Title : NSF 95-26 GRANT POLICY MANUAL Type : General Publication NSF Org: BFA Date : August 3, 1995 File : nsf9526 GRANT POLICY MANUAL NSF 95-26 Replaces NSF 88-47 NATIONAL SCIENCE FOUNDATION Arlingtion, Virginia 22230 July 1995 (introduction) This Grant Policy Manual (GPM) is a compendium of basic NSF policies and procedures for use by the grantee community and NSF staff. Its coverage includes the NSF award process, from issuance and administration of an award through closeout. Guidance regarding other grant requirements or considerations which either are not universally applicable or which do not follow the award cycle is also provided. The GPM does not address differences between paper and electronic processing of requests, information, etc. As new electronic initiatives are implemented which change or alter existing guidance, updates will be issued to incorporate these new policies or procedures. The Manual is available by subscription from the Superintendent of Documents, Government Printing Office(GPO), Washington,DC 20402 or (202) 512-1800. GPO subscription prices and terms are subject to change without notice. The GPM and other referenced NSF issuances are also available through the NSF Science and Technology Information System (STIS). STIS is an electronic dissemination system that provides fast, easy access to NSF publications. For additional information on STIS contact: (e-mail) stis@nsf.gov (Internet); phone: (703) 306- 0214 (voice mail); and TDD (Telephonic Device for the Deaf) (703) 306-0090. General information about NSF programs may be found in the NSF Guide to Programs. Additional information about special requirements of individual NSF programs may be obtained from the appropriate Foundation program offices. Information about program deadlines and target dates for proposals appears in the NSF Bulletin, issued monthly except July and August and in individual program announcements and solicitations. Guidelines detailing the NSF proposal preparation process may be found in the Grant Proposal Guide (GPG). This brochure provides guidance regarding the preparation, submission, review and processing of unsolicited proposals to NSF. Informal information about NSF activities can be obtained on the Grants Bulletin Board (GBB). To make arrangements to access the bulletin board, send your electronic mail address along with your complete name, address and telephone number to grants@nsf.gov (Internet). [Any or all portions of this Manual may be reproduced.] TABLE OF CONTENTS CHAPTER I -- BASIC INFORMATION 100 The National Science Foundation I-1 110 NSF Organization I-1 111 National Science Board I-1 112 Program Division/Office I-1 113 Division of Grants and Agreements I-1 114 Division of Contracts, Policy and Oversight I-1 115 Division of Financial Management I-2 116 Office of the General Counsel I-2 117 Office of Equal Opportunity Programs I-2 118 Office of Inspector General I-2 120 The NSF Grant Policy Manual I-2 121 Purpose and Applicability I-2 122 General Organization and Citation I-2 123 Changes I-2 130 Proposal Submission and Merit Review I-2 Exhibit I-1 NSF Organization Chart I-4 Exhibit I-2 Statutes, Executive Orders and Other DirectivesI-5 CHAPTER II -- NSF AWARDS 200 Background II-1 210 Definitions II-1 220 NSF-Grantee Relationships II-2 221 Basic Requirements II-2 222 Acceptance of Assistance Agreements II-2 230 Grant Instrument II-23 240 NSF Grant Conditions II-3 250 NSF Grant Periods II-3 251 Definitions II-3 252 Significance of Grant Period II-3 253 Changes in Grant Periods II-3 253.1 Effective Date II-3 253.2 Expiration Date II-34 253.3 No-Cost Extension II-4 260 Additional Funding Support II-4 261 Types of Additional Funding Support II-4 262 Renewed Support (Standard Grants) II-4 263 Continued Support (Continuing Grants) II-4 264 Supplemental Support II-5 CHAPTER III -- GRANT ADMINISTRATION 300 Monitoring Project Performance III-1 301 Grantee Responsibilities III-1 302 Grantee Notifications to NSF and Requests for NSF Approval III-1 310 Changes in Project Direction or Management III-1 311 Changes in Objectives, Scope or Methodology III-1 311.1 Changes in Objectives or Scope III-1 311.2 Changes in Methodology III-1 311.3 Significant Changes, Delays or Events of Unusual Interest III-2 312 Changes in PI/PD or Person-Months Devoted to the Project III-2 312.1 Background III-2 312.2 Basic Requirements III-2 312.3 Short-Term Absence of PI/PD III-2 312.4 Long-Term Absence of PI/PD III-2 312.5 Change in Person-Months Devoted to the Project III-2 312.6 Withdrawal of PI/PD III-2 312.7 Substitute PI/PD III-3 312.8 Disposition of a Grant When a PI/PD Transfers from One Organization to Another Organization III-3 313 Contracting or Transferring the Project Effort (Subawards) III-43 320 Changes in the Grant Budget III-4 321 OMB Directives III-4 322 Grant Changes and Approvals III-4 330 Cost Sharing and Matching III-4 331 Basis for NSF Requirements III-4 331.1 Statutory Requirement III-4 331.2 OMB Directive III-4 332 Significance of Cost Sharing Promises in Proposals III-45 333 NSF Cost Sharing Requirements III-45 333.1 Unsolicited Research Projects III-45 333.2 Solicited Research Projects III-5 333.3 Cost Sharing Amount III-5 333.4 Cost Sharing Method III-5 333.5 Method of Providing Contributions III-65 333.6 Cost Sharing Records and Reports III-6 333.6 Cost Sharing Records and Reports III-6 334 NSF Matching Requirement III-6 340 Technical Reporting Requirements III-6 341 Annual Progress Reports III-6 342 Final Project Report III-76 343 Final Technical Information Items III-7 344 Compliance with Technical Reporting Requirements III-7 345 Grant Closeout III-7 350 Records Retention and Audit III-7 Exhibit III-1 Grantee Notifications to and Requests for Approval From the National Science Foundation III-8 Exhibit III-2 NSF Grant Transfer Request (NSF Form 1263) III-119 CHAPTER IV -- FINANCIAL REQUIREMENTS AND PAYMENTS 400 Background IV-1 410 Standards for Financial Management IV-1 420 Definitions IV-1 430 Payment Requirements IV-2 431 General IV-2 432 Payment Policies IV-2 433 Request for Advance IV-2 434 Request for Reimbursements IV-2 435 Working Capital Advance IV-2 436 ACH Vendor Express IV-3 437 Use of Women-Owned and Minority-Owned Banks IV-3 440 Cash Refunds and Credits to NSF IV-3 441 Final Unobligated Balance IV-3 442 Erroneous Payments IV-4 443 Interest Earned on Advance Payments IV-4 444 Program Income IV-4 445 Other Cost Credits IV-4 450 Grant Financial Reporting Requirements IV-4 451 Quarterly Disbursement Reporting-Federal Cash Transactions Report (FCTR) IV-4 452 Final Disbursement Reporting IV-5 453 Compliance with Financial Reporting Requirements IV-5 Exhibit IV-1 Request for Advance or Reimbursement (SF 270) IV-67 Exhibit IV-2 ACH Vendor/Miscellaneous Payment Enrollment Form (SF 3881) IV-98 Exhibit IV-3 Instructions for Federal Cash Transactions Report (FCTR SF 272) IV-119 Exhibit IV-4 E-mail FCTR Instructions IV-175 CHAPTER V -- GRANTEE STANDARDS 500 Background V-1 501 Prospective Grantee Organization and Management Data V-1 501.1 General V-1 501.2 Definitions V-1 501.3 Required Information V-2 510 Conflict of Interests Policies V-22 520 Financial Management Systems Standards V-43 530 Procurement Standards V-43 540 Property Management Standards V-4 541 Background V-4 542 Title to Equipment V-4 542.1 Title to Equipment - Non-Profit Organizations V-4 542.2 Title to Equipment - Commercial Organizations V-4 543.3 Right to Transfer Title V-4 543 Conditions for Acquisition and Use of Equipment V-4 544 Use of NSF-Supported Research Instrumentation and Facilities Guidelines V-5 545 Property Management Standards When Title Retained by NSF V-5 546 Excess Government Personal Property V-5 546.1 Policy V-5 546.2 Eligibility V-5 546.3 Procedures V-65 546.4 Visiting Holding Agency Facilities V-6 546.5 Dollar Limitation V-76 546.6 Restrictions V-7 546.7 Costs V-7 546.8 Title V-7 546.9 Accountability and Recordkeeping V-8 Exhibit V-1 Principles Related to the Use and Operation of National Science Foundation-Supported Research Instrumentation and Facilities (Important Notice 91) V-9 Exhibit V-2 Preparation of Transfer Order V-13 CHAPTER VI -- ALLOWABILITY OF COSTS 600 Basic Considerations VI-1 601 Federal Cost Principles VI-1 601.1 Applicability to Grantees VI-1 601.2 Applicability to Contracts Under Grants VI-1 601.3 Conflicting Guidelines VI-1 602 Other Considerations VI-1 602.1 Maximum Obligation VI-1 602.2 Pre-Award Costs VI-1 602.3 Post-Expiration Costs VI-2 603 Prior Approval VI-2 603.1 OMB Directive VI-2 603.2 NSF Prior Approval Policy VI-2 604 Advance Understandings VI-2 610 Direct Costs VI-2 611 Salaries, Wages and Fringe Benefits VI-2 611.1 Salaries and Wages VI-2 611.2 Fringe Benefits VI-3 612 Equipment VI-3 612.1 Related Equipment Guidelines VI-3 612.2 Definitions VI-3 612.3 Special Purpose Equipment VI-3 612.4 General Purpose Equipment VI-4 613 Materials and Supplies VI-4 614 Travel Costs VI-4 615 Computer Costs VI-4 615.1 Automatic Data Processing Equipment (ADPE) Leasing Costs VI-4 615.2 Grantee-Owned ADPE Facilities VI-4 616 Consultant Services VI-4 616.1 Outside Consultants VI-4 616.2 Intra-University Consulting VI-5 616.3 Federal Employees VI-5 617 Publication, Documentation and Dissemination VI-5 618 Participant Support Costs VI-6 618.1 General VI-6 618.2 Stipends or Subsistence Allowances VI-6 618.3 Travel Allowances VI-6 620 Other Direct Costs VI-6 621 Rearrangements and Alterations VI-6 622 News Release Costs VI-7 623 Rental or Lease of Facilities or Special Purpose Equipment VI-7 624 Relocation Costs VI-7 625 Meetings and Conferences VI-7 630 Indirect Costs VI-8 631 Background VI-8 632 NSF Funding Policy VI-8 632.1 Basic Policy VI-8 632.2 Exceptions to Basic Policy VI-9 633 Indirect Costs in Proposals for NSF Support VI-9 633.1 Proposal Budget VI-9 633.2 Off-Campus (Off-Site) Activities VI-109 634 Indirect Costs in NSF Cost Reimbursement Grants VI-10 634.1 General VI-10 634.2 NSF Calculation of Indirect Cost Amount VI-10 634.3 Off-Campus (Off-Site) Indirect Cost Rates VI-10 634.4 Amendment for Additional Funding Support VI-110 635 Grantee Reimbursement for Indirect Costs VI-11 635.1 Approved Rates (other than Maximum Provisional) VI-11 635.2 Maximum Provisional Rate VI-11 635.3 Underrecovery of Indirect Costs VI-11 635.4 Rebudgeting of Indirect Cost Funds Provided Under NSF Grants VI-11 640 Fee Payments Under NSF Grants VI-11 CHAPTER VII -- OTHER GRANT REQUIREMENTS 700 Non-Discrimination Statutes VII-1 701 General VII-1 702 Civil Rights Act of 1964 VII-1 702.1 Background VII-1 702.2 NSF Regulations VII-1 702.3 Assurance of Compliance VII-1 702.4 Civil Rights Assurance-Subrecipients VII-121 702.5 Grant Provisions VII-2 703 Rehabilitation Act VII-2 703.1 Background VII-2 703.2 NSF Regulations VII-2 703.3 Assurance of Compliance VII-2 703.4 Section 504 Assurance-Subrecipients VII-2 703.5 Grant Conditions VII-2 704 Title IX - Sex Discrimination VII-2 705 Age Discrimination Act VII-2 705.1 Background VII-2 705.2 NSF Regulations VII-2 705.3 Grant Conditions VII-2 706 Equal Employment Opportunity Under E.O.11246 VII-2 706.1 Background VII-2 706.2 Grant Conditions VII-3 710 Protection of Living Organisms VII-3 711 Human Subjects VII-3 711.1 Background VII-3 711.2 NSF Regulation VII-3 711.3 Certification of Compliance VII-3 712 Research Involving Recombinant DNA Molecules VII-3 712.1 Applicability VII-3 712.2 Policy VII-3 712.3 Research Requiring Prior Approval of the Director, NIH VII-3 712.4 Recombinant DNA Research Outside the U.S. VII-3 712.5 Reporting VII-4 712.6 Additional Information VII-4 713 Animal Welfare Requirements VII-4 714 Marine Mammal Protection Act VII-4 720 Construction, Rearrangements and Alterations VII-5 721 Davis-Bacon Act VII-5 722 Bonding and Insurance VII-5 723 Flood Insurance VII-5 724 Seismic Safety of Buildings VII-5 730 Intellectual Property VII-5 731 Patent and Inventions VII-5 731.1 Background VII-5 731.2 National Science Foundation Patent Policy VII-6 731.3 Standard Patent Rights Clause VII-6 732 Copyright VII-9 732.1 Rights to Copyrightable Material VII-9 732.2 Standard Copyrightable Material Clause VII-10 733 Special Patent and Copyright Situations VII-10 733.1 Special Grant Provisions VII-10 733.2 Grants Not Primarily for Research VII-10 733.3 Grants Affected by International Agreements VII-11 734 Dissemination and Sharing of Research Results VII-11 735 Tangible Property VII-11 735.1 Background VII-11 735.2 Legal Rights to Tangible Property VII-11 740 Publication/Distribution of Grant Materials VII-11 741 NSF Policy VII-112 742 Costs VII-12 743 Responsibilities VII-12 744 Grantee Obligations VII-12 750 Program Income VII-12 751 Background VII-12 752 Definition VII-12 753 NSF Policy VII-12 760 International Considerations VII-123 761 Travel to Foreign Countries VII-123 761.1 Policy VII-123 761.2 Use of U.S.-Flag Air Carriers VII-13 761.3 Use of Foreign-Flag Air Carriers VII-13 762 Charter Flights VII-13 763 Projects in a Foreign Country VII-13 764 Passports and Visas VII-14 765 International Travel Grants VII-14 Exhibit VII-1 Assurance of Compliance VII-15 CHAPTER VIII -- OTHER PROPOSAL AND AWARD CONSIDERATIONS 800 Intergovernmental Review of Federal Programs VIII-1 810 Handling of Information VIII-1 811 Questionnaires: Data Collection Under NSF Grants VIII-1 811.1 Paperwork Control VIII-1 811.2 NSF Policy VIII-1 812 Release of Information by NSF VIII-1 812.1 Routine Information Releases VIII-1 812.2 Press Releases VIII-2 812.3 Open Government Legislation VIII-2 812.4 Release of Project Reports VIII-2 820 Tax Status VIII-2 830 Environmental Impact VIII-2 840 Protection of Properties in the National Register of Historic Places VIII-2 850 National Security VIII-2 860 Miscellaneous VIII-3 861 Liabilities and Losses VIII-3 862 Pre-College Students and Experimental Curriculum Development Projects VIII-3 863 Use of Metric Measurements VIII-3 CHAPTER IX -- RECONSIDERATION/ SUSPENSION AND TERMINATION/ DISPUTES/MISCONDUCT IN SCIENCE 900 Reconsideration of Proposals Declined or Returned by the Foundation IX-1 901 General IX-1 902 Policy IX-1 903 Explanations by the NSF Program Officer or Division Director IX-1 904 Reconsideration by the Assistant Director IX-2 905 Further Reconsideration by the Deputy Director IX-2 910 Suspension and Termination Procedures IX-2 911 Definitions IX-2 912 Suspension and Termination IX-3 912.1 NSF Policy IX-3 912.2 Procedures for Suspension or Termination by NSF IX-3 913 Termination by Mutual Agreement IX-4 913.1 NSF Policy IX-4 913.2 Procedures IX-4 914 NSF Suspension or Termination Review Procedure IX-4 920 Informal Resolution of Grant Administration Disputes IX-4 921 Background IX-4 922 Scope of Post-Award Disputes Covered IX-4 923 Procedures IX-4 930 Misconduct in Science IX-5 931 NSF Policies and Responsibilities IX-5 932 Role of Grantees IX-5 933 Reporting Possible Misconduct IX-6 CHAPTER X -- SUBJECT INDEX X-1 BASIC INFORMATION This chapter provides basic information about the National Science Foundation, its organization, grant policies and this Manual. It consists of the following topics: 100 THE NATIONAL SCIENCE FOUNDATION 110 NSF ORGANIZATION 120 THE NSF GRANT POLICY MANUAL 130 PROPOSAL SUBMISSION AND MERIT REVIEW 100 THE NATIONAL SCIENCE FOUNDATION a. The National Science Foundation (NSF) is an independent agency of the Federal government established in 1950 to promote and advance scientific and engineering progress in the United States. NSF funds research and education in most fields of science and engineering, but does not itself conduct research or carry out education projects. b. The Foundation carries out its statutory responsibilities for the support of research, education and related activities, through a number of programs. The NSF Guide to Programs and other brochures and announcements contain information about NSF programs, their objectives and timing for the submission of proposals. (See GPM 130, "Proposal Submission and Merit Review," for information on proposal preparation guidelines.) c. NSF has no programs involving the construction of public works in metropolitan areas, no development assistance programs, no programs requiring State plans as a condition of assistance, none involving coordination of planning in multi-jurisdictional areas and no programs of grants to State and local governments as defined in Section 6501(4) of title 31 of the United States Code (USC). 110 NSF ORGANIZATION a. The current NSF organization chart is shown as Exhibit I-1. b. The NSF organizations/offices described below are normally of most direct interest to grantees. 111 National Science Board The National Science Board is the governing body of the National Science Foundation. The Board is composed of 24 members, representing a cross section of American leadership in science and engineering research and education; appointed by the President to six-year terms, with one third appointed every two years; and selected solely on the basis of established records of distinguished service. The NSF Director is a member ex officio of the Board. In addition to governance of the Foundation, the Board serves the President and the Congress as an independent advisory body on policies affecting the health of U.S. science and engineering and education in science and engineering. 112 Program Division/Office Program Divisions/Offices are responsible for the scientific, technical and programmatic review and evaluation of proposals and for recommending that proposals be declined or awarded. The scientific, engineering or educational aspects of a grant will be monitored by the NSF Program Officer named in the grant. 113 Division of Grants and Agreements The Division of Grants and Agreements (DGA) is responsible for the business, financial and administrative review of all recommended grants, cooperative agreements and other assistance awards and assuring that they are consistent with applicable policies, regulations, directives and fund certifications. The NSF Grants Officer, an official in DGA, is the only NSF official with delegated authority to issue grants, cooperative agreements and other assistance awards and to obligate NSF funds for expenditures under such arrangements. DGA is also responsible for issuing all amendments and certain approvals under these awards and for the administration and closeout of these awards. 114 Division of Contracts, Policy and Oversight The Division of Contracts, Policy and Oversight (CPO) is responsible for solicitation, negotiation, award and administration of NSF contracts; for NSF proposal and award policy development, coordination and issuance; and for overseeing NSF procurement systems, processes and guidance. In addition, it performs cost analysis and resolves audit findings pertaining to the allowability, allocability and appropriateness of costs claimed under all NSF awards (including grants and cooperative agreements). 115 Division of Financial Management The Institutional Ledger Section (ILS) of the Division of Financial Management (DFM) is available to assist the grantee financial and business official in matters of payment and financial reporting discussed in Chapter IV of this Manual. 116 Office of the General Counsel The Office of the General Counsel (OGC) is responsible for NSF patent and other legal matters. It provides legal advice to NSF offices and handles invention disclosures and other patent-related matters (see GPM 730, "Intellectual Property"). 117 Office of Equal Opportunity Programs The Office of Equal Opportunity (OEO) Programs is responsible for all NSF civil rights matters. It provides direction and monitors all complaints related to race, color, religion, sex, age, national origin or disability. 118 Office of Inspector General The Office of Inspector General (OIG) is responsible for conducting audits, inspections and investigations involving NSF operations. This includes the investigation of financial or nonfinancial wrongdoing in connection with NSF proposals and grants. In particular, OIG receives and investigates allegations of misconduct in science and engineering. 120 THE NSF GRANT POLICY MANUAL 121 Purpose and Applicability a. Purpose. This NSF Grant Policy Manual (GPM) sets forth NSF policies regarding the award and administration of grants and implements Office of Management and Budget (OMB) Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, and 45 CFR §602 (the Common Rule implementing OMB Circular A-102), Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.1 This Manual also implements other OMB Circulars, Public Laws, Executive Orders (E.O.) and other directives2 listed in Exhibit I-2 insofar as they apply to grants, and is issued pursuant to the authority of Section 11(a) of the NSF Act (42 USC §1870). b. Applicability. This Manual is applicable to: 1)grants; and 2) cooperative agreements, unless noted otherwise in the award instrument. This Manual does not apply to NSF contracts. 122 General Organization and Citation The GPM is organized into chapters which correspond, in general, to the process from issuance and administration of a grant through closeout. Other requirements or considerations which either are not universally applicable or which do not necessarily follow the award cycle are contained in Chapters VII-IX. Chapters are subdivided into sections which cover single subjects within the scope of the chapter. Specific sections may be cited by the section number, e.g., GPM 122, "General Organization and Citation." 123 Changes Changes to this Manual will be made through use of Updates issued by the Policy Office, CPO. Each Update will describe the new material transmitted, the old material superseded (if any) and the purpose of the change. These Updates will transmit the new or revised material in loose-leaf form. Updates will also be provided electronically via the Grants Bulletin Board (GBB). Approximately every two years, the GPM will be reissued in its entirety incorporating all previously issued Update material. The current version of the GPM is also available on NSF's Science and Technology Information System (STIS). 130 PROPOSAL SUBMISSION AND MERIT REVIEW General guidance for the preparation, (content, format, budget, etc.), submission, review and processing of unsolicited proposals is contained in the Grant Proposal Guide (GPG). The GPG also contains a Proposal Forms Kit (Section IX) which includes all the forms/formats necessary for proposal submission. The Proposal Forms Kit is also available as a separate publication. Some NSF programs issue or utilize more specific program announcements/solicitations which may modify the guidance contained in the GPG. The latest version of the GPG is available electronically on NSF's STIS. Copies of the GPG, Proposal Forms Kit or any other NSF publication referenced in the GPM may also be obtained from: National Science Foundation Forms and Publications Unit 4201 Wilson Boulevard -- Room P15 Arlington, VA 22230 Telephone: (703) 306-1130 Internet: pubs@nsf.gov _______________________________ 1For purposes of this Manual, references to OMB Circular A-110 also include comparable portions of 45 CFR §602, where appropriate. 2 Consult Exhibit I-2 for information on obtaining these types of documents. NSF Organization Chart (Not available here. May only be accessed in paper copy.) 5. Office of Management and Budget Circulars Page 1 of 3 Exhibit I-2 STATUTES, EXECUTIVE ORDERS AND OTHER DIRECTIVES Following are lists of the various statutes, executive orders and other directives referred to or implemented by the GPM section indicated. 1. Statutes (Names in quotes are unofficial) Title Age Discrimination Act United States Code: 42 USC §§6101 et seq. GPM: 705 Animal Welfare Act United States Code: 7 USC §§2131-59 GPM: 713 Bayh-Dole Act United States Code: 35 USC §§200-212 GPM: 730 Byrd Anti-Lobbying Act United States Code: 31 USC §1352 GPM: OMB Circular A-110 Cash Management Improvement Act United States Code: 31 USC §6503 GPM: 443 Civil Rights Act of 1964, Title IX United States Code: 42 USC §§2000d et seq. GPM: 702 Clean Air Act, Sec. 306 United States Code: 42 USC §§7401 et seq. GPM: OMB Circular A-110 Contract Work Hours and Safety Standards Act of 1962 United States Code: 40 USC §§327-333 GPM: OMB Circular A-110 Copeland Anti-Kick Back Act United States Code: 18 USC §874, 40 USC §276c GPM: OMB Circular A-110 Cost-type Research and Development Contracts w/ Educational Institutions United States Code: 41 USC §254(a) GPM: 630 Davis-Bacon Act United States Code: 40 USC §§276a et seq. GPM: 721 Demonstration Cities and Metropolitan Development Act of 1966, Sec. 204 United States Code: 42 USC §3334 GPM: 800 Education Amendments of 1972, Title IX United States Code: 20 USC §§1681-86 GPM: 704 Federal Grant and Cooperative Agreement Act of 1977 United States Code: 31 USC §§6301-08 GPM: 210 Federal Water Pollution Control Act United States Code: 33 USC §§1251 et seq. GPM: OMB Circular A-110 Freedom of Information Act United States Code: 5 USC §552 GPM: 812.3 Government in the Sunshine Act United States Code: 5 USC §552b GPM: 812.3 Intergovernmental Cooperation Act of 1968 United States Code: 31 USC §6502 GPM: 800 Internal Revenue Code of 1954 United States Code: 26 USC 501(c) GPM: 730 International Air Transportation Fair Competitive Practices Act of 1974 United States Code: 49 USC §1517 GPM: 760 Marine Mammal Protection Act of 1972 United States Code: 16 USC §§1361-1421h GPM: 714 Metric Conversion Act of '75, as amended United States Code: 15 USC §205a-k GPM: 863 National Environmental Policy Act of 1969, Sec. 102 United States Code: 42 USC §4332 GPM: 830 National Flood Insurance Act of 1968 United States Code: 42 USC §4012a, 42 USC §4106 GPM: 723 National Historic Preservation Act United States Code: 16 USC §470 GPM: 840 National Science Foundation Act of 1950, as amended United States Code: 42 USC §§1861-75 GPM: 100,120,333,722,731 Paperwork Reduction Act of 1980 United States Code: 44 USC §§3501-11 GPM: 811.1 Plant Variety Protection Act United States Code: 7 USC §§2321 et. seq. GPM: 730 Rehabilitation Act of 1973, Sec. 504 United States Code: 29 USC §794 GPM: 703 Resource Conservation and Recovery Act United States Code: 42 USC §6962 GPM: OMB Circular A-110 Single Audit Act United States Code: 31 USC §§7501-07 GPM: 350 2. Executive Orders Number Short Title GPM 9492 Patents 731 11246 and 11375 Equal Employment Opportunity, as amended 706 11247 Civil Rights 702 11296 Evaluation of Flood Hazards 723 11593 Protection and Enhancement of the Cultural Environment 840 11764 Nondiscrimination in Federally Assisted Programs 700 12356 National Security Information 850 12372 Intergovernmental Review of Federal Programs 800 12549 and 12689 Debarment and Suspension OMB Circular A-110 12699 Seismic Safety of Federal and Federally-assisted or Regulated New Building Construction 724 12770 Metric Usage in Federal Government Programs 863 3. NSF Regulations (45 CFR, Chapter VI) Part Number Subject GPM 602 Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments Entire Manual 605, 611, and 617 Nondiscrimination in Federally Assisted Programs 700 612, 613, and 614 Freedom of Information, Privacy, and Government in the Sunshine Acts 812.3 620 Debarment and Suspension and Drug-Free Workplace 912,930 640 National Environmental Policy Act 830 650 Patents 731 660 Intergovernmental Review of NSF Programs 800 689 Misconduct in Science and Engineering 930 690 Protection of Human Subjects 711 4. Other Federal Regulations Title Contract Cost Principles and Procedures (Federal Acquisition Regulations) Code of Federal Regulations: 48 CFR §31 GPM: 600 Contract Work Hours and Safety Standards Code of Federal Regulations: 29 CFR §5 GPM: OMB Circular A-110 Controlling Paperwork Burdens on the Public Code of Federal Regulations: 5 CFR §1320 GPM: 811 Council on Environmental Quality Code of Federal Regulations: 40 CFR §§1500-1508 GPM: 830 Disposition (Government-owned Federal Information Processing Equipment) Code of Federal Regulations: 41 CFR §201.23 GPM: 546.6 Equal Employment Opportunity Code of Federal Regulations: 41 CFR §60 GPM: 706 Metric Usage in Federal Government Programs Code of Federal Regulations: 3 CFR,1991 comp GPM: 863 Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals Code of Federal Regulations: 45 CFR, Part 74, Appendix E GPM: 601 Withdrawal of Cash from the Treasury for Advances Under Federal Grant and Other Programs Code of Federal Regulations: 31 CFR, 205 GPM: 403 Protection of Historic and Cultural Properties Code of Federal Regulations: 36 CFR §800 GPM: 840 Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements Code of Federal Regulations: 37 CFR §§401et seq. GPM: 731 Rules and Procedures for Funds Transfers Code of Federal Regulations: 31 CFR §205 GPM: Ch. 4 Small Business Size Regulations Code of Federal Regulations: 13 CFR §121 GPM: 501.2 Utilization of Personal Property Code of Federal Regulaitons: 41 CFR §101.43 GPM: 543.3 5. Office of Management and Budget Circulars Number Short Title GPM A-21 Cost Principles for Educational Institutions 601 A-87 Cost Principles for State and Local Governments 601 A-110 Uniform Administrative Requirements for Grants and Other Agreements to Non-Profit Organizations Entire Manual A-122 Cost Principles for Non-Profit Organizations 601 A-128 Audits of Institutions of Higher Education and Other Non-Profit Institutions 350 A-133 Audits of State and Local Governments 350 6. How to Obtain Volumes of the United States Code and the Code of Federal Regulations can be purchased from the Government Printing Office by contacting: Superintendent of Documents, Attn: New Orders, Box 371954, Pittsburgh, PA 15250-7954. Telephone orders can be made with a credit card by dialing: (202) 512-1800 (voice), (202) 512-2250 (fax), or (202) 512-2265 (TDD). In addition, the Government Printing Office distributes these documents to U.S. Government Depository Libraries in each state. These documents are also often available in the reference sections of major libraries. Copies of pending and enacted federal legislation can be requested by bill or law number by calling either the Senate Document Room at (202) 224-7701 or the House Document Room at (202) 225-3456. For further information about ordering other congressional documents, contact the Government Printing Office on (202) 512-2465. Copies of Executive Orders and Office of Management and Budget Circulars can be obtained by contacting: The Executive Office of the President (EOP), Publications Distribution Services, 725 17th Street, NW, Room 2200, Washington, DC 20503 or by telephone at (202) 395-7332. 731 660 Intergovernmental Review of NSF Programs 800 NSF AWARDS This chapter discusses the award process and specifically highlights the following topics: 200 BACKGROUND 210 DEFINITIONS 220 NSF-GRANTEE RELATIONSHIPS 230 GRANT INSTRUMENT 240 NSF STANDARD GRANT CONDITIONS 250 NSF GRANT PERIODS 260 ADDITIONAL FUNDING SUPPORT 200 BACKGROUND The types of activities funded by NSF and the purposes of NSF funding vary. Consequently, the degree of NSF responsibility for and the management control of such activities also varies. NSF traditionally uses grants for fundamental research and other support activities. The key factor in determining the appropriate award terms and conditions is the type of project which is to be funded, not the type of performing organization which will be the recipient of the award or the NSF program recommending the award. 210 DEFINITIONS a. An AUTHORIZED ORGANIZATIONAL REPRESENTATIVE is the administrative official who on behalf of the proposing organization is empowered to make certifications and assurances and can commit the organization to the conduct of a project that NSF is being asked to support as well as and to adhere to various NSF policies and grant requirements. b. ASSISTANCE AWARDS are awards which entail the transfer of money, property, services or other thing of value from the Federal government to a State or local government or other recipient to accomplish a public purpose of support or stimulation. In the case of the NSF, assistance awards involve the support or stimulation of scientific and engineering research, science and engineering education or other related activities. NSF is authorized to use grants or cooperative agreements for this purpose. c. A GRANT* is a type of assistance award and a legal instrument which permits an executive agency of the Federal government to transfer money, property, services or other thing of value to a grantee when no substantial involvement is anticipated between the agency and the recipient during the performance of the contemplated activity. Grants are the primary mechanism of NSF support. NSF awards the following types of grants: 1. A STANDARD GRANT is a type of grant under which NSF agrees to provide a specific level of support for a specified period of time. There is with no statement of NSF intent to provide additional future support without submission of another proposal. 2. A CONTINUING GRANT is a type of grant under which NSF agrees to provide a specific level of support for an initial specified period of time, with a statement of intent to provide additional support of the project for additional periods provided funds are available and the results achieved warrant further support. 3. A COST REIMBURSEMENT GRANT is a type of grant under which NSF agrees to reimburse the grantee for work performed and/or costs incurred by the grantee up to the total amount specified in the grant. Such costs must be allowable in accordance with the applicable cost principles (e.g., OMB Circular A-21 Cost Principles for Educational Institutions or A-122 Cost Principles for Non-Profit Organizations). Accountability is based primarily on technical progress, financial accounting and fiscal reporting. Except under certain programs and under special circumstances, NSF grants and cooperative agreements are normally cost reimbursement type awards. 4. A FIXED AMOUNT AWARD is a type of grant used in certain programs and situations under which NSF agrees to provide a specific level of support, without regard to actual costs incurred under the project. The award amount is negotiated using the applicable cost principles or other pricing information as a guide. This type of grant reduces some of the administrative burden and record keeping requirements for both the grantee and NSF. Except under unusual circumstances, such as termination, there is no governmental review of the actual costs subsequently incurred by the grantee in performance of the project. There typically is a requirement for the grantee to certify that the approximate number of person-months or other activity called for in the grant was performed. Payments are based on meeting specific requirements of the grant and accountability is based primarily on technical performance and results. d. A COOPERATIVE AGREEMENT* is a type of assistance award which may be used when the project being supported requires substantial agency involvement during the project performance period. Substantial agency involvement may be necessary when an activity: is technically or managerially complex; requires extensive or close coordination with other Federally supported work; or helps assure suitability or acceptability of certain aspects of the supported activity. Examples of projects which might be suitable for cooperative agreements are systemic reform efforts, research centers, policy studies, large curriculum projects, multi-user facilities, projects which involve complex subcontracting, construction or operations of major in-house university facilities and major instrumentation development. e. A GRANTEE* is the organization or other entity that receives a grant and assumes legal and financial responsibility and accountability both for the awarded funds and for the performance of the grant-supported activity. NSF grants are normally made to organizations rather than to individual PI/PD(s). Categories of eligible proposers may be found in GPG Chapter I. f. PRINCIPAL INVESTIGATOR/PROJECT DIRECTOR (PI/PD) is the individual designated by the grantee, and approved by NSF, who will be responsible for the scientific or technical direction of the project. The term "Principal Investigator" generally is used in research projects, while the term "Project Director" generally is used in science and engineering education and other projects. * For purposes of this Manual, except where explicitly noted, the term "grant" is interchangeable with the term "cooperative agreement", and the term "grantee" is interchangeable with the "recipient" of a cooperative agreement. 220 NSF-GRANTEE RELATIONSHIPS 221 Basic Requirements a. Grants will be used by NSF when the accomplishment of the project objectives requires minimal NSF involvement during performance of the activities. Grants establish a relationship between NSF and the grantee in which: 1. NSF agrees to provide up to a specified amount of financial support for the project to be performed under the conditions and requirements of the grant. NSF will monitor grant progress and assure compliance with applicable standards. 2. The grantee agrees to the performance of the project, to the prudent management of the funds provided and to carry out the supported activities in accordance with the provisions of the grant. (See GPM 230, "Grant Instrument", for the documents which comprise an NSF grant.). b. Cooperative agreements will be used by NSF when the accomplishment of the project objectives requires substantial NSF technical or management involvement during performance of the activities. 1. Cooperative agreements will specify the extent to which NSF will be required to advise, review, approve or otherwise be involved with project activities. 2. Although active NSF involvement may be necessary under cooperative agreements, recipients still have primary management responsibility for conduct of their projects. To the extent that NSF does not reserve responsibility for coordinating or integrating the project activities with other related activities or does not assume a degree of shared responsibility for certain aspects of the project, all such responsibilities remain with the recipient. As appropriate, NSF may provide advice, guidance or assistance of a technical, management, or coordinating nature and require NSF approval of specific decisions, milestones, procedures or subawards. While NSF will monitor cooperative agreements, it will not assume overall control of a project or unilaterally change or direct the project activities. All cooperative agreements will state the nature and extent of expected NSF involvement to ensure that the responsibilities of each party are fully understood. 222 Acceptance of Assistance Agreements a. Grant Acceptance. Grantees are free to accept or reject the grant. Normally, action to obtain Federal funds constitutes acceptance of a grant once it is made. However, in some cases, NSF may require written acceptance. b. Cooperative Agreement Acceptance. All cooperative agreements must be signed by an Authorized Organizational Representative at the recipient organization before the agreement becomes binding. 230 GRANT INSTRUMENT The following documents comprise an NSF grant: a. the grant letter, including any special conditions applicable to the award and any numbered amendments thereto; b. the budget, which indicates the amounts, by categories of expense, on which NSF has based its support; c. the proposal referenced in the grant letter; d. the applicable NSF conditions referenced in the grant letter (see GPM 240, "NSF Grant Conditions," for listing); and e. any NSF program announcement/ or solicitation or other document incorporated by reference in the grant letter. 240 NSF GRANT CONDITIONS a. NSF Grant Conditions. Each NSF grant letter specifically identifies certain conditions which are applicable to and become part of that award. When these conditions reference a particular GPM section, that section becomes part of the grant requirements through incorporation by reference. b. Basic Conditions. The following types of basic conditions may be made a part of an NSF grant, as appropriate. 1. General Conditions. (a) Grant General Terms and Conditions (GC-1) are used in most NSF grant awards; (b) Federal Demonstration Project General Terms and Conditions (FDP-II) and Agency Specific Requirements (Modifications to the General Terms and Conditions) are used in most grants to participants in the FDP only; and (c) Small Business Innovation Research (SBIR) Phase II Grant General Conditions are used in Phase II grants under the SBIR program. 2. Standard Conditions. These types of conditions may either supplement or modify the applicable General Conditions described above. (a) Administration of NSF Conference or Group Travel Award Grant Special Conditions (FL 26) are used for conference or travel grants. (b) Construction Conditions (A-2) are used for grants which include rearrangements/alterations/renovation over $10,000 (construction). (c) Fixed Amount Award Grant Conditions (FAA) are used in NSF fixed amount grants. (Note: these conditions may establish different financial and other requirements which are not generally used in cost reimbursement type grants.). (d) Cooperative Agreement Conditions (CA-1) are used under NSF cooperative agreements. c. Availability. The latest version of each set of these general and standard conditions, as well as other standard conditions, is available on STIS. These conditions are also available from the NSF Forms and Publications Unit (for address see GPM 130, "Proposal Submission and Merit Review"). 250 NSF GRANT PERIODS 251 Definitions a. EFFECTIVE DATE is the date specified in the grant letter on or after which, except for fixed amount awards, expenditures may be charged to the grant. Effective dates used by NSF are normally either the 1st or the 15th day of the month. If no effective date is specified, then the date of the grant letter is the effective date. (See, however, GPM 602.2, "Pre-Award Costs.") b. EXPIRATION DATE is the date specified in the grant letter after which expenditures may not be charged against the grant except to satisfy obligations to pay allowable project costs committed on or before that date. The expiration date is normally the last day of a month. c. GRANT PERIOD is the period of time between the effective date and the expiration date of an NSF grant shown as the duration. 252 Significance of Grant Period a. Except in fixed amount awards, an NSF grant gives authority to the grantee to commit and expend funds for allowable costs (see Chapter VI) in support of the project up to the grant amount specified in the grant letter at any time during the grant period. b. Except as provided in GPM 602.2, "Pre-Award Costs", GPM 602.3, "Post-Expiration Costs", or GPM 617, "Publication, Documentation and Dissemination", expenditures may not be charged prior to the effective date or subsequent to the expiration date under an NSF cost reimbursement grant. 253 Changes in Grant Periods 253.1 Effective Date The effective date of a grant will not be changed unless it is justified by exceptional circumstances. Any request to change the effective date must contain such justification and be signed by the PI/PD and endorsed by an Authorized Organizational Representative. Two copies of the request should be transmitted to the NSF Grants Officer. If approved, the NSF Grants Officer will issue an amendment to the grant. No other commitments regarding effective dates are valid. 253.2 Expiration Date The expiration date may be changed as a result of approval of a request for continued support of a continuing grant, for a no-cost grant extension, or, in some cases, by renewed support of a standard grant or supplemental support. If approved, the NSF Grants Officer will issue an amendment to the grant. 253.3 No-Cost Extension a. Grantee Authorized Extension. Grantees may authorize a one-time extension of the expiration date of the grant of up to 12 months if additional time beyond the established expiration date is required to assure adequate completion of the original scope of work within the funds already made available. This one-time extension may not be exercised merely for the purpose of using the unliquidated balances. The grantee shall notify the NSF Grants Officer in writing, providing supporting reasons for the extension and the revised extension date, at least ten days prior to the expiration date specified in the grant to ensure accuracy of NSF's grant data. For extensions provided by organizations, no amendment will be issued. b. NSF-Approved Extension. 1. If additional time beyond the extension provided by the grantee is required and exceptional circumstances warrant, a formal request must be submitted to NSF. Two copies of the request, signed by the PI/PD and an Authorized Organizational Representative, must be received by the cognizant NSF program office at least 45 days before the expiration date of the grant. The request must explain the need for the extension and include an estimate of the unobligated funds remaining and a plan for their use. As indicated above, that unobligated funds may remain at the expiration of the grant is not in itself sufficient justification for an extension. The plan must adhere to the previously approved objectives of the project. 2. Any approved no-cost extension will be issued by an NSF Grants Officer in the form of an amendment to the grant specifying a new expiration date. Grantees are cautioned not to make new commitments or incur new expenditures after the expiration date in anticipation of a no-cost extension. 260 ADDITIONAL FUNDING SUPPORT 261 Types of Additional Funding Support Additional funding of a project beyond the original grant period will be in the form of renewed support, continued support or supplemental support. 262 Renewed Support (Standard Grants) a. Renewed support is defined as additional funding for a support period subsequent to that provided by a standard grant. Standard grants may be renewed one time by amendment of the original grant instrument provided that the cumulative duration does not exceed five years. Subsequent renewals (if any) will be in the form of a new grant with a new grant number. Costs incurred under the old grant cannot be transferred to the new grant. Residual funds remaining in the old grant cannot be transferred to the new grant. b. A proposal for renewed support of a project is evaluated in competition with all other pending proposals. Instructions for preparation of renewal proposals are contained in the GPG, Sections II and VI. 263 Continued Support (Continuing Grants) a. Funding increments for projects being supported under continuing grants, as defined in GPM 210, receive high priority within NSF and normally are not considered in competition with proposals for new grants or for renewed support of standard grants. b. Unless otherwise provided for in the original grant letter, each increment of a continuing grant will be funded at the level indicated in that letter without a formal request, provided the required annual progress report has been received and subject to NSF's judgment of satisfactory progress and availability of funds. NSF makes every attempt to honor continuing grant commitments. However, in order to adjust to changes in the general level of funds for a particular field of science or engineering or to major new opportunities in that field, NSF may reduce continuing grant increments below the levels indicated in original grant letters. This requires full written justification by program staff and management review and approval. In the absence of major unanticipated fiscal year constraints, reductions are rare. c. In order to obtain a committed funding increment and ensure continuity of funding, one copy of the NSF Form 1328, Annual NSF Grant Progress Report, addressed to the cognizant program office, with a copy to the Authorized Organizational Representative, must be received by NSF at least three months before the end of the period currently being funded. Requests should be prepared in accordance with the instructions contained on the form. Processing of the planned funding increment will not be initiated until the required progress report is submitted. The certification on the NSF Form 1328 must be signed by the PI/PD. This form is contained in the GPG and is also available on STIS. 264 Supplemental Support a. In unusual circumstances, small amounts of supplemental funding and up to six months of additional support may be requested to assure adequate completion of the original scope of work. Such requests for supplemental funding support should be submitted to the cognizant NSF Program Officer at least two months prior to the need for the additional funds and must be adequately justified. Program Officers may make decisions regarding whether or not to recommend a small supplement without merit review of the supplemental request. Requests for larger supplements may require merit review. b. A request for supplemental support should include: 1. A brief justification of need; and 2. A signed budget, (NSF Form 1030, Summary Proposal Budget,) highlighting the use by budget category of the additional funding as distinguished from the original funding provided in those categories of cost. Two copies of the request should be submitted. c. NSF will not approve requests for supplemental support for such purposes as defraying the costs of increases in salaries, wages or staff benefits or for additional indirect cost reimbursement, whether caused by a change in the indirect cost rate or by changes in direct cost expenditures which affect the indirect cost base. (See GPM 602.1, "Maximum Obligation," and GPM 635, "Grantee Reimbursement for Indirect Costs.") d. If approved, the NSF Grants Officer will amend the grant to provide additional funding for the current support period. The amendment letter will specify both the amount of supplemental funding and the cumulative amount awarded through the expiration date, which normally will remain unchanged. e. Only in exceptional cases will more than one supplement be approved. f. Special NSF programs such as Research Experiences for Undergraduates may provide their funding through supplements to other NSF grants. In such instances, the guidance in this section may not be applicable. GRANT ADMINISTRATION This chapter implements various requirements contained in OMB Circular A-110 and is applicable to all NSF grants to all types of performing organizations. It contains the following topics: 300 MONITORING PROJECT PERFORMANCE 310 CHANGES IN PROJECT DIRECTION OR MANAGEMENT 320 CHANGES IN THE GRANT BUDGET 330 COST SHARING AND MATCHING 340 TECHNICAL REPORTING REQUIREMENTS 350 RECORDS RETENTION AND AUDIT 300 MONITORING PROJECT PERFORMANCE 301 Grantee Responsibilities a. A grantee has full responsibility for the conduct of the project or activity supported under an NSF grant and for the results achieved. The grantee should monitor the performance of the project to assure adherence to performance goals, time schedules or other requirements as appropriate to the project or the terms of the grant. In order to carry out these responsibilities, each grantee organization shall agree to comply with the applicable Federal requirements for grants and to the prudent management of all expenditures and actions affecting the grant. Documentation for each expenditure or action affecting the grant shall reflect appropriate organizational reviews or approvals which should be made in advance of the action. Organizational reviews are intended to help assure that expenditures are allowable, necessary and reasonable for the conduct of the project, and that the proposed action: 1. is consistent with grant terms and conditions; 2. is consistent with NSF and grantee policies; 3. represents effective utilization of resources; and 4. does not constitute a change in objective or scope. b. Notwithstanding these responsibilities, NSF continues to encourage communication between NSF Program Officers and PI/PDs on the progress of projects supported by NSF as well as on project changes. c. NSF, through authorized representatives, has the right, at all reasonable times, to make site visits to review project accomplishments, grantee management control systems and administration and management of the grant and to provide technical assistance as may be required. If any site visit is made by the Foundation on the premises of the grantee or a subawardee under a grant, the grantee shall provide and shall require its subawardees to provide all reasonable facilities and assistance for the safety and convenience of the NSF representatives. 302 Grantee Notifications to NSF and Requests for NSF Approval Exhibit III-1 provides a listing of grantee notifications to and requests for approval from NSF. While the listing is not intended to be all-inclusive, it does highlight the most frequent areas where specific notifications and requests for approval are called for. 310 CHANGES IN PROJECT DIRECTION OR MANAGEMENT 311 Changes in Objectives, Scope or Methodology 311.1 Changes in Objectives or Scope Neither the phenomena under study nor the objectives of the project stated in the proposal or agreed modifications thereto should be changed without prior NSF approval. Such changes should be proposed to the NSF Program Officer by the PI/PD in a written communication countersigned by the Authorized Organizational Representative. If approved by NSF, the Grants Officer will amend the grant. 311.2 Changes in Methodology NSF believes that the PI/PD, operating within the established policies of the grantee organization, should feel free to pursue interesting and important leads which may arise during the conduct of a research (or other grant-supported) project or to adopt an alternative approach which appears to be a more promising means of achieving the objectives of the project. Significant changes in methods or procedures should be reported to appropriate grantee official(s) and to the cognizant NSF Program Officer. 311.3 Significant Changes, Delays or Events of Unusual Interest a. In the event there are problems, delays or adverse conditions that will materially affect the ability to attain the objectives of the project or to meet such time schedules as may have been proposed, appropriate grantee officials should notify the NSF Program Officer. b. NSF should be informed of any events of unusual interest which occur during the course of the project. Reports, communications or photographs may be directed to the NSF Program Officer. 312 Changes in PI/PD or Person-Months Devoted to the Project 312.1 Background The NSF decision to support or not to support a proposed project is based to a considerable extent upon its evaluation of the proposed PI/PD's knowledge of the field of study and his/her capabilities to conduct the project in an efficient and productive manner. This is reflected in the NSF criteria for the selection of research projects (see GPG Section III). The named PI/PD should be continuously responsible for the conduct of the project and be closely involved with the effort. 312.2 Basic Requirements If the named PI/PD plans to, or becomes aware that he/she will: (a) devote substantially more or less effort to the work than anticipated in the approved proposal; (b) sever his/her connection with the grantee organization; or (c) otherwise relinquish active direction of the project, he/she shall advise the Authorized Organizational Representative, who shall initiate action appropriate to the situation under the guidelines which follow. 312.3 Short-Term Absence of PI/PD If the named PI/PD will be absent from the project for short periods of up to three months, he/she shall notify appropriate officials of the grantee organization and the NSF Program Officer of arrangements for conduct of the project during his/her temporary absence. 312.4 Long-Term Absence of PI/PD In the event the named PI/PD will be away from the project for a period greater than three months (e.g. sabbatical leave) but intends to return, arrangements for oversight of the project shall be sent to NSF for approval. This information shall be provided at least 30 days before departure or as soon as practicable after the prospective absence is known. It should be endorsed by the Authorized Organizational Representative and addressed to the NSF Program Officer. The NSF Program Officer will provide written approval if the arrangements are satisfactory, but no formal amendment to the grant will be made. If the arrangements are not satisfactory to NSF, the grant may be terminated as prescribed in GPM 910, "Suspension and Termination Procedures." If the PI/PD's temporary activities might constitute a conflict of interest (e.g., working for a Federal agency), a substitute PI/PD shall be appointed as described in GPM 312.7, "Substitute PI/PD." 312.5 Change in Person-Months Devoted to the Project If the PI/PD will devote substantially more or less time to the project than anticipated in the proposal, he/she should consult with appropriate officials of the grantee organization and with the NSF Program Officer. If either determines that the increased effort will substantially affect the project proposal as approved or the reduction of effort will substantially impair the successful execution of the project, the Program Officer should consult the NSF Grants Officer. The NSF Grants Officer may: a. request the grantee to nominate a replacement PI/PD acceptable to the NSF Program Officer; b. initiate the termination procedures described in GPM 910, "Suspension and Termination Procedures"; or c. negotiate an appropriate modification to the grant. 312.6 Withdrawal of PI/PD In the event the named PI/PD severs his/her connection with the grantee organization or otherwise relinquishes active direction of the project, the Authorized Organizational Representative should notify the NSF Program Officer, and either: a. initiate grant closeout procedures through submission of final reports (GPM 342, "Final Project Report," and GPM 452, "Final Disbursement Reporting"); or b. nominate a substitute as described in GPM 312.7, "Substitute PI/PD." 312.7 Substitute PI/PD In the event the grantee desires to continue the project with a substitute PI/PD, the Authorized Organizational Representative should advise the NSF Program Officer of the substitute PI/PD's name, qualifications, and current and pending support for research from all sources. The recommended substitute PI/PD shall countersign the notification letter to the NSF Program Officer from the Authorized Organizational Representative nominating the substitute PI/PD. If approved by NSF, the Grants Officer will amend the grant. If not approved, NSF may take steps, pursuant to GPM 910, "Suspension and Termination Procedures," to suspend or terminate the grant. 312.8 Disposition of a Grant When a PI/PD Transfers from One Organization to Another Organization a. Policy. When a PI/PD plans to leave an organization during the course of a grant, the organization has the prerogative to nominate a substitute PI/PD or request that the grant be terminated and closed out. In those cases where the PI/PD's original and new organizations agree, NSF will facilitate a transfer of the grant and the assignment of remaining unobligated funds to the PI/PD's new organization. This should normally be done with a tripartite agreement (involving NSF and the PI/PD's original organization and new organization), or by a subaward arrangement (in certain circumstances) between the PI/PD's original and new organizations, subject to NSF's consent. (See GPM 313 "Contracting or Transferring the Project Effort (Subawards).") b. Procedures. When a PI/PD plans to leave an organization during the course of a grant, the PI/PD or the PI/PD's organization shall notify the NSF Program Office. If the project is to continue with the original organization, the NSF Program Officer should advise the grantee to nominate a substitute PI/PD (see GPM 312.7, Substitute PI/PD"). If the project is to be continued at the PI/PD's new organization, and if NSF and both organizations agree, formal notification of the impending transfer countersigned by the Authorized Organizational Representatives of both the original and new organizations shall be made to the NSF Program Office using NSF Form 1263, NSF Grant Transfer Request. (See Exhibit III-2.) The required certifications on page 2, Certification Page, shall be signed by both the PI/PD(s) and the Authorized Organizational Representative of the new organization. The completed transfer request shall be accompanied by: 1. a brief summary of progress to date; 2. a description of work yet to be accomplished; and 3. a budget for the amount to be transferred. Signing of the request constitutes agreement by the new organization to assume responsibility for completion of the project effort and to administer the grant (as originally awarded) from the transfer date to completion in accordance with any special terms and conditions and the applicable general terms and conditions that normally govern NSF grants made to the new organization. c. Fund Transfer. Upon receipt of the above material, NSF will review the request and, if approved, deduct the specified transfer amount from the original grant and re-establish it under a new grant number at the new organization. Signature of the NSF Grants Officer will constitute formal ratification of the grant transfer. At that time, the Grants Officer will also specify the applicable basic terms and conditions to govern the grant (i.e., NSF GC-1, FDP, or other Terms and Conditions). d. Equipment Transfers. Equipment purchased with NSF funds for use in a specific project should remain available for use for the duration of the project. PI/PDs who are in the midst of projects that included funding for equipment and who will continue the project at a new organization with NSF support should be able to arrange with their original organization to have the equipment transferred with them. Shipping costs for such equipment may be charged to the original or transferred grant as an allowable cost. Budgets should not include funds to "buy" equipment that had been previously obtained with Federal funds. e. Possible Alternatives to the Transfer Process. When the amount of time and funds remaining in a project are modest, and if both the original and new organizations are in agreement, the original organization may issue a subaward to the new organization for completion of the project. This and other possible alternatives should be discussed with the NSF Grants Officer. 313 Contracting or Transferring the Project Effort (Subawards) a. Excluding the procurement of items such as commercially available supplies, materials, equipment or general support services allowable under the grant, no significant part of the research or substantive effort under an NSF grant may be contracted or otherwise transferred to another organization without prior NSF authorization. The intent to enter into such arrangements should be disclosed in the proposal submission. b. If it becomes necessary to contract or otherwise transfer a significant part of the research or substantive effort after a grant has been made, the grantee shall submit, at a minimum, to the NSF Grants Officer: 1. a clear description of the work to be performed; 2. the basis for selection of the subawardee (except for collaborative/joint arrangements); and 3. a budget in the prescribed NSF format for each subaward. Collaborative/joint arrangements may include closely related and coordinated activities at another organization; a joint activity by several organizations or a consortia; and group proposals from multiple organizations. The request shall be signed by the PI/PD and endorsed by the Authorized Organizational Representative. NSF authorization will be indicated by an amendment to the grant signed by the Grants Officer. The NSF grant will identify which NSF grant conditions should be included in subawards. (See also GPM 731.3.g, "Standard Patent Rights Clause," regarding patent "flow-down" provisions.) c. Procurements under NSF grants are also subject to GPM 530, "Procurement Standards," and OMB Circular A-110 Sections .41 through .48. 320 CHANGES IN THE GRANT BUDGET 321 OMB Directives Section .25 of OMB Circular A-110 contains optional requirements regarding budgetary revisions. NSF elects NOT to impose the following requirements on its grantees: a. prior approval requirements for appropriate transfer between direct and indirect cost categories of the grant budget; and b. restrictions in transfers of funds among direct cost categories for grants in which the Federal share exceeds $100,000. 322 Grant Changes and Approvals a. If required in furtherance of the project, the grantee is authorized to transfer funds from one budget category to another for allowable expenditures. Exhibit III-1, however, highlights certain budget changes which may require NSF prior approval. b. When a change requires NSF approval, two copies of a request, signed by the PI/PD and by the grantee's Authorized Organizational Representative, should be sent to the appropriate NSF office. The request should clearly state which budget items, if any, are to be changed and by what amounts, and should explain the reasons for any changes. c. Whenever the amount of Federal funds authorized by an NSF grant is expected to exceed the requirements of the project, as outlined in the approved proposal, by more than $5,000 or 5 percent of the grant amount, whichever is greater, the PI/PD, with the endorsement of the Authorized Organizational Representative, will promptly notify the NSF Program Officer. If a request for a no-cost extension (GPM 253.3, "No- Cost Extension"), renewed support (GPM 262, "Renewed Support (Standard Grants)") or continued support (GPM 263, "Continued Support (Continuing Grants)") is under preparation, such notification should be included in that request. 330 COST SHARING AND MATCHING 331 Basis for NSF Requirements 331.1 Statutory Requirement The appropriations providing funds to NSF and other independent agencies contain the following language: "None of the funds provided in this Act may be used for payment, through grants and contracts, to recipients that do not share in the cost of conducting research resulting from proposals for projects not specifically solicited by the Government: Provided, that the extent of cost sharing by the recipient shall reflect the mutuality of interest of the grantee or contractor and the Government in the research." 331.2 OMB Directive Section .23 of OMB Circular A-110 prescribes criteria and procedures for the allowability of cash and in-kind contributions in satisfying cost sharing and matching requirements. 332 Significance of Cost Sharing Promises in Proposals Even if not required by a particular program announcement/solicitation, a promise of cost sharing by a prospective grantee may be a significant factor in NSF's funding decision and may be made a specific condition of the grant. 333 NSF Cost Sharing Requirements 333.1 Unsolicited Research Projects a. In accordance with Congressional requirements (GPM 331.1, "Statutory Requirement"), NSF requires that each grantee share in the costs of research projects resulting from unsolicited proposals. (An unsolicited proposal is one not specifically solicited by an NSF program solicitation or other document.) NSF grants which provide funds solely for the following purposes are not considered to be support of "research" for statutory cost sharing purposes: 1. international travel; 2. construction, improvement or operation of facilities; 3. acquisition of research equipment; 4. ship operations; 5. education and training; 6. publication, distribution and translation of scientific data and information; 7. symposia, conferences and workshops; and 8. special studies authorized or required by Subsections 3a(5) through 3a(7) of the NSF Act, as amended. b. As a matter of policy, NSF does not reimburse grantees for the indirect costs associated with grants solely for the support of doctoral dissertation research and considers that as satisfaction of the cost sharing requirement. (See GPM 632.2, "Exceptions to Basic Policy.") 333.2 Solicited Research Projects NSF encourages organizations responding to program solicitations to contribute to the cost of performing the research unless that would be inappropriate. Nevertheless, unless otherwise specified in a particular program solicitation, cost sharing is not a prerequisite to the award of a grant to support a project resulting from such a program solicitation. 333.3 Cost Sharing Amount a. NSF expects that grantees will share in the costs at a level which reflects their interest in the research, the potential benefits they may derive and their ability to cost share. Organizations have a great deal of flexibility with regard to their approach to cost sharing under NSF-supported projects, and thus shall assume and exercise responsibility in determining appropriate levels of cost sharing. b. Grantees shall share in the cost of projects requiring cost sharing as indicated in GPM 333.4, "Cost Sharing Method," except in certain instances where specific cost sharing amounts, percentages or other requirements may be included in or incorporated by reference in specific NSF grants. In such cases the provisions of the grant govern the amount, level or nature of cost sharing. A failure to provide such cost sharing may result in grant costs being questioned and required to be refunded to NSF and may constitute a violation of the terms of the grant so serious as to provide grounds for debarment or suspension. 333.4 Cost Sharing Method a. Except for grants which require specific cost sharing amounts or percentages (see GPM 333.3, "Cost Sharing Amount"), grantees can comply with the basic cost sharing requirement and meet the minimum amount by either of two alternative methods: 1. cost sharing a minimum of one percent on each and every project; or 2. cost sharing a minimum of one percent on the aggregate total costs of all projects requiring cost sharing. This latter approach allows organizations greater flexibility by being able to share a greater percentage on some projects and not share at all on others. b. Decisions on which method to use may be made by the grantee and there is no requirement that NSF either be advised or approve of the method chosen. NSF does not use "organizational cost sharing agreements," such as those used by some granting agencies, to provide for aggregated cost sharing. c. Regardless of the method chosen and unless otherwise specified in the NSF program announcement/solicitation, the amount or percentage of cost sharing need not be detailed in specific project proposals or proposal budgets, except if cost sharing is expected to be undertaken by claiming less than the approved indirect cost rate, which should be clearly stated in the proposal budget. (See GPM 333.5, "Method of Providing Contributions.") d. Cost sharing responsibilities are assumed by the grantee upon acceptance of the grant. 333.5 Method of Providing Contributions a. Unless the grant states otherwise, contributions may be made from any non-Federal source, including non-Federal grants or contracts. Contributions from non-Federal sources may be counted as cost sharing toward Federal projects only once. Thus, contributions counted as cost sharing toward projects of another Federal agency may not be counted as cost sharing toward projects supported by NSF. If such contributions however, are related to projects supported by more than one Federal agency, the recipient may elect to make a proration among the agencies involved. b. The contributions may be in the form of either direct or indirect costs. c. Only items which would be allowable under the applicable cost principles, if charged to the project, may be included as the grantee's contribution. d. Organizations will not be required to obtain prior NSF approval of the manner in which contributions are to be provided. The contributions may be in any allowable budget category or combination of categories. However, when direct cost items are contributed to the project, any indirect costs related to that item may not be charged to the project. Those indirect costs may, of course, be counted as part of the contribution. This restriction also applies to fringe benefits (when treated as direct costs) applicable to direct salaries contributed by the recipient. e. If a grantee wishes to provide cost sharing in the indirect cost category, it should merely reduce its claim for indirect costs to which it would be otherwise entitled, indicating the difference as cost sharing. 333.6 Cost Sharing Records and Reports a. Grantee Records. 1. Grantees shall maintain records of all research project costs which are claimed by the grantee as being its contribution to cost participation, as well as records of costs to be paid by the government. Such records are subject to audit. 2. If the grantee's cost participation includes in- kind contributions, the basis for determining the valuation for volunteer services and donated property must be documented. 3. Grantees using the aggregate cost sharing method may find it useful, on a fiscal year basis, to prepare a summary of the total project costs for the year of all NSF-funded projects requiring cost sharing (excluding those grants which require specific cost sharing amounts or percentages; see GPM 333.3, "Cost Sharing Amount"), the total amount of cost sharing on those projects for the year, and the aggregate level of cost sharing expressed as a percentage of contributed costs to total project costs. Such information will facilitate organizational and Federal audit review and analysis of compliance with the cost sharing requirements on the aggregate basis. b. Grantee Reports. Unless otherwise required by the grant instrument or requested by NSF, the actual cost participation by the grantee need not be reported to NSF. However, in cases where grantee cost sharing commitments are $500,000 or more, the grant instrument will require as a condition of the grant, the Authorized Organizational Representative to report and certify the amount of cost sharing on an annual and cumulative basis. These cost sharing reports shall be included as part of the annual progress and final project reports. 334 NSF Matching Requirement Some NSF programs have a requirement for grantees to match the Federal support in whole or in part, as outlined in the specific program announcement. Records and reporting requirements for matching funds are the same as those outlined above for cost sharing amounts, GPM 333.6, "Cost Sharing Records and Reports." 340 TECHNICAL REPORTING REQUIREMENTS 341 Annual Progress Reports a. PI/PDs should submit progress reports as indicated below. Such reports should be submitted on the NSF Form 1328, Annual NSF Grant Progress Report, (see GPG) to the NSF Program Officer specified in the grant instrument and in accordance with such procedures as the grantee organization may prescribe. The certification contained on the NSF Form 1328 shall be signed by the PI/PD. b. Unless otherwise specified in the grant instrument, progress reports shall be submitted in the following frequency: 1. for standard grants awarded for two or more years, progress reports are required annually, no later than 90 days after the anniversary of the effective date of the grant. If the grant is not renewed, no progress report is required at the end of the final year, only the final project report need be submitted; or 2. for continuing grants, the progress report is part of the annual request for continued support, described in GPM 263, "Continued Support (Continuing Grants)." 342 Final Project Report Within 90 days following expiration of the grant, one copy of NSF Form 98A, Final Project Report, (see GPG), shall be submitted to the cognizant NSF Program Officer. This form contains a summary of the completed project that will be used to answer inquiries by non- scientists as to the nature and significance of the project. The form also includes space to indicate the status of submission of the final technical information items for NSF program use. (See GPM 343, "Final Technical Information Items.") In addition, Part IV of the form requests summary data on the project personnel. The certification contained on the NSF Form 98A shall be signed by the PI/PD. Part II of a completed NSF Form 98A is available to the public. 343 Final Technical Information Items As soon as they are available after completion of the project, the following technical items shall be submitted for NSF program management use: a. abstracts of theses; b. publication citations and reprints of articles; c. data on scientific collaborators; d. information on inventions; e. technical description of the project and results; f. other materials either required in the grant instrument or considered to be useful to NSF; and g. Universal Resource Locator numbers of electronic publications generated by the project. 344 Compliance with Technical Reporting Requirements NSF Program Officers are responsible for ensuring that Final Project Reports on prior, expired grants have been submitted by PI/PDs before new grants are made to those PI/PDs. Failure to provide final technical reports (NSF Form 98A) will delay NSF review and processing of pending proposals for that PI/PD. 345 Grant Closeout Grant closeout is the process by which NSF determines that all applicable administrative actions and all required work of the grant have been completed. Grants will be closed upon receipt of the final disbursement information in the Federal Cash Transaction Report (FCTR) and Final Project Report, and after determination that any other administrative requirements in the grant instrument have been met. In the event a final audit has not been performed prior to the closeout of the grant, NSF reserves the right to recover appropriate amounts after fully considering the recommendations on disallowed costs resulting from the final audit. 350 RECORDS RETENTION AND AUDIT a. Financial records, supporting documents, statistical records and other records pertinent to a grant will be retained by the grantee for a period of three years from submission of the Final Project Report described in GPM 342, "Final Project Report," except that: 1. records related to audits, appeals, litigation or the settlement of claims arising out of the performance of the project will be retained until such audits, appeals, litigation or claims have been disposed of; and 2. records related to projects subject to special program income provisions (GPM 753, "NSF Policy") will be retained for three years from the end of the grantee's fiscal year in which the grantee's obligations expire. b. Unless court action or audit proceedings have been initiated, the grantee may substitute microfilm copies of original records. c. The NSF Director and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any pertinent books, documents, papers and records of the grantee organization (and of the performing organization, if different) to make audits, examinations, excerpts and transcripts. Further, in accordance with Section .48(d) of OMB Circular A- 110, any negotiated contract in excess of the small purchase threshold made by the grantee shall include a provision to the effect that the grantee, NSF, the Comptroller General or any of their duly authorized representatives, shall have access to pertinent records for similar purposes. d. In order to avoid duplicate recordkeeping, NSF may make special arrangements with grantees to retain any records which are needed for joint use. NSF may request transfer to its custody of records not needed by the grantee when it determines that the records possess long-term retention value. When the records are transferred to or maintained by NSF, the three-year retention requirement is not applicable to the grantee. In the rare event that these provisions are exercised, NSF will negotiate a mutually agreeable arrangement with the grantee regarding reimbursement of costs. e. It is the responsibility of grantees that are institutions of higher education or other non-profit organizations to arrange for the conduct of audits as required by OMB Circular A- 133, Audits of Institutions of Higher Education and Other Non-profit Institutions, except those organizations that are audited as part of single audits in accordance with OMB Circular A-128, Audits of State and Local Governments. Any Federal project audit(s) deemed necessary by NSF shall build upon the results of such audit(s). Exhibit III-1 GRANTEE NOTIFICATIONS TO AND REQUESTS FOR APPROVAL* FROM THE NATIONAL SCIENCE FOUNDATION Type of Grantee GPM Send To NSF: Notification Grantee Approved No-Cost 253.3 Grants Officer Extensions Significant Changes in Methods/ 311.2 Program Officer Procedures Significant Changes/Delays or 311.3 Program Officer Events of Unusual Interest Short-Term Absence of the PI/PD 312.3 Program Officer Amount of Federal funds is 322 Program Officer expected to exceed requirements of the grant by more than $5,000 or 5% Conflicts of Interest which cannot 510 Office of the General be satisfactorily managed, Counsel reduced or eliminated Type of Grantee Request to Change Effective Date GPM: 253 GC-1: (none) Send To NSF: Grants Officer Final NSF Action By: Grants Officer NSF Approved No-Cost Extension GPM: 253.3 GC-1: Article 4 Send To NSF: Program Officer Final NSF Action By: Grants Officer Request for Supplemental Support GPM: 264 GC-1: (none) Send To NSF: Program Officer Final NSF Action By: Grants Officer Change in Objective or Scope GPM: 311.1 GC-1: Article 8 Send To NSF: Program Officer Final NSF Action By: Grants Officer Long-Term Absence of the PI/PD GPM: 312.4 GC-1: Article 8 Send To NSF: Program Officer Final NSF Action By: Program Officer** Change in Person-Months Devoted to Project GPM: 312.5 GC-1: Article 8 Send To NSF: Program Officer Final NSF Action By: Grants Officer, if necessary Withdrawal of PI/PD GPM: 312.6 GC-1: (none) Send To NSF: Program Officer Final NSF Action By: Grants Officer Substitute PI/PD GPM: 312.6 GC-1: (none) Send To NSF: Program Officer Final NSF Action By: Grants Officer PI/PD Transfer from One Organization to Another GPM: 312.8 GC-1: (none) Send To NSF: Program Officer Final NSF Action By: Grants Officer Establishing Relatedness of Projects Under the Direction of Collaborating PI/PDs GPM: (none) GC-1 Article 5 Send To NSF: Grants Officer Final NSF Action By: Grants Officer Contracting or Transferring the Project Effort (Subawards) GPM 313 GC-1 Article 8 Send to NSF: Grants Officer Final NSF Action By: Grants Officer Pre-award Costs in Excess of 90 Days GPM: 602.2 GC-1: Article 3 Send to NSF: Grants Officer Final NSF Action By: Grants officer Reallocation of Funds Budgeted for Participant or Trainee Support Costs GPM: 618 GC-1: Article 2 Send to NSF: Program Officer Final NSF Action By: Program Officer Rearrangements/Alterations over $10,000 GPM: 621 GC-1: Article 11 Send to NSF: Grants Officer Final NSF Action By: Grants Officer Note: * This listing of Grantee Notifications and Grantee Requests for approval is not intended to be all-inclusive. ** Final action by Grants Officer, when warranted - page 1 -Nsf Form 1263 (7/95) -- NSF Grant Transfer Request - page 2 -page 2 of 1263 (Certification Page) (Not available here. Copies may be accessed in the Word version or in the paper copy.) - page 3 - Instructions for Use of NSF Grant Transfer Request (NSF Form 1263 (next page) When a Principal Investigator plans to leave an rganization during the course of an award, the PI or the I's organization must notify the NSF Program Office. If the project is to continue with the original organization, the NSF Program Officer will advise the grantee to nominate a substitute PI (see GPM 312622.7). If the project is to be continued at the PI's new organization, and if NSF and both organizations agree, formal notification of the impending transfer countersigned by the Authorized Organizational Representatives of both the original and new organizations must be made to the NSF Program Office using NSF Form 1263. The required certifications on page 2, Certification Page, must be signed by both the Principal Investigator(s) and the Authorized organizational Representative of the new organization. The completed transfer request (NSF Form 1263) must be accompanied by: a brief summary of progress to date; a description of work yet to be accomplished; and a budget for the amount to be transferred. Signing of the equest constitutes agreement by the new organization to assume responsibility for completion of the project effort and to administer the grant (as originally awarded) from the transfer date to completion in accordance with any special terms and conditions and the applicable general terms and conditions that normally govern NSF awards made to the new organization. Upon receipt of the above material, NSF will review the request and, if approved, deduct the specified transfer amount from the original award and re-establish it under a new grant number at the new organization. Signature of the NSF Grants Officer will constitute formal ratification of the grant transfer. At that time, the Grants Officer will also specify the applicable terms and conditions to govern the award, (i.e., NSF GC-1, FDP, or other Terms and Conditions). Equipment purchased with NSF funds for use in a specific project should remain available for use for the duration of the project. PIs who are in the midst of projects that included funding for equipment and who will continue the project at a new organization with NSF support should be able to arrange with their original organization to have the equipment transferred with them. Shipping costs for such equipment may be charged to the original or transferred grant as an allowable cost. Budgets should not include funds to "buy" equipment that had been previously obtained with Federal funds. This chapter covers general grant payment methods and policies and provides instructions for obtaining payments. Topics covered are: 400 BACKGROUND 410 STANDARDS FOR FINANCIAL MANAGEMENT 420 DEFINITIONS 430 PAYMENT REQUIREMENTS 440 CASH REFUNDS AND CREDITS TO NSF 450 GRANT FINANCIAL REPORTING REQUIREMENTS 400 BACKGROUND a. The acceptance of a grant from NSF creates a legal duty on the part of the grantee organization to use the funds or property made available in accordance with the conditions of the grant. Payments may be made in advance of work performed or as a reimbursement for work performed and/or costs incurred by the grantee. However, payments may not be made in advance of a grant being signed by a grants official for the project period. NSF has a reversionary interest in the unused balance of advance payments in any funds improperly applied (whether or not received as an advance payment); and in property acquired through the grant, to which NSF specifically either retains title or reserves the right to require title transfer. b. The provisions of this chapter cover all NSF grants. Graduate Fellowship agreements with domestic colleges and universities are included, but contracts are excluded. All categories of grantees (academic, nonacademic, profit and non-profit) are covered by this chapter. The procedures in this chapter apply primarily to the comptroller's office or business office. 410 STANDARDS FOR FINANCIAL MANAGEMENT NSF grantees are required to have financial management systems which meet the requirements of Section .21 of OMB Circular A-110. 420 DEFINITIONS The following definitions are either not included elsewhere in the manual or are repeated in this section because of their special applicability to this chapter. a. BUSINESS OFFICER is the financial official of the grantee organization who has primary responsibility for the accountability for and reporting on NSF grant funds. b. CASH ON HAND includes NSF funds on deposit, imprest funds and undeposited Treasury checks. c. DISBURSEMENTS/OUTLAYS/EXPENDITURES are charges made to the project during a given period for: 1. goods and other tangible property received; 2. services performed by employees, subawardees, contractors and other payees; and 3. amounts becoming owed for which no current services or performance is required. d. A GRANTEE is the organization or other entity that receives a grant and assumes legal and financial responsibility and accountability both for the awarded funds and for the performance of the grant-supported activity. NSF grants are normally made to organizations rather than to individual PI/PD(s). e. NSF OBLIGATIONS are funds authorized by an NSF Grants Officer, in writing, for payment to a grantee. f. GRANTEE OBLIGATIONS are the amounts of orders placed, subawards issued, contracts awarded, services received and similar transactions during a given period that will require payment by the grant during the same or a future period. g. PAYMENTS are moneys transferred from NSF to the grantee by direct deposit (Automated Clearing House (ACH) Vendor Express) and in some rare occasions by check. h. UNLIQUIDATED OBLIGATIONS, for financial reports prepared on a cash basis, represent the amount of obligations incurred by the grantee that have not been paid. For reports prepared on an accrued expenditure basis, unliquidated obligations represent the amount of obligations incurred by the grantee for which an outlay has not been recorded. I. UNOBLIGATED BALANCE is the portion of the funds authorized by the grant that has not been obligated by the grantee. It is determined by deducting outlays and unliquidated obligations from the cumulative funds authorized. 430 PAYMENT REQUIREMENTS 431 General Federal grant and other programs involving advances to various organizations outside the Federal government constitute a significant portion of the Federal budget. Advances of cash from the U.S. Treasury to such organizations for the purpose of financing current operations under Federal programs have a substantial impact on Treasury financing costs and the level of the public debt. The purpose of this section is to prescribe the timing of such advances and the procedures to be observed to assure that cash withdrawals from the Treasury occur only when essential to meet the needs of a grantee for its actual disbursements. 432 Payment Policies a. Timing of Payments. Advances to a grantee shall be limited to the minimum amount needed and shall be timed to be in accordance with the actual, immediate cash requirements of the grantee in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to actual disbursements for direct program costs and the proportionate share of any allowable indirect costs. b. Payments to Subawardees. Cash advances made by primary grantees (those which receive advances directly from NSF) to others (subawardees) shall conform to the same standards of timing and amount as apply to advances by NSF to primary grantees, including the furnishing of reports of cash disbursements and balances. c. Withholding payments. NSF reserves the right, upon written notice, to withhold future payments after a specified date if the recipient: 1. fails to comply with the conditions of an NSF grant, including the reporting requirements; or 2. is indebted to the U.S. Government. d. Safeguarding Funds. In no case will NSF-furnished funds be commingled with the personal funds of, or be used for personal purposes by, any officer, employee, agent of the grantee; nor will any of these funds be deposited in personal bank accounts for disbursement by personal check. 433 Request for Advance a. Grantees may receive payments from NSF in advance of cost incurred provided that the following conditions exist: 1. funds for the project period have been obligated by a Grants Officer in the form of a signed grant; 2. the grantee has established or demonstrated to NSF the willingness and ability to establish written procedures that will minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by the grantee; and 3. the grantee's financial management system meets the standards for fund control and accountability prescribed in Section .21 of OMB Circular A- 110. b. The grantee's designated official (Accounting Officer, Business Officer, Treasurer, etc.) must submit an SF 270, Request for Advance or Reimbursement, to NSF on a periodic basis (monthly, biweekly or other regular cycle) depending on normal disbursement patterns. Such requests should be limited to the minimum amounts needed and be timed to meet the anticipated cash requirements for allowable charges to active NSF projects. Grantees qualified to receive advance payments, are instructed to use the "Alternate Computation for Advance," section 12 of SF 270, instead of section 11. SF 270 along with preparation instructions is included in Exhibit IV-1. c. Grantees shall maintain advances of NSF funds in interest bearing accounts as specified in GPM 443, "Interest Earned on Advance Payments." 434 Request for Reimbursements When a grantee does not meet the conditions specified in GPM 433, "Request for Advance," or when otherwise considered appropriate by NSF, the grantee shall be required to finance its operations with its own working capital, and payments shall be made to reimburse the grantee for actual cash disbursements based on requests for reimbursement submitted to NSF. The amount requested as reimbursement will be reported on line 11i of the SF 270. 435 Working Capital Advance In those cases where the reimbursement method described in GPM 434, "Request for Reimbursements," is not feasible, arrangements may be made whereby NSF projects are financed on a working capital advance basis. On this basis, funds may be advanced to the grantee to cover estimated disbursement needs for a given initial period. Thereafter, the grantee would be reimbursed for the amount of its actual cash disbursements. The amount of the initial advance shall be geared to the reimbursement cycle so that after the initial period, the advance approximately equals the average amount of the grantee's unreimbursed program disbursements. Under this method of payment, SF 270, section 12, will be used for the initial advance; thereafter, reimbursements will be requested on SF 270, line 11i. 436 ACH Vendor Express a. Electronic Funds Transfer. NSF Grantees will be paid through the ACH Vendor Express System based on submission of a request for funds to NSF. GPM 433-435 describe the conditions for requesting funds from NSF. Whether funds are paid in advance, as a reimbursement, or on a working capital replenishment basis, the actual payment will be made through the Vendor Express System. Vendor Express is an electronic funds transfer (EFT) system which allows the Government to transfer funds to a grantee's financial institution (bank) along with explanatory information about the payment. A grantee and its financial institution will determine how the grantee will be advised of the deposit and the explanatory information. b. Enrollment. When awarded a grant, new grantees will receive a copy of the SF 3881, ACH Vendor/Miscellaneous Payment Enrollment Form (see Exhibit IV- 2). This form is required to implement the Vendor Express System and to notify NSF of any change or correction to the financial institution information. c. Requests for Payments. After enrollment in the Vendor Express System, funds may be requested from NSF, as needed, in any of the following three formats: 1. SF 270 (an original only) mailed to NSF, DFM, ILS, Room 575, 4201 Wilson Blvd., Arlington, VA 22230; 2. SF 270, faxed to (703) 306-0287 (DFM). Grantees shall not duplicate their request by mailing a copy of the same form to NSF; or 3. an electronic mail message addressed to "loc@nsf.gov" (Internet). By electing to submit an electronic cash request, grantees are certifying to its truthfulness as stated in the certification in section 13 of SF 270. Under penalties of perjury, a willful false certification is a criminal offense, 18 USC §1001. d. Review of requests for funds. Daily reviews of requests for funds are performed by DFM by 1 p.m. to ensure that the information provided is correct as follows: 1. the amount requested; 2. the ten-digit organization code (this number can be found on the quarterly SF 272, Federal Cash Transactions Report (FCTR), in the top right corner, directly beneath the organization's name); 3. the full name of the organization; 4. the name and telephone number of the individual making the request; 5. an indication of whether the request for cash is for an advance or for a reimbursement; 6. identification of the period covered by the request; e.g., from 1/2/95 to 1/4/95. Advance requests should be limited to the minimum amounts needed and be timed to meet the anticipated cash requirement for allowable charges to active NSF projects; and 7. SF 3881 is on file at NSF. (See Exhibit IV-2.) Requests for funds will be rejected for missing or incorrect information. The grantee will be informed by telephone, fax or electronic mail of any rejection. NSF-approved requests are sent via magnetic tape to the U.S. Treasury (Birmingham Regional Finance Center) where payment is transferred via ACH to the grantee's bank account. 437 Use of Women-Owned and Minority-Owned Banks Recipients of NSF grants are encouraged by the Federal government to use banks which are owned (at least 50 percent) by women or minority groups such as Asian, Black, Hispanic, Native Americans and Pacific Islanders. This action is consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises. 440 CASH REFUNDS AND CREDITS TO NSF 441 Final Unobligated Balance NSF has a reversionary interest in the unobligated balance of a grant upon expiration or completion of the grant. Based on final disbursements reported on the FCTR, the final unobligated balance will be computed by NSF and reported in the "Final Unobligated Balance" column of the FCTR. (See GPM 452, "Final Disbursement Reporting.") The entry reduces the grantee's "Balance Authorized" as computed on line 17 of the FCTR. (See Exhibit IV-3.) 442 Erroneous Payments Advances or reimbursements made in error must be refunded by check (payable to the National Science Foundation) if the erroneous payment creates an excess cash on hand condition or a negative "Balance Authorized" as computed on line 17 of FCTR. Excess funds should be promptly refunded and redrawn when needed if the funds are erroneously drawn in excess of immediate disbursement needs. The only exception to the requirement for prompt refunding is when the funds involved will be disbursed within 30 calendar days. This exception to the requirement for prompt refunding should not be construed as approval by NSF for a grantee to maintain excessive funds; it is applicable only to excessive amounts of funds which are erroneously drawn. 443 Interest Earned on Advance Payments Grantees shall maintain advances of NSF funds in interest bearing accounts, unless any of the following apply: a. the grantee receives less than $120,000 in Federal grants per year; b. the best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances; or c. The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources. Interest earned on NSF advances deposited in interest bearing accounts shall be remitted annually to the Department of Health and Human Services (DHHS), Payment Management System, P.O. Box 6021, Rockville, MD 20852 (telephone number: (301) 443-9247). Grantees are authorized to retain up to $250 per year for administrative expenses. Interest on advances earned shall be reported on line 11 of the FCTR. The requirement to annually remit interest does not apply to grantees subject to the Cash Management Improvement Act (CMIA) and its implementing regulations (i.e., State agencies and instrumentalities). State universities and hospitals shall comply with the CMIA, as it pertains to interest. In accordance with Section .22 of OMB Circular A-110, if a grantee subject to CMIA uses its own funds to pay pre-award costs without prior written approval from NSF, it waives its right to recover the interest under CMIA. 444 Program Income If, in accordance with the grant, program income is designated for credit to grant costs, it will be recovered by NSF by crediting costs otherwise chargeable against the grant on the FCTR. (See Exhibit IV-3 and GPM 750, "Program Income.") In these cases, income in excess of the grant will be remitted to NSF by check payable to the National Science Foundation. 445 Other Cost Credits Purchase discounts, rebates, allowances, credits resulting from overhead rate adjustments and other credits relating to any allowable cost received by or accruing to the grantee shall be credited against NSF grant costs if the grant has not been financially closed out. A grant is financially closed out when the final net disbursements have been reported on the FCTR. Credits of $300 or more shall be credited against NSF grant costs even if the grant has been closed out. See also GPM 617, "Publication, Documentation and Dissemination." 450 GRANT FINANCIAL REPORTING REQUIREMENTS 451 Quarterly Disbursement Reporting - Federal Cash Transactions Report (FCTR) Shortly (usually within ten days) after the end of each calendar quarter, NSF will send (via electronic or conventional mail) to each grantee a FCTR to be updated, certified and returned to NSF. This report is required whether funds are provided on an advance or a reimbursable basis. The report elements are in compliance with the uniform Federal standards applicable to financial reporting by grantees. The FCTR with instructions is shown in Exhibit IV-3. The original and one copy of the completed FCTR must be sent in time to reach the DFM by no later than the reporting date specified at the bottom of FCTR. FCTRs that lack a Certifying Official's signature will not be processed. Failure to submit the FCTR to NSF in a timely manner can result in one or more of the following actions: a. suspension of all future payments; b. close-out of expired grants based on previously reported disbursements; c. suspension of unexpired grants; and d. suspension of review and processing of new proposals. Electronic submissions of FCTR data is optional at NSF. Grantees may enroll by contacting the DFM, ILS Section, (703) 306-1283. Participating grantees will continue to receive the paper copy of the FCTR each quarter, in addition to an electronic mail (E-Mail) FCTR (see Exhibit IV-4) which contains grant data similar to the paper FCTR. The E-Mail FCTR consists of two messages. The first message contains basic instructions while the second message contains the grant data that is to be updated and returned to NSF. By electronic submission of the FCTR, grantees are certifying to its truthfulness as stated in the certification at the end of FCTR. Additional information on electronic submission of FCTRs may be obtained by calling the cognizant grant accountant (703) 306-1283. 452 Final Disbursement Reporting NSF does not require grantees to submit individual SF 269, Financial Status Reports, for purposes of final grant accountability. NSF procedures have been designed to extract the final financial data from the entries in the FCTR. This reporting is accomplished as follows: a. For any grant listed on the FCTR that expired prior to the beginning of the quarter covered by the FCTR, the grantee will enter the final disbursement amount in the "Net Disbursement Reporting Quarter" column. b. If there are valid unpaid obligations outstanding at the time final disbursements are due, the obligations must be charged against the NSF cash advance and reported in the "Net Disbursement Reporting Quarter" column as if they had actually been paid. If subsequent payment differs by $300, plus or minus, from the amount previously reported, the grantee must request the approval of the Cost Analysis/Audit Resolution Branch, CPO. The request should specify the reason for the adjustment. Adjustments will not be approved for amounts less than $300. c. If by law, regulation or accounting system limitations, valid unpaid obligations cannot be charged against the NSF advance and reported as disbursed in accordance with b, above, closeout by NSF will be deferred provided that: 1. the grantee submits to DFM, ILS, a one-time statement of the reason(s) for not reporting unpaid obligations as disbursed; 2. for each grant to be held active, the grantee inserts "unpaid obligations" in the Recipient Remarks column of the FCTR; and 3. the grantee signs the certification printed at the end of the FCTR. d. The final disbursement amount may not exceed the amount of the grant. If the grantee erroneously reports such an excess, NSF will keep the grant in the FCTR in the subsequent quarter and require the grantee to review its accounting records and make the necessary adjustments so that the disbursement amount does not exceed the grant amount. e. When the final disbursements have been recorded by NSF, the grant will be financially closed and no additional disbursements shall be shown by the grantee in subsequent reports. f. When all final reporting requirements have been met, the grant will be deleted from the FCTR. When this is done, the grant will be shown in the next "Schedule of Awards Purged and Subsequent Adjustments During the Quarter," Part IV of the FCTR. 453 Compliance with Financial Reporting Requirements DFM monitors financial report submissions to assure that the requirements for final disbursement information in the FCTR are fulfilled. REQUEST FOR ADVANCE OR REIMBURSEMENT INSTRUCTIONS (SF 270) Line No. 1a. Recipients that qualify for advance payments in accordance with conditions stated in GPM 433 should "X" the "Advance" block. Recipients that do not meet the requirements specified GPM 433 should "X" the "Reimbursement" block. 3. Enter: National Science Foundation Division of Financial Management 7. Enter the 10 digit institution code which is printed under the recipients' name on the Federal Cash Transactions Report. Note: A new Form SF 3881 must be submitted to NSF to change either to a new bank or bank account number. 8. Enter the month, day, and year for the beginning and ending of the period covered in this request. If the request is for an advance, or for both an advance and reimbursement, show the period that the advance will cover. If the request is for reimbursement, show the period for which the reimbursement is requested. 9. Self-explanatory. 11i. If the "Reimbursement" block is designated in 1a, above, enter in the "Total" column the amount requested for reimbursement for the period covered by the request. 12. If "Advance" block is designated in 1a, above, complete lines 12a through 12c. 13. Complete the certification before submitting this request. note: Standard Form 270 is not available here. May be accessed in the Word format or in the paper copy.ance and reimbursement, show the period that the advance will cover. IV-2 ACH VENDOR/MISCELLANEOUS PAYMENT ENROLLMENT FORM (Not available here. May be accessed in the Word version or in the paper copy.) FEDERAL CASH TRANSACTIONS REPORT (FCTR) (Not available here. May be accessed in the Word version or in the paper copy.) per copy.) ADDRESS PAGE Enter address corrections as needed so that the Federal Cash Transactions Report will be mailed directly to the office responsible for the preparation of the FCTR. This page need not be returned to NSF unless corrections are made. FCTR PART I: SF 272 - STATUS OF FEDERAL CASH 1. Enter the total amount of NSF cash on hand at the beginning of the reporting period. This line should agree with line 8 of the previous FCTR. 2. Enter the total amount of payments received during the reporting quarter. See part III of the FCTR for a listing of payments made by NSF. 3. Enter the sum of lines 1 and 2. 4. Enter the total NSF cash disbursements made during the reporting period including disbursements from NSF's share of project income which has been designated for credit to award costs. Disbursements as used here also include the amount of advances and payments less refunds to subgrantees or subcontractors, the gross amount of direct salaries and wages, including the employee's share of benefits if treated as a direct cost, inter-departmental charges for supplies and services, and the amount to which the recipient is entitled for indirect costs. 5. Enter the NSF share of project income which has been designated for credit to awards costs. 6. Enter the difference between the amount on line 4 and the amount on line 5. The amount should be the same as the total of the "Net Disbursements Reporting Quarter" column on SF 272A. This amount is also reported on optional line 15. 7. Enter the amount of all prior period adjustments which affect the ending balance but have not been included in any lines above. Identify each financially closed award for which an adjustment was made, and enter an explanation for each adjustment on line 18, "Remarks". 8. Enter the total amount of NSF cash on hand at the end of the reporting period. This amount should include all funds on deposit, imprest funds, and undeposited funds (line 3 less line 6, plus or minus line 7). 9. Enter the total number of Request for Funds for which payments were received during the reporting quarter. 10. Enter the estimated number of days until the cash on hand (line 8) will be expended. An explanation is required if the number of days cash on hand is greater than three. 11. Enter the unremitted amount of interest earned on NSF advances. OMB circular A-110 requires that interest earned be remitted to HHS at least annually. 12. Enter the amount of advances to secondary recipients included in line 6. NOTE: Completion of lines 137 through h 1721 is optional. 13. Enter the total of the "Net Award" column from SF 272A. 14. Enter the total of the "Cum. Net Disb. thru Prior Qtr." column from SF 272A. 15. Enter the total of the "Net Disbursements Reporting Quarter" column from SF 272A. 16. Subtract the amount on lines 14 and 15 from the amount on line 13 and enter the remainder. 17. Subtract the amount on line 8 (add if line 8 is a deficit) from the amount on line 16 and enter the remainder. This amount represents the balance of unadvanced award authority. If the amount on line 8 is positive and is greater than the amount on line 16, the amount on this line should be negative. A negative balance on this line represents an over advance which must be returned by check to NSF. Make check payable to the National Science Foundation. 18. Enter the award identification of amount reported on line 7 explanation of excess cash on hand reported on line 10 grant number(s) pertaining to line 7 and/or other remarks deemed appropriate. FCTR PART II: SF 272A - FEDERAL SHARE OF NET DISBURSEMENTS 1.