GIM 18
Attachment A
Part 4

Authorities Given to Grantees
Prior Approval Authorities Retained by PHS for Research Grants

PHS has waived approval of certain actions which had previously required awarding office prior approval. These expanded authorities are applicable to all PHS research grants with the following exceptions: cooperative agreements, certain for-profit organizations (see appendix 6), awards to individuals or foreign institutions, class deviations granted by the Office of the Assistant Secretary for Health (OASH) for a particular program or class of grants, and when circumstances indicate that the expanded authority should not be extended to a specific research grant (for example, the designation of the recipient as "high risk"). Where expanded authorities are applicable, only the prior approvals listed in this section shall apply. Several of the expanded authorities have specific deadlines for submission of reports or for timely notification to the PHS awarding office. Grantees should be aware that any consistent pattern of failure to adhere to those deadlines for reporting or notification in items 1 and 3 shall be grounds for excluding that grantee institution from these special provisions.

NIH has received a class deviation from OASH and is applying the expanded authorities only to the "R" series of research grants with the following exceptions: R10, Cooperative Clinical Research Grants; R18, Research Demonstration and Dissemination Projects; R43, Small Business Innovation Research (SBIR) Grants, Phase I; and R44, SBIR Grants, Phase II.

When the NGA indicates that a research grant is subject to special grants administration provisions (i.e., expanded authorities), the recipient may take the following actions without PHS prior approval.

1. Extensions Without Additional Funds. The grantee organization may extend the final budget period of a research project one time for a period of up to 1 year beyond the original expiration date shown on the NGA. Such an extension may be made when no additional funds are required to be obligated by the awarding office, there will be no change in the project's originally approved scope or objectives, and any one of the following applies:

   1. Additional time beyond the established expiration date is required to assure adequate completion of the originally approved project.

   2. Continuity of PHS grant support is required while a competing continuation application is under review.

   3. The extension is necessary to permit an orderly phaseout of a project that will not receive continued support.

   The fact that funds remain at the expiration date of the grant is not in itself sufficient justification for an extension without additional funds. The grantee organization must notify the PHS awarding office in writing of the extension 10 days prior to the expiration date of the project period. Upon notification, the PHS awarding office will issue a revised NGA to reflect the change of expiration date. Grantees may not extend project periods previously extended by the PHS awarding office. In extending the final budget period of the grant through this process, the grantee agrees to automatically extend the applicability of all certifications required for funding of the original budget period of the grant to the new extended period of support, e.g., animal welfare, drug free workplace, human subjects, misconduct in science.

2. Preaward Costs. A grantee organization may, at its own risk, incur obligations and expenditures to cover costs prior to the beginning date of an award provided the following criteria are met:

   1. The costs incurred are considered necessary for the conduct of the project.

   2. The costs are allowable under the potential award.

   3. PHS written prior approval is obtained when required.

   Such preaward costs may be incurred within 90 days prior to the beginning date of the award without PHS prior approval. Preaward costs incurred more than 90 days prior to the beginning date of the award require written PHS prior approval.

   PHS expects the grantee organization to be fully aware that preaward costs must not impair its ability to accomplish project objectives or in any way adversely affect the conduct of the project. Additionally, the incurrence of costs prior to the award of a grant imposes no obligation on PHS to make an award.

   Please note that this authority no longer requires that the application must have been recommended for approval by an objective review group or by a National Advisory Council.

3. Carryover of Unobligated Balances. Except for funds restricted on a NGA, grantee organizations are authorized to carry over unobligated research grant funds remaining at the end of a budget period.

   The grantee organization must notify the PHS awarding office whether it has elected to carry over unobligated balances and the amount to be carried over. The notification shall be provided under item 12, "Remarks," in the Financial Status Report (FSR). A revised NGA will not be issued to reflect the carryover. Any unobligated balance not specified for carryover on the FSR shall be available for disposition by the PHS awarding office. Grantee organizations are required to submit the FSR within 90 days after the expiration of a budget period.

   When a grantee reports on the FSR balances of unobligated funds in excess of 25 percent of the total amount awarded, or $250,000, whichever is less, the awarding office GMO shall review the circumstances resulting in such balances to assure that these funds are necessary to complete the project. The GMO may request additional information from the grantee, including a revised budget, as part of the review. The GMO may withdraw the unobligated funds by issuing a revised NGA for the current budget period, revise the current NGA to authorize the grantee to spend the unobligated funds for approved purposes, or leave the unobligated funds in the grant account in the payment system for utilization as determined by the PHS awarding office.

4. Cost-Related Prior Approvals. The requirements for prior Federal approval of expenditures under the applicable cost principles are waived, with the following two exceptions. Prior approval for capital expenditures for land and buildings is not waived because such capital expenditures are allowable only when the program's legislation or regulations so permit. Prior approval for indemnification against liabilities to third parties and any other loss or damage not compensated by insurance or otherwise is not waived because the Government is obligated to indemnify the organization only to the extent expressly provided in the award. Requirements for allowability, reasonableness, allocability, and consistency of costs are still applicable.

5. Use of Program Income. With the exception of non-SBIR for-profit organizations (see appendix 6), grantee organizations may use the additional costs alternative for the use of general program income (see "General Program Income"), unless regulations or the NGA specify another alternative or a combination of alternatives. Disposition of other kinds of program income, such as royalties from copyrights or inventions, shall be governed by the provisions in 45 CFR Part 74, Sections 74.43 through 74.47. If the grantee uses the additive method to increase the level of activity, the Federal Government is not committed to funding future budget periods at this increased level of activity. (See also Actions Requiring Additional Federal Funds below and Treatment of General Program Income Under Research Grants.)

1. Change of Scope or Research Objectives. The grantee organization is required to seek approval from the PHS awarding office when the scope or research objectives of the project change. Actions likely to be considered a change in scope or objectives include, but are not limited to, the following:

   1. Change in the specific aims approved at the time of award.

   2. Substitution of one animal model for another.

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

   4. Shifting the emphasis of the research from one disease area to another.

   5. Applying a new technology, i.e., changing assays from those approved to use of a different type of assay.

   6. Transferring the performance of substantive programmatic work to a third party by contract or any other means.

   7. Change in key personnel whose expertise is critical to the approved project.

   8. Significant rebudgeting whether or not it requires approval under rules governing budget changes. Significant rebudgeting occurs when the cumulative amount of transfers among direct cost categories for the current budget period exceeds 25 percent of the total amount awarded, or $250,000, whichever is less. (See also the applicable discussion in Changes in Project.)

   9. Incurrence of patient care costs not previously approved by PHS and/or when a grantee desires to rebudget funds out of the patient care category.

   This list is not all inclusive. In the event of uncertainty as to whether a particular change is significant enough to require prior approval, questions should be referred to the GMO of the PHS awarding office for final determination.

2. Change in Principal Investigator (PI). The grantee organization is required to seek approval in writing before a substitute is appointed to replace an absent departed PI. If the PI is absent from the project for 3 months or more, a substitute must be proposed by the grantee organization and must be approved by the PHS awarding office. The request for approval of a substitute PI should include a justification for the change, the curriculum vitae of the individual proposed, and any budgetary changes resulting from the proposed change.

3. Change of Grantee Organization. PHS awarding office approval is required to transfer a grant from one grantee organization to another. PHS awarding office approval is also required for successor-in-interest situations. A successor in interest may occur as a result of a merger, divestiture, or other corporate change in which all or part of the assets involved in the performance of the grant-supported activity(ies) are transferred to another entity.

4. Actions Requiring Additional Federal Funds. PHS awarding office prior approval is required if the grantee organization takes action that generates a need for additional Federal funding to carry out the project.

5. Retention of Research Grant Funds When a Research Career Development Award (RCDA) is Awarded. Funds budgeted in a PHS-supported research grant for an individual's salary and/or fringe benefits, but freed as a result of receiving an RCDA for that individual, may not be used for any other purpose without the prior approval of the PHS awarding office.

6. Award Terms and Conditions. Deviations from special terms or conditions stated on the NGA require prior approval from the PHS awarding office.

7. Closely Related Work. When salaries and/or other activities are being supported by two or more technically related PHS grant projects under the direction of the same Principal Investigator/Project Director and funded by the same awarding office, grantees may charge costs to the project for which the costs are originally approved or to another closely related PHS project only with the prior approval of the PHS awarding office.

8. Audiovisuals and Publications. Approval by the Office of the Assistant Secretary for Public Affairs is needed for acquisition or production of audiovisual materials exceeding $25,000 for a single audiovisual product and publication and printing costs exceeding $25,000 for a single publication.

9. Preaward Costs Incurred More Than 90 Days Prior to the Effective Date of any New or Competing Continuation Award. The incurrence of costs prior to the award of a grant imposes no obligation on the Federal Government to make the award or increase the amount of the approved budget.

10. Drawings/Specifications for Alternations and Renovations Over $50,000. Costs for alterations and renovations may not exceed the lesser of $150,000 or 25 percent of total direct costs during any consecutive 3-year period unless a waiver is obtained.

11. Indemnification Against Third Parties. Prior approval for indemnification against liabilities to third parties and any other loss or damage not compensated by insurance or otherwise is not waived because the Government is obligated to indemnify the organization only to the extent expressly provided in the award.

12. Capital Expenditures for Land and Buildings. Prior approval for capital expenditures for land and buildings is not waived because such capital expenditures are allowable only when the program's legislation or regulation s so permit.

13. Extensions of Budget Periods other than the extension of the final budget period of a project one time for a period of up to 1 year beyond the original expiration date shown on the NGA.