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Thursday, August 23, 2012

Notice of Changes to Policies and Procedures for FY2013 NIH Awards to Foreign Institutions

Notice of Changes to Policies and Procedures for FY2013 NIH Awards to Foreign Institutions

Notice Number: NOT-OD-12-139
Key Dates
Release Date: August 17, 2012

Issued by
National Institutes of Health (NIH)

Purpose
This Notice informs National Institutes of Health (NIH) grantee institutions of a change in payment method, policies, and processes for awards to foreign institutions made on or after October 1, 2012.  This Notice also informs NIH grantee institutions of changes to the FFR requirements for foreign institutions.  These changes do not affect the payment methods or FFR requirements for domestic institutions with foreign components. 

Change in Method of Payment for All Foreign Grantees for Awards Issued after October 1, 2012
Currently, the NIH Office of Financial Management pays foreign grantees directly by using a fixed quarterly advance via U.S. Treasury checks or wire transfers.  Between October 1, 2012 and September 30, 2013, NIH will transition payment for all foreign awards to the Payment Management System (PMS), which is a centralized grants payment and cash management system, operated by the U.S. Department of Health and Human Services (HHS), Division of Payment Management (DPM).  For all new and continuing awards to foreign institutions issued after October 1, 2012 (FY 2013 funding and beyond), payment will be made through the PMS.   The PMS will establish sub-accounts using the (B) Account for each NIH foreign grant award made on or after October 1, 2012.  It is imperative that all foreign grantees register in PMS as soon as the FY 2013 Notice of Award is issued.

For grants with a non-competing continuation year of funding in FY2013, NIH will use a technical process to shift the FY2013 funding into PMS by issuing all non-competing continuation awards as Type 4 (funded extension awards).  This means that all foreign Type 5s (non-competing continuation awards), and foreign Type 8s (non-competing continuation awards with a change of awarding Institute or Center), will be issued as Type 4s during the transition period.    This enables NIH to separately track obligations and payments for foreign grants which span the Federal Fiscal Years 2012 and 2013.  In addition to changing the record Type and the document number for the fiscal year 2013 award, NIH will change the project period end date of the fiscal year 2012 award when the FY 2013 award is issued.  The project period end date will be changed to the budget period end date.  This change will be reflected in the eRA Commons; however, NIH will not issue a revised Notice of Award (NoA).  Therefore, the Federal Financial Reports (FFR) for the FY2012 award will be considered the Final FFR; and NIH will be able to close out the financial records in the old accounting system at the end of the FY2012-funded year. Please note that the final FFR may not include unliquidated obligations.
 
NIH will make this transition as seamless as possible for grantees and NIH staff.  The conversion of the non-competing continuation progress report (Type 5), or in rare instances the Type 8, to a Type 4 will be an internal NIH process.  There will be no change to the due dates or to the submission or review of progress reports for foreign awards for Fiscal Year 2013. 
In addition to changing the method of payment to the PMS, this change will affect the process by which funds are carried over between Fiscal Year 2012 and 2013 awards.  See the section on the carryover process for the transition year, below. 
Please be aware that no FY 2013 funding action including supplements and transfers can take place until the initial FY 2013 award has been issued. 
See below for procedural changes detailed in sections Change in Process to Carryover Funds on All Foreign Awards during Fiscal Year 2013 (October 1, 2012 – September 30, 2013) .

Change in Annual Federal Financial Report (FFR) Requirement for Foreign Awards under Streamlined Non-Competing Award Process issued after October 1, 2012
Currently, foreign grantees must report expenditure data annually via electronic submission of an FFR through the eRA Commons, even if the award was issued under the Streamlined Non-Competing Award Process (SNAP). 
For all initial SNAP awards issued to foreign institutions after October 1, 2012, foreign grantees will not be required to report expenditure data annually via the FFR.  NIH will monitor the financial aspects of these grants by using transaction information in PMS.  For these awards, FFR expenditure data is required only at the end of a competitive segment.   FFR expenditure data 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 FFR must be submitted during this time frame whether or not a competing continuation award is made.  If no further award is made, the report will serve as the final FFR.  This change does not affect awards issued with prior fiscal year funds that are revised after October 1, 2012.
Foreign awards that are not issued under SNAP will still be required to report FFR expenditure data annually via the eRA Commons.

Change in Policy Regarding the Use of Currency Exchange Rates in Preparation of Financial Reporting of Expenditure Data for Awards Issued after October 1, 2012
Current policy requires grantees to use the currency rate in effect at the time the FFR expenditure data is prepared.  
For initial awards issued after October 1, 2012 (Fiscal Year 2013) when preparing the FFR expenditure data grantees must use the currency rate in effect at the time the funds are drawn down from PMS. 

Change in Process to Carryover Funds on All Foreign Awards during Fiscal Year 2013 (October 1, 2012 – September 30, 2013). 
Section III of the NoA for all grants includes a term and condition that states whether the grantee has automatic carryover authority or if carryover of an unobligated balance requires prior approval by the NIH awarding IC.
The change in method of payment from the old accounting system to PMS, affects carryover for these awards regardless of the carryover authority noted in the NoA.  Therefore, carryover of an unobligated balance from an award issued prior to October 1, 2012 to an award issued after that date must be done with the assistance of NIH. 
In order to carry over an unobligated balance from an award issued to a foreign institution prior to October 1, 2012, to an award issued after that date, the grantee must return the unobligated balance to the NIH at the time the annual FFR is submitted.  The final FFR should include a statement indicating that the funds are being returned and if the grantee is requesting carryover.  Unobligated balances must be returned by check to the attention of Alan Whatley, Office of Financial Management (OFM), Government Accounting Branch (see address below).  Funds returned must reference the grant number and the grantee organization.

Checks remitting unobligated balances of funds issued prior October 1, 2012 (FY2012) should be sent to:
National Institutes of Health
Office of Financial Management
Government Accounting Branch
Attention: Alan Whatley
2115 East Jefferson Street, Suite 4B432
Rockville, Maryland 20852  U.S.A.

Include the name and contact information of the program contact you list in the ENS record
If the award was issued with automatic carryover authority, OFM will automatically authorize the carryover in PMS equal to the amount returned by the grantee*.  If the award was not issued with automatic carryover authority, the unobligated balance must be returned to OFM at the time the annual FFR is submitted and the grantee may submit a carryover request to the awarding IC.  If the request is approved, a revised NoA reflecting the approved carryover amount will be issued and the authorized amount will be reflected in the PMS. Failure to return unobligated balances in a timely manner may affect future funding.

*In accordance with existing policy, the GMO will review unobligated balances in excess of 25 percent of the total authorized amount for the budget period and may request additional information from the grantee as part of the review.  If the GMO determines that some or all of the unobligated funds are not necessary to complete the project, the GMO may restrict the grantee’s authority to automatically carry over unobligated balances in the future, use the balance to reduce or offset NIH 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 terms and conditions of the NoA.

Process for PMS Registration for All Foreign Grantees to be Paid through the Payment Management System
Foreign grantees must register in PMS by submitting the required forms to PMS after an award is issued.  The required forms are: 1) one DPM PMS System Access Form for each PMS user and 2) one Direct Deposit Sign-Up Form (SF-1199A) for each organization required if the organization does not have a PMS account for HHS awards or if the organization has a PMS account for HHS awards, but there will a change the banking information. 
PMS will send a Welcome package if the grantee has no current PMS account with other U.S. Agencies.  However, the forms can be downloaded and completed prior to receiving the package.  The forms must not be submitted to PMS until the FY2013 NoA has been issued. 

To complete the SF-1199A:
Section one:  must be completed by the grantee.  Grantee should use the Organization’s Name and Employee Identification Number (EIN) as reflected on the NoA.   

Section two:    Government Agency Name is DHHS/DPM and the address is
Post Office Box 6021, Rockville, MD 20852
Section three:  completed by financial institution
To complete the DPM PMS System Access Form:
Item one: the grantee must use the Organizations Name as reflected on NoA.  
 
Item two: If the grantee does not have an established PMS Payee Identification Number (PIN), enter the EIN from the NoA.

Item three: provide information on the individual that requires access to PMS.

Item four: the grantee should select “Payment Requests and Inquiries.”
Item five: signature of authorized representative
Completed forms with original signatures must be returned to PMS:

Express Mail:
U. S. Department of Health & Human Services
PSC/FMS/Division of Payment Management
7700 Wisconsin Avenue – Suite 10104
Bethesda, Maryland 20814

Regular Mail:
U.S. Department of Health & Human Services
PSC/FMS/Division of Payment Management
Post Office Box 6021
Rockville, Maryland 20852

PMS will review the PMS System Access form and will issue a Payee Account Number (PAN), Payee Identification Number (PIN) and User Name for the individual and Temporary Password.  NOTE:  Temporary Passwords are alpha numeric and case sensitive and must be changed once the system is accessed. 
The grantee must request funds electronically through PMS; http://www.dpm.psc.gov.
Funds are delivered via Electronic Funds Transfer (EFT).
Payment can be requested as often as needed, but must accommodate only immediate needs. 

Reminder of Continuing Requirements
Foreign grantees are strongly encouraged to use U.S. banks or banks with U.S. branches. 
The requirement for grantees to maintain grant funds in an interest bearing account is unchanged.  See NIH Grants Policy Statement Section 6.3 Interest Earned on Advances of Grant Funds.  Interest earned in excess of $250 per year in the aggregate on advances of Federal funds must be returned in U.S. dollars by reimbursement check.
If the interest is earned on funds for awards issued prior to October 1, 2012 (FY13), the grantee should send the check to the NIH Office of Financial Management at the address below.

National Institutes of Health
Office of Financial Management
Government Accounting Branch
Attention: Alan Whatley
2115 East Jefferson Street, Suite 4B432
Rockville, Maryland 20852  U.S.A.

Include the name and contact information of the program contact you list in the ENS record.
Once PMS accounts are established, recipients are encouraged to remit interest electronically. 
If the interest is earned on funds for awards issued on or after October 1, 2012 (FY13), the grantee is encouraged to remit interest electronically.  The procedure for electronically returning funds is found at: http://www.dpm.psc.gov/grant_recipient/funding_requests/returning_funds.aspx

The grantee may remit interest via check instead.  The check, payable to the Department of Health and Human Services, should be sent to the Division of Payment Management at the address below.  The PMS PAN should be included along with the reason for the check (e.g. interest earned).

HHS Program Support Center
PO Box 530231
Atlanta, GA 30353-0231 U.S.A

Inquiries
Please direct all inquiries to:

Division of Grants Policy
Office of Policy for Extramural Research Administration
National Institutes of Health

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