Implementation of NIH Sub Accounting. Presented by: Krystina Gross, NIH Manager Sponsored Projects Accounting Washington University in St.

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1 Implementation of NIH Sub Accounting Presented by: Krystina Gross, NIH Manager Sponsored Projects Accounting Washington University in St. Louis

2 Implementation of NIH Sub Accounting Background Accomplishments Implementation Timeline Impact on Institutions Washington University s Plan Issues Departmental Perspective Useful Links

3 Washington University in St. Louis WUSTL is a large research institution. $564 million in research expenditures in FY13. NIH grants accounted for 71% of the FY13 expenditures. School of Medicine accounts for 85% of the total research expenditures. Arts and Science, Engineering and Social Work also have a strong research base.

4 Background on transition U.S. Department of Health and Human Services (HHS) issued a directive to Agencies to enhance financial data integrity and financial closeout for all awards. NIH is transitioning all domestic award payments to the Payment Management System (PMS) subaccount method.

5 Background Cont. U.S. Government Accountability Office (GAO) did a review and issued a report. The GAO found that at the end of fiscal year 2011, there was more than $794 million in funding remaining in expired grant accounts in PMS. These accounts were more than 3 months past the grant end date and had no activity for 9 months or more

6 Background Cont. The American Recovery and Reinvestment Act (ARRA) paved the way. NSF made the transition from FastLane (pooled payment request) to ACM$ (award level detail payment request) in 2013.

7 What does the transition accomplish Enhances Transparency Greater Accountability More timely Closeout Allows for burn rate monitoring More real time reporting

8 The Pooled Method All NIH awards are pooled together and only one dollar amount is requested for the entire NIH portfolio per draw request. Draw requests are reconciled quarterly via the quarterly FFR report in PMS. NIH has limited information about award specific expenditures only as good as the last quarterly report.

9 The Subaccount Method New NIH awards are now drawn individually on an account by account basis. NIH can see how much is being spent on a more timely basis. Universities will not be able to request funds after 90 days from the end date of the award without agency approval.

10 The Good News!!! DHHS granted the NIH an extension for implementing subaccounts. This gave the NIH and Universities another year to prepare for the transition. (we are currently down to 6 months!!!) See NOT-OD

11 Implementation timeline New & competing continuation awards issued between 10/1/2013 and 9/30/15 are being issued as PMS subaccounts (P subaccounts). Type 1 New Awards Type 2 Renewals or Competing Continuations Type 7 Change of Grantee Institution

12 Implementation timeline Non-competing continuations will transition to subaccounts on the new budget period start date between 10/1/15 and 9/30/16. Type 5 - Non-competing continuations Type 8 Change of NIH awarding Institution/Division for a non- competing award

13 Implementation timeline Currently - competitive revisions and supplements will be issued in the same account as the parent award. Starting 10/1/15 Competitive revisions and supplements will be issued in the P account regardless of whether the parent grant is still in PMS pooled accounts (G accounts) or has transitioned to PMS subaccounts (P subaccounts Type 3 Competitive revisions/supplements

14 Non-Competing Cont. Transition Starting 10/1/15 NIH will issues all noncompeting continuation awards (type 5 and type 8) that have not already been transitioned to the PMS P subaccount as a Type 4 award on the FFY16 budget period start date. This will help to separately track the obligations and payments for awards that transition in the middle of a competitive period.

15 Non-Competing Cont. Transition The competitive segment will be broken into 2 mini segments. The first segment begins at the budget period start date of the current competitive segment and ends at budget period end date of the FFY15 award. The second segment begins with the budget period start date of the FFY16 award and ends with the original project period end date on that award.

16 Non-Competing Cont. Transition NIH will change the end date of the first mini segment in era commons to match the end of the current budget period end date. The document number will change on the new FFY16 award. (i.e. if it was an A it will now be a B ). A transitional subaccount FFR will be required for all awards (SNAP and non-snap). Carryover will happen automatically when the FFR has been processed by NIH.

17 Changes to Awards in FFY 2016 LOC Type FFY Grant Number PMS "G" (pooled) PMS "P" subaccounts Document Number Budget Period End Date Project Period End Date 13 1R01CA RCA123456A 7/31/2014 7/31/ R01CA RCA123456A 7/31/2015 7/31/ R01CA RCA123456A 7/31/2016 7/31/ R01CA RCA123456B 7/31/2017 7/31/ R01CA RCA123456B 7/31/2018 7/31/2018 Note the change of the type to a 4 and also the change in document number from an "A" to a "B" to allow the transition from the "G" to the "P" account in PMS. At the end of year 5, normal closeout for the original competitive segment (years 1-5) will be required withn 90 days last budget period. Project period end date changed to match the budget period end date. A final FFR for this period will be required. Final Invention Statement and Progress Reports are NOT required at this time.

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19 Institutional Impacts Accounting for the mini segments. Increase in FFR volume in the non-competing award transition year (10/1/15 9/30/16) Modify internal systems to accommodate the subaccount draw process Managing two separate NIH LOC draws. Preparing two separate NIH quarterly FFR reports. Issuing new Sub Agreements. Every institution will be different based on structure.

20 Washington University s Plan NIH Portfolio is approximately active projects. (815 active projects still on the G and 250 active on the P Currently file approximately 330+ FFRs per year. Estimate that in the transition year we will have to file approximately 600 FFRs.

21 Washington University s Plan New accounts for the awards issued under the PMS P subaccount. Leveraging ARRA functionality that had been created in our Research Admin System. System enhancements to our letter of credit process. Re-purposed an attribute field to track funds issued with PMS P payment terms.

22 Washington University s Plan Deficits or overdrafts cannot be carried forward so pre-award spending on the new account should be considered. Carryforward may be delayed given the significant volume of FFRs that NIH will have to review and accept.

23 Washington University s Plan There will be a significant impact on our preaward office in setting up all of the new accounts in our general ledger. We are not hiring any post award financial staff to help with the increase in work We will be using existing staff and will reorganize priorities as needed. This may cause delays in special projects and/or other routine work functions.

24 Utilizing PMS Capabilities

25 Utilizing PMS Capabilities

26 Draw Request Issues Award amounts that are not spent/drawn within 90 days of the budget period end date are automatically moved into the Expired Funds column. PMS will hold your entire payment request for any subaccount line item request made after day 90 pending awarding agency approval. The awarding agency has 3 business days to review and approve or the request will be rejected.

27 Draw Request Issues The awarding agency has the option to modify the budget period on the award or enter a liquidation extension date in PMS. This is a significant change to how we do business. This could cause cash management issues and loss of interest at Universities with large payroll draw requests.

28 PMS Date Methodology Award Year Budget Period Expiration Date 01 2/1/14-1/31/15 5/2/ /1/15-1/31/16 5/2/ /1/16-1/31/17 5/2/ /1/17-1/31/18 5/2/2018 Project Period : 2/1/14-1/31/18

29 Cash Draw Request 1/15/2015 Payee Account Subacct Code Year 01: 16 days from Budget Period End date Unexpired Funds (A) $ Expired Funds (B) $ In-Transit Payments (C) $ Total Funds (A+B+C) $ Subacct Amt Requested $ 9999P FCA112233A 35,000 35,000 9,000 Grantee: Reimbursement request for $9,000

30 Cash Draw Request 2/15/2015 Year 01: Budget End Date + 15 days Year 02: First month of second budget period Payee Account Subacct Code Unexpired Funds (A) $ Expired Funds (B) $ In-Transit Payments (C) $ Total Funds (A+B+C) $ Subacct Amt Requested $ 9999P FCA112233A 126, ,000 7,000 Grantee: Reimbursement request for $7,000 DPM: Add year 02 Funding Authorizaton of $100,000 Year Budget Period Unexpired Bal Detail DPM Expiration 01 2/1/14-1/31/15 26,000 5/2/ /1/15-1/31/16 100,000 5/2/ ,000

31 Cash Draw Request 4/16/2015 Year 01: Budget End Date + 75 days Payee Account Subacct Code Year 02: Third month of second budget period Unexpired Funds (A) $ Expired Funds (B) $ In-Transit Payments (C) $ Total Funds (A+B+C) $ Subacct Amt Requested $ 9999P FCA112233A 119, ,000 12,000 Grantee: Reimbursement request for $12,000 Year Budget Period Unexpired Bal Detail DPM Expiration 01 2/1/14-1/31/15 19,000 5/2/ /1/15-1/31/16 100,000 5/2/ ,000

32 Cash Draw Request 5/15/2015 Year 01: Budget End Date days Payee Account Subacct Code Year 02: Fourth month of second budget period Unexpired Funds (A) $ Expired Funds (B) $ In-Transit Payments (C)$ Total Funds (A+B+C)$ Subacct Amt Requested$ 9999P FCA112233A 100,000 7, ,000 17,000 Year Grantee: Reimbursement request for $17,000 DPM: Balance of 01 Budget Period moved to Expired (5/3/2015) Budget Period Unexpired Bal Detail Expired Funds DPM Expiration 01 2/1/14-1/31/15 7,000 5/2/ /1/15-1/31/16 100,000 5/2/ ,000 7,000

33 Budget Period 90 Day Expiration Issues Effective management of this is going to be very difficult. Seems contradictory to automatic carryforward. May run into de-obligation in NCE period. WU has not been successful in getting money moved out of the expired funds column. How to explain this issue to the PI??????

34 Final Draw Issues We may implement a more aggressive close out internally with our awards. Subcontracts may be cut to 11 months in the final year of a competitive segment to ensure timely reporting. We may stop allowing revisions for increases in costs unless there is an exceptional circumstance. We are working with a group of department administrators to develop a new close out policy to accommodate the strict timing issues.

35 Quarterly Report Not going away.. PMS also has download and upload capabilities for the quarterly report. WUSTL has built in system functionality to assist with this reporting. Double the work during the transition period to manage and reconcile two NIH quarterly reports.

36 Departmental Perspective Increase in administrative burden however it s no different than opening a new competitive segment New fund numbers every year Re-create any purchase orders/blanket orders Billing issues invoices may come in with incorrect PO # s Re-create subawards (with a new number they will no longer be linked in our subs system)

37 Departmental Perspective Pre-award spending authorization/prior approval request (during transition period and if NOA s are late) Principal Investigators may not be happy learning a new fund number every year Sourcing changes Delays in carry-forward spending

38 Departmental Perspective Possibility of running out of fund numbers Can the system accommodate longer fund numbers? Follow up on bills due after project end (strict 90 day close-out) Great Article: Preparing for the Impending Storm of Enforcement Related to Final Financial and Programmatic Closeout (NCURA Magazine, August 2014, pg ).

39 Useful Links NIH FAQ - Payment (PMS Subaccount) Payment Management System GRANTS MANAGEMENT: Action Needed to Improve the Timeliness of Grant Closeouts by Federal Agencies NIH Domestic Awards to Transition to Payment Management System Subaccounts in FY 2014 and FY Revised Timeline for Administrative Changes to NIH Domestic Awards to Transition to Payment Management System Subaccounts

40 Contact Info Krystina Gross Manager, Sponsored Projects Accounting Washington University in St. Louis (314)