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HRD-84-24 1 (1983-12-13)

handle is hein.gao/gaobabnfb0001 and id is 1 raw text is: 1; ATHk:%UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 HUMAN NEOURCE DECEMBER 13. 1983 DIVI8ION -213628 II 111 1111111 The Honorable Margaret M. Heckler 123036 The Secretary of Health and Human Services Dear Madam Secretary: Subject: Millions of Unspent NIH Grant Funds Available for Use (GAO/HRD-84-24) During our review of how indirect cost rates are estab- lished for National Institutes of Health (NIH) grantees, we identified an opportunity for NIH to realize a one-time funding windfall of from $41 million to $143 million by offsetting grantees' estimated year-end unspent grant fund balances against the next period's grant awards. Generally, NIH has permitted grantees to carry over in their grant accounts, but not to ex- pend, any unspent grant funds. As a result, such funds are available, but remain unused for an entire year before being offset against future grant funding. HHS regulations (45 C.F.R. 74.108) require grantees to either (1) report promptly when a grant is expected to exceed needs by more than $5,000 or 5 percent of the grant, whichever is greater, or (2) include an estimate of expected unused funds in their applications for the next period's funding. These applications are due about 3 months before the end of the budget period. In addition, NIH grantees are required to submit a report of expenditures showing unused funds within 3 months after the end of the grant budget year. NIH policy provides that when an estimated unspent grant balance of $2,500 or more is reported, grant awarding offices can determine whether and to what extent unspent grant funds should be offset against the next period's grant award. How- ever, NIH grant awarding offices generally do not offset any of the unspent funds against the next period's grant awards. Ac- cording to an NIH official, this practice is followed to ensure that grantees have sufficient funds in case their estimates of unspent funds are overstated. Further, when a grant's actual unspent balance is reported, the NIH grant awarding office gen- erally instructs grantees to carry over, but not expend, the un- spent fund balance for the remainder of the budget year. (103968)

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