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Modular Grants: Implementation

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Effective January 1, 2000, OSR implemented a new appropriation process for NIH Modular Grant Awards. Consistent with NIH's strong commitment to streamline proposal and award procedures, traditional line item budgets will no longer be established.

The elimination of a budget in the Modular Grant proposal negates the need for a budget at the time an award is received. The elimination of the budget coupled with the elimination of significant rebudgeting requirements provides Principal Investigators maximum flexibility to use funds in accordance with programmatic needs rather than detailed budget categories. It is anticipated that this new process will also significantly reduce time expended and paperwork required to establish new awards.

Effective January 1, 2000, the standard method for processing modular grant awards is as follows:

Upon receipt of a notice of grant award (NGA), OSR will assign an account number and open a standard set of expenditure object codes (list attached). Budget allocations will not be assigned to these expense objects. Instead, all direct costs awarded will be budgeted to object code 2800 except for restricted categories (subcontracts, patient care, funds restricted by NIH), which will continue to be separately appropriated. (Please see sample Project Account Summary). Based on information provided on the OSR-1 form OSR will open object codes for such categories as animal care, patient care, research subject fees, and space rental. Requests to open additional object codes should be submitted to the appropriate OSR Research Administrator via e-mail.

The above process represents the standard operating procedure for all new modular grant awards. However, OSR will continue to accept and appropriate OSR-3 budget requests for those departments that have elected to continue use of this form. To establish a line item budget, a completed OSR-3 must be received at the time the proposal is submitted for review and endorsement or when the completed OSR office copy is provided (within one week of submission to the sponsor). If at the time of award, an OSR-3 is not on file, the award will be appropriated according to the standard operating procedures for modular grant awards noted above. For those modular proposals submitted prior to January 1, 2000, an OSR-3 must be received by the anticipated start date of the award.

This change in the award appropriation process does not eliminate the applicability of the Cost Accounting Standards or the need for sound fiscal management practices. The expectation remains that costs incurred on sponsored projects will continue to be reasonable, allowable, allocable and consistently treated. Expenses must continue to be charged to appropriate object codes. In particular, personnel effort must continue to be properly charged and reported, consistent with award commitments and the NIH salary cap.

Given that this is a new process for both NIH and Northwestern, implementation will be monitored very closely the first year and input will be solicited from business administrators and Principal Investigators with modular grant awards. A formal two-year assessment of the process will follow the first year of implementation.

Should you have questions or need additional information regarding this process, please contact your OSR Research Administrator.

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