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).