NIH Research

The National Institutes of Health (NIH) has developed policies and procedures for assessing scientific progress and ensuring the effective financial management of its extramural grant programs, but its system of internal controls could be strengthened. The flexibility that NIH's institutes and grantees have in implementing its policies and procedures for administering grants tends toward a lack of important information on scientific progress and inventions developed in a grant's last year as well as on unobligated funds that could be recovered for rebudgeting within the federal government. GAO identified areas where controls over financial management in the oversight and the monitoring of grantees could be strengthened. For example, NIH does not always receive and use the single audit reports the Office of Management and Budget requires, a key tool for financial management oversight. Other areas in internal controls that could be strengthened include the discrepancies GAO found between grant award amounts reported in key NIH systems, which increase the risk of inaccuracies and improper authorization of grant funds. In its fiscal year 1999 audit report on internal controls, the independent public accountant responsible for the financial audit of NIH identified a material weakness in the analysis and the development of financial statements that included a weakness related to the financial management of grants. Regarding NIH's use of fiscal year 1999 appropriations, NIH allocated about the same percentage of funds to extramural research as it did in fiscal year 1998. Appropriations allocated for extramural research grants accounted for about $1.4 billion of the nearly $2 billion increase in NIH's appropriations, or about 70 percent.

GAO noted that: (1) assessing scientific progress and ensuring effective financial management are critical elements in managing NIH's extramural grant programs; (2) NIH has developed policies and procedures to carry out these important functions, but GAO found that its system of internal controls could be strengthened; (3) institutes and grantees have flexibility in implementing NIH's policies and procedures for administering grants; (4) although the processes for assessing scientific progress varied at the six institutes GAO reviewed, each contained similar key aspects; (5) these included annual reviews of the scientific progress and budgetary aspects of the research as well as assessments of compliance with administrative requirements; (6) however, GAO found that some grant files lacked documentation of these reviews; (7) as a result, NIH lacked important information on scientific progress and inventions developed in a grant's last year as well as on unobligated funds that could be recovered for rebudgeting within the federal government; (8) regarding controls over financial management, GAO identified areas in the oversight and monitoring of grantees that could be strengthened; (9) regarding NIH's use of FY 1999 appropriations, NIH allocated about the same percentage of funds to extramural research as it did in FY 1998; (10) appropriations allocated for extramural research grants accounted for about $1.4 billion of the nearly $2 billion increase in NIH's appropriations, or 70 percent; (11) about 41 percent of the increase for extramural grants was used to expand by 978 the number of competitive grants and to increase the average amount awarded for each competitive grant by 15 percent over FY 1998 levels; and (12) the remaining funds were used to provide outyear commitments to more than 20,000 ongoing grants, support for extramural research centers, and other extramural research activities.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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