Grants Policy and Management Training for Foreign Investigators

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Part 6. Receiving and Spending Money

This is Part 6 of the Grants Policy and Management Training for Foreign Investigators.

Learn how to receive NIH funds, spend your money in ways that NIH allows, and manage your money throughout your award.

Table of Contents

• How Does NIH Issue Funds?
  • Check
  • Electronic Deposit
  • Wire Transfer
• Award Amount Determines Distribution
• Whom Can I Contact About Payments?
• What Are Allowable Costs?
  • Direct Costs
    • Personnel
    • Consultants
    • Equipment
    • Supplies
    • Travel
    • Other Expenses
  • Facilities and Administrative Costs
    • Insurance
• Unallowable Costs
• Pay Attention to How You Spend Your Money
• Using Leftover Funds
  • Making a Carryover Request

How Does NIH Issue Funds?

Grantee institutions may receive grant funds from NIH either by U.S. Treasury check, electronic deposit, or wire transfer.

Your grants management specialist can help you decide which way is best for you.

Note: NIH pays awards in U.S. dollars and will not adjust for currency exchange fluctuations after we give you an award.

Check

NIH usually sends money using a paper U.S. Treasury check four times each grant budget period. Since paper checks can take several weeks to arrive, consider an electronic deposit.

Electronic Deposit

To facilitate electronic transactions, we encourage foreign institutions to have a U.S. bank account or use a local bank affiliated with a U.S. bank.

NIH might allow your funds to be electronically deposited into your institution's research activity account if the institution's bank has a branch in the U.S. Contact your grants management specialist to find out.

For this method, you need to have the following information for the receiving bank in the U.S.:

• ABA number.
• Name.
• Address, city, and state.
• Account number.
• Account name.
• Contact (name, telephone, fax, and email).

Wire Transfer

Wire transfers are another way of getting grant funds, though they may involve fees.

Institutions need the following information for the bank in the foreign country:

• Name.
• Address.
• Account number.
• Swift code.
• Contact (name, telephone, fax, and email).

Award Amount Determines Distribution

Depending on amount, NIH sends your award as a lump sum or in four equal payments.

• If the award is greater than $15,000, your institution gets the money in four equal payments.
• If it is $15,000 or less, your institution receives one lump sum.

If the quarterly distribution does not meet your cash requirements, the grantee's institutional business official must submit a written request to the NIAID grants management specialist detailing the need for additional funds.

Institutions must maintain their advanced quarterly payments in an interest-bearing account and must return annual interest of more than $250 to NIH.

Whom Can I Contact About Payments?

For help with a payment issue, contact the NIH Office of Financial Management:

Joyce Lee
Government Accounting Branch
Office of Financial Management
National Institutes of Health
2115 East Jefferson Street, MSC 8500, Suite 4B432
Bethesda, MD 20892-8500
Telephone: +1 301-402-9123
Fax: +1 301-402-4934
Email: LeeJ1@mail.nih.gov

Subawardees should contact the grantee or the grantee's institutional business office with questions.

What Are Allowable Costs?

NIH defines the items and parameters for using your grant money. Your costs must meet the following conditions:

1. Dollar amount is reasonable; that is, within limits that a prudent person would pay for the goods or service.
2. Goods or services can be directly assigned to a grant.
3. Goods or services are consistent with your standard operating procedures and local practices.
4. Grant costs conform to the "Allowability of Costs/Activities" section of the NIH Grants Policy Statement.

There are two types of allowable costs: direct costs and facilities and administrative costs.

Direct Costs

Direct costs are costs that support your project.

Personnel

Salary or compensation you pay with grant funds must be reasonable for the position, for example, the education required and the person's experience.

• When determining salaries, look at standard salaries at your organization and ensure that they are reasonable for your region.
• NIH also has salary limits, called a salary cap, which changes every fiscal year. Check PI Salary Cap and Stipends or your business office for the latest figure.

In addition to salary, some institutions may provide fringe benefits as part of an employee's compensation. Make sure fringe benefits are in proportion to the effort devoted to the project.

• Fringe benefits may include costs such as health insurance, sabbatical leave, retirement savings, child care, overtime, and dues and fees for membership in professional organizations.
• Institutions may also pay bonuses, retention funds, and incentive payments as part of a compensation package as long as the costs are reasonable.

Consultants

Consultants usually provide advice or services and may participate significantly in the research. They work for a fee; they are not employees of the applicant organization.

Usually, consultant fees are paid by the hour. For example, you would calculate costs for consultants as follows:
300 hours at $50 an hour = $15,000.

Equipment

Equipment is an instrument, machine, or tool that can be used for more than one year and usually costs no more than $5,000 or an amount set by your institution, whichever is lower.

It can be strictly scientific or not, for example, a car or movable trailer is considered to be equipment as long as it is required for your grant.

When asking NIH for equipment, request only what you needed to accomplish the proposed work.

For example, to document costs for equipment, you would calculate as follows:
Freezer $5,000 and centrifuge $1,200 = $6,200.

Devices over $5,000 and with a life expectancy of over one year are always considered to be equipment. Other than that rule, your institution determines the difference between equipment and supplies (see below), in keeping with its policies.

Supplies

Supplies include small items and other materials, such as chemicals and glassware used for a project. Itemize requests.

For example, you would calculate as follows:
ELISA kits: 100 at $150 = $15,000.

Travel

Request travel to visit sites, recruit participants, attend scientific meetings, or for other purposes required for the project.

You must use one of the following carriers to travel outside your country:

• U.S. flag carriers -- carriers that hold a certificate under U.S. code and whose service is authorized by the carrier certificate or by exemption or regulation.
• Code-share carriers -- foreign airlines that have an agreement with U.S. flag carriers.

When traveling by air, use coach seating and purchase tickets early for reduced rates.

For exceptions to this rule and further information, see the Fly America Act.

Other Expenses

Other expenses are other items needed for your project, such as the following:

• Communications -- long distance telephone calls, telegrams, express mail.
• Audio visual activities, books, and journals.
• Equipment maintenance agreements.
• Recruitment -- for both obtaining study participants and hiring employees.
• Transportation -- moving property, for example, from one institution to another.
• Rentals and leases -- for renting or leasing facilities or equipment; use only when more cost-effective than purchasing.

When describing other expenses, itemize your request and include calculations.

You may be able to use grant monies to pay for the costs of inventions, licensing, and patents. Items include licensing fees, attorney's fees for preparing or submitting patent applications, and fees paid to the U.S. Patent Office.

Facilities and Administrative Costs

As a foreign grantee, you can receive up to 8 percent of your direct costs (excluding equipment) for facilities and administrative costs (F&A).

F&A can pay only for expenses for complying with NIH requirements, such as human subjects, animal welfare, financial conflict of interest, and invention reporting.

Other examples include:

• Paying for a computerized system or file cabinet to keep records.
• Costs for translating the NIH Grants Policy Statement.
• Having training sessions on compliance topics, such as audit requirements of OMB Circular A-133.

Before the 8 percent is available for your institution's use, you need to have sufficient expenses (at least 8 percent of your direct costs) that meet compliance requirements.

Plus, the amount you can spend on F&A is proportional to the direct costs spent on your project. For example, if you received $100,000 plus an additional $8,000 for F&A and you only spent $50,000 in direct costs, you can only use $4,000 of the F&A.

If you have questions, talk to your grants management specialist.

Insurance

Insurance is usually treated as an F&A cost. However, if special insurance is required as a condition of the grant because of risks specific to the project, NIH may allow you to charge the insurance premium as a direct cost.

You will need to receive a Notice of Award that specifically allows you to purchase insurance.

Unallowable Costs

You cannot charge the following costs to your grant:

• Customs or import duties -- including consular fees, customs fees, value added taxes, and other related charges.
• Full F&A costs -- costs greater than the 8 percent F&A rate (except the American University of Beirut and the World Health Organization). NIAID will not provide facility costs.
• Research patient care costs -- routine and ancillary services that hospitals provide to research participants provided only in exceptional circumstances and with our approval. Check the Guide announcement for the funding opportunity announcement details.

Pay Attention to How You Spend Your Money

As soon as you get a Notice of Award, you can start spending funds. Your Notice of Award will arrive about six to eight weeks after NIAID's advisory Council meeting, and in rare cases it may arrive sooner.

Be aware that you may be able to start spending funds as early as 90 days before that. Your business office must approve because doing so is at your institution's risk since NIH is not yet obligated to award the funds. Find details in our Early Grant Awards questions and answers.

When working with your grant funds, always remember that you have a limited amount of money, and keep in mind your expenditure rate. Ask yourself:

• Am I pacing myself?
• Am I spending all my money in the first month or two of the project?
• Am I not spending the money fast enough?

Don't depend on your institution to monitor your spending.

We expect you to have reasonable monthly expenditures. Also consider whether you are using your money for allowable or unallowable costs, which we explained above.

If you have any questions about using your grant funds, check your terms and conditions of award, consult the NIH Grants Policy Statement, or contact your grants management specialist.

Using Leftover Funds

NIAID funds you by budget period (usually one year) and expects you to use funds during that budget period.

At some point, however, you may find yourself with an unobligated balance -- money not spent in a budget period. You may carry over these funds to the next budget period if you have the authority to do so (see your Notice of Award to find out).

You must report the amount unobligated and carried over in your progress report and financial status report (FSR). Read more about reporting in Part 7. Annual Progress Report and Part 8. Other Reporting Requirements.

Making a Carryover Request

If you do not have the authority to automatically carry over funds, you must get NIAID's approval.

Your institution should send NIAID a request to carry over your funds to the next budget period. Include the following details:

• Why you have funds to carryover.
• How much money you want to carry over.
• Why your work cannot be accomplished by using or rebudgeting from current funds.
• Your scientific justification, if costs are for recurring expenses (i.e., supplies, personnel), and how these expenses will be funded in the future.
• Your budget and checklist page.
• Contact information for yourself and your authorized institutional business official.

NIAID will make sure you need the funds now and can't find another way to cover your requested expenses. Try to limit carryover requests to your actual needs for the current budget period, and submit your financial status reports on time -- otherwise, we won't grant your request!

If your carryover request represents a change in scope, you'll have a lot more difficulty getting approval. See Importance of Scope of Research and What Constitutes a Change in Scope? in Part 3. Know What Actions You Can Take.

See the Carryover Requests SOP for more details.

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