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Accelerating Spending of ARRA Funding

OMB Memorandum 11-34: Accelerating Spending of Remaining ARRA Funds for Discretionary Grant Programs

On September 15, 2011, the federal Office of Management and Budget (OMB) distributed Memorandum 11-34 (Accelerating Spending of Remaining Funds from the American Recovery and Reinvestment Act for Discretionary Grant Programs) to the heads of executive departments and agencies of the federal government regarding the need to accelerate the expenditure of ARRA (or “Recovery Act”) funds.

The memo states that despite the rapid pace of spending of ARRA funds over the past 30 months, there remains billions in ARRA funds that, although they have been obligated, have not yet been outlayed. In light of the current economic situation and the need for further economic stimulus, OMB is now asking federal agencies to spend these remaining ARRA funds as quickly and efficiently as possible by September 30, 2013. This new policy would compress the period of availability for the bulk of remaining funds in discretionary grant programs into the next two years.


The National Science Foundation and National Institutes of Health have issued guidance in response to Memorandum 11-34. See below for campus guidance to Principal Investigators with NSF and NIH ARRA awards.

SPO anticipates that other federal agencies will communicate the requirements of Memorandum 11-34 by adding these requirements to new grant agreements, modifying terms and conditions of existing grant agreements, or other appropriate written means. Agencies also are being directed to revise the terms of ARRA discretionary grant agreements, to the extent permitted by law, to provide for reclamation of funds that remain unspent after September 30, 2013, absent a waiver issued by OMB. SPO will update this page as needed with new campus guidance.


NSF Notice of Intent to Revise ARRA Award General Terms and Conditions

On December 13, 2011, the National Science Foundation issued a Notice of Intent that outlines how NSF plans to encourage Principal Investigators to accelerate the spending of ARRA funds by September 30, 2013. NSF provides more guidance in a FAQ for NSF PIs.

The following information only applies to campus PIs with active NSF grant awards funded with ARRA funds. (NSF will be issuing guidance on cooperative agreements separately.) If you are unsure if your NSF grant is supported with ARRA funds, please see the list of all campus ARRA awards on the SPO web site.


NSF divides its ARRA awards into the following categories and will have different procedures for each type of grant.

1. Grants That, Even with the Exercise of Grantee-Approved No-Cost Extensions, Will Not Expire After September 30, 2013

This applies to NSF grants with a current end date prior to September 30, 2013 that would still end prior to September 30, 2013 even if the University approved a no cost extension for up to 12 months.

Example:
Current end date: June 30, 2012
End date with University approved 12 month no cost extension: June 30, 2013

In this case the new end date is prior to September 30, 2013. For this type of grant, PIs are encouraged to responsibly accelerate the expenditure of their grant funds wherever possible. NSF does not anticipate making any modifications to these awards.

2. Grants that Expire On or Before September 30, 2013 but are Currently Eligible for Extension Beyond September 30, 2013 with a Grantee-approved No-Cost Extension

This means that if the PI were to request a University approved no cost extension of up to 12 months the new end date of the project would be after September 30, 2013.

Example:
Current end date: October 31, 2012
End date with 12 month no cost extension: October 31, 2013

In this case the new end date is after September 30, 2013. For NSF projects in this category, NSF will require that the University obtain prior written NSF approval before granting a no cost extension that extends the end date beyond September 30, 2013. Because this departs from NSF’s standard award terms and conditions, NSF will issue an amendment to these awards explaining the new requirement.

3. Grants that Expire After September 30, 2013

NSF staff administering these grants will reach out to PIs to discuss possible strategies for responsibly accelerating progress and expenditures, including the potential amending of the award expiration date to September 30, 2013. NSF also will require that the University obtain prior written NSF approval before approving a no cost extension that extends the project end date beyond September 30, 2013. Because this departs from NSF’s standard award terms and conditions, NSF will issue an amendment to these awards explaining the new requirement.


Awards Extending Beyond September 30, 2013

For any ARRA award in category 2 or 3 above anticipated to continue past September 30, 2013, the NSF PI must work through SPO to officially contact the NSF Program Officer identified in the Award Notice in writing to explain why the extension of the expiration date is vital for the completion of the project. All such requests must be processed by SPO and received by NSF before March 2, 2012 for grants and before March 9, 2012 for cooperative agreements, regardless of the current project expiration date.

NSF will then have to request a waiver from the Office of Management and Budget (OMB) to extend the end date of the project. NSF will consider requesting an OMB waiver to extend a project beyond September 30, 2013 only under one or more of the following circumstances approved by OMB:

  1. The project is long-term by design, and acceleration would compromise core programmatic goals;
  2. The project must undergo complex environmental review that cannot be completed within this timeframe;
  3. Contractual commitments between the awardee and vendors/subrecipients legally prevent adjusting the timeline for spending; and/or
  4. Special circumstances exist where acceleration may cause unnecessary harm or unreasonable risk to vertebrate animals or human subjects involved in the research.

Summary

PIs with NSF grant awards funded by ARRA should, as always, spend project funds responsibly. Given this new guidance from NSF, PIs also should take into account NSF’s new prior approval requirements for no cost extensions when planning their expenditures. PIs of NSF projects funded by ARRA previously scheduled to end after September 30, 2013, also should begin to consider strategies for accelerating project expenditures. PIs wishing to obtain NSF approval to extend their project beyond September 30, 2013, will need to work with SPO to provide a NSF with a written justification based on OMB criteria by March 2, 2012 for grants and by March 9, 2012 for cooperative agreements.


NIH Notice of Revised Term of Award for All Recovery Act Awards to Ensure Project Completion by September 30, 2013

In response to OMB Memorandum 11-34, the National Institutes of Health plans to amend the terms and conditions of some NIH awards funded by ARRA. Notice Number NOT-OD-12-014, “Recovery Act: Notice of Revised Term of Award for All Recovery Act Awards to Ensure Project Completion by September 30, 2013,” published December 13, 2011, outlines the changes anticipated.

The following is a synopsis of the Notice:

  1. NIH plans to revise the terms and conditions of all NIH ARRA awards that currently extend beyond or could potentially extend beyond September 30, 2013.

  2. For this group of awards, NIH will modify awardees’ automatic authority to issue no cost extensions without prior NIH approval.

  3. The new terms and conditions will indicate that awardees may not extend a project beyond September 30, 2013 without prior approval from NIH.

  4. NIH also has provided guidance on the process for requesting prior approval to extend a project beyond September 30, 2013 as well as the criteria NIH will use to evaluate such requests.

  5. All requests to extend a project beyond September 30, 2013 will need to be received by NIH on or before June 1, 2012, regardless of the current project period end date.

Campus PIs with active NIH ARRA awards should read the complete notice carefully. If you are unsure if your NIH award is supported with ARRA funds, please see the list of all campus ARRA awards

Note: At this time NIH has not determined the need for waiver requests to OMB, so NIH continues to strongly encourage grantees to accelerate expenditures for all active ARRA grants regardless of the current or projected project period end date.

Should a PI need to extend his or her project beyond September 30, 2013, the PI must submit a request to NIH to extend the project and provide a justification based on the following criteria:

  • The project is long-term by design and acceleration would compromise core programmatic goals;
  • The project must undergo complex environmental review that cannot be completed within this timeframe;
  • Contractual commitments between the awardee and vendors/subrecipients legally prevent adjusting the timeline for spending;
  • Special circumstances exist where acceleration may cause unnecessary harm or unreasonable risk to vertebrate animals or human subjects involved in the research (such as in ongoing clinical trials).

This request and justification must be submitted to NIH by June 1, 2012, regardless of the current project period. UC Berkeley PIs are reminded that all requests for NIH no cost extensions must be submitted through SPO.