NIH Research:

Improvements Needed in Monitoring Extramural Grants

HEHS/AIMD-00-139: Published: May 31, 2000. Publicly Released: Jun 30, 2000.

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Pursuant to a congressional request, GAO provided information on how the National Institutes of Health (NIH) monitors the use of extramural grant funds, focusing on: (1) how NIH monitors the scientific progress of extramural research; (2) whether NIH has controls to ensure the effective financial management of extramural research grants; and (3) how NIH used the increased funds from its fiscal year (FY) 1999 appropriations to support extramural research.

GAO noted that: (1) assessing scientific progress and ensuring effective financial management are critical elements in managing NIH's extramural grant programs; (2) NIH has developed policies and procedures to carry out these important functions, but GAO found that its system of internal controls could be strengthened; (3) institutes and grantees have flexibility in implementing NIH's policies and procedures for administering grants; (4) although the processes for assessing scientific progress varied at the six institutes GAO reviewed, each contained similar key aspects; (5) these included annual reviews of the scientific progress and budgetary aspects of the research as well as assessments of compliance with administrative requirements; (6) however, GAO found that some grant files lacked documentation of these reviews; (7) as a result, NIH lacked important information on scientific progress and inventions developed in a grant's last year as well as on unobligated funds that could be recovered for rebudgeting within the federal government; (8) regarding controls over financial management, GAO identified areas in the oversight and monitoring of grantees that could be strengthened; (9) regarding NIH's use of FY 1999 appropriations, NIH allocated about the same percentage of funds to extramural research as it did in FY 1998; (10) appropriations allocated for extramural research grants accounted for about $1.4 billion of the nearly $2 billion increase in NIH's appropriations, or 70 percent; (11) about 41 percent of the increase for extramural grants was used to expand by 978 the number of competitive grants and to increase the average amount awarded for each competitive grant by 15 percent over FY 1998 levels; and (12) the remaining funds were used to provide outyear commitments to more than 20,000 ongoing grants, support for extramural research centers, and other extramural research activities.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Agency concurred with the recommendation and has implemented it. In September 2002, HHS reported that NIH has improved the timeliness and accuracy of their reconciliations and is striving to maintain the improved performance. NIH devoted more staff to improve their timeliness and accuracy and implemented a new NIH business system to also improve the quality of the process.

    Recommendation: To improve internal controls at NIH, the Secretary of Health and Human Services should direct the Acting Director of NIH to ensure the accuracy of grant data in the three key financial management systems, information for management, planning, and coordination (IMPAC II), the central accounting system (CAS), and the payment management system (PMS), by: (1) resolving discrepancies resulting from the reconciliation between CAS and PMS on a timely basis; and (2) performing periodic detailed reviews of transactions, specifically the grant award amount, within IMPAC II, CAS, and PMS.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: NIH reported that its Division of Financial Advisory Services (DFAS) reviews each audit finding and discusses audit reports with cognizant NIH grants and contract management staff, representatives of other grant-awarding agencies, and officials from the grantee organization. To help with the resolution process, HHS' OIG issues monthly reports to HHS resolution office and DFAS tracks any outstanding findings. According to NIH, it is in full compliance with HHS' audit resolution policy.

    Recommendation: To improve internal controls at NIH, the Secretary of Health and Human Services Acting Director of NIH to establish and implement a process to ensure that single audit reports are reviewed to identify significant problems related to NIH's grants and use this process as a management tool for ensuring that significant problems are resolved and considered in the oversight and monitoring of grant recipients.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: NIH reported that under HHS' new oversight efforts, sanctions are utilized, where appropriate, against delinquent grantees according to timetables provided under the Single Audit Act Amendments of 1996. Also, HHS reported that NIH had completed its follow-up activities on referrals of delinquent single audit reports for fiscal years 1995, 1996, and 1997, and is in full compliance with HHS' policy for ensuring that grant recipients meet Single Audit Act requirements.

    Recommendation: To improve internal controls at NIH, the Secretary of Health and Human Services should direct the Acting Director of NIH to follow up and resolve delinquent single audit reports on a timely basis after the Department of Health and Human Services has identified delinquent grantees and, in particular, complete the followup and resolution of delinquent reports for fiscal years 1995, 1996, and 1997.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: HHS concurs with the recommendation, but acknowledges that closing out grants is not a priority. In September 2002, HHS reported that all NIH institutes and centers require program staff to document their assessment of scientific progress by completing a progress report form/checklist on an annual basis and prior to additional funds being awarded for continuation of the projects.

    Recommendation: To improve internal controls at NIH, the Secretary of Health and Human Services should direct the Acting Director of NIH to ensure that institutes properly close out completed grant files in a timely manner.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed - Implemented

    Comments: HHS reported that an NIH work group had completed its follow-up activities on HHS referrals of delinquent audit reports for fiscal years 1995, 1996, and 1997, and is in full compliance with HHS' policy for ensuring that grant recipients meet Single Audit Act requirements.

    Recommendation: To improve internal controls at NIH, the Secretary of Health and Human Services should direct the Acting Director of NIH to require that the institutes document their assessments of grantees' scientific progress before awarding continued funding by ensuring that progress report review forms are properly filled out and problems with scientific progress are documented.

    Agency Affected: Department of Health and Human Services

  6. Status: Closed - Implemented

    Comments: NIH reported that under HHS' new oversight efforts, sanctions are utilized, where appropriate, against delinquent grantees according to timetables provided under the Single Audit Act Amendments of 1996. Also, HHS reported that NIH had completed its follow-up activities on referrals of delinquent single audit reports for fiscal years 1995, 1996, and 1997, and is in full compliance with HHS' policy for ensuring that grant recipients meet Single Audit Act requirements.

    Recommendation: To improve internal controls, the Secretary of Health and Human Services should direct the Assistant Secretary for Management and Budget to refine and implement the procedures that have been developed to identify, report, and follow up on grantees that are delinquent in submitting single audit reports by ensuring the: (1) completion of the followup and resolution of delinquent reports from fiscal years 1995, 1996, and 1997; (2) performance of the analysis to determine the status of the FY 1998 single audit reports; and (3) reinforcement of the use of sanctions against delinquent grantees.

    Agency Affected: Department of Health and Human Services

 

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