as to prevent disputes from escalating to levels      |
|              | requiring more formal or judicial resolution.         |
+--------------+-------------------------------------------------------+
| applicable   | Those receipts that offset or reduce direct or        |
| credit       | indirect costs. Typical examples of such transactions |
|              | include purchase discounts, rebates, or allowances;   |
|              | recoveries or indemnities on losses; insurance        |
|              | refunds; and adjustments of overpayments or erroneous |
|              | charges.                                              |
+--------------+-------------------------------------------------------+
| application  | A request for financial support of a project,         |
|              | program, or activity submitted on specified forms and |
|              | in accordance with OPDIV instructions. (See "Types of |
|              | Applications and Letters of Intent" in Part I for an  |
|              | explanation of the types of applications.)            |
+--------------+-------------------------------------------------------+
| approved     | The financial expenditure plan for a grant-supported  |
| budget       | project, program, or activity, including revisions    |
|              | approved by the OPDIV and permissible revisions made  |
|              | by the recipient. The approved budget consists of     |
|              | Federal (grant) funds and, if required by the terms   |
|              | and conditions of the award, non-Federal              |
|              | participation in the form of matching or cost         |
|              | sharing. Expenditures under an approved budget that   |
|              | consists of both Federal and non-Federal shares are   |
|              | deemed to be borne by the recipient in the same       |
|              | proportion as the percentage of Federal/non-Federal   |
|              | participation in the overall budget.                  |
+--------------+-------------------------------------------------------+
| assurance    | A written statement by an applicant, normally         |
|              | included with the application, indicating that it     |
|              | will abide by a particular requirement if a grant is  |
|              | awarded. (See Part I.)                                |
+--------------+-------------------------------------------------------+
| audit        | The process of resolving audit findings, including    |
| resolution   | those related to management and systems deficiencies  |
|              | and monetary findings (i.e., questioned costs).       |
+--------------+-------------------------------------------------------+
| award        | The document that provides OPDIV funds to a recipient |
|              | to carry out an approved program or project (based on |
|              | an approved application or progress report). The      |
|              | term, when used as a noun, is sometimes used          |
|              | interchangeably with "grant."                         |
+--------------+-------------------------------------------------------+
| awarding     | The OPDIV organizational component responsible for    |
| office       | the business management and non-programmatic aspects  |
|              | of the award and administration of grants. When       |
|              | referring to the focal point for recipient-initiated  |
|              | prior approval requests or actions by an awarding     |
|              | office that may require changes in the terms and      |
|              | conditions of award, reference will be to the GMO.    |
+--------------+-------------------------------------------------------+
| budget       | The intervals of time (usually 12 months each) into   |
| periods      | which a project period is divided for budgetary and   |
|              | funding purposes. Funding of individual budget        |
|              | periods sometimes is referred to as "incremental      |
|              | funding."                                             |
+--------------+-------------------------------------------------------+
| carryover    | Unobligated Federal funds remaining at the end of any |
|              | budget period that may be carried forward to another  |
|              | budget period to cover allowable costs of that budget |
|              | period (whether as an offset or additional            |
|              | authorization). Obligated but unliquidated funds are  |
|              | not considered carryover.                             |
+--------------+-------------------------------------------------------+
| cash basis   | An accounting method in which revenue and expenses    |
|              | are recorded on the books of account when received    |
|              | and paid, respectively, without regard to the period  |
|              | in which they are earned or incurred; distinguished   |
|              | from accrual basis.                                   |
+--------------+-------------------------------------------------------+
| cash         | The recipient's cash outlay, including the outlay of  |
| contribution | money contributed to the recipient by third parties.  |
+--------------+-------------------------------------------------------+
| change of    | A process in which the legal and administrative       |
| grantee      | responsibility for a grant-supported project,         |
|              | program, or activity is transferred from one legal    |
|              | entity to another before the end of the project       |
|              | period. This action also may be termed "transfer of a |
|              | grant."                                               |
+--------------+-------------------------------------------------------+
| clinical     | A biomedical or behavioral research study of human    |
| trial        | subjects that is designed to answer specific          |
|              | questions about biomedical or behavioral              |
|              | interventions (drugs, treatments, devices, or new     |
|              | ways of using known drugs, treatments, or devices).   |
|              | Clinical trials are used to determine whether new     |
|              | biomedical or behavioral interventions are safe,      |
|              | efficacious, and effective. Clinical trials of an     |
|              | experimental drug, treatment, device, or intervention |
|              | may proceed through four phases:                      |
|              |                                                       |
|              | Phase I---testing in a small group of people (e.g.,   |
|              | 20 to 80) to determine efficacy and evaluate safety   |
|              | (e.g., determine a safe dosage range and identify     |
|              | side effects).                                        |
|              |                                                       |
|              | Phase II---study in a larger group of people (several |
|              | hundred) to determine efficacy and further evaluate   |
|              | safety.                                               |
|              |                                                       |
|              | Phase III---study to (1) determine efficacy in large  |
|              | groups of people (from several hundred to several     |
|              | thousand) by comparing the intervention to other      |
|              | standard or experimental interventions, (2) monitor   |
|              | adverse effects, and (3) collect information to allow |
|              | safe use.                                             |
|              |                                                       |
|              | Phase IV---studies done after the intervention has    |
|              | been marketed. These studies are designed to monitor  |
|              | the effectiveness of the approved intervention in the |
|              | general population and to collect information about   |
|              | any adverse effects associated with widespread use.   |
+--------------+-------------------------------------------------------+
| closeout     | The process by which an OPDIV determines whether all  |
|              | applicable administrative actions and all work        |
|              | required under the award have been completed by the   |
|              | recipient and the awarding office.                    |
+--------------+-------------------------------------------------------+
| cognizant    | The Federal agency that, on behalf of all Federal     |
| agency       | agencies, is responsible for reviewing, negotiating,  |
|              | and approving cost allocation plans, indirect cost    |
|              | rate and similar rates; monitoring non-Federal audit  |
|              | reports; conducting Federal audits as necessary; and  |
|              | resolving cross-cutting audit findings. The cognizant |
|              | agency under applicable cost principles and under OMB |
|              | Circular A-133 may be different for a given           |
|              | recipient.                                            |
+--------------+-------------------------------------------------------+
| competition  | A process in which applications undergo an objective  |
|              | review; the applications are evaluated against        |
|              | established review criteria and scored and rated      |
|              | accordingly.                                          |
+--------------+-------------------------------------------------------+
| competitive  | The initial project period recommended for support    |
| segment      | (up to 5 years) or each extension of a project period |
|              | resulting from a competing continuation award.        |
+--------------+-------------------------------------------------------+
| completion   | The date on which all work under an award is          |
| date         | completed or the date in the NoA (as amended) on      |
|              | which Federal sponsorship ends (i.e., the end of a    |
|              | project period).                                      |
+--------------+-------------------------------------------------------+
| consortium   | A formal agreement whereby a project is carried out   |
| agreement    | by a recipient and one or more other organizations    |
|              | that are separate legal entities. Under the           |
|              | agreement, the recipient must perform a substantive   |
|              | role in the conduct of the planned project or program |
|              | activity and not merely serve as a conduit of funds   |
|              | to another party or parties. Consortium agreements    |
|              | are considered subawards for purposes of this policy  |
|              | statement.                                            |
+--------------+-------------------------------------------------------+
| contract     | A written agreement between a recipient and a third   |
| under a      | party to acquire commercial goods or services.        |
| grant        |                                                       |
+--------------+-------------------------------------------------------+
| construction | A project to support the initial building or major    |
|              | A&R (i.e., large-scale modernization or permanent     |
|              | improvement) of a facility.                           |
+--------------+-------------------------------------------------------+
| consultant   | An individual who provides professional advice or     |
|              | services for a fee, but normally not as an employee   |
|              | of the engaging party. The term "consultant" also     |
|              | includes a firm that provides paid professional       |
|              | advice or services.                                   |
+--------------+-------------------------------------------------------+
| cooperative  | A financial assistance support mechanism used when    |
| agreement    | there will be substantial Federal programmatic        |
|              | involvement. Substantial involvement means that OPDIV |
|              | program staff will collaborate or participate in      |
|              | project or program activities as specified in the     |
|              | NoA.                                                  |
+--------------+-------------------------------------------------------+
| copyright    | > A form of protection provided by the laws of the    |
|              | > United States (Title 17, U.S. Code) to the authors  |
|              | > of "original works of authorship," including        |
|              | > literary, dramatic, musical, artistic, and certain  |
|              | > other intellectual works, including computer        |
|              | > programs. This protection is available to both      |
|              | > published and unpublished works.                    |
+--------------+-------------------------------------------------------+
| cost         | > The breakdown and verification of cost data         |
| analysis     | > proposed in an application budget, including        |
|              | > evaluating specific elements of costs and examining |
|              | > them to determine the necessity, reasonableness,    |
|              | > and allocability of the costs and their             |
|              | > allowability pursuant to the applicable Federal     |
|              | > cost principles and other governing requirements.   |
+--------------+-------------------------------------------------------+
| cost sharing | See "matching or cost sharing."                       |
+--------------+-------------------------------------------------------+
| Departmental | The administrative board responsible for resolving    |
| Appeals      | certain disputes arising under HHS assistance         |
| Board        | programs. The DAB provides an impartial adjudicatory  |
|              | hearing process for appealing certain final written   |
|              | decisions by GMOs. The DAB's jurisdiction is          |
|              | specified in 45 CFR part 16, "Procedures for HHS      |
|              | Grant Appeals Board."                                 |
+--------------+-------------------------------------------------------+
| direct       | A financial assistance support mechanism, which must  |
| assistance   | be specifically authorized by statute, whereby goods  |
|              | or services are provided to recipients in lieu of     |
|              | cash. Direct assistance generally involves the        |
|              | assignment of Federal personnel or the provision of   |
|              | equipment or supplies such as vaccines. This type of  |
|              | financial assistance also is described as             |
|              | "non-monetary assistance."                            |
+--------------+-------------------------------------------------------+
| direct costs | Costs that can be identified specifically with a      |
|              | particular sponsored project, an instructional        |
|              | activity, or any other institutional activity, or     |
|              | that can be directly assigned to such activities      |
|              | relatively easily with a high degree of accuracy.     |
+--------------+-------------------------------------------------------+
| domestic     | A public (including a State or other governmental     |
| organization | agency) or private non-profit or for-profit           |
|              | organization that is located in the United States or  |
|              | its territories, is subject to U.S. laws, and assumes |
|              | legal and financial accountability for funds awarded  |
|              | and for the performance of the grant-supported        |
|              | activities.                                           |
+--------------+-------------------------------------------------------+
| Entity       | A three-part coding scheme of 12 characters used in   |
| Id           | PMS to identify organizations and individuals. The    |
| entification | first character identifies the recipient as an        |
| Number       | organization or an individual. The next 9 characters  |
|              | are the Internal Revenue Service tax number           |
|              | identification (TIN) for organizations or the social  |
|              | security number (SSN) for individuals. The last 2     |
|              | characters are a suffix to provide distinction        |
|              | between organizational entities that are assigned a   |
|              | single EIN and those that have more than one EIN. The |
|              | entities could be subsidiaries, divisions, branches,  |
|              | subdivisions, or other organizational groupings of a  |
|              | major organizational entity.                          |
+--------------+-------------------------------------------------------+
| equipment    | An article of tangible nonexpendable personal         |
|              | property that has a useful life of more than 1 year   |
|              | and an acquisition cost of \$5,000 or more per unit   |
|              | or the capitalization threshold established by the    |
|              | recipient, whichever is less.                         |
+--------------+-------------------------------------------------------+
| excess       | The property under the control of any OPDIV that, as  |
| property     | determined by the head of the OPDIV or designee, is   |
|              | no longer required for its needs or the discharge of  |
|              | its responsibilities.                                 |
+--------------+-------------------------------------------------------+
| exempt       | Tangible personal property acquired, in whole or      |
| property     | part, with Federal funds, where the OPDIV has         |
|              | statutory authority to vest title in the recipient    |
|              | without further obligation to the Federal government. |
+--------------+-------------------------------------------------------+
| expanded     | Operating authorities provided to recipients that     |
| authorities  | waive the requirement for OPDIV prior approval for    |
|              | specified actions.                                    |
+--------------+-------------------------------------------------------+
| expenditure  | For non-construction grants, generally the FSR; and   |
| report       | for construction grants, the Outlay Report and        |
|              | Request for Reimbursement for Construction Programs.  |
+--------------+-------------------------------------------------------+
| expiration   | The date signifying the end of the current budget     |
| date         | period, as indicated in the NoA, after which the      |
|              | recipient does not have authority to obligate grant   |
|              | funds.                                                |
+--------------+-------------------------------------------------------+
| facilities   | See "indirect costs."                                 |
| and          |                                                       |
| ad           |                                                       |
| ministrative |                                                       |
| costs        |                                                       |
+--------------+-------------------------------------------------------+
| Federal cash | A standard form, PMS 272, used to obtain disbursement |
| transactions | information and to monitor cash advanced to           |
| report       | recipients.                                           |
+--------------+-------------------------------------------------------+
| Federal      | The total amount of Federal funds obligated by the    |
| funds        | OPDIV for use by the recipient. This amount may       |
| authorized   | include any authorized carryover of unobligated funds |
|              | from one of the two preceding budget periods.         |
+--------------+-------------------------------------------------------+
| Federal      | A Cabinet-level department or independent agency of   |
| institution  | the executive branch of the Federal government or any |
|              | component organization of such a department or        |
|              | agency.                                               |
+--------------+-------------------------------------------------------+
| Federal      | The amount, generally expressed as a percentage of    |
| share        | total project costs, of financial, property, and      |
|              | other direct assistance provided by the OPDIV, as     |
|              | specified in the NoA.                                 |
+--------------+-------------------------------------------------------+
| federally    | The governing body of an Indian tribe, band, nation,  |
| recognized   | or other organized group or community, including any  |
| Indian       | Native village as defined in Section 3 of the Alaska  |
| tribal       | Native Claims Settlement Act of 1971 (43 U.S.C. 1601  |
| government   | et seq.), that is certified by the Secretary of the   |
|              | Interior as eligible for the special programs and     |
|              | services provided through the Bureau of Indian        |
|              | Affairs and the Indian Health Service.                |
+--------------+-------------------------------------------------------+
| fee          | An amount, in addition to actual, allowable costs,    |
|              | paid to an organization providing goods or services   |
|              | consistent with normal commercial practice. This      |
|              | payment also is referred to as "profit."              |
+--------------+-------------------------------------------------------+
| financial    | Transfer of money, property in lieu of money, or      |
| assistance   | other direct assistance to an eligible recipient to   |
|              | support or stimulate a public purpose authorized by   |
|              | statute.                                              |
+--------------+-------------------------------------------------------+
| Financial    | A standard Federal form, SF 269 (long form) or SF     |
| Status       | 269A (short form), that shows the status of funds in  |
| Report       | non-construction programs and is used to monitor the  |
|              | financial progress of awards. The forms require       |
|              | information on total outlays (Federal and recipient   |
|              | shares) and unobligated balances of Federal funds.    |
|              | The long form is used for grants that involve program |
|              | income.                                               |
+--------------+-------------------------------------------------------+
| flow-down    | The rules governing whether, and how, grant terms     |
| or\          | apply to subawards or contracts under grants.         |
| flow-through |                                                       |
| provisions   |                                                       |
+--------------+-------------------------------------------------------+
| foreign\     | The performance of any significant element or segment |
| component    | of a project outside of the United States, either by  |
|              | the recipient or by a researcher or other individual  |
|              | employed by a foreign organization, whether or not    |
|              | grant funds are expended.                             |
+--------------+-------------------------------------------------------+
| foreign\     | An organization located in a country other than the   |
| organization | United States and its territories that is subject to  |
|              | the laws of that country, regardless of the           |
|              | citizenship of the proposed PI/PD.                    |
+--------------+-------------------------------------------------------+
| for-profit\  | An organization, institution, corporation, or other   |
| organization | legal entity that is organized or operated for the    |
|              | profit or financial benefit of its shareholders or    |
|              | other owners. Such organizations also are referred to |
|              | as "commercial organizations."                        |
+--------------+-------------------------------------------------------+
| full-time\   | The number of days per week and/or months per year    |
| appointment  | representing full-time effort at the                  |
|              | applicant/recipient organization, as specified in     |
|              | organizational policy. The organization's policy must |
|              | be applied consistently, regardless of the source of  |
|              | support.                                              |
+--------------+-------------------------------------------------------+
| funding      | An OPDIV's formally issued announcement of the        |
| opportunity  | availability of Federal funding through one of its    |
| announcement | financial assistance programs. The announcement       |
|              | invites applications and provides such information as |
|              | eligibility and evaluation criteria, funding          |
|              | preferences/priorities, how to obtain application     |
|              | kits, and the submission deadline (see Part I).       |
+--------------+-------------------------------------------------------+
| grant        | A financial assistance support mechanism providing    |
|              | money, property or other direct assistance in lieu of |
|              | money, or both, to an eligible entity to carry out an |
|              | approved project or activity in support of a public   |
|              | purpose and not the direct benefit of the government. |
|              | A grant is used whenever the OPDIV anticipates no     |
|              | substantial programmatic involvement with the         |
|              | recipient during performance of the financially       |
|              | assisted activities.                                  |
+--------------+-------------------------------------------------------+
| gra          | Those activities specified or described in an         |
| nt-supported | application or in a subsequent submission that are    |
| project or   | approved by an OPDIV for funding, regardless of       |
| activity     | whether Federal funding constitutes all or only a     |
|              | portion of the financial support necessary to carry   |
|              | them out.                                             |
+--------------+-------------------------------------------------------+
| high risk    | The term used to describe a recipient who is at risk  |
|              | of financial failure or failure to perform based on a |
|              | history of poor performance or poor business          |
|              | practices, financial instability, or inadequate       |
|              | management systems.                                   |
+--------------+-------------------------------------------------------+
| human        | A living individual about whom an investigator        |
| subject      | obtains data through intervention or interaction with |
|              | the individual or obtains identifiable private        |
|              | information. Regulations governing the use of human   |
|              | subjects extend to use of human organs, tissues, and  |
|              | body fluids from identifiable individuals as human    |
|              | subjects and to graphic, written, or recorded         |
|              | information derived from such individuals.            |
+--------------+-------------------------------------------------------+
| indirect     | Costs that are incurred by a recipient for common or  |
| costs        | joint objectives and cannot be identified             |
|              | specifically with a particular project or program.    |
|              | These costs also are known as "facilities and         |
|              | administrative costs."                                |
+--------------+-------------------------------------------------------+
| i            | An administrative body whose purpose is to protect    |
| nstitutional | the rights and welfare of human subjects recruited to |
| review board | participate in research activities conducted under    |
|              | the auspices of the organization with which it is     |
|              | affiliated. The IRB has the authority to approve,     |
|              | require modifications in, or disapprove all research  |
|              | activities that fall within its jurisdiction.         |
+--------------+-------------------------------------------------------+
| intangible   | This term means property that ordinarily does not     |
| property     | have physical existence. It includes, but is not      |
|              | limited to, copyrights for which assignments of       |
|              | rights are acquired under awards; patents and other   |
|              | intellectual property for which ownership is acquired |
|              | under awards; loans, notes, and other debt            |
|              | instruments (even if considered tangible for other    |
|              | purposes); lease agreements; and stock and other      |
|              | instruments of property ownership. The term excludes  |
|              | copyrights, patents, and other intellectual property  |
|              | that are generated or developed, rather than          |
|              | acquired, under awards.                               |
+--------------+-------------------------------------------------------+
| in           | An organization that identifies itself as             |
| ternational\ | international or intergovernmental and has membership |
| organization | from, and represents the interests of, more than one  |
|              | country, without regard to whether the headquarters   |
|              | of the organization and location of the activity are  |
|              | inside or outside of the United States.               |
+--------------+-------------------------------------------------------+
| invention    | Any discovery that is or may be patentable or         |
|              | otherwise protectable. The term "subject invention"   |
|              | means any invention of an awardee conceived or first  |
|              | actually reduced to practice in the performance of    |
|              | work under a funding agreement, i.e., contract,       |
|              | grant, or cooperative agreement.                      |
+--------------+-------------------------------------------------------+
| key          | The PI/PD and other individuals who contribute to the |
| personnel    | programmatic development or execution of a project or |
|              | program in a substantive, measurable way, whether or  |
|              | not they receive salaries or compensation under the   |
|              | grant.                                                |
+--------------+-------------------------------------------------------+
| local        | A county, municipality, city, town, township, local   |
| government   | public authority (including any public and Indian     |
|              | housing agency), school district, special district,   |
|              | intra-State district, council of governments (whether |
|              | or not incorporated under State law), any other       |
|              | regional or interstate government entity (such as     |
|              | regional planning agencies), or any agency or         |
|              | instrumentality of a local government. The term does  |
|              | not include institutions of higher education and      |
|              | hospitals.                                            |
+--------------+-------------------------------------------------------+
| matching or  | The value of third-party in-kind contributions and    |
| cost sharing | the portion of the costs of a federally assisted      |
|              | project or program not borne by the Federal           |
|              | government. Costs used to satisfy matching or         |
|              | cost-sharing requirements are subject to the same     |
|              | policies governing allowability as other costs under  |
|              | the approved budget.                                  |
+--------------+-------------------------------------------------------+
| misconduct   | See "research misconduct."                            |
| in science   |                                                       |
+--------------+-------------------------------------------------------+
| monitoring   | A process in which a grant's programmatic performance |
|              | and business management performance are assessed by   |
|              | reviewing information gathered from various required  |
|              | reports, audits, site visits, and other sources.      |
+--------------+-------------------------------------------------------+
| n            | A limited period of time beyond the end of the        |
| on-competing | project period, authorized by an OPDIV or a recipient |
| extension    | under an expanded authority, needed to complete       |
|              | project activities.                                   |
+--------------+-------------------------------------------------------+
| non-Federal  | The portion of allowable project costs not borne by   |
| share        | the Federal government.                               |
+--------------+-------------------------------------------------------+
| objective    | An advisory review of discretionary grant             |
| review       | applications conducted by unbiased reviewers with     |
|              | expertise in the programmatic area for which          |
|              | applications are submitted.                           |
+--------------+-------------------------------------------------------+
| obligations  | The amounts of orders placed, contracts and           |
|              | subawards, goods and services received, and similar   |
|              | transactions by a recipient during a budget period    |
|              | that will require payment during the same or a future |
|              | budget period.                                        |
+--------------+-------------------------------------------------------+
| outlays or   | The charges made to the federally sponsored project   |
| expenditures | or program. They may be reported on a cash or accrual |
|              | basis.                                                |
+--------------+-------------------------------------------------------+
| patent       | A property right awarded by the Federal government    |
|              | whereby the government grants the right to exclude    |
|              | others from making, using, or selling the invention   |
|              | for a period of years.                                |
+--------------+-------------------------------------------------------+
| peer review  | A form of objective review, generally required by     |
|              | statute, in which the assessment of scientific or     |
|              | technical merit of applications is carried out by     |
|              | individuals with knowledge and expertise equivalent   |
|              | (peer) to that of the individuals whose applications  |
|              | for support they are reviewing.                       |
+--------------+-------------------------------------------------------+
| pre-award    | Costs incurred prior to the beginning date of the     |
| costs        | project period, in anticipation of an award and at    |
|              | the applicant's own risk, for otherwise allowable     |
|              | costs.                                                |
+--------------+-------------------------------------------------------+
| prior        | Written consent or issuance of an award by the OPDIV  |
| approval     | GMO in response to a written request from the         |
|              | recipient to incur a specific direct cost or take     |
|              | other action that requires such approval (as          |
|              | specified in Part II of the HHS GPS). If the costs or |
|              | other actions are specifically identified in an       |
|              | application, approval of the application, and         |
|              | issuance of an award based thereon, constitutes such  |
|              | authorization. Prior approval for components of       |
|              | indirect costs must be obtained from the cognizant    |
|              | agency or as specified in the applicable cost         |
|              | principles.                                           |
+--------------+-------------------------------------------------------+
| profit       | See "fee."                                            |
+--------------+-------------------------------------------------------+
| program      | Gross income earned by a recipient that is directly   |
| income       | generated by the grant-supported project, program, or |
|              | activity or earned as a result of the award.          |
+--------------+-------------------------------------------------------+
| progress     | Periodic, usually annual, reports submitted by the    |
| report       | recipient and used by the OPDIV to assess progress    |
|              | and, except for the final progress report, to         |
|              | determine whether to provide funding for the budget   |
|              | period subsequent to that covered by the report.      |
+--------------+-------------------------------------------------------+
| project or   | The total allowable costs incurred by a recipient     |
| program      | (and the value of in-kind contributions made by third |
| costs        | parties) in accomplishing the objectives of the award |
|              | during the project period.                            |
+--------------+-------------------------------------------------------+
| project      | The total time for which support of a project has     |
| period       | been programmatically approved. The total project     |
|              | period comprises the initial competitive segment, any |
|              | subsequent competitive segments resulting from a      |
|              | competing continuation award, and any non-competing   |
|              | extensions.                                           |
+--------------+-------------------------------------------------------+
| real         | Land, including land improvements, structures, and    |
| property     | appurtenances, but not movable machinery and          |
|              | equipment.                                            |
+--------------+-------------------------------------------------------+
| reasonable   | A cost whose nature or amount does not exceed that    |
| cost         | which would be incurred by a prudent person under the |
|              | circumstances prevailing when the decision was made   |
|              | to incur the cost.                                    |
+--------------+-------------------------------------------------------+
| recipient    | The organization or individual that receives a grant  |
|              | or cooperative agreement award from an OPDIV and is   |
|              | responsible and accountable for the use of the funds  |
|              | provided and for the performance of the               |
|              | grant-supported project or activity. The recipient is |
|              | the entire legal entity even if a particular          |
|              | component is designated in the NoA. The term includes |
|              | "grantee."                                            |
+--------------+-------------------------------------------------------+
| r            | A payment made to a recipient upon its request after  |
| eimbursement | it makes cash disbursements. Most reimbursement       |
|              | payments are processed through the Payment Management |
|              | System (PMS), the Department's centralized grants     |
|              | payment system.                                       |
+--------------+-------------------------------------------------------+
| research     | A systematic, intensive study intended to increase    |
|              | knowledge or understanding of the subject studied, a  |
|              | systematic study specifically directed toward         |
|              | applying new knowledge to meet a recognized need, or  |
|              | a systematic application of knowledge to the          |
|              | production of useful materials, devices, and systems  |
|              | or methods, including design, development, and        |
|              | improvement of prototypes and new processes to meet   |
|              | specific requirements. Also termed "research and      |
|              | development."                                         |
+--------------+-------------------------------------------------------+
| research     | Fabrication, falsification, or plagiarism in          |
| misconduct   | proposing, performing, or reviewing research, or in   |
|              | reporting research results. Fabrication is making up  |
|              | data or results and recording or reporting them.      |
|              | Falsification is manipulating research materials,     |
|              | equipment, or processes, or changing or omitting data |
|              | or results such that research is not accurately       |
|              | represented in the research record. Plagiarism is the |
|              | appropriation of another person's ideas, processes,   |
|              | results, or words without giving appropriate credit.  |
|              | The term does not include honest error or differences |
|              | of opinion.                                           |
+--------------+-------------------------------------------------------+
| research     | Routine and ancillary services provided by hospitals  |
| patient care | to patients participating in research programs. The   |
|              | costs of these services are normally assigned to      |
|              | individual research projects through the development  |
|              | and application of research patient care rates or     |
|              | amounts (collectively referred to as "rates").        |
+--------------+-------------------------------------------------------+
| significant\ | A threshold that is reached when expenditures in a    |
| rebudgeting  | single direct cost budget category deviate (increase  |
|              | or decrease) from the approved budget amount for that |
|              | budget category for that budget period by a specified |
|              | amount, usually more than 25 percent of the total     |
|              | costs awarded. Significant rebudgeting is one         |
|              | indicator of change in scope.                         |
+--------------+-------------------------------------------------------+
| small        | A business that is independently owned and operated   |
| business     | and not dominant in its field of operation; has its   |
| concern      | principal place of business in the United States and  |
|              | is organized for profit; is at least 51 percent owned |
|              | or, in the case of a publicly owned business, at      |
|              | least 51 percent of its voting stock is owned by U.S. |
|              | citizens or lawfully admitted permanent resident      |
|              | aliens; has, including its affiliates, not more than  |
|              | 500 employees; and meets other regulatory             |
|              | requirements established by the SBA at 13 CFR 121.    |
+--------------+-------------------------------------------------------+
| State        | The government of any State of the United States, the |
| government   | District of Columbia, the Commonwealth of Puerto      |
|              | Rico, any U.S. territory or possession, or any agency |
|              | or instrumentality of a State exclusive of local      |
|              | governments. State institutions of higher education   |
|              | and State hospitals are not considered State          |
|              | governments for purposes of the HHS general           |
|              | administrative requirements for grants and the HHS    |
|              | GPS.                                                  |
+--------------+-------------------------------------------------------+
| stipend      | A payment made to an individual under a fellowship or |
|              | training grant in accordance with established levels  |
|              | to provide for the individual's living expenses       |
|              | during the period of training. A stipend is not       |
|              | considered compensation for the services expected of  |
|              | an employee.                                          |
+--------------+-------------------------------------------------------+
| subaward     | Financial assistance in the form of money or property |
|              | in lieu of money provided under an award by a         |
|              | recipient to an eligible subrecipient (or by an       |
|              | eligible subrecipient to a lower-tier subrecipient).  |
|              | The term includes financial assistance when provided  |
|              | by any legal agreement, even if the agreement is      |
|              | called a contract, but does not include either        |
|              | procurement of goods or services or, for purposes of  |
|              | this policy statement, any form of assistance other   |
|              | than grants and cooperative agreements. The term      |
|              | includes consortium agreements.                       |
+--------------+-------------------------------------------------------+
| subrecipient | An entity that receives a subaward from a recipient   |
|              | or another subrecipient under an award of financial   |
|              | assistance and is accountable to the recipient or     |
|              | other subrecipient for the use of the Federal funds   |
|              | provided by the subaward.                             |
+--------------+-------------------------------------------------------+
| substantive  | The primary project activities for which grant        |
| programmatic | support is provided.                                  |
| work         |                                                       |
+--------------+-------------------------------------------------------+
| supplies     | Personal property other than equipment, intangible    |
|              | property, and debt instruments. The category of       |
|              | "supplies" includes items that could be considered    |
|              | equipment, but do not meet the threshold definition.  |
+--------------+-------------------------------------------------------+
| suspension   | Temporary withdrawal of a recipient's authority to    |
|              | obligate grant funds, pending either corrective       |
|              | action by the recipient, as specified by the OPDIV,   |
|              | or a decision by the OPDIV to terminate the award.    |
|              | This meaning of the term "suspension" differs from    |
|              | that used in conjunction with the debarment and       |
|              | suspension process.                                   |
+--------------+-------------------------------------------------------+
| tangible     | Equipment, supplies, and any other property other     |
| property     | than that defined as intangible property. It also     |
|              | does not include copyrights, patents, and other       |
|              | intellectual property that is generated or developed  |
|              | (rather than acquired) under an award.                |
+--------------+-------------------------------------------------------+
| termination  | Permanent withdrawal by the OPDIV of a recipient's    |
|              | authority to obligate previously awarded grant funds  |
|              | before that authority would otherwise expire,         |
|              | including the voluntary relinquishment of that        |
|              | authority by the recipient.                           |
+--------------+-------------------------------------------------------+
| terms and\   | All legal requirements imposed on a grant by the      |
| conditions   | OPDIV, whether based on statute, regulation, policy,  |
| of award     | or other document referenced in the NoA, or specified |
|              | by the NoA itself. In addition to general terms and   |
|              | conditions, the NoA may include other conditions that |
|              | are considered necessary to attain the award's        |
|              | objectives, facilitate post-award administration,     |
|              | conserve grant funds, or otherwise protect the        |
|              | Federal government's interests.                       |
+--------------+-------------------------------------------------------+
| third-party  | The value of non-cash contributions directly          |
| in-kind      | benefiting a grant-supported project or program that  |
| c            | is provided by non-Federal third parties to the       |
| ontributions | recipient, the subrecipient, or a cost-type           |
|              | contractor under the grant or subgrant without        |
|              | charge. In-kind contributions may be in the form of   |
|              | real property, equipment, supplies and other          |
|              | expendable property, and goods and services directly  |
|              | benefiting and specifically identifiable to the       |
|              | project or program.                                   |
+--------------+-------------------------------------------------------+
| total        | The total allowable costs (both direct and indirect)  |
| project or   | incurred by the recipient to carry out a              |
| program      | grant-supported project or activity. Total project or |
| costs        | program costs include costs charged to the award and  |
|              | costs borne by the recipient to satisfy a matching or |
|              | cost-sharing requirement.                             |
+--------------+-------------------------------------------------------+
| unallowable  | A cost specified by law or regulation, Federal cost   |
| cost         | principles, or term and condition of award that may   |
|              | not be reimbursed under a grant or cooperative        |
|              | agreement                                             |
+--------------+-------------------------------------------------------+
| unliquidated | The amount of obligations incurred by the recipient   |
| obligations  | that has not been paid (for financial reports         |
|              | prepared on a cash basis) or the amount of            |
|              | obligations incurred by the recipient for which an    |
|              | outlay has not been recorded (for reports prepared on |
|              | an accrual basis).                                    |
+--------------+-------------------------------------------------------+
| unobligated  | The portion of the funds authorized by the Federal    |
| balance      | agency that has not been obligated by the recipient.  |
+--------------+-------------------------------------------------------+
| vertebrate   | Any live animal having a backbone or spinal column    |
| animal       | used or intended for use in research, research        |
|              | training, experimentation, biological testing, or     |
|              | related purposes.                                     |
+--------------+-------------------------------------------------------+
| withholding  | An action taken by an OPDIV, after appropriate        |
| of payment   | administrative procedures have been followed, that    |
|              | restricts a recipient's ability to access its grant   |
|              | funds until the recipient takes corrective action     |
|              | required by the OPDIV.                                |
+--------------+-------------------------------------------------------+
| withholding  | A decision by an OPDIV not to make a non-competing    |
| of support   | continuation award within a previously approved       |
|              | project period.                                       |
+--------------+-------------------------------------------------------+
| woman-owned  | A business that is, at least, 51 percent owned,       |
| business     | controlled, and operated by a woman or women.         |
+--------------+-------------------------------------------------------+

# Index

Page references containing an *n* refer to footnotes.

Pages references preceded by B refer to definitions

**A**

Abbreviations list A-1

Abortion funding restriction II-6, II-22

Accelerated expenditures II-45, II-62

Accessibility standards, facilities II-21

Acknowledgment

of Federal
funding\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-3,
II-24

of Federal
support\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-32,
II-73

Activation Notice, fellowship II-110, II-114

Administration for Children and Families I-1

Administration on Aging I-1

Administrative requirements I-4, II-1

definition...................................................................................................\...\...\...\...B-1

fellowships.......................................................................................................II-109

Advances of grant funds, interest earned on II-64

Advertising, costs II-31

Advisory Council on Historic Preservation I-21

Affiliated organization services, cost considerations II-25

Age Discrimination Act of 1975 II-3, II-8

Agency for Healthcare Research and Quality I-1, II-13*n*

Alcoholic beverages, costs II-31

Allocability test, allowability of costs and II-26

allocable cost,
definition..........................................................................................B-1

Allowability of costs II-26, II-30 *et seq*., B-1

financial system
and..............................................................................................II-48

matching or cost
sharing....................................................................................\...\...II-47

*Also* *see* Cost considerations; *specific types of grants, recipients*

Alteration and renovation (A&R). *Also* *see* Construction grants

allowability II-31

definition .B-2

major A&R II-31, II-33, II-102, II-103, II-118, B-4

minor A&R II-31,II-103, II-118

prior-approval requirements II-50

public policy requirements II-4, II-21

Animal welfare I-33, II-3, II-12, II-61

Animals, costs II-32

Appeals procedures

adverse determinations and II-97

alternative dispute resolution II-98

Departmental Appeals Board II-97, III-2, B-4

Applicable credits II-30

Application

budget............................................................................................................\....I-22

definition B-2

false, fictitious, or fraudulent information in I-8

types of applications I-15 *et seq*.

> Application process
>
> application forms I-17
>
> application receipt points and deadlines I-26
>
> application submission I-26

eligibility I-11

Grants.gov I-26

*Also* *see* *specific types of grants, recipients*

Application review process

disposition of applications I-31

objective review I-30 *et seq*., B-7

review criteria I-30

review responsibilities I-6

peer review I-30, B-8

use of application information I-28

Approved budget, definition B-2

Architectural Barriers Act II-4, II-21

Assistant Secretary for Planning and Evaluation I-1

Assurances

animals I-33, II-12, II-13

civil rights I-32

definition B-2

general I-12, I-18, I-19

> human subjects I-33, II-9, II-10, II-11
>
> subrecipients II-81

Audiovisual activities, allowability II-32

Audit costs II-32

Audit requirements II-90

for-profit organizations II-90, II-124

foreign organizations, international organizations, and domestic grants
with\
foreign components II-90, II-117

recipients, domestic, non-profit II-90

subawards (including consortium agreements) II-82

Authorized organizational representative (AOR) role and
responsibilities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-6

Award, definition B-2

Award instruments, types of ii

Awarding office, definition B-2

**B**

Bad debts, costs II-32

Bayh-Dole Act of 1980 II-71, II-74 *et seq*.

*Also see* Inventions and patents

Bid and proposal costs II-32

Bonding, costs II-32

Bonus payments II-41

Books and journals, costs II-32

> Budget
>
> changes in II-50, II-105

approved budget, definition B-2

NoA and I-36

significant rebudgeting II-55, II-57, B-9

Budget periods

about I-15, I-35, I-36

definition B-2

*Also see* Funding

Building acquisition

costs................................................................................................................II-36

prior-approval
requirements....................................................................................II-51

Business management
review..............................................................................\...\...\...\...I-32

**C**

Career awards

eligibility I-12

facilities and administrative costs and I-24

prior-approval requirements for retention of funds II-52

Carryover of unobligated balances

definition............................................................................................................B-2

expanded authority
and..........................................................................................II-60

prior-approval
of..................................................................................................II-52

requests
for......................................................................................................\...II-58

Cash requests I-37, I-38

CASHLINE/ACH I-38

Catalog of Federal Domestic Assistance I-9

Centers for Disease Control and Prevention I-2, I-3, II-6, II-9,
II-13*n*, II-16

Centers for Medicare and Medicaid Services I-2

Central Contractor Registration I-26

Certificates of confidentiality II-3, II-19

Change of grantee organization

definition............................................................................................................B-3

prior-approval
for.................................................................................II-51,
II-53 *et seq*.

foreign or international organizations
and..................................................................\...I-119

relinquishing
statement\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-53,
II-54, II-55, II-83, II-84

Changes in project and budget

*See* Prior approval; Expanded authorities

Child-care costs II-32

Children

human subjects
treatment..............................................................................\...II-10,
II-12

inclusion as subjects in clinical research I-19

Pro-Children Act ....II-5, II-23

toys and nursery items, costs II-43

Citizenship requirements I-12

Civil False Claims Act I-8

Civil rights

foreign organizations
and......................................................................................II-117

Office
for...........................................................................................................III-2

pre-award
requirements.......................................................................................\.....I-32

Civil Rights Act of 1964 ......II-3, II-8

*Also see* Limited English Proficiency

Clean Air and Clean Water Act II-21

> Clinical research
>
> drugs used in, costs II-34
>
> inclusion of children as subjects in I-19
>
> inclusion of women and minorities as subjects in I-19
>
> investigational new drug applications and II-19

recombinant DNA and human gene transfer II-16

transplantation of human fetal tissue II-18

Cloning. *See* Human embryonic stem cell research and cloning

Closeout

about...............................................................................................................II-94

definition............................................................................................................B-3

reporting
requirements............\...............................................................\......\....II-94
*et seq.*

Cognizant agency B-3, II-40, II-50

Communications, costs II-33

Compensation

> consultants II-33
>
> Federal employees II-35, II-123 *et seq*.
>
> fringe benefits and II-35
>
> general II-40 *et seq*.
>
> fellows II-113
>
> sabbatical leave and II-40
>
> students II-35, II-42
>
> *Also see* Salaries and wages

Competing continuation application

additional funding
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-56

description\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-16

pre-award costs
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-38,
II-51, II-60

reporting in relation
to\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-88,
II-95

Competitive segment, definition B-3

Concurrent benefits II-113

Conference grants

about II-98

acknowledgment of support and disclaimer II-99

allowable costs II-35, II-37, II-100 *et seq*.

funding II-99

intellectual property, use of II-101 *et seq*.

representation requirements II-99

unallowable costs I-23, II-31, II-35, II-101

use of logos II-99

Confidentiality

certificates of II-3, II-19

of patient/client records II-4, II-22

of subjects' identity II-5, II-12

Conflict of interest,

consultant payments
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-33

financial\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-4,
II-14 *et seq*.

financial and SBIR/STTR Phase
I\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-130

financial and
subawards\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-82

payments to or on behalf of Federal
employees\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-123,
II-124

Conformance test, allowability of costs and II-27

Consistency test, allowability of costs and II-27

> Consortium agreement

allowability
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-42

applicability of HHS GPS
to\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....iii

definition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....B-4

recipient responsibilities
for\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-14,
II-14, II-15, II-78, II-81 *et seq*.

SBIR/STTR
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-129

*Also see S*ubawards; Subrecipients

Construction. *Also* *see* Construction grants

allowability of costs II-33

definition B-4

Construction grants

about II-102

allowable costs and activities II-34, II-103 *et seq.*

equal employment opportunity, labor standards, and other requirements
II-106 *et seq.*

funding II-103

prior-approval requirements II-52, II-53, II-55, II-105

procurement requirements for services under II-106

public policy requirements I-20, I-21 *et seq*., II-3 *et seq*., II-21

reporting under II-88, B-5

unallowable costs and activities I-23, II-105

use and disposition of facility II-69, II-109

Consultant, definition B-4

Consultant services, costs II-33--II-34, II-100

Consumer/provider boards, costs of participation II-34

Contingency funds, costs II-34, II-104

Contract under a grant

costs II-42

definition B-4

flowdown of requirements *iii*, II-2, II-3, B-6

prior-approval requirements II-59, II-60, II-79 *et seq*.

requirements for written agreement II-79

Contract Work Hours and Safety Standards Act II-107

Controlled substances II-4, II-20

Cooperative agreement

definition ii, B-4

usage iii

Copyright. A*lso* *see* intangible property

> definition B-4
>
> conference grants and II-101
>
> fellowships II-74
>
> publications II-73
>
> data, rights in II-72
>
> royalties and licensing fees/program income from II-62 *et seq*.,
> II-74
>
> SBIR/STTR grants and II-131

Cost analysis I-33, B-4

Cost considerations

accelerated expenditures II-45, II-62

affiliated organization services II-46

allocation of costs II-45

allowability of costs II-26, II-30

applicable credits II-30

cost overruns II-45

cost principles II-25

cost transfers II-44, II-62

delayed expenditures II-45, II-62

direct costs II-27

indirect costs, reimbursement of II-27 *et seq*.

selected items of cost (Exhibit) II-30 *et seq*.

*Also* *see* *specific types of grants, recipients*

Cost principles for

educational institutions (OMB Circular
A-21)\...\...\...\...\...\...\...\...\...\...\....II-25, II-28, II-29,
II-35, II-41, II-42

for-profit organizations (48 CFR subpart
31.2)\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-125

hospitals (45 CFR part 74, Appendix
E)\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-25,
II-125

non-profit institutions (OMB Circular
A-122)\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-25,
II-25*n*; II-32, II-34, II-40

State, local, and Indian tribal governments\
(OMB Circular
A-87)\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-24,
II-25, II-25*n,* II-27, II-27*n*, II-34, II-121

Cost sharing. *See* Matching or cost sharing

Cost transfers II-44, II-62

Criminal False Claims Act I-8

Customs and import duties, costs II-34

**D**

Data. *See* Copyright; Research data and results

Deadlines. *See* Application process

Debarment\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
\...\...\...\.....I-13 *et seq*., II-94

drug-free workplace
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-22

foreign
organizations\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-117

labor standards
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-108

research misconduct
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-14

*Also see* Suspension and debarment

Debt

bad debts, costs II-32

delinquency on Federal debt I-14

collection as enforcement action II-96

instruments II-68

> Degree requirements II-110

Delayed expenditures II-45, II-62

Depreciation or use allowances II-34

land or building acquisition
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-36

rental or lease of facilities or equipment
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-39

valuation of donated supplies, equipment, space, or
land\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-48

Direct costs, definition II-27, B-4

Discretionary grants contrasted with mandatory grants I-3

Domestic conference, definition II-98

Domestic organization

civil rights assurance and I-32

definition B-4

payment for fellows at II-110

prior-approval requirements for foreign component added to grant II-51,
II-119

Donor costs II-34

Drug-free workplace II-4, II-22

foreign organizations
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-118

Drugs

costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-34

investigational new drug
applications\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-19

controlled substances and Drug Enforcement
Administration\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-20

Dues or membership fees

conference grants
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-101

costs
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-34

DUNS number
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-26,
II-83

**E**

Education Amendments of 1972, Title IX II-4, II-8

Educational institutions, cost principles for II-25

> Educational loans or GI bill II-113

Eligibility

citizenship
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-11

general\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-11
*et seq*.

grants to Federal institutions II-120

matching or cost sharing and I-24

non-profit
organizations\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-11

SBIR and STTR II-127, II-128

voluntary exclusion from I-13

Enforcement actions

about II-92

debt collection II-96

modification of award terms II-92

suspension or termination II-93

withholding a non-competing continuation award II-93

Entertainment costs II-34

Entity Identification Number (EIN) II-83, B-5

Environmental impact

construction grants and I-19 *et seq*.

costs related to II-37, II-105

Equal employment opportunity requirements, construction grants II-106

Equipment. *Also see* Alteration and renovation; Property; Supplies

accountability II-121

change of grantee and II-54 *et seq*.

costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-35,
II-100, II-101, II-102, II-103, II-105

definition B-5

insurance on II-36

management system for II-66 *et seq*.

prior-approval for purchase of II-51, II-56, II-60

rental, costs of II-39, II-79

sale of property acquired and proceeds from sale II-63, II-64, II-67,
II-69

tax on purchase of, allowability II-42

trailers and modular units II-43

valuation of donated II-47 *et seq.*

Executive Order 12372 I-27

Exempt property II-66, B-5

Expanded authorities

about II-59

carryover of unobligated balances II-60

cost-related prior approvals II-60

definition B-5

extension of final budget period of project period II-60

foreign organizations and II-119

pre-award costs II-60

transfer of performance to third party II-60

Expenditures

accelerated and delayed II-45, II-62

financial management requirements and II-61 *et seq*.

outlays or, definition B-8

reports of II-86 *et seq*., II-102

Schedule of Expenditures of Federal Awards II-91

Extensions

additional OPDIV funding and II-51, II-56

final budget period without additional OPDIV funding II-51, II-57, II-60

**F**

Facilities acquisition, alteration and renovation, and construction.
*See* Alteration and renovation; Building acquisition; Construction;
Construction grants

Facilities and administrative costs. *See* Indirect costs

Federal employees

copyright and II-101

inventions and II-122

payments to/on behalf of II-35, II-121, II-122 *et seq*.

Federal institution, grants to

allowable
costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-121

definition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
B-5

eligibility and
certification\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-120

equipment
accountability\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-121

inventions\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-122

payment\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-120

procurement
requirements\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-122

reporting
requirements\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-122

Fee (or
profit)\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-36,
II-30, II-125, II-130, B-5

Fellowships (Ruth L. Kirschstein National Research Service Awards)

Activation Notice II-114

allowable costs II-111 *et seq*.

award notice II-110

changes in project/activity II-115

compensation II-113

concurrent benefits II-113

consecutive support II-116

copyright of material II-116

degree requirements II-110

disposition of professional fees II-117

educational loans or GI bill II-113

eligibility I-12

employee benefits II-112

Federal laboratories, individuals training at II-110

financial reporting II-115

Form 1099 II-114

indirect costs I-23

initiation of support II-110

institutional allowance II-110, II-111 *et seq.*II-115, II-116, II-121

inventions and patents II-116

Payback Agreement II-110, II-115

payment II-110

period of support II-110

professional fees II-117

progress reports II-115

reporting requirements II-114

stipend supplementation II-112

stipends, taxability of II-113

Termination Notice II-115

termination of award II-116

transfers II-115

travel to foreign training sites II-112

tuition and
fees\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-112

Final Invention Statement and Certification II-96

Financial conflict of interest

general\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-4,
II-7, II-14 et seq.

SBIR/STTR
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-130

subawards
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-82

Financial management system II-61 *et seq*.

Financial reporting

Financial Status Report II-86 *et seq*., II-94, B-6

conference grants II-102

fellowships II-115

foreign organizations II-118

Fines and penalties II-35

Flood Disaster Protection Act of 1973, flood insurance and II-4, II-21

Food and Drug Administration I-2, I-3, II-13*n,* II-18 *et seq.*

For-profit organization, grants to

> about II-124

allowable costs II-125

audit II-125

definition B-6

intellectual property II-125

profit or fee under II-125

*Also see* SBIR and STTR programs

Foreign component \...B-6

Foreign countries, activities
in\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-3,
II-24, II-101

Foreign
organization\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....B-6

*Also see* Grants to foreign organizations, international organizations,
and domestic grants with foreign components

Freedom of Information Act (FOIA) I-29

Fringe benefits, costs II-35, II-49, II-123

Full-time appointment B-6

> Funding
>
> acknowledgment of Federal funding/support II-3, II-24, II-99

availability of information about I-10

budget period and project period I-35 *et seq.*

fellowships II-110

conference grants II-99

construction grants II-103

grants to foreign organizations, international organizations, and
domestic grants with\
foreign components II-118

needing for additional II-51, II-56

NoA and I-34

prior-approval requirements II-105

Funding opportunity announcement

about\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-10,
B-6

EO
12372\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-27

matching or cost sharing

review
criteria\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-31

Fundraising costs II-35

**G**

GI Bill. *See* Educational loans or GI bill

Grant

> definition B-6
>
> usage iii

Grant appeals procedures. *See* Appeals procedures

Grant-supported project or activity B-6

Grantee. *See* Recipient

Grants.gov

Grants.gov
FIND\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-9,
I-10

Grants.gov
APPLY\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-17,
I-26

Grants Management Officer (GMO) role and
responsibilities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-5

Grants Management Specialist (GMS) role and responsibilities .I-5

Grants to foreign institutions, international organizations, and
domestic grants with foreign components

about II-117

allowable costs II-118

audit II-119

eligibility II-120

indirect costs I-24

funding II-118

payment II-118

prior-approval requirements II-119

public policy and requirements II-117

subawards II-119

**H**

Handicapped individuals

facility accessibility standards II-21

Rehabilitation Act of 1973 II-8

Hatch Act II-4, II-8

Hazardous waste disposal, costs II-35

Health and Human Services, Department of (HHS)

points of contact III-1 *et seq*.

roles and responsibilities I-6

Health and safety standards and regulations II-23

Health insurance for fellows II-112

*Also see* Institutional allowance for fellowships

Health Insurance Portability and Accountability Act (HIPAA) II-4, II-22

Health Resources and Services Administration I-2, II-13*n*

Historic properties and archeological sites

allowable
costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-34,
II-104

protection
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-21
*et seq*., II-4

Honoraria II-35, II-101

Hospitals

allowable
costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-36,
II-37, II-40

cost
principles\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-25,
II-125

*Also see* Research patient care costs

Human embryonic stem cell research and cloning II-4, II-16

Human fetal tissue

research
on\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-6,
II-17

transplantation
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-18

Human gene transfer research II-5, II-16

Human Research Protections, Office for I-6, I-33, II-9 *et seq*., III-1

Human subjects

definition B-6

grants to for-profit organizations and II-125

protection of II-5, II-9 *et seq*.

**I**

Incentive payments, costs II-35, II-41

Inclusiveness in research design, requirements for I-19

Indemnification of third parties II-35, II-51

Independent research and development costs II-36, II-125, II-130, II-131

Indian Health Service I-2, I-3, II-120

Indian tribal governments

administrative requirements
for\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-4

allowable costs
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-24,
II-37, II-40

cost principles
for\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-35

Executive order 12372
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-27

federally recognized,
definition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....B-5

interest
accountability\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-64

Indirect costs

about\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-23,
I-24, I-36, I-37, II-27

definition B-6

conference grants I-23, II-101

construction grants I-23

Federal institutions I-23, II-121

foreign and international organizations I-24, II-119

fellowships I-23

prior approval II-50

reimbursement II-27 *et seq.*

SBIR and STTR programs II-130 *et seq.*

training awards I-24

Information availability

access to research data II-72 *et seq*., II-77 *et seq*.

Freedom of Information Act I-28

Privacy Act and I-30

Information sources, general I-9

Initiation of support,
fellowships\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-110

In-kind contributions. *See* Third-party in-kind contributions

Institutional allowance, fellowships II-111 *et seq.*

Institutional Animal Care and Use Committee (IACUC) I-19, I-33, II-3,
II-12

Institutional Review Board (IRB)

> financial conflict of interest and II-15
>
> human subjects protection and II-11
>
> just-in-time procedures and I-33

Insurance

construction grants II-104

costs II-36

flood insurance II-4, II-21

health insurance II-112

real property II-70

> Intangible property B-7
>
> Intellectual property
>
> conference grants II-101
>
> fellowships II-116

for-profit organizations II-125

Federal institutions II-122

> general II-71 *et seq*.

SBIR and STTR programs II-131

subawards and II-82

*Also see* Intangible property

Interest

costs II-36

earned on advances of grant funds II-64

International conference, definition II-98

> International organization B-7

*Also see* Grants to foreign organizations, international organizations,
and domestic grants with foreign components

Inventions and patents. *Also* *see* Bayh-Dole Act of 1980

costs II-36

invention reporting compliance responsibilities (exhibit) II-75 *et
seq*.

fellowships II-116

Final Invention Statement and Certification II-53, II-77, II-96

royalties and licensing fees from II-74

Investigational new drug (INDs) applications/investigational device
exceptions (IDEs) II-5, II-18, II-19

**J**

Just-in-time procedures, in pre-award process I-19, I-32, I-33

**K**

Key personnel

definition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...B-7

prior
approval\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-7,
II-14, II-51, II-56

**L**

Labor standards, construction grants II-107

Laboratory Animal Welfare, Office of (OLAW) II-12, II-13, III-1

Land acquisition, costs II-36, II-105

Leave costs II-36, II-40

Legal services, costs II-36

Letters of intent I-16

Library services, costs II-36

Licensing

costs II-36

fees from copyrights, inventions, and patents II-74

Limited English proficiency, nondiscrimination II-5, II-24

Liquidated damages provisions, construction grants II-108

Lobbying

appropriated funds and I-15

certification I-15

costs II-36

disclosure statement II-86

**M**

Management systems and procedures

assessment in pre-award process I-32

financial management system II-61 *et seq.*

procurement system II-78 *et seq.*

property management system II-65 *et seq*.

> Matching or cost sharing

about\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-24
*et seq*., II-47

definition B-7

program income and II-49, II-63

valuation of contributions II-47 *et seq.*

Meals, costs II-37, II-100

Membership fees. *See* Dues or membership fees

Minorities

conferences and representation in II-99

contracting with minority-owned firms for goods and services II-80

inclusion as subjects in clinical research I-19

Modernization I-33, II-102 *et seq*.

*Also see* Construction

Monitoring\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-85,
B-7

Moving, costs. *See* Recruitment costs; Relocation costs; Transportation
of property

Multiple Project Assurances (MPAs) II-110*n*

**N**

National Environmental Policy Act (NEPA) I-20, II-5, II-37, II-105

National External Audit Review Center II-91

National Historic Preservation Act I-21 *et seq*., II-4, II-32, II-104

National Institutes of Health *ii*, I-2, I-3, II-6*n,* II-13*n*

National Register of Historic Places I-21, II-31

New application I-15

*NIH Guidelines for Research Involving Recombinant\
DNA Molecules* II-5, II-9, II-16

Non-competing continuation

application\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-16,
I-36, II-88

award\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-36,
II-38, II-86, II-88, II-89, II-93, II-97

*Also see* Withholding of support

Non-Competing Grant Progress Report (PHS 2590)

*See* Non-competing continuation application; Progress report

Non-profit institutions, cost principles for II-25

Nonexempt property, administrative requirements II-66, II-67

Non-segregated facilities requirement, construction grants II-107

Notice of Award (NoA)

about I-34 *et seq*.

acceptance I-35

budget and funding I-36

budget period and project period I-35 *et seq.*

fellowship II-110

terms and conditions I-34, I-35, I-37

Notice of Federal Interest II-70, II-104

Nursery items, costs II-43

**O**

Objective review I-30 *et seq*., II-54, B-7

Office of the Inspector General I-7, II-92, III-1

Office of Management and Budget (OMB) Circulars

A-21\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-25,
II-28, II-29, II-35, II-41, II-42

A-87\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-24,
II-25, II-27, II-34

A-102\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-4

A-110\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-4

A-122\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-25,
II-32, II-34, II-40

A-133\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-32,
II-90 *et seq.*, II-119, II-120, II-125 *et seq*., III-1

Office of Public Health and Science I-3, II-6*n*, II-13*n*

Order of precedence II-1

Overtime. *See* Salaries and wages

**P**

Paperwork Reduction Act I-8, II-84 *et seq.*

Patents. *See* Inventions and patents

Patient records, confidentiality of II-4, II-22

PATRIOT
Act\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-6,
II-9

Payback Agreement,
fellowships\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-115

> Payment
>
> about I-37 *et seq*.

cash requests I-38

CASHLINE/ACH I-38

Federal institutions II-121

fellowships II-110

foreign institutions II-118

interest earned on advances of grant funds II-64

reimbursement I-37, I-38, B-8

SMARTLINK II/ACH I-38

Payroll distribution II-40 *et seq.*

Peer review. *See* Objective review

Pension plan costs II-37

*PHS Policy on Humane Care and Use of Laboratory Animals* I-33, II-12,
II-31

Physical destruction insurance, real property II-70, II-104

> Pre-applications I-16
>
> Pre-award activities
>
> cost analysis I-33, B-4

just-in-time procedures I-19, I-33

management systems assessment I-33

Pre-award
costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-38,
II-104, B-7

prior approval
and\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-51,
II-60

Preservation of Open Competition and Government Neutrality toward
Government Contractors' Labor Relations on Federal and Federally Funded
Construction Projects (EO 13202) II-107

> Principal Investigator (PI)/Program or Project Director

change in status and prior approval II-56

roles and responsibilities I-6

Principles for Determining Costs Applicable to Research and Development
under Grants and Contracts\
with Hospitals II-25

> Prior-approval requirements
>
> about II-49 *et seq*.

additional funding II-56

alteration and renovation II-31

application approval and II-30, II-49

capital expenditures II-60

carryover of unobligated balances II-52

change in grantee organizational status II-53--II-55

change in scope II-55

change of grantee organization II-53 *et seq.*

changes in status of PI/PD and key personnel II-56

conference grants and II-99

construction grants II-105 *et seq*., II-108

definition B-8

expanded authorities II-59 *et seq.*, B-5

extension of project period II-57, II-60

foreign grants and II-119

OPDIV prior approval, summary of actions requiring (exhibit) II-50 *et
seq*.

pre-award costs II-51, II-60\
prior approval, definition II-50, II-58

requests for II-58

research patient care II-39, II-51

significant rebudgeting II-55, II-57

transfer of substantive programmatic work II-57

*Also see* Cost considerations

Privacy Act I-30

Pro-Children Act II-5, II-23

Procurement requirements

construction grants II-106

for grants to Federal institutions II-122

system standards II-78

Professional fees, disposition of fellowships II-117

Profit. *See* Fee

Program Director. *See* Principal Investigator/Program or Project
Director

Program Fraud and Civil Remedies Act I-8

> Program income
>
> accountability and use of II-62 *et seq*.
>
> definition B-8

grants to for-profit organizations II-64

reporting II-64

Project Officer/Program Official (PO) role and responsibilities I-5

> Progress reports
>
> conference grants II-102
>
> definition B-8
>
> Federal institutions II-122
>
> fellowships II-115
>
> final progress report II-95

requirements I-36, II-86, II-88

Project Director. *See* Principal Investigator/Program or Project
Director

Project period I-15, I-35 *et seq*., B-8

extensions
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-57,
II-60

conference
grants\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-99

construction
grants\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-103

Property management requirements II-65 *et seq*.

Public disclosure

conference materials II-102

environmental impact I-20

intellectual property II-101

Public Health Security and Bioterrorism Preparedness and Response Act
II-5, II-9

Public policy requirements

about I-18, II-2

determining applicability/inclusion (exhibit) II-3 *et seq*.

grants to for-profit organizations II-125

grants to foreign organizations, international organizations, and
domestic grants with foreign components II-117

in pre-award process I-18 *et seq*.

SBIR and STTR programs II-130

Public relations costs II-38

Publication

about II-73

conference grants II-99, II-101, II-102

costs II-38, II-100

fellowships II-116

**R**

Real estate appraisals II-69

Real property

acquisition, use, and management of II-68 *et seq.*

definition B-8

insurance requirements II-70

notice of Federal interest in II-70

disposition II-69

Reasonableness test, allowability of costs and II-26

Recipient. *Also* *see* Grantee

> definition B-9

staff responsibilities I-6 *et seq.*

> usage *iii*

Recombinant DNA II-5, II-9, II-16

Record retention and access II-89

conference
grants\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-102

construction
grants\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-106

Recruitment costs II-38

Registration fees (conferences/symposiums/seminars) II-38, II-100

Rehabilitation Act of 1973 II-5, II-8

Reimbursement

of indirect costs. *See* Indirect costs

method of
payment\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
I-37, I-38

*Also see* Enforcement actions

third-party\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-26

Relinquishing statement. *See* Change of grantee

Relocation assistance. *See* Uniform Relocation Assistance and Real
Property Acquisition Policies Act

Relocation costs II-39

Rental or lease of facilities and equipment

costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-39,
II-79, II-100

matching or cost sharing
contribution\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-47
*et seq*.

Reporting requirements

about\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-86
*et seq.*

audit\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-90
*et seq.*, II-119, II-125

closeout and final reports II-94

conference grants II-102

> inventions(and exhibit) II-75 *et seq*., II-96

fellowships II-114

financial (expenditure) reports II-86, II-94

Federal institutions II-122

lobbying disclosure II-86

overdue reports II-89

program income II-64, II-74

progress reports II-88, II-95

Public Health
System\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-27

research misconduct II-13

> Research data and results
>
> access to II-72
>
> sharing II-77
>
> subawards and II-78

Research design requirements, inclusiveness in I-19

Research Integrity, Office of II-13, II-14, III-1

Research misconduct II-5, II-13, B-9

Research patient care

allowability of costs II-39, II-1-1, II-119

definition B-9

prior approval and II-51, II-56, II-60

rate\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...I-25

Research tools, sharing of II-77

Reserve funds II-39

Resource Conservation and Recovery Act II-6, II-24

Responsibility of Applicants for Promoting Objectivity in Research for
which\
PHS Funding is Sought (42 CFR part 50, Subpart F) II-4, II-14

Review Administrator I-6

Revised (amended) application I-16

Revocable license agreement II-68

Royalties and licensing fees from copyrights, inventions, and patents
II-74

**S**

Sabbatical leave, costs II-40

Safe Drinking Water Act II-6, II-21

Safety. *See* Health and safety standards and regulations II-23

Salaries and wages

students, compensation of II-42

costs II-40 *et seq.*

> dual appointment payments II-41

disposition of unclaimed wages, construction grants II-108

payroll distribution systems II-40

Sale

equipment and
supplies\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-64,
II-67

real
property\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-69

Schedule of Expenditures of Federal Awards II-91

Scientific meetings. *See* Conference grants

Scope, change in and prior approval of\
I-16, II-51, II-52, II-54, II-55 *et seq*., II-57, II-60, II-99, II-105,
II-119

Seat belt use II-6, II-24

Service charges, costs II-42

Severance pay, costs II-42

Significant rebudgeting II-55, II-57, B-9

Single Project Assurances (SPAs) 59*n*

Small Business Innovation Research and Technology Transfer Programs
(SBIR and STTR)

about II-126

data sharing requirements II-132

differences between SBIR and STTR II-127

Fast-track application process II-127

indirect costs II-130

intellectual property II-131

market research II-131

minimum level of effort II-129

place of performance II-129

profit or fee II-130

public policy requirements II-130

small business concern, definition and
qualification\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-128

SMARTLINK II/ACH I-38

Smoke-free environment

Pro-Children Act and II-6, II-23

workplace\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...II-6,
II-23

Standards of conduct II-7

Standards of Privacy of Individuals Identifiable Health Information
(HIPAA) (Privacy Rule) II-4, II-22

State, local, and Indian tribal governments

cost principles II-25

payroll distribution II-40

pension plan, costs II-37

State government, definition B-9

Uniform Administrative Requirements for Grants and Cooperative\
Agreements I-4

Statement of Miscellaneous Income (IRS Form 1099) II-114

Sterile needle/syringe distribution restriction II-6, II-22

> Stipends
>
> costs II-42, II-111
>
> definition B-9

training allowance and prior approval II-52

supplementation II-113

taxability II-114

Students, compensation of II-42, II-113

Subawards (including consortium agreements)

> about II-81 *et seq.*
>
> approval authorities II-59

audit II-90

cost principles II-25

costs II-42

definitions B-4, B-9

financial conflict of interest II-15

flowdown of requirements *iii*, II-2, II-3, B-6

foreign II-119

intellectual property II-64, II-74

public policy requirements II-117

personal property II-65

subrecipient B-10

terms and conditions I-15, II-63, II-64

transfer of performance to third party by II-55, II-60

written agreement II-81

Subject costs. II-44, II-123

*Also see* Research patient care costs

Submission of applications

application forms I-17

confidentiality of information I-28

Grants.gov APPLY I-26

receipt points and deadlines I-26 *et seq*.

Substance Abuse and Mental Health Services Administration I-3

> Supplemental
> application\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....I-16
>
> Supplies. *Also see* Equipment

costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-42,
II-100

definition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...B-10

sale
of\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-67

valuation of
donated\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-47

Surveys\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....II-84

Suspension (post-award). *Also see* Debarment and suspension

costs II-43

definition B-10

enforcement actions II-93

**T**

Taxability of stipends II-113

Technology transfer policy. *See* Bayh-Dole Act of 1980; Inventions and
patents

> Termination
>
> costs II-43

definition B-10

enforcement actions II-93

Termination Notice, fellowships II-115

Terms and conditions of award. *Also see* Cost considerations; Notice of
Award; Payment; Pre-award activities; Public policy requirements

definition B-10

modification of award terms, enforcement actions II-92

overview *i,* I-37

prior-approval requirements for deviation from II-1, II-51

Third-party in-kind
contributions\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....I-25,
II-47 *et seq*., B-10

Third-party
reimbursement.......................................................................................\....I-26

Title insurance II-70, II-104

Total project or program costs B-10

Trailers and modular units, costs II-43

Training allowances prior-approval requirements for transfer of amounts
II-43

Transfer of funds between construction and nonconstruction work,
prior-approval requirements II-52

Transfers, fellowships II-115

Transplantation of human fetal tissue, research on II-6, II-18

Transportation of property, costs II-43

Travel

costs II-43

to foreign training sites II-44

institutional allowance for II-112

Tuition and fees

under
fellowships\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-112

remission\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....II-42

**U**

Uniform Relocation Assistance and Real Property Acquisition\
Policies Act I-22

Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) II-9

Unobligated balances. *See* Carryover of unobligated balances

U.S. air flag carriers II-6, II-44

Use allowances II-34, II-39, II-48

**V**

Vertebrate animals. *See* Animal welfare

**W**

Wetlands protection I-22, II-5

Withholding of payment II-89, II-96, B-10

Withholding of support

definition B-11

enforcement actions II-93

Women

contracting with women's business enterprises for goods and services
II-80

inclusion as subjects in clinical research I-19

[^1]: As indicated under "Applicability," the National Institutes of
    Health (NIH) maintains its own Grants Policy Statement. While the
    requirements of both policy statements are equivalent, the NIH GPS
    addresses only research and research-related matters as well as
    requirements that apply only to NIH.

[^2]: This HHS GPS is issued as a preliminary step by HHS to standardize
    and streamline award terms and conditions. Once there are
    government-wide changes under the Federal Financial Assistance
    Management Improvement Act of 1999, 31 U.S.C. 6101 note, HHS will
    use this document to reflect those changes.

[^3]: Currently, the HHS implementation of OMB Circular A-110 continues
    to be 45 CFR part 74 even with the publication of A-110 in Title 2
    of the CFR (2 CFR part 215).

[^4]: The responsible DCA office generally is determined on the basis of
    geographical location.

[^5]: The standard government-wide format was promulgated by the Office
    of Federal Financial Management, OMB, on June 23, 2003 (68 FR
    37370).

[^6]: Section 1611 of Title 2 of the U.S.C. prohibits non-profit
    entities organized under (501)(c)(4) of the Internal Revenue Code
    that engage in lobbying activities from receiving Federal grants.

[^7]: Title 8 Section 1101(a)(29) of the U.S.C. includes an additional
    criterion that is not applicable to this eligibility determination.

[^8]: Consistent with the OMB guidance on debarment and suspension in 2
    CFR part 180, the regulations at 45 CFR part 76 will be superseded,
    for HHS, by 2 CFR part 376.

[^9]: The information contained in the Excluded Parties Listing System
    is available in printed and electronic formats. The printed version
    is published monthly. Copies may be obtained by purchasing a yearly
    subscription from the Superintendent of Documents, U.S. Government
    Printing Office, Washington, DC 20402, or by calling the Government
    Printing Office Inquiry and Order Desk at 202-783-3238. The
    electronic version can be accessed on the Internet
    ([http://www.epls.gov](http://www.epls.gov/)).

[^10]: This form may continue to be used in accordance with OPDIV
    instructions until transition to use of Grants.gov is complete.

[^11]: As of February 28, 2001, OHRP no longer accepts applications for
    Multiple Project Assurances (MPAs) or Single Project Assurances
    (SPAs) limited to HHS-supported research, to special categories of
    research, or to individual research projects. All MPAs have been
    superseded. Current SPAs will remain in effect through the
    expiration of their respective grant (or contract) award and any
    non-competing continuation award.

[^12]: *Protecting Human Research Subjects: Institutional Review Board
    Guidebook*, 1993, Stock No. 017-040-00525-3, may be ordered from the
    Superintendent of Documents, telephone: 202-512-1800. This guidebook
    is also available from OHRP's website
    (<http://www.hhs.gov/ohrp/irb/irb_guidebook.htm>).

[^13]: For this purpose and financial conflict of interest in the next
    subsection, PHS includes the following OPDIVs with research
    programs: NIH, CDC, FDA, HRSA, OPHS, and AHRQ.

[^14]: See 42 CFR part 73, *Select Agents and Toxins;* and 7 CFR part
    331 and 9 CFR part 121, *Possession, Use, and Transfer of Biological
    Agents and Toxins.*

[^15]: Additional information on cost allocation plans and indirect cost
    rates is found in HHS's *A Guide for State, Local and Indian Tribal
    Governments: Cost Principles and Procedures for Developing Cost
    Allocation Plans and Indirect Cost Rates for Agreements with the
    Federal Government -- Implementation Guide for Office of Management
    and Budget Circular A-87 (ASMB C-10),* which is available on the
    Internet at <http://www.hhs.gov/grantsnet/state>, *and Review Guide
    for State and Local Governments State/Local-Wide Central Service
    Cost Allocation Plans and Indirect Cost Rates*, which is available
    at <http://rates.psc.gov/>.

[^16]: Non-profit organizations that are specifically listed in
    Attachment C to OMB Circular A-122 are subject to the Federal cost
    principles applicable to commercial organizations (48 CFR subpart
    31.2) rather than to the cost principles for non-profit
    organizations.

[^17]: OMB Circular A-87 also addresses public assistance cost
    allocation plans; however, the types of programs eligible for such
    costs are not covered by this HHS GPS.

[^18]: For this purpose, "data" means recorded information, regardless
    of the form or media on which it may be recorded, and includes
    writings, films, sound recordings, pictorial reproductions,
    drawings, designs or other graphic representations, procedural
    manuals, forms, diagrams, work flow charts, equipment descriptions,
    data files, data processing or computer programs (software),
    statistical records, and other research data.