HHS OIG Report Finds Gaps in the NIH Grant Management System

The United States Department of Health and Human Services Office of Inspector General (HHS OIG) issued a report about the grant funding at the National Institutes of Health (NIH). According to the report, roughly 80% of the NIH funding goes towards research grants, including grants to foreign organizations. In fiscal year (FY) 2022, that amounted to $257 million going to 224 foreign grant recipients.

In conducting the audit that prompted the report, HHS OIG found that there are significant oversights within the NIH grant management system, resulting in compliance problems. HHS OIG audited 90 NIH grant recipients from the list of FY 2019 through FY 2020 foreign grant recipients with reported annual expenditures greater than $750,000 in either FY 2019 or FY 2020. From that group of 90 NIH grant recipients, HHS OIG found that 109 annual audit reports should have been prepared and submitted.

However, NIH did not ensure that NIH foreign grant recipients completed and submitted the required annual reports. In fact, NIH did not receive 81 of 109 annual audit reports for foreign grant recipients that met the requirements for an audit and for which NIH provided the majority of HHS funding. Of the 28 audit reports that were received by NIH, 10 included findings that required follow-up actions by NIH and the foreign grant recipient, but for seven of those 10, NIH did not follow-up with a management decision letter or did not issue the management decision letter in a timely manner.

This report follows a prior OIG audit of NIH, National Human Genome Research Institute, which found that some foreign grant recipients did not submit the required audit report and that NIH was unaware of the omission.

HHS OIG Recommendations

HHS OIG made four comments to NIH based on the report:

1. That NIH follow up with the foreign grant recipients to confirm the 81 outstanding audits were completed, obtain the outstanding audit reports, and issue management decision letters where appropriate.
2. That NIH issue management decision letters for the two audit reports that indicated a need for increased monitoring.
3. That NIH work with HHS Audit Resolution Division officials to identify foreign grant recipients required to submit annual audit reports and address audit report submission delinquencies by NIH foreign grant recipients.
4. That NIH develop policies and procedures to issue timely management decision letters for foreign grant recipient audit reports, with audit findings, within 6 months of the date HHS accepts the audit report package.

NIH concurred with all four recommendations, saying it would follow-up with the foreign grant recipients regarding the 81 outstanding audit reports, obtain the reports, and issue management letters where appropriate. NIH also said it would increase the number of auditors assigned to determine whether the delinquent audit reports were completed. Additionally, NIH responded that it had already issued one of the two outstanding management decision letters and has plans to complete the second outstanding management decision letter and will implement policies and procedures to issue timely management decision letters in the future. All recommendations are expected to be completed by NIH by September 2024.