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?
  • Payment Management System: When to Use
    • Registering for PMS
    • Filling Out the Forms
    • After Submitting the Forms
    • PMS Payments
    • For PMS Help
  • Wire Transfer
  • Check
  • Electronic Deposit
• 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?

Starting with awards made in fiscal year 2013—which begins October 1, 2012—NIH will fund foreign grantees using direct deposits through HHS's Payment Management System (PMS). The PMS replaces the Wire Transfer, Check, and NIH-issued Electronic Deposit methods described below.

When the grantee draws funds from the PMS, the PMS converts the amount from U.S. dollars using the most current exchange rate.

For details, read the August 17, 2012, Guide notice.

Payment Management System: When to Use

Grantees who obtain an initial award in FY 2013 must register for PMS after receiving their Notice of Award.

Those with noncompeting grants should file their progress report and federal financial report (FFR) as usual. See Part 8. Other Reporting Requirements. After receiving the FY 2013 Notice of Award, grantees should then register for PMS to receive payment for subsequent years.

Registering for PMS

To request funds electronically and receive them through Electronic Funds Transfer, institutions—even those who already have a PMS account number—must register with PMS by submitting two forms.

• Grantees with an existing PMS account must submit the following:
  • Direct Deposit Sign-Up Form - SF 1199A (one form for all NIH grants)
  • DPM PMS System Access Form (one form for each PMS user)
• Those with no current PMS account with another U.S. government agency (e.g., CDC, USAID, DoD) will receive a Welcome package that includes the required forms.
• In either case, you do not need a Payee Account Number (PAN) to submit the forms. However, you do need your EIN and DUNS number.
• Send original documents to:

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

  Regular Mail:
  U.S. Department of Health & Human Services
  PSC/FMS/Division of Payment Management
  P.O. Box 6021
  Rockville, MD 20852

Filling Out the Forms

Direct Deposit Sign-Up Form—SF 1199A

• Complete sections 1 and 2. Recipient’s bank completes section 3.
• Type all information.
• Make sure all signatures are original and in ink.
• Section 1: at top right hand corner, type DUNS, followed by your DUNS number.

  A. Organization’s name, address, and telephone number.
  B. Organization’s name.
  C. EIN number.
  D. Savings (must be a savings account).
  E. Account number at the financial institution to which the funds will be deposited.
  F Check “Other” and type the National Institutes of Health, DHHS.
  G. Leave blank.

  Signature: People who can sign for bank account.

• Section 2

• Government Agency Name: DHHS/DPM
• Government Agency Address

  P.O. Box 6021
  Rockville, MD 20852

• Section 3:  To be completed by recipient's financial institution.
  • Must be signed by recipient's bank representative with phone number. 
  • Account title must be filled in and match the organization’s name.

DPM PMS System Access Form

• Item 1:  Use the organization's name reflected on the Notice of Award. 
• Item 2: If you do not have an established PMS Payee Identification Number (PIN), enter the EIN from the Notice of Award.
• Item 3: Provide information on the person requiring PMS access. 
• Item 4: Select “Payment Requests and Inquiries.”
• Item 5: Signature of authorized representative.

After Submitting the Forms

Once the Division of Payment Management processes your forms, it will issue the following:

• Payee Account Number (PAN) and PIN.
• User name and temporary password.
• You can then log in and access your account.

Note: once you have accessed the system, you must change your temporary password.

PMS Payments

You can request payments as often as needed, but the funds must accommodate immediate needs only, and must be spent within three business days from withdrawal.

For PMS Help

Contact the PMS help desk at PMSSupport@psc.gov or 877-614-5533.

You may also request training by Webinar. Email PMS_Training@psc.hhs.gov with dates and times as well as names, phone number, and contact information for all attendees. See Grant Recipient Training for more details.

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

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).

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:

Alan Whatley
Government Accounting Branch
Office of Financial Management
National Institutes of Health
2115 East Jefferson Street, MSC 8500, Room 3C-334
Bethesda, MD 20892-8500
Telephone: +1 301-451-9210
Fax: +1 301-435-1547
Email: whatleya@od.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. Check PI Salary Cap and Stipends or your business office for the latest figure for the current fiscal year.

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 and consistently applied for all employees of the same type.

• 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 considered employees of the applicant organization. They should be listed in the consultant category, not personnel.

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:

• Child care costs: allowable to help people participate as subjects in research projects.
• Nursery items: allowable for the purchase of items such as toys and games to allow patients to participate in research protocols.
• Meals: allowable for subjects under study, or where approved as part of the project activity, provided that such charges are not already paid for by participants' per diem or subsistence allowances.
• Patient-related costs: allowable for research protocol costs, recruitment costs, participant incentives and transportation, and clinical screening tests.
• Ancillary tests: allowable for people participating in research programs if performed outside of a hospital on a fee or service basis.
• Data management or statistical analysis of clinical research results.
• Otherwise allowable direct costs, e.g., travel, meals, consulting physician fees, or any other direct payment to people.

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

Facilities and Administrative Costs

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

Your organization can use F&A only to pay for expenses for complying with NIH requirements, such as:

• Human subjects (including the required education in the protection of human research participants)
• Animal welfare
• Financial conflict of interest
• Invention reporting
• Research misconduct.
• Computer systems or file cabinets 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.

If you meet your compliance costs and still have money left over from the 8 percent, you may be able to rebudget the leftover money to use for other direct costs. Before using the funds, contact your NIAID grants management specialist to discuss rebudgeting.

F&A Calculation Example

An international organization receives a grant from NIAID for:

• $500,000 direct costs
• $40,000 F&A (8 percent of the total direct costs, less equipment)
• $540,000 total costs

The organization meets all compliance requirements at a cost of $32,000, leaving $8,000. The grants management specialist confirms that the remaining money may be rebudgeted.

Therefore, the organization may use the $8,000 for other direct costs. 

Be sure to document all expenses and be able to demonstrate that F&A costs have been used for compliance requirements. You will need this documentation in case of an audit.

Keep in mind that we do not pay for normal operations of international organizations either as F&A or a direct cost budget expense. Acquisition or depreciation of capital expenditures.

However, 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.

Also, 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.

This would require NIH prior approval, and your Notice of Award would need to specify that you are allowed to purchase insurance.

Unallowable Costs

You cannot charge the following costs to your grant:

• Major alterations and renovations—greater than $500,000.
• Customs or import duties—including consular and visa fees, customs surtax, 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). NIH 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. Note: some patient-related costs are allowed in the Other Expenses budget categories of your application or progress report. See Other Expenses.

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 is posted in your eRA Commons account within about six to eight weeks after NIAID's advisory Council meeting, earlier if it underwent expedited second-level review. This could take longer if the study section had human or animal concerns or you have a complex grant type.

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).

Whether or not you have that authority, be aware of the following. To carry over an unobligated balance from an award issued before October 1, 2012, to an award issued after that date, grantees must return the unobligated balance to NIH when they submit the annual FFR.

Due to a change in payment method for foreign awards made in fiscal year 2013, NIH is considering the annual FFR for awards starting in FY 2012 as the final FFR,which must include a statement indicating grantees are returning funds and if they are requesting carryover.  Note: the final FFR may not include unliquidated obligations.

Grantees must return unobligated balances by check to the following:

National Institutes of Health 
Office of Financial Management 
Government Accounting Branch
Attention: Alan Whatley
2115 East Jefferson Street, Suite 4B432
Rockville, MD 20852 USA

You must report the amount unobligated and carried over in your progress report and financial reports. 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:

• Grant number and name of PI.
• Why you have funds to carry over.
• 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 federal financial 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. Actions You Can Take as the Project Leader.

See the Carryover Requests SOP for more details.

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