Proper award management and fiscal oversight are critical to maintaining scientific integrity and public trust in stewardship of federal funds. To this end, all HHS operating divisions, including NIH, are making changes that will affect how grantees manage their grant funds. One such change involves a shift from pooled account payments to subaccount payments.
Traditionally, NIH funding goes to grantee organizations in the U.S. into a single “pooled” account, which they access through the HHS Payment Management System (PMS) to draw down cash and pay for research expenses. We are now moving to a system that uses subaccounts, which means grantees draw down funds from award-specific accounts in the PMS. Foreign grantee organizations are already on the sub-accounting system, and ultimately all NIH grantees will use subaccounts as well.
We announced this transition for domestic grantees earlier this month after receiving a directive from HHS. Hearing concerns from our grantees and others regarding issues in the implementation of the policy, we worked with HHS to adjust the transition timeline. As a result, we will delay implementing the use of subaccounts for noncompeting continuation awards for one year, meaning we will not move these awards to subaccounts until the FY 2015 increment. However, all new awards including competitive renewals will be issued into subaccounts beginning October 1, 2013. The NIH Guide notice issued yesterday provides details on the transition by award type, and timing.
The end goal of issuing all NIH funding into subaccounts has not changed, and we plan to transition all award payments by the end of fiscal year 2015. The sub-accounting system will ultimately allow grantees and NIH to better understand how much money is available for distinct research projects. And this delay in placing noncompeting continuation awards into subaccounts until the next fiscal year will give the grantee organization time to adjust their systems and processes accordingly.
I encourage you to review the new Guide notice (NOT-OD-13-120), and the related frequently asked questions, which includes detailed information on the implementation timeline and how this transition works for all NIH awards.