The National Institutes of Health and EcoHealth Alliance Did Not Effectively Monitor Awards and Subawards, Resulting in Missed Opportunities to Oversee Research and Other Deficiencies (A-05-21-00025)
Summary
An audit report of the Department of Health and Human Services Office of Inspector General, A-05-21-00025, issued January 2023, titled The National Institutes of Health and EcoHealth Alliance Did Not Effectively Monitor Awards and Subawards, Resulting in Missed Opportunities to Oversee Research and Other Deficiencies. OIG finds that deficiencies in complying with established monitoring procedures limited NIH's and EcoHealth's ability to monitor grant awards and subawards, including subawards to a foreign entity. NIH could conclude that research produced virus growth meeting specified benchmarks only from a late progress report it failed to follow up on until nearly 2 years after its due date. OIG recommends enhanced NIH monitoring of recipients with foreign subrecipients and that EcoHealth submit timely progress reports and refund $89,171 in unallowable costs.
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- Issuer
- HHS Office of Inspector General
- Document type
- Audit report
- Date
- 2023-01
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“The National Institutes of Health and EcoHealth Alliance Did Not Effectively Monitor Awards and Subawards, Resulting in Missed Opportunities to Oversee Research and Other Deficiencies (A-05-21-00025).”
HHS Office of Inspector General. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/hhs-oig-a-05-21-00025-the-national-institutes-of-health-and-ecohealth-eaefd80065/
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Department of Health and Human Services
OFFICE OF
INSPECTOR GENERAL
THE NATIONAL INSTITUTES OF
HEALTH AND ECOHEALTH ALLIANCE
DID NOT EFFECTIVELY MONITOR
AWARDS AND SUBAWARDS, RESULTING
IN MISSED OPPORTUNITIES TO
OVERSEE RESEARCH AND
OTHER DEFICIENCIES
Inquiries about this report may be addressed to the Office of Public Affairs at
Public.Affairs@oig.hhs.gov.
Christi A. Grimm
Inspector General
January 2023
A-05-21-00025
Office of Inspector General
https://oig.hhs.gov
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is
to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the
health and welfare of beneficiaries served by those programs. This statutory mission is carried out
through a nationwide network of audits, investigations, and inspections conducted by the following
operating components:
Office of Audit Services
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with
its own audit resources or by overseeing audit work done by others. Audits examine the performance of
HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are
intended to provide independent assessments of HHS programs and operations. These audits help reduce
waste, abuse, and mismanagement and promote economy and efficiency throughout HHS.
Office of Evaluation and Inspections
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, Congress,
and the public with timely, useful, and reliable information on significant issues. These evaluations focus
on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of
departmental programs. To promote impact, OEI reports also present practical recommendations for
improving program operations.
Office of Investigations
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of fraud and
misconduct related to HHS programs, operations, and beneficiaries. With investigators working in all 50
States and the District of Columbia, OI utilizes its resources by actively coordinating with the Department
of Justice and other Federal, State, and local law enforcement authorities. The investigative efforts of OI
often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties.
Office of Counsel to the Inspector General
The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering
advice and opinions on HHS programs and operations and providing all legal support for OIG’s internal
operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS
programs, including False Claims Act, program exclusion, and civil monetary penalty cases. In
connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG
renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides
other guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement
authorities.
Notices
THIS REPORT IS AVAILABLE TO THE PUBLIC
at https://oig.hhs.gov
Section 8M of the Inspector General Act, 5 U.S.C. App., requires
that OIG post its publicly available reports on the OIG website.
OFFICE OF AUDIT SERVICES FINDINGS AND OPINIONS
The designation of financial or management practices as
questionable, a recommendation for the disallowance of costs
incurred or claimed, and any other conclusions and
recommendations in this report represent the findings and
opinions of OAS. Authorized officials of the HHS operating
divisions will make final determination on these matters.
Report in Brief U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES
Date: January 2023
OFFICE OF INSPECTOR GENERAL
Report No. A-05-21-00025
Why OIG Did This Audit The National Institutes of Health and EcoHealth
OIG initiated this audit because
of concerns regarding the Alliance Did Not Effectively Monitor Awards and
National Institutes of Health’s Subawards, Resulting in Missed Opportunities to
(NIH’s) grant awards to
EcoHealth Alliance (EcoHealth), Oversee Research and Other Deficiencies
NIH’s monitoring of EcoHealth,
and EcoHealth’s use of grant What OIG Found
funds, including its monitoring of Despite identifying potential risks associated with research being performed
subawards to a foreign entity. under the EcoHealth awards, we found that NIH did not effectively monitor or
take timely action to address EcoHealth’s compliance with some requirements.
Our objectives were to Although NIH and EcoHealth had established monitoring procedures, we found
determine whether NIH deficiencies in complying with those procedures limited NIH and EcoHealth’s
monitored grants to EcoHealth in ability to effectively monitor Federal grant awards and subawards to understand
accordance with Federal the nature of the research conducted, identify potential problem areas, and take
requirements, and whether corrective action. Using its discretion, NIH did not refer the research to HHS for
EcoHealth used and managed its an outside review for enhanced potential pandemic pathogens (ePPPs) because it
NIH grant funds in accordance determined the research did not involve and was not reasonably anticipated to
with Federal requirements. create, use, or transfer an ePPP. However, NIH added a special term and
condition in EcoHealth’s awards and provided limited guidance on how EcoHealth
How OIG Did This Audit should comply with that requirement. We found that NIH was only able to
We obtained a list of all NIH conclude that research resulted in virus growth that met specified benchmarks
awards to EcoHealth and all based on a late progress report from EcoHealth that NIH failed to follow up on
subawards made by EcoHealth until nearly 2 years after its due date. Based on these findings, we conclude that
during Federal fiscal years 2014 NIH missed opportunities to more effectively monitor research. With improved
through 2021 (audit period). Our oversight, NIH may have been able to take more timely corrective actions to
audit covered three NIH awards mitigate the inherent risks associated with this type of research.
to EcoHealth totaling
approximately $8.0 million, We identified several other deficiencies in the oversight of the awards. Some of
which included $1.8 million of these deficiencies include: NIH’s improper termination of a grant; EcoHealth’s
EcoHealth’s subawards to eight inability to obtain scientific documentation from WIV; and EcoHealth’s improper
subrecipients, including the use of grant funds, resulting in $89,171 in unallowable costs.
Wuhan Institute of Virology
(WIV). OIG oversight work has continually demonstrated that grant-awarding agencies’
oversight of subrecipients, whether domestic or foreign, is challenging. The
Our audit methodology was shortcomings we identified related to NIH’s oversight of EcoHealth demonstrate
designed to address NIH and continued problems. Compounding these longstanding challenges are risks that
EcoHealth’s policies, procedures, may limit effective oversight of foreign subrecipients, which often depends on
and internal controls in place to cooperation between the recipient and subrecipient, and the countries in which
monitor, manage, and use grant the research is performed. Although WIV cooperated with EcoHealth’s
funds. We selected and monitoring for several years, WIV’s lack of cooperation following the COVID-19
reviewed 150 EcoHealth outbreak limited EcoHealth’s ability to monitor its subrecipient. NIH should
transactions totaling $2,578,567 assess how it can best mitigate these issues and ensure that it can oversee the
across the 3 NIH awards use of NIH funds by foreign recipients and subrecipients.
comprised of different types of
cost categories for allowability.
The full report can be found at https://oig.hhs.gov/oas/reports/region5/52100025.asp.
What OIG Recommends, and National Institutes of Health’s and
EcoHealth’s Comments
We recommend that NIH ensure that EcoHealth accurately and in a timely
manner report award and subaward information; ensure that administrative
actions are appropriately performed; implement enhanced monitoring,
documentation, and reporting requirements for recipients with foreign
subrecipients; assess whether NIAID staff are following policy to err on the side
of inclusion when determining whether to refer research that may involve ePPP
for further review; consider whether it is appropriate to refer WIV to HHS for
debarment; ensure any future NIH grant awards to EcoHealth address the
deficiencies noted in the report; and resolve costs identified as unallowable as
well as possibly unreimbursed costs.
In written comments, NIH stated that it concurred or generally concurred with
our recommendations and provided actions taken or planned to address them,
which are more fully described in the report.
We recommend EcoHealth submit progress reports by the required due dates,
comply with immediate notification requirements, ensure access to all
subrecipient records, properly account for subawards, and refund to the Federal
Government $89,171 in unallowable costs.
In written comments, EcoHealth concurred with our recommendation to prepare
accurate subaward and consultant agreements but did not directly state whether
it concurred with the other recommendations. EcoHealth identified two
substantive areas of disagreement with the reported findings: (1) the timeliness
of EcoHealth’s Year 5 progress report and (2) whether an experiment exhibited
enhanced virus growth. Regarding the nine monetary recommendations,
EcoHealth stated that it reimbursed NIH for the total reported unallowable costs
and provided NIH with details on the amounts of allowable but unreimbursed
costs. However, EcoHealth disagreed with OIG’s interpretation of Federal
requirements for some items of cost.
With respect to EcoHealth’s comments regarding the timeliness of EcoHealth’s
Year 5 progress report, we have no evidence that the progress report, which was
initiated on NIH’s online portal in July 2019, was fully uploaded to the online
portal at that time. Regarding the finding that an experiment exhibited
“enhanced growth,” our audit did not assess scientific results for any of the
experiments or make any determination regarding the accuracy of NIH’s or
EcoHealth’s interpretations of the Years 4 and 5 research results. Our audit
found that NIH’s own evaluation of the Year 5 progress report concluded that
the research was of a type that should have been reported immediately to NIH.
After reviewing NIH’s and EcoHealth’s comments, we maintain that all of our
recommendations are valid.
The full report can be found at https://oig.hhs.gov/oas/reports/region5/52100025.asp.
TABLE OF CONTENTS
INTRODUCTION............................................................................................................................... 1
Why We Did This Audit ....................................................................................................... 1
Objectives............................................................................................................................ 1
Background ......................................................................................................................... 1
National Institutes of Health................................................................................... 1
EcoHealth Alliance .................................................................................................. 2
Wuhan Institute of Virology.................................................................................... 2
Grant-Related Requirements.................................................................................. 3
Requirements for Research Involving Enhanced
Potential Pandemic Pathogens ............................................................................ 3
NIH Peer Review, Pre-Award, and Award Process for Grant Applications............. 4
How We Conducted This Audit........................................................................................... 5
FINDINGS......................................................................................................................................... 7
NIH Had Policies and Procedures To Monitor Grants and To Review
for Enhanced Potential Pandemic Pathogens.................................................................. 8
NIH Had Established Policies and Procedures To Monitor EcoHealth’s Awards.... 9
NIH’s Actions To Implement Enhanced Monitoring for Awards to EcoHealth....... 9
NIH’s Monitoring of EcoHealth Grant Awards Included Reviews
for Enhanced Potential Pandemic Pathogens ................................................... 10
NIH’s Monitoring of EcoHealth Grant Awards Did Not Comply With HHS
Policies and Procedures and Federal Requirements ..................................................... 14
NIH Did Not Ensure a Progress Report Was Submitted in a Timely Manner
for One of EcoHealth’s Grant Awards ................................................................ 14
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) i
NIH Did Not Ensure EcoHealth Reported Required Subaward Data
for Award R01AI110964 ..................................................................................... 15
NIH Did Not Follow All Required Procedures To Terminate One of Its
Grant Awards ..................................................................................................... 16
EcoHealth Had Policies and Procedures To Manage Grant Awards and Mitigate
Potential Risk Before Subawarding Grant Funds ........................................................... 18
EcoHealth Did Not Ensure Subawards Were Compliant With Federal Requirements..... 20
Subaward Agreements Did Not Contain All Required Information...................... 20
Inaccurate Subrecipient and Consultant Agreements.......................................... 20
EcoHealth Did Not Ensure Compliance With Reporting
and Subrecipient Monitoring Requirements ................................................................. 21
The Progress Report Was Not Submitted in a Timely Manner for Year 5
of a Grant Award ................................................................................................ 21
EcoHealth Was Unable To Obtain Scientific Documentation
From a Subrecipient ........................................................................................... 21
EcoHealth Did Not Comply With Certain Requirements Associated With
Reporting Subaward Funding............................................................................. 22
EcoHealth Did Not Always Use Its Grant Funds According to Federal Requirements ..... 23
Salary Costs Exceeded the NIH Salary Cap............................................................ 24
EcoHealth Provided Employee Bonuses Without an Established Plan
and Claimed Unallowable Indirect and Fringe Benefits..................................... 25
Tuition Costs Did Not Meet Federal Requirements.............................................. 25
Indirect Costs Were Claimed in Excess of Allowable Rates
for Foreign Subawards ....................................................................................... 26
Travel Costs Did Not Meet Federal Requirements ............................................... 26
Other Costs Did Not Meet Federal Requirements................................................ 27
Potential Unreimbursed Costs for a Grant Award............................................................ 28
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) ii
CONCLUSION ............................................................................................................................... 28
RECOMMENDATIONS ................................................................................................................... 30
NATIONAL INSTITUTES OF HEALTH AND ECOHEALTH COMMENTS
AND OFFICE OF INSPECTOR GENERAL RESPONSE ..................................................................... 32
APPENDICES
A: Audit Scope and Methodology ..................................................................................... 37
B: Requirements Associated With Reviewing Research Involving
Enhanced Potential Pandemic Pathogens ..................................................................... 40
C: Peer Review of EcoHealth Applications........................................................................ 42
D: Pre-Award and Award Procedures ............................................................................... 43
E: NIH Grant Awards to EcoHealth and EcoHealth’s Subawards...................................... 45
F: Federal Requirements for Terminating and Suspending Grant Awards....................... 48
G: Federal Requirements for Subrecipient Monitoring.................................................... 49
H: Subrecipient Agreements Lacked Required Data Elements......................................... 51
I: National Institutes of Health Comments ....................................................................... 52
J: EcoHealth Comments .................................................................................................... 57
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) iii
INTRODUCTION
WHY WE DID THIS AUDIT
This audit was initiated after the Office of Inspector General (OIG) became aware of concerns
regarding the National Institutes of Health’s (NIH’s) grant awards to EcoHealth Alliance
(EcoHealth), NIH’s monitoring of EcoHealth, and EcoHealth’s use of grant funds, including its
monitoring of subawards to a foreign entity.
OIG’s oversight has examined NIH’s efforts to ensure the integrity and the effective
management of its grant application and selection processes, and has reviewed NIH-funded
research institutions’ compliance with Federal requirements and NIH policies that establish
controls for NIH grants, contracts, and other transactions. 1 Prior OIG work highlighted an
increased need for transparency in research funding and identified several areas in which NIH
could improve how it oversees the more than $30 billion in grants for research it awards each
year. More specifically, OIG previously identified NIH’s oversight of grants to foreign applicants
as a risk to the Department of Health and Human Services (HHS or the Department) in terms of
meeting program goals and the appropriate use of Federal funds.2
Our oversight work has also consistently found deficiencies with grant-awarding agencies’
oversight of subrecipients. NIH must effectively monitor and administer Federal awards to
ensure that Federal funding is spent, and associated programs are implemented, in full
accordance with statutory and public policy requirements.
OBJECTIVES
Our objectives were to determine whether: (1) NIH monitored grants to EcoHealth in
accordance with Federal requirements and (2) EcoHealth used and managed its NIH grant funds
in accordance with Federal requirements.
BACKGROUND
National Institutes of Health
NIH is the agency responsible for the Nation’s medical and behavioral research. Its mission is to
seek fundamental knowledge about the nature and behavior of living systems and to apply that
1
The Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019, and
Continuing Appropriations Act, 2019, P.L. No. 115-245, directed OIG to examine the efforts of NIH to ensure the
integrity of its grant application evaluation and recipient selection processes.
2
The National Human Genome Research Institute Should Strengthen Procedures in Its Pre-Award Process To Assess
Risk for Certain Foreign and Higher Risk Applicants, A-05-20-00026, August 2021, available at
https://oig.hhs.gov/oas/reports/region5/52000026.asp.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 1
knowledge to enhance health, lengthen life, and reduce illness and disability. In Federal fiscal
year (FY) 2020, NIH awarded more than $30.8 billion in extramural research awards. In
FY 2021, NIH awarded more than $32.3 billion.
NIH comprises 27 Institutes and Centers, each with a specific research agenda often focusing on
particular diseases or body systems. The National Institute of Allergy and Infectious Diseases
(NIAID) conducts and supports basic and applied research to better understand, treat, and
ultimately prevent infectious, immunologic, and allergic diseases. NIAID has a unique mandate
that requires the Institute to respond to emerging public health threats. Toward this end,
NIAID manages a complex and diverse research portfolio that aims to expand the breadth and
depth of knowledge in all areas of infectious, immunologic, and allergic diseases, and develop
flexible domestic and international research capacities to respond appropriately to emerging
and re-emerging disease threats at home and abroad. In FY 2021, NIAID awarded
approximately $3.9 billion in research grants.
EcoHealth Alliance
EcoHealth is a global environmental health nonprofit organization dedicated to protecting
wildlife and public health from the emergence of disease. 3 According to EcoHealth, its mission
is to integrate innovative science-based solutions and partnerships that increase capacity to
protect global health by “preventing the outbreak of emerging diseases and safeguarding
ecosystems by promoting conservation.” EcoHealth is based in New York City and employs
administrative and scientific staff including wildlife veterinarians, epidemiologists, biologists,
technologists, analytic modelers, and public health professionals. EcoHealth works with local
governments, in-country scientists, and policymakers around the world to make changes for the
prediction and prevention of infectious disease. EcoHealth is funded primarily by government
contracts, grants, and private contributions.
Wuhan Institute of Virology
In one of its grant applications to NIH, EcoHealth described the Wuhan Institute of Virology
(WIV) as China’s premier institute for virological research. WIV consists of three research
departments and one center: the Department of Molecular Virology; the Department of
Bio-Control; the Department of Analytical Biochemistry and Biotechnology; and the Virus
Resource and Bioinformation Center of China. The application describes WIV as an accredited
biosafety level 3 (BSL-3) laboratory. 4 EcoHealth’s grant application reported that the laboratory
has both an Institutional Biosafety Committee and an Institutional Animal Care and Use
Committee.
3
Accessed at https://www.ecohealthalliance.org/about on August 18, 2021.
4
Biosafety levels are used to identify the protective measures needed in a laboratory setting to protect workers,
the environment, and the public. The four biosafety levels are BSL-1, BSL-2, BSL-3, and BSL-4, with BSL-4 being the
highest (maximum) level of containment.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 2
Grant-Related Requirements
Monitoring requirements are addressed through Federal regulations, and departmental and
awarding agency policies. The regulations at 45 Code of Federal Regulations (CFR) part 75
establish uniform administrative requirements, cost principles, and audit requirements for HHS
awards to non-Federal entities. The regulations describe subrecipient monitoring and
management requirements applicable to all non-Federal entities that provide a subaward to
carry out part of a Federal program. 5 The HHS awarding agency may impose specific award
conditions as needed in accord with 45 CFR § 75.207. The use of grant funds are controlled by
the terms and conditions of the award, and EcoHealth’s awards incorporate all requirements in
part 75.
The HHS Grants Policy Administration Manual (GPAM) establishes HHS policies for the
administration of grants and cooperative agreements, including the monitoring of awards. It
provides all HHS awarding agencies with a uniform set of minimum policy requirements that
HHS staff must follow throughout a grant’s life cycle.
The NIH Grants Policy Statement (GPS) provides NIH policy requirements that are incorporated
into the terms and conditions of NIH awards. The NIH GPS has three parts that allow general
information, application information, and other types of reference material to be separated
from legally binding terms and conditions. EcoHealth’s awards incorporate all requirements of
the NIH GPS.
Requirements for Research Involving Enhanced Potential Pandemic Pathogens
On October 17, 2014, the White House announced that the Federal Government was instituting
a governmentwide funding pause on gain-of-function research projects that may be reasonably
anticipated to confer attributes to influenza, Middle East respiratory syndrome (MERS), or
severe acute respiratory syndrome (SARS) viruses such that the virus would have enhanced
pathogenicity and/or transmissibility in mammals via the respiratory route. 6 On January 9,
2017, the White House issued Recommended Policy Guidance for Departmental Development of
Review Mechanisms for Potential Pandemic Pathogen Care and Oversight (P3CO), which
described procedures for Federal agencies to adopt in order to lift the funding pause. The HHS
Framework for Guiding Funding Decisions about Proposed Research Involving Enhanced
Potential Pandemic Pathogens (HHS P3CO Framework), which was published on December 19,
2017, satisfied the January 9, 2017, White House guidance to address certain gain-of-function
research and to lift the requirement for the research funding pause. The HHS P3CO Framework
is intended to guide HHS funding decisions on research that is reasonably anticipated to create,
5
45 CFR §§ 75.351 through 75.353.
6
Gain-of-function experiments aim to increase the ability of infectious agents by enhancing pathogenicity or
increasing transmissibility. Accessed at https://obamawhitehouse.archives.gov/blog/2014/10/17/doing-diligence-
assess-risks-and-benefits-life-sciences-gain-function-research on August 12, 2022.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 3
transfer, or use enhanced potential pandemic pathogens (ePPPs). 7 NIH describes potential
pandemic pathogens (PPPs) as bacteria, viruses, and other microorganisms that are likely highly
transmissible, and capable of wide, uncontrollable spread in human populations, and highly
virulent, making them likely to cause significant morbidity and/or mortality in humans. The
HHS P3CO Framework includes criteria to guide funding decisions, roles, and responsibilities of
HHS and awarding agencies, and related procedures. For example, one funding decision
criterion states that “[t]he research will be supported through funding mechanisms that allow
for appropriate management of risks and ongoing Federal and institutional oversight of all
aspects of the research throughout the course of the research.”
In implementing the HHS P3CO Framework, NIH recognized that while ePPP research is
inherently risky and requires strict oversight, the risk of not doing this type of research and not
being prepared for the next pandemic is also high. NIAID implemented the HHS P3CO
Framework by developing a standard operating procedure NIAID Extramural Potential
Pandemic Pathogen Care and Oversight (P3CO). NIAID’s P3CO risk assessment process begins
with a review by program staff of all applications, proposals, supplements, and progress reports
being considered for funding that involve research with a PPP. The NIAID Dual Use Research
Concern (DURC)/P3CO Review Committee consists of NIAID program staff and leadership with
broader infectious diseases and policy expertise who review research that could be subject to
the HHS P3CO Framework. Based on the results of DURC/P3CO Review Committee meetings,
NIAID would inform an applicant if it determined the applicant’s research needs to undergo a
departmental review under the HHS P3CO Framework. Appendix B lists requirements
associated with reviewing research involving enhanced potential pandemic pathogens.
NIH Peer Review, Pre-Award, and Award Process for Grant Applications
Prior to an award being made, peer reviews are conducted by an initial review group or a
scientific review group to evaluate scientific and technical merit. 8 Applications recommended
for further consideration from the initial or scientific review groups receive a second level of
review by an NIH Institute or Center’s National Advisory Council or advisory board for scientific
and technical merit and relevance to the Institute or Center’s programs and priorities.
Appendix C provides detailed information on the peer review process.
Following the peer review process, successful applications are reviewed by an Institute or
Center’s grants management and program officials for other considerations, including the
project’s budget, applicant eligibility, and an assessment of the applicant’s management
systems. NIH conducts final administrative reviews, including pre-award risk assessments. As
7
The terms “gain-of-function” and “ePPP” were both used in Government guidance at different points during the
audit period. While these terms may have some distinctions from a scientific perspective, for purposes of this
audit, which does not assess the underlying science of the EcoHealth grants, we use the terms interchangeably.
Both terms refer generally to research involving the enhancement of a pathogen’s transmissibility or virulence.
8
The scientific review group is composed primarily of non-Federal scientists who have expertise in the relevant
scientific disciplines and current research areas.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 4
part of a pre-award risk assessment, NIH’s staff are instructed to ensure that concerns and
recommendations found in the peer review process are addressed, and their results are
documented in an Award Worksheet. Once an application is approved, the successful applicant
receives a Notice of Award. Appendix D provides detailed information on the pre-award and
award procedures.
HOW WE CONDUCTED THIS AUDIT
We obtained a list of all NIH awards to EcoHealth, and all subawards made by EcoHealth from
FY 2014 through FY 2021 (audit period). Our audit covered three NIH awards to EcoHealth
totaling approximately $8.0 million, which included $1.8 million of EcoHealth’s subawards to
eight subrecipients. See Table 1 for a list of grants included in the scope of our audit. Appendix
E includes a detailed list of EcoHealth’s NIH awards and subawards.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 5
Table 1: Funding Awarded to and Spent by EcoHealth*
Award Number Award Title Award Amount
(FYs Awarded) (Subrecipients) Amount Spent
R01AI110964
Understanding the Risk of Bat Coronavirus
(FYs 2014–20) $3,748,715 $3,376,503
Emergence
Initially
(Wuhan Institute of Virology;
awarded
Wuhan University School of Public Health)
May 27, 2014
U01AI151797 Understanding Risk of Zoonotic Virus Emergence in 3,052,312 1,529,259
(FYs 2020–21) EID Hotspots of Southeast Asia
Initially (Henry M. Jackson Foundation; Conservation
awarded Medicine; Chulalongkorn University; University of
June 17, 2020 North Carolina at Chapel Hill)
U01AI153420 Study of Nipah virus dynamics and genetics in its bat 1,155,842 478,971
(FYs 2020–21) reservoir and of human exposure to NiV across
Bangladesh to understand patterns
of human outbreaks
Initially
awarded (Institute of Epidemiology Disease Control and
September 15, Research; International Centre For Diarrhoeal
2020 Disease Research, Bangladesh)
Award and Expenditure Totals $7,956,869 $5,384,733
* Grants awarded cover the audit period from FY 2014 through FY 2021. Grant expenditures are as of July 2021, the date for
the latest available accounting records from EcoHealth at the time audit fieldwork began. Additional information about
subawards can be found in Appendix E.
To address our first objective, our audit methodology was designed to assess NIH’s policies,
procedures, and internal controls in place to monitor the grant awards. 9 Specifically, we
interviewed NIH and NIAID officials familiar with the grant award and monitoring process;
reviewed HHS and NIH policies and procedures related to monitoring grant awards; reviewed
email communications and other correspondence to gain insight on the types of interactions
that occurred during the performance of the grant awards; reviewed Peer Review Summary
Statements; reviewed required financial and programmatic reports; reviewed NIH oversight of
EcoHealth’s compliance with terms and conditions stated in the Notices of Award; and
reviewed NIH’s oversight and reporting requirements associated with ePPP. Our audit did not
9
This audit was intended to focus on NIH’s monitoring activities and did not fully assess the steps NIH took when
awarding the grants.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 6
assess the results of reviews by NIH to determine whether certain research involved gain-of-
function or ePPP as this type of scientific examination was beyond the scope of this audit.
To address our second objective, our audit methodology was designed to assess EcoHealth’s
policies, procedures, and internal controls in place to manage and use grant funds. Specifically,
we interviewed EcoHealth officials familiar with the grant awards and monitoring process;
reviewed EcoHealth’s policies and procedures; reviewed 12 of EcoHealth’s subrecipient
agreements covering 8 subrecipients; reviewed EcoHealth’s subrecipient risk assessments;
reviewed EcoHealth’s subrecipient monitoring checklists; reviewed required financial and
programmatic reports that EcoHealth submitted to NIH; and selected and reviewed 150
transactions totaling $2,578,567 across the 3 NIH awards comprised of different types of cost
categories for allowability.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Appendix A contains the details of our audit scope and methodology.
FINDINGS
In accordance with Federal requirements, NIH had policies and procedures in place for
monitoring grant awards by reviewing financial and progress reports, taking action to
implement enhanced monitoring for awards to EcoHealth, and reviewing research that could
involve enhanced potential pandemic pathogens. However, NIH did not adequately monitor
EcoHealth’s grant awards in accordance with its policies and procedures and other Federal
requirements. Specifically, NIH did not ensure EcoHealth in a timely manner submitted a
progress report that was 2 years late and that NIH concluded contained evidence of a virus with
growth that should have been reported immediately; did not ensure EcoHealth publicly
reported required subaward data; and did not follow proper procedures to terminate an award
to EcoHealth.
EcoHealth had procedures in place to conduct risk assessments of its subrecipients, and also
had standardized checklists to document routine monitoring of its subrecipients. However, we
found that EcoHealth did not ensure that subawards were compliant with Federal
requirements, did not ensure compliance with subrecipient monitoring and reporting
requirements, and did not comply with certain public disclosure requirements associated with
reporting subaward funding. In addition, EcoHealth did not always use its grant funds in
accordance with Federal requirements, resulting in $89,171 in unallowable costs. These
deficiencies occurred because NIH and EcoHealth did not follow established policies and
procedures.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 7
Although NIH and EcoHealth had established monitoring procedures, lapses in complying with
those procedures limited NIH and EcoHealth’s ability to: (1) effectively monitor Federal grant
awards and subawards to understand the nature of the research conducted, identify potential
problem areas, and take corrective action; (2) provide the visibility and transparency to
determine how these grant funds were used; and (3) mitigate the risk of noncompliance with
Federal requirements and internal policies and procedures.
NIH HAD POLICIES AND PROCEDURES TO MONITOR GRANTS AND TO REVIEW FOR ENHANCED
POTENTIAL PANDEMIC PATHOGENS
NIH established policies and procedures to monitor awards consistent with Federal
requirements, which included implementing enhanced monitoring as a special award condition.
NIH’s policies and procedures addressed the October 2014 governmentwide pause on funding
certain gain-of-function research and the subsequent HHS P3CO Framework requirements
established in December 2017 to review research for enhanced potential pandemic pathogens.
The NIH GPS states that recipients are responsible for managing the day-to-day operations of
grant-supported activities using their established controls and policies, as long as the controls
and policies are consistent with NIH requirements. However, to fulfill their role to provide
stewardship of Federal funds, NIH’s awarding Institutes and Centers monitor their grants to
identify potential problems and areas in which technical assistance to recipients might be
necessary. This active monitoring is accomplished through reviews of reports and
correspondence from the recipient, independent audit reports, site visits, and reviews of other
information available to NIH. NIH’s monitoring of a project or activity continues for as long as
NIH retains a financial interest in the project or activity and may continue for a period of time
after the grant is administratively closed out and NIH is no longer providing active grant support
(NIH GPS, section 8.4).
GPAM requires that all monitoring be documented by NIH and that the Program and Grants
Management Office (Program Office) at each Institute or Center must document the adequacy
of recipient performance and compliance at least annually during the period of performance
(Part H., Chapter 2, Par. 4). Furthermore, a Program Office’s annual assessment should consist
of a review, statement, and signed acknowledgment of the annual progress report. The
statement should indicate the recipient’s overall progress and whether there are known issues
(Part H., Chapter 2, Par. 12). Finally, NIH does not have a direct relationship with subrecipients.
The pass-through entity is responsible for monitoring its subrecipient’s activities and
compliance with terms and conditions of the award (Part H., Chapter 2, Pars. 15-16). 10
10
A pass-through entity is a non-Federal entity that provides a subaward to a subrecipient to carry out part of a
Federal program.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 8
NIH Had Established Policies and Procedures To Monitor EcoHealth’s Awards
Consistent with the grant monitoring requirements outlined above, NIH’s policies and
procedures for monitoring awards primarily relied on reviewing reports and exchanging
correspondence with the recipient. NIH uses various financial and progress reports that
provide information about the amount of Federal funds spent, results from independent audit
reports, and progress made on a grant award. In addition, we found that NIH had procedures
in place to use information from the peer review process to identify specific grant-related
concerns and develop award restrictions.
As an example, the peer review that was conducted prior to Year 1 of R01AI110964 noted
concerns about the applicant’s proposed research that were not fully addressed in the
application. To minimize risk associated with the award, NIAID added restrictions to the Notice
of Award that no human subjects may be involved in any project supported by the award until
all requirements set forth by NIH for human subjects research had been met and approved by
NIH, and that no funds for research involving human subjects may be drawn down until NIAID
had notified EcoHealth that the issues had been resolved and the restriction removed. NIH was
responsible for oversight to ensure compliance with these additional restrictions added to the
Notice of Award.
NIH’s Actions To Implement Enhanced Monitoring for Awards to EcoHealth
Consistent with Federal requirements, NIH imposed specific award conditions to perform
enhanced monitoring on two EcoHealth awards, U01AI151797 and U01AI153420, based on
NIH’s belief that EcoHealth did not properly monitor WIV’s activities in compliance with grant
requirements. Federal regulations at 45 CFR § 75.371 allow for HHS awarding agencies to
impose additional award conditions as described in 45 CFR § 75.207 as a remedy for
noncompliance with terms and conditions of a Federal award. Federal regulations (45 CFR
§ 75.207) allow for HHS awarding agencies to impose specific award conditions as needed when
an applicant or recipient has a history of failing to comply with general or specific terms and
conditions of a Federal award, when an applicant or recipient fails to meet expected
performance goals, or when an applicant is not otherwise responsible. These additional award
conditions include but are not limited to requiring additional, more descriptive financial reports
and requiring additional project monitoring.
Below we describe a sequence of events that culminated in NIH implementing enhanced
monitoring by imposing specific award conditions for its U01AI151797 and U01AI153420
awards to EcoHealth. 11
• April 24, 2020: NIH terminated the R01AI110964 award originally awarded in 2014.
These events represent actions taken by NIH and are not intended to be all-encompassing of NIH’s enhanced
11
monitoring of EcoHealth.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 9
• June 17, 2020: NIH awarded new funds to EcoHealth to study the Risk of Zoonotic Virus
Emergence in Southeast Asia (Grant Number U01AI151797).
• July 8, 2020: NIH reinstated and immediately suspended the R01AI110964 award via a
letter with this date to EcoHealth.
• August 28, 2020: NIH revised the terms and conditions of award U01AI151797 to
require EcoHealth to submit to NIH copies of all subrecipient agreements established
under the award and documentation of timely entries of subrecipient information
pursuant to Federal Funding Accountability and Transparency Act of 2006 (FFATA)
requirements.
• September 15, 2020: NIH awarded new funds to EcoHealth to study the Nipah virus in
Bangladesh (Grant Number U01AI153420).
• October 23, 2020: NIH acknowledged receipt of EcoHealth’s appeal of the grant
suspension dated August 13, 2020, related to R01AI110964; reiterated requests for
materials, information, and a site visit by an outside inspection team made in the July 8,
2020, letter to EcoHealth; and further requested from EcoHealth copies of WIV
subrecipient agreements, risk assessments, and biosafety reports.
• April 13, 2021: NIH acknowledged receipt of EcoHealth’s April 11, 2021, response to
NIH’s July 8, 2020, and October 23, 2020, letters, and reiterated certain requests made
on October 23, 2020.
• July 23, 2021: NIH wrote to inform EcoHealth that the Year 5 progress report for
R01AI110964, which was due in September 2019, was late. NIH also requested
subrecipient agreements, audit reports, safety monitoring documents, progress reports,
and financial records for both the U01AI151797 and U01AI153420 awards.
• January 6, 2022: NIH wrote to inform EcoHealth that it was adding specific award
conditions on the awards that were first issued in June and September 2020 due to a
history of failure to comply with several elements of the terms and conditions of grant
awards and required EcoHealth to develop a Corrective Action Plan for both
U01AI151797 and U01AI153420.
NIH’s Monitoring of EcoHealth Grant Awards Included Reviews for Enhanced Potential
Pandemic Pathogens
NIAID had processes related to assessing and monitoring awards potentially involving ePPP.
During the scope of our audit, NIAID’s processes included assessing whether research was
subject to the gain-of-function funding pause (from 2014–17) or subject to the HHS P3CO
Framework review (after 2017). As described in more detail in subsequent paragraphs, NIAID
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 10
reviewed award R01AI110964 to EcoHealth after the gain-of-function funding pause was in
effect to assess whether it was subject to the pause, and NIH determined that the R01AI110964
research was not subject to the gain-of-function funding pause. After the gain-of-function
funding pause was lifted in 2017, NIH assessed all three awards that were initiated or ongoing
to determine whether to refer research for review under the HHS P3CO Framework. NIH did
not refer any of the three awards to the Department for review under the HHS P3CO
Framework. Our audit did not review the basis of NIH’s determinations, which is a scientific
issue beyond our scope and expertise, and we do not make any conclusions about NIH’s
determinations about gain-of-function research or the necessity of a departmental review
under the HHS P3CO Framework. However, we note that NIH recognized the need for strict
oversight of research involving ePPP. NIAID’s P3CO standard operating procedure instructed
program staff reviewing proposed research involving a PPP to “err on the side of inclusion”
when determining whether proposed research should be referred to the NIAID DURC/P3CO
Committee for further review and possible referral to the Department for review under the
HHS P3CO Framework.
The following discussion lays out in greater detail conditions and requirements for each grant
related to ePPP. It was NIH’s responsibility to monitor EcoHealth’s compliance with these
requirements described below.
Grant Number R01AI110964
On May 28, 2016, the NIAID Grants Management Specialist and Program Officer for the grant
notified EcoHealth that, based upon information in the progress report for Year 2 submitted by
EcoHealth on May 13, 2016, NIAID had determined that the research could be gain-of-function
and subject to the funding pause on certain gain-of-function research. NIAID stated that, per
the funding pause announcement, new funding would not be released for gain-of-function
research projects that may be reasonably anticipated to confer attributes to influenza, MERS, or
SARS viruses such that the virus would have enhanced pathogenicity or transmissibility in
mammals via the respiratory route. The letter requested additional information from
EcoHealth about the research including support as to whether the research did or did not
include work applicable to the gain-of-function funding pause.
On June 8, 2016, EcoHealth provided a response with additional details describing the
R01AI110964 research. In that letter, EcoHealth explained the goal of the proposed work was
to understand the potential origins of MERS-Coronavirus (CoV) in bats by studying bat
MERS-like CoVs in detail. EcoHealth stated that it was highly unlikely that this work would have
any pathogenic potential. EcoHealth’s letter did state that should any of these recombinants
show evidence of enhanced virus growth greater than certain specified benchmarks involving
log growth increases, or grow more efficiently in human airway epithelial cells, EcoHealth
would immediately: (1) stop all experiments with the mutant, (2) inform the NIAID Program
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 11
Officer of these results, and (3) participate in decision-making trees to decide appropriate paths
forward.12
On July 7, 2016, NIAID officials responded to EcoHealth saying that they had reviewed the
original grant application and the documents and explanations provided by EcoHealth in
response to NIAID’s question about whether the research included any gain-of-function work
subject to the funding pause. NIAID determined that the work proposed to generate MERS-like
or SARS-like chimeric coronaviruses was not subject to the gain-of-function research funding
pause and was not reasonably anticipated to have enhanced pathogenicity or transmissibility in
mammals via the respiratory route. Furthermore, NIAID stated that if any of the MERS-like or
SARS-like chimeras generated under this grant showed evidence of enhanced virus growth
greater than certain specified benchmarks involving log growth increases, EcoHealth would
immediately stop all experiments with these viruses and provide the NIAID Program Officer and
Grants Management Specialist with the relevant data and information related to these
unanticipated outcomes.13, 14
On July 5, 2018, the NIAID Grants Management Specialist and Program Officer sent EcoHealth a
letter introducing the HHS P3CO Framework published in December 2017. In response to the
HHS P3CO Framework, NIAID re-reviewed EcoHealth’s R01AI110964 grant application and other
information provided by EcoHealth and determined that the experiments to generate
MERS-like or SARS-like chimeric coronaviruses were not subject to the HHS P3CO
Framework. However, also in 2018, NIAID revised the terms and conditions of the Year 5 award
to indicate that should experiments proposed in this award result in a virus with enhanced
growth by more than certain specified benchmarks involving log growth increases, EcoHealth
must notify NIAID immediately, and further research may require review by HHS according to
the HHS P3CO Framework. Further information about events occurring related to the Year 5
award are described in the audit findings section related to the failure of EcoHealth to submit a
progress report on time.
12
The agenda for NIAID’s weekly DURC/Gain-of-Function meeting scheduled for June 17, 2016, included a
discussion item related to the R01AI110964 award and whether the research supported under the award was
subject to the gain-of-function funding pause.
13
Although the letter had an immediate notification requirement, as we describe later in this report, we did not
find evidence that NIAID clearly defined expectations as to the process and timeline EcoHealth should follow to
provide “immediate notification.”
14
NIH incorporated restrictions described in the July 7, 2016, letter in the Notice of Award issued on July 22, 2016.
The Notice of Award stated no funds are provided and no funds can be used to support gain-of-function research
covered under the October 17, 2014, White House announcement.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 12
Grant Number U01AI151797
Grant U01AI151797 was awarded after implementation of the HHS P3CO Framework. NIAID
did not refer this grant to the DURC/P3CO Committee for consideration on the need for a
departmental review under the HHS P3CO Framework. The following events provide details
regarding this decision.
• On April 30, 2020, during the application review process, NIAID staff internally noted a
reference to possible enhanced potential pandemic pathogens and took additional steps
to review the proposed research as required by the HHS P3CO Framework.
• On May 1, 2020, NIAID staff requested additional information from EcoHealth regarding
the nature of experiments related to this award.
• On May 5, 2020, EcoHealth responded to the request outlining two approaches to the
research.
• On May 7, 2020, during an internal review of this additional information, NIAID staff
noted that no further action was needed as the proposed research did not meet the
criteria for classification as P3CO studies based on a review of the application and
additional information from EcoHealth. However, NIAID staff noted there was a
possibility that this may change in the future, and suggested adding a special P3CO term
of award, which we further describe in the next bullet.
• On June 17, 2020, NIAID issued the Notice of Award and addressed the possible P3CO
concern noted on May 7, 2020, by requiring EcoHealth to immediately stop work on all
experiments and notify the NIAID Program Officer and Grants Management Specialist
should any experiments proposed in the application result in specific outcomes.
Furthermore, the award stated that it does not include funds to support research
subject to the HHS P3CO Framework.
Grant Number U01AI153420
In response to our request for steps taken for this grant application and possible review under
the HHS P3CO Framework, NIAID informed OIG that it had reviewed and determined the
application did not meet the scope of the HHS P3CO Framework, noting that sufficient
information was provided in the grant application to review the proposed experiments and use
of pathogens. NIAID did not provide OIG with any further documentation indicating that it
considered referring the research to the Department for review under the HHS P3CO
Framework.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 13
NIH’S MONITORING OF ECOHEALTH GRANT AWARDS DID NOT COMPLY WITH HHS POLICIES
AND PROCEDURES AND FEDERAL REQUIREMENTS
NIH Did Not Ensure a Progress Report Was Submitted in a Timely Manner for One of
EcoHealth’s Grant Awards
Contrary to GPAM requirements, NIH did not follow up in a timely manner with EcoHealth after
it failed to submit a progress report due September 2019. EcoHealth’s failure to submit a
progress report in a timely manner and NIH’s failure to follow up on a missing progress report
limited NIH’s ability to effectively monitor its grant award to EcoHealth and evaluate whether
the special terms and conditions were met. This oversight failure is particularly concerning
because NIH had previously raised concerns with EcoHealth about the nature of the research
being performed. Once NIH received and reviewed the late progress report, NIH concluded the
research resulted in a virus with enhanced growth. EcoHealth’s Notice of Award for Year 5 of
R01AI110964 was issued on June 18, 2018. It had a budget period of June 1, 2018, to May 31,
2019. The Notice of Award required that a final progress report be submitted within 120 days
of the budget period’s end date. Thus, EcoHealth should have submitted its progress report for
Year 5 by the end of September 2019.
Completing an online progress report is a multistep process. 15 The principal investigator or
delegate initiates the progress report. Processing of the progress report continues with edits,
and in the final step the progress report is submitted to NIH. Until the progress report is
submitted to NIH, the online system marks the report status as “draft” and the submission date
space is blank. We found evidence in the online system that EcoHealth initiated the progress
report in July 2019; however, not until after NIH requested the progress report in July 2021 did
EcoHealth submit it on August 3, 2021, nearly 2 years late.
While EcoHealth bears responsibility for its late progress report, which we discuss in more
detail later in this report, we find no evidence that NIH informed EcoHealth of the late progress
report from the time EcoHealth initiated the report in NIH’s online system until July 2021, just
short of 2 years after the progress report was initially due. Furthermore, NIH did not comply
with the GPAM requirement to follow up with EcoHealth about the late report no later than
30 days after the established due date (Part H., Chapter 2, Par. 45). 16 NIH’s failure to follow up
with EcoHealth about the late progress report limited its ability to understand the nature of the
research conducted during Year 5 of the award on a timely basis.
Below we provide an overview of NIH’s and EcoHealth’s interpretations of Year 5’s research
results. We again note that our audit did not assess scientific results for any of the experiments
15
The online system is described in Appendix D.
16
As we describe later in this report, this action was taken after NIH terminated, reinstated, and suspended the
award.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 14
or make any determination regarding the accuracy of NIH’s or EcoHealth’s interpretations of
Year 5’s research results.
EcoHealth’s Notice of Award for Year 5 of R01AI110964 required EcoHealth to immediately
notify its NIAID Program Officer and Grants Management Specialist if any experiments
proposed in the award resulted in a virus with enhanced growth by more than one log
compared to wild-type strains. The Notice of Award also stated that research involving the
resulting virus(es) may require review under the HHS P3CO Framework.
According to NIH’s evaluation of EcoHealth’s progress report for Year 5 of the grant, NIH
believed there was evidence that the research conducted by EcoHealth’s subrecipient WIV
during Year 5 resulted in enhanced growth by more than one log, thus triggering the special
term and condition to immediately notify NIAID and potentially requiring the research to
undergo review under the HHS P3CO Framework. NIH required immediate notification of this
type of unexpected research result, because a one-log increase in growth has been used as a
criteria for initiating a secondary review to determine whether the research aims should be
evaluated or new biosafety measures should be enacted.
With respect to the issue of the special term and condition to provide “immediate notification”
to NIAID, EcoHealth asserted that the experiment reported in the Year 5 progress report
included results from a followup analysis of the same experiment conducted in Year 4 of the
award and reported in the Year 4 progress report. However, based on NIH’s Office of
Extramural Research review of the progress reports for Year 4 and Year 5, NIH explained that it
cannot determine whether Year 4’s progress report included results from the same
experiment.17 EcoHealth believes it was in compliance with the requirement to immediately
notify NIAID of the research results because EcoHealth reported the results in the Year 4
progress report. However, NIH does not believe reporting research in a progress report
constitutes immediate notification. We agree with NIH’s assessment that reporting research in
a progress report does not constitute immediate notification; however, we did not find
evidence that NIH clearly defined requirements related to the process and timeline EcoHealth
should follow to provide immediate notification.
NIH Did Not Ensure EcoHealth Reported Required Subaward Data for Award R01AI110964
NIH’s monitoring did not discover EcoHealth’s noncompliance with requirements to report
subawards for more than 5 years, which demonstrates that NIH’s policies and procedures were
not always effective. FFATA as amended requires most recipients of Federal funds awarded on
or after October 1, 2010, to report on subawards and subcontracts equal to or greater than
$25,000. Recipients use the FFATA Subawarding Reporting System (FSRS) to report their
17
While NIH was not able to substantiate whether the Year 4 and Year 5 experiments were the same, NIH
informed us that it does not believe that either experiment described is associated with severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2) or the COVID-19 pandemic.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 15
subawards. Prior to July 2020, EcoHealth had not complied with the subaward reporting
requirement for at least 5 years. Not reporting required subaward information limits NIH and
the general public’s visibility into, and transparency of, how these grant funds were used.
While EcoHealth was not in compliance with the disclosure requirements, it was not evident
that NIH was aware of this failure until July 2020, when NIH required EcoHealth to comply with
the disclosure requirements as one of the conditions of its grant suspension. Given that
EcoHealth’s first subaward covered the period June 1, 2014, through May 31, 2015, we believe
NIH’s monitoring of EcoHealth’s grants should have revealed EcoHealth’s failure to comply with
the subaward disclosure requirement as early as 2016 during the renewal process for Year 3 of
the award.
As part of its monitoring, NIH has access to recipient audit reports and financial statements.
Based on our review of audit reports, we noted that EcoHealth’s Schedule of Expenditures of
Federal Awards (SEFA) included in its financial statements for the years ended June 30, 2016,
June 30, 2017, June 30, 2018, and June 30, 2019, did not include the proper amounts of
subaward funding for NIAID’s Federal programs. 18 We would reasonably expect NIH’s
monitoring activities to detect this repeated reporting omission and then for NIH to advise
EcoHealth to modify that section of its financial statements.
NIH Did Not Follow All Required Procedures To Terminate One of Its Grant Awards
Although NIH found EcoHealth to have several instances of noncompliance with award
requirements, NIH did not follow Federal regulations and departmental policy to appropriately
terminate one of EcoHealth’s awards.
As part of NIH’s monitoring of the R01AI110964 award to EcoHealth, NIH sent a letter to
EcoHealth on April 19, 2020, requiring EcoHealth to cease providing any funds to its
subrecipient WIV, citing concerns that WIV may have been involved with the release of the
coronavirus responsible for COVID-19. On April 21, 2020, EcoHealth responded that it would
comply with this request. Three days later, on April 24, 2020, NIH sent a letter informing
EcoHealth that it was terminating the grant “for convenience,” stating NIH did not believe the
current project outcomes aligned with program goals and agency priorities.
We found several deficiencies with the notice NIH provided to EcoHealth terminating the
award:
• NIH stated that it did not believe the current project outcomes aligned with program
goals and agency priorities. Accordingly, the termination notice cited “for convenience”
as the cause for termination; however, that is not a valid termination cause pursuant to
18
As part of a grant recipient’s financial statements, a recipient of a Federal grant award must prepare a SEFA that
covers the period of the financial statements to disclose the total amount of a Federal award spent, subawards
received, and amounts passed through to subrecipients.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 16
45 CFR § 75.372. 19
• The termination notice did not include a statement of EcoHealth’s appeal rights as
required by Federal regulations and NIH GPS. 20
• There was no NIH official named on the termination notice to whom EcoHealth should
submit an appeal, as required by NIH GPS. 21
• The termination notice did not provide any sort of opportunity for EcoHealth to provide
information and documentation challenging the termination action, as required by
Federal regulations. 22
On May 22, 2020, EcoHealth submitted a formal appeal to NIH, challenging the termination
action. In absence of a specific person at NIH named on the termination notice to send an
appeal to, EcoHealth addressed its appeal to the NIH Deputy Director for Extramural Research
who signed the termination letter.
On July 8, 2020, NIH wrote to EcoHealth informing EcoHealth that NIH had withdrawn its
termination of grant R01AI110964 and reinstated the grant. The letter went on to cite that NIH
had received reports that WIV, one of EcoHealth’s subrecipients, had been conducting research
at WIV’s facilities in China that posed serious biosafety concerns and, as a result, created health
and welfare threats to the public in China and other countries. In this letter, NIH proceeded to
suspend all activities related to R01AI110964 until concerns listed in the letter were addressed
to NIH’s satisfaction.23 The notice cited that the suspension was taken in accord with 45 CFR §
75.371 and that the action was not appealable; however, EcoHealth could provide information
and documentation demonstrating that WIV and EcoHealth had satisfied certain requirements.
GPAM (Part H, Chapter 4, Par. 21) states that the notice of post-award suspension of award
activities must clearly indicate which corrective actions must occur during the enforcement
action and an HHS operating division’s intent to terminate the award if the recipient does not
meet the conditions of the enforcement action.
19
Appendix F contains Federal requirements associated with terminating and suspending grant awards.
20
45 CFR § 75.374(a) and NIH GPS, Section 8.7.
21
NIH GPS, section 8.7.
22
45 CFR § 75.374(a).
23
EcoHealth was to address certain items related to lab safety and oversight of WIV. During the period of
suspension, EcoHealth was not to allow any research to be conducted under the suspended award, nor spend any
grant funds associated with the suspended award.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 17
NIH and EcoHealth had ongoing communications spanning a more than 2-year period
addressing items related to the grant suspension. Most recently, on August 19, 2022, NIH sent
a letter notifying EcoHealth of actions: (1) to terminate the subaward from EcoHealth to WIV;
(2) to explore renegotiating the remainder of the award without involvement from WIV, and
without a significant scientific departure from the original peer-reviewed project; and (3) if the
remaining award could be renegotiated, to issue a revised award subject to specific award
conditions. NIH noted that a partial termination is appealable. Because of these actions, we
make no recommendations to NIH related to its initial termination of the R01AI110964 award
to EcoHealth.
ECOHEALTH HAD POLICIES AND PROCEDURES TO MANAGE GRANT AWARDS AND MITIGATE
POTENTIAL RISK BEFORE SUBAWARDING GRANT FUNDS
EcoHealth had policies and procedures to manage grant awards and mitigate potential risk
before subawarding grant funds as we describe below. EcoHealth is responsible for the
oversight of the operations of Federal award-supported activities and must monitor
subrecipient activities under Federal awards to assure compliance with applicable Federal
requirements and performance expectations are being achieved (45 CFR § 75.342(a)). In
addition, in its role as a pass-through entity, EcoHealth must evaluate each subrecipient’s risk of
noncompliance with Federal statutes, regulations, and the terms and conditions of the
subaward to determine the appropriate subrecipient monitoring. 24
This risk assessment may consider factors such as:
• the subrecipient’s prior experience with the same or similar subawards,
• the results of previous audits,
• whether the subrecipient has new personnel or new or substantially changed systems,
and
• the extent and results of HHS awarding agency monitoring (e.g., whether the
subrecipient also receives Federal awards directly from an HHS grant-awarding agency).
In February 2017, EcoHealth established a policy documenting its responsibility for monitoring
the programmatic and financial activities of its subrecipients to ensure proper stewardship of
sponsor funds to comply with the requirements of 45 CFR part 75. Among other things, the
policy requires EcoHealth to monitor programmatic progress and the ability of the subrecipient
to meet the objectives of the subaward, to complete risk assessments on new subrecipient
organizations, and to conduct annual assessments on active subrecipient organizations.
EcoHealth uses a risk-based approach to subrecipient monitoring, focusing on those
24
45 CFR § 75.352(b).
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 18
subrecipients deemed at greatest risk for noncompliance. See Table 2 for criteria EcoHealth
used for assigning a level of risk.
Table 2: Factors for Assigning Level of Risk
• foreign versus domestic25 • audit results
• maturity of organization • accounting/procurement systems
• subrecipient’s prior experience • scope of work and project
with similar subawards or deliverables
awarding agency • familiarity of EcoHealth and
• adequacy of facilities26 subrecipient principal investigators
• percentage of award passed • rate of subrecipient spending on
through to subrecipient award
• subrecipient familiarity with award • subrecipient organization type
mechanism
EcoHealth’s risk analysis process included:
• checking the General Services Administration (GSA) System for Award Management
(SAM) website to determine whether the subrecipient was suspended or debarred,
• verifying that the subrecipient had a compliant conflict of interest policy if required by
the awarding agency, and
• verifying that the subrecipient maintained an adequate financial management system to
account for award funds.
Based on our review of documentation that EcoHealth provided OIG, we found that EcoHealth
officials met with WIV staff in person on at least 20 occasions between June 2014 and
December 2019 and traveled to Wuhan, China, to meet with individuals from WIV at least
annually during that time to discuss the research conducted under its subaward.27 EcoHealth
staff told OIG that they engaged in frequent phone calls and email exchanges with WIV staff
throughout the grant period until the time the grant was terminated in April 2020.
Furthermore, since EcoHealth implemented its subrecipient monitoring policy in February 2017,
we found that EcoHealth conducted risk assessments for each of its subrecipients. EcoHealth
25
According to EcoHealth’s risk checklist, foreign organizations are rated with “medium” or “high” risk, depending
on the stability of the country’s government and financial system.
26
According to EcoHealth’s risk checklist, this refers to whether the facilities are adequate and well-established;
adequate and new; or inadequate.
27
The documentation indicated that some meetings were at WIV.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 19
also completed monitoring checklists for those subrecipients and conducted desk audits for
selected subrecipients. Due to the COVID-19 pandemic, EcoHealth told OIG it had not
conducted any in-person site visits at any of its subrecipients’ facilities from January 2020
through the end of audit fieldwork in August 2022.
ECOHEALTH DID NOT ENSURE SUBAWARDS WERE COMPLIANT WITH
FEDERAL REQUIREMENTS
Subaward Agreements Did Not Contain All Required Information
Contrary to Federal regulations, none of the subaward agreements contained all of the required
information. Pursuant to 45 CFR § 75.352(a), each pass-through entity such as EcoHealth must
ensure that each subaward is clearly identified as a subaward and must include specific
information on the subrecipient agreement. 28
Of the 11 subrecipient agreements we reviewed that EcoHealth used to subaward funding, all
11 agreements lacked at least 1 of these required elements. 29 This occurred because
EcoHealth’s policies and procedures did not ensure that the required data elements were
included on each subaward. EcoHealth’s noncompliance with these requirements limited the
transparency of key Federal funding information to the subrecipients, such as the total amount
of a Federal award committed to a subrecipient and the Federal award identification number.
See Appendix H for details about subrecipient agreements lacking required data elements.
Inaccurate Subrecipient and Consultant Agreements
Some of the subrecipient and consultant agreements we reviewed were not written according
to Federal regulations, which require non-Federal entities to maintain a financial management
system that provides for the following:
• accurate, current, and complete disclosure of the financial results of each Federal award
or program; and
• records that adequately identify sources and applications of funds for federally funded
activities (45 CFR § 75.302(b)).
During our review of subrecipient and consultant agreements, we identified six agreements
that contained inaccurate references to funding sources in EcoHealth’s financial management
system. In some cases, these incorrect references were in the form of unique grant identifiers
in the accounting system; in other cases, written text in the agreement described a different
funding source. According to EcoHealth, these errors occurred during copying and pasting of
28
Appendix G contains a list of requirements associated with subrecipient agreements and monitoring.
29
We also reviewed an additional subrecipient agreement, but it was not subject to these requirements because
the agreement was signed prior to implementation of the requirements at 45 CFR § 75.352(a).
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 20
information from old agreements to new agreements. While we did not find evidence that the
wrong funding source was used to pay subrecipients or consultants, it is possible that not all of
EcoHealth’s subrecipients or consultants were fully informed about the Federal funding source
associated with their funding.
ECOHEALTH DID NOT ENSURE COMPLIANCE WITH REPORTING AND SUBRECIPIENT
MONITORING REQUIREMENTS
The Progress Report Was Not Submitted in a Timely Manner for Year 5 of a Grant Award
As we described earlier in this report, EcoHealth submitted its Year 5 progress report late and
the report involved research that NIH believed resulted in a virus with enhanced growth.
EcoHealth’s Notice of Award for Year 5 of R01AI110964 was issued on June 18, 2018. It had a
budget period of June 1, 2018, to May 31, 2019. The Notice of Award required a final progress
report be submitted within 120 days of the budget period’s end date. Thus, EcoHealth should
have submitted its progress report for Year 5 by the end of September 2019. We found
evidence in the online system used to submit progress reports that EcoHealth initiated the
progress report in July 2019; however, not until after NIH requested the progress report in July
2021 did EcoHealth submit the progress report on August 3, 2021, nearly 2 years late.
EcoHealth claimed that it had difficulty accessing the system used to submit progress reports,
but we could not find evidence to support that claim. While we found that EcoHealth
contacted NIH in late July 2019 in reference to the progress report, we did not find evidence
that EcoHealth notified NIH about difficulty accessing the system used to submit progress
reports. Furthermore, we found no evidence that NIH requested the progress report until July
2021. Due to late submission of the Year 5 progress report, EcoHealth was not in compliance
with the report submission deadlines, which contributed to NIH not being made aware of the
research results and not having information needed to understand the nature of research
conducted in a timely manner.
EcoHealth Was Unable To Obtain Scientific Documentation From a Subrecipient
EcoHealth has been unable to provide NIH with certain scientific documentation in response to
an NIH request. Federal regulations (45 CFR § 75.364(a)) require non-Federal entities to grant
access to any documents, papers, or other records of the non-Federal entity that are pertinent
to the Federal award to the HHS awarding agency, the Inspector General, or the pass-through
entity. EcoHealth’s subaward agreements state that EcoHealth may examine, audit, or have
audited the records of the subrecipient as they relate to activities supported by the agreement.
On November 5, 2021, NIH requested that EcoHealth provide certain scientific documentation
from WIV substantiating research covering EcoHealth’s Year 4 (project period June 1, 2017, to
May 31, 2018) and Year 5 (project period June 1, 2018, to May 31, 2019) progress reports to
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 21
gain insights into the nature of the experiments that were performed.30 In turn, EcoHealth
requested the information from WIV. However, based on records reviewed, we did not see
evidence that EcoHealth obtained the scientific documentation. EcoHealth officials confirmed
to us that WIV had not been responsive to its request to provide the scientific documentation
and indicated it was unlikely to receive the requested information. As a result, EcoHealth has
been unable to comply with NIH’s request on this matter. In a discussion of this specific matter
with NIH’s Deputy Director for Extramural Research, NIH acknowledged to OIG that WIV may
never provide EcoHealth with the requested documentation. Although EcoHealth’s subaward
agreements had language permitting it to access the records of its subrecipients and also had
policies and procedures to assess and monitor its subrecipients, EcoHealth has been limited in
its ability to require WIV to take specific action or provide specific information. This has been
due in part to the lack of cooperation by WIV, as reported by EcoHealth and NIH.
The approach in the governmentwide regulations that NIH follows related to oversight and
monitoring of foreign subrecipients also contributed to this finding. These regulations are
designed to have a prime grant recipient monitor the activities of a subrecipient, rather than
requiring the grant-awarding agency—in this case, NIH—to conduct active monitoring of
subrecipients. NIH expects its prime grant recipients to be accountable for performance of the
research project, and it also expects prime grant recipients to address and report certain
problems with its subrecipients to NIH—sometimes immediately. For foreign subrecipients, the
effectiveness of the prime recipient’s monitoring relies on the level of cooperation between the
recipient and the subrecipient. In certain countries in which the research is performed, there
may be a risk that larger political or governmental issues may impede cooperation and prime
recipients will have limited ability to effectively monitor their foreign subrecipients.
As previously stated in this report, OIG has identified NIH’s oversight of grants to foreign
applicants as a potential risk to the Department in meeting program goals and the appropriate
use of Federal funds. Additionally, prior OIG work has found foreign recipients at risk of
noncompliance with grant requirements and maintaining documentation that is needed to
effectively oversee and manage Federal grant awards.31
EcoHealth Did Not Comply With Certain Requirements Associated With Reporting Subaward
Funding
Contrary to Federal regulations, EcoHealth did not properly report subawards in its SEFA or
report them on the FSRS website. Regulations at 45 CFR § 75.510(b) require auditees to
prepare a SEFA for the period covered by the auditee’s financial statements. The SEFA must
30
The scientific documentation requested consisted of complete and dated copies of the original laboratory
notebook entries and original electronic files that led to the Year 4 and Year 5 progress reports.
31
Although CDC Implemented Corrective Actions To Improve Oversight of the President’s Emergency Plan for AIDS
Relief Recipients, Some Internal Control Weaknesses Remained, A-04-18-01010, December 2020, available at
https://oig.hhs.gov/oas/reports/region4/41801010.asp.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 22
include the total Federal awards expended. Regulations at 45 CFR §§ 75.510(b)(2-4) require the
recipient to list the name of each pass-through entity for which it received Federal subawarded
funding and require the auditee to include the total amount provided to subrecipients from
each Federal program.
The SEFA in EcoHealth’s financial statements for the years ended June 30, 2016, June 30, 2017,
June 30, 2018, and June 30, 2019, did not include the proper amount of subawarded funding
for NIAID’s Federal programs. EcoHealth stated that its independent accountants advised
EcoHealth not to include that information; however, this advice was contrary to Federal
reporting requirements. In addition, EcoHealth’s failure to report the subaward funding limited
NIH’s access to accurate information in the audit report’s SEFA to use in NIH’s monitoring
process.
FFATA requires most recipients of Federal funds awarded on or after October 1, 2010, to report
on subawards and subcontracts equal to or greater than $25,000. Recipients use FSRS to report
their subawards. Prior to July 2020, EcoHealth had not complied with the reporting
requirement to report its subawards. Until NIH informed EcoHealth in July 2020 that it was not
in compliance with these reporting requirements for its subawards, EcoHealth did not report
any of its subawards on the FSRS website according to Federal requirements. During the audit,
we noted EcoHealth did not have sufficient policies and procedures to address these reporting
requirements.
ECOHEALTH DID NOT ALWAYS USE ITS GRANT FUNDS ACCORDING TO FEDERAL
REQUIREMENTS
We determined that EcoHealth claimed $89,171 in costs that did not meet Federal
requirements. These costs included salaries exceeding the NIH salary cap, employee bonuses,
travel costs, tuition costs, indirect costs claimed by a subrecipient, other costs, and associated
fringe and indirect costs. See Table 3 for a summary of unallowable costs by cost category.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 23
Table 3: Summary of Unallowable Costs by Cost Category
Unallowable
Fringe Benefit Total
Cost Category Unallowable and Indirect Unallowable
(Associated Grant Numbers) Direct Cost Cost Cost
Salaries and Bonuses
$26,604* $17,836 $44,440
(All Grant Numbers)
Tuition
13,951 4,641 18,592
(R01AI110964)
Indirect Costs Claimed by Subrecipient
13,037 0 13,037
(R01AI110964)
Travel
5,752 1,876 7,628
(R01AI110964)
Other
4,571 903 5,474
(R01AI110964 and U01AI151797)
Unallowable Cost Totals $63,915 $25,256 $89,171
* This amount includes $10,627 and $15,977 in unallowable salary and bonus costs, respectively.
Federal regulations at 45 CFR § 75.403 require that costs:
• be necessary and reasonable for the performance of the Federal award and be allocable
under these principles,
• conform to any limitations or exclusions set forth in these principles or in the Federal
award,
• be consistent with policies and procedures that apply uniformly to both federally
financed activities and other activities of the non-Federal entity, and
• be adequately documented.
Salary Costs Exceeded the NIH Salary Cap
We determined that $10,627 in sampled salary costs for selected EcoHealth employees were
claimed in excess of the NIH salary cap. NIH funds shall not be used to pay the salary of an
individual through a grant or other extramural mechanism at a rate in excess of that prescribed.
Applications and proposals with categorical, direct-cost budgets reflecting direct salaries of
individuals in excess of the rate prescribed are to be adjusted according to the legislative salary
limitation (NIH GPS, section 4.2.10). For our audit period, NIH’s salary cap ranged from
$181,500 to $199,300 for recipient employees fully allocated to NIH grant awards. For recipient
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 24
employees whose salaries are partially funded by NIH grant awards, the salary cap is adjusted
proportionally to the amount of effort charged to the NIH award.
While EcoHealth indicated that it was aware of the NIH salary cap and properly accounted for it,
we determined that EcoHealth did not consider the percent of effort assigned to the grant,
resulting in amounts paid with NIH grant funds in excess of the salary cap.
EcoHealth Provided Employee Bonuses Without an Established Plan and Claimed Unallowable
Indirect and Fringe Benefits
We identified $15,977 in employee bonuses that were improperly paid with NIH grant funds to
seven EcoHealth employees. The bonuses paid were not in accordance with NIH GPS
requirements. The NIH GPS states that “Incentive compensation to employees based on cost
reduction, or efficient performance, suggestion awards, safety awards, etc., is allowable to the
extent that the overall compensation is determined to be reasonable and such costs are paid or
accrued pursuant to an agreement entered into in good faith between the non-Federal entity
and the employees before the services were rendered, or pursuant to an established plan
followed by the non-Federal entity so consistently as to imply, in effect, an agreement to make
such payment.” (NIH GPS, section 7.9.1)
EcoHealth’s policy on Performance Management states that positive performance evaluations
do not guarantee increases in salary, bonus payments, or any other type of discretionary
compensation. Promotions, salary increases, and discretionary payments of any kind are solely
under the discretion of management and depend upon many factors in addition to individual
performance (EcoHealth Employee Handbook, chapter 19).
We determined that all $15,977 in bonuses we reviewed were unallowable because there was
no agreement entered into between EcoHealth and the employees before the services were
rendered. Nor do we believe the language in EcoHealth’s Employee Handbook meets the
requirements listed in NIH GPS as it relates to having an established plan to pay bonuses. The
language in EcoHealth’s Employee Handbook is too vague to be an agreement to make a bonus
payment or an established plan that is followed so consistently as to imply an agreement to
make a bonus payment. EcoHealth believed that charging employee bonuses to NIH grants was
allowable.
In addition to the unallowable salary costs in excess of NIH’s salary cap and unallowable bonus
costs, we determined that associated indirect and fringe benefit costs that EcoHealth paid with
NIH grant funds of $17,836 were also unallowable.
Tuition Costs Did Not Meet Federal Requirements
We determined that EcoHealth claimed unallowable Ph.D. education tuition costs for an
EcoHealth employee enrolled at Kingston University, located in London, England. The claims
were made to the R01AI110964 research grant in the amounts of $4,603 and $9,348 for the
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 25
2018–19 and 2019–20 academic years, respectively. Regulations at 45 CFR § 75.472 specifically
allow for the cost of training and education provided for employee development. However,
section 7.9.1 of NIH GPS states that trainee costs are allowable only under predoctoral and
postdoctoral training grants.
EcoHealth explained that it believed paying tuition costs with NIH grant funds was allowable.
According to the NIH GPS, that is true only in limited cases involving a specific type of NIH grant
award, and EcoHealth’s grant was not of this limited type. Accordingly, we identified a total of
$13,951 in unallowable tuition costs, along with $4,641 in associated indirect costs.
Indirect Costs Were Claimed in Excess of Allowable Rates for Foreign Subawards
We determined that EcoHealth claimed $13,037 in unallowable indirect costs associated with
subawards at WIV. Facilities and administrative costs under grants to foreign and international
organizations will be funded at a fixed rate of 8 percent of modified total direct costs, exclusive
of tuition and related fees, direct expenditures for equipment, and subawards in excess of
$25,000. These funds are paid to support the costs of compliance with Federal requirements
(NIH GPS, section 7.4).
For four sampled claims, we determined that WIV claimed indirect costs at a rate of 11 percent,
or 3 percent greater than the allowable rate of 8 percent.
Travel Costs Did Not Meet Federal Requirements
We determined that $5,752 in travel costs paid with NIH grant funds were unallowable for the
reasons listed below. Travel costs are allowable as a direct cost when providing a direct benefit
to the grant-funded project. Consistent with the organization’s established travel policy, these
costs for employees working on a grant-supported project may include associated per diem or
subsistence allowances and other travel-related expenses. If a recipient organization has no
established travel policy, Federal Travel Regulations issued by GSA will be used to determine
the amount that may be charged for travel costs. Those regulations include maximum per diem
and subsistence rates. Alcohol is generally an unallowable expense (NIH GPS, section 7.9.1).
We determined that a payment totaling $3,285 for the transportation and accommodation
costs of an EcoHealth employee attending a conference in October 2016 was unallowable. The
employee was traveling under a non-NIH grant. Travel costs are required to provide direct
benefit to the grant-funded project.32 A coding mistake resulted in the charge to the
NIH-funded grant, and EcoHealth concurred with our determination.
We determined that a payment totaling $2,128 for a meeting room and meal costs at a hotel on
February 3, 2016, was unallowable. The support provided for the claim was an attestation of
32
GPS Section 7.9.1.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 26
expenses. Travel costs are required to be supported by source documentation and be
adequately documented. 33 EcoHealth noted that the original receipt had been lost. EcoHealth
officials documented the costs to the best of their knowledge. The attestation is not sufficient
to support the claiming of costs to the grant.
We identified a claim for a one-night hotel stay on April 14, 2015, totaling $601, which was
above the allowable per diem amount of $268. The hotel costs above the per diem rate totaled
$334 and were unallowable. Also included on this invoice was a claim for an alcoholic beverage
totaling $5 that was unallowable, for a total of $339 in unallowable costs. Travel costs must be
made according to established per diem rates and for allowable purposes. 34
According to the indirect rates EcoHealth used at the time each of these payments were made,
we computed an additional $1,876 in unallowable indirect costs associated with the
unallowable travel payments.
Other Costs Did Not Meet Federal Requirements
Visa Costs
We identified an invoice for which EcoHealth claimed reimbursement for expedited processing
fees for an H-1B visa totaling $2,500. Visa costs are generally allowable as part of recruiting
costs on an NIH grant as long as they are incurred to recruit a new employee and result in the
institution having an employee/employer relationship with the individual. 35 Expedited
processing fees are generally unallowable unless and until they become part of standard
processing fees (NIH GPS, section 7.9.1).
EcoHealth believed that the expedited processing was required due to a backlog in visa
processing. We express no opinion as to the necessity of expedited processing; however, the
$2,500 portion of the invoice covering expedited processing charged to NIH grants, along with
the $896 in associated indirect costs, are not allowable.
Invoice-Related Overpayments
EcoHealth claimed $2,078 in invoice-related overpayments. In general, NIH grant awards
provide for reimbursement of actual, allowable costs incurred and are subject to Federal cost
principles. A cost may be considered reasonable if the nature of the goods or services acquired
or applied and the associated dollar amount reflect the action that a prudent person would
have taken under the circumstances prevailing when the decision to incur the cost was made.
33
45 CFR § 75.302(b)(3) and 45 CFR § 75.403(g).
34
GPS Section 7.9.1.
35
Temporary worker visas are for persons who want to enter the United States for employment lasting a fixed
period of time, and are not considered permanent or indefinite.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 27
A cost is allocable to a cost objective—that is, a specific grant, function, department, or other
component—if the goods or services involved are chargeable or assignable to that cost
objective according to the relative benefits received or other equitable relationship (NIH GPS,
section 7.2).
EcoHealth claimed $2,052 in unallowable costs associated with a subaward to WIV. The
subrecipient submitted an invoice that contained a duplicate charge for in vitro studies, and the
amount was added twice to arrive at the total invoiced amount. Separately, a consultant
requested a payment of $15,000, but the detailed invoice only totaled $14,981, or $19 less than
the actual payment. EcoHealth paid the consultant the full $15,000, resulting in a $19
overpayment from the detailed invoice, and $7 in associated indirect costs.
POTENTIAL UNREIMBURSED COSTS FOR A GRANT AWARD
As of May 2022, EcoHealth provided us with documentation to demonstrate that it had
unreimbursed costs of approximately $74,500. EcoHealth claims that these costs were the
result of adjustments to fringe benefits and indirect cost rates that occurred after the initial
claims were submitted. We did not independently verify the accuracy of this computation;
however, NIH should perform further analysis to determine whether EcoHealth had any
incurred, unreimbursed costs for grant R01AI110964. The notices of termination and
suspension to EcoHealth did not indicate which costs NIH would reimburse if the enforcement
action were lifted and the award resumed.
NIH notified EcoHealth on April 24, 2020, that it elected to terminate the project Understanding
the Risk of Bat Coronavirus Emergence, funded under grant R01AI110964, for convenience.
Later, on July 8, 2020, NIH notified EcoHealth that it withdrew its termination of grant
R01AI110964 and reinstated the grant. However, in the same letter NIH suspended all activities
related to R01AI110964 until these concerns have been addressed to NIH’s satisfaction, citing
45 CFR § 75.371, Remedies for Noncompliance, and several GPS citations.
GPAM (Part H, Chapter 4, Par. 21) requires that the notice of post-award suspension of award
activities must clearly indicate which costs the HHS operating division will reimburse if the
enforcement action is ultimately lifted and the award resumed. Additionally, NIH GPS
(section 7.9.1) provides that NIH will allow full credit to a recipient for the Federal share of
otherwise allowable costs if the obligations are properly incurred by the recipient before
suspension or termination—and not in anticipation of suspension or termination—and, in the
case of termination, are not cancellable. The Grants Management Officer may authorize other
costs in, or subsequent to, the notice of termination or suspension.
CONCLUSION
Despite identifying potential risks associated with research being performed under the
EcoHealth awards, NIH did not effectively monitor or take timely action to address EcoHealth’s
compliance with some research requirements. After the Federal governmentwide pause on
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 28
gain-of-function research was lifted, HHS and NIH implemented specific procedures to assess
and monitor research reasonably anticipated to create, transfer, or use an ePPP. Given the
inherent risks of this type of work, NIAID had a policy to err on the side of inclusion when
considering whether to refer potential ePPP research to the NIAID DURC/P3CO Committee
under the P3CO process. NIH determined that research under EcoHealth awards did not
involve ePPP research, and as such, did not refer the proposed research to the HHS P3CO
Committee for additional review. Nevertheless, NIH added a special term and condition in
EcoHealth’s awards requiring immediate notification if the research resulted in certain specified
benchmarks involving log growth increases.
NIH provided limited guidance on how EcoHealth should comply with this specific requirement.
EcoHealth never provided separate notice under that special term and condition because
EcoHealth believed annual progress reports would constitute immediate notification. In
addition, EcoHealth did not in a timely manner submit an annual progress report, nor did NIH in
a timely manner follow up on the late report until nearly 2 years after its due date. Although
NIH concluded the progress report identified virus growth that met certain benchmarks,
EcoHealth’s inability to obtain scientific documentation from WIV limited NIH’s ability to assess
EcoHealth’s position that it had notified NIH/NIAID of meeting certain benchmarks in the Year 4
progress report and possibly conclude whether the research involved ePPP. As a result, NIH
missed opportunities to more effectively monitor EcoHealth’s research. With improved
oversight, NIH may have been able to take more timely corrective actions to mitigate the
inherent risks associated with this type of research.
Lapses in complying with NIH’s monitoring procedures limited NIH and EcoHealth’s ability to
effectively monitor Federal grant awards and subawards to understand the nature of the
research conducted, identify potential problem areas, and take necessary corrective action.
Furthermore, these lapses limited NIH and EcoHealth’s ability to determine how these grant
funds were used, and mitigate the risk of noncompliance with Federal requirements and
internal policies and procedures.
Our oversight work has continually demonstrated that grant-awarding agencies’ oversight of
subrecipients, whether domestic or foreign, is challenging. This is partly due to
governmentwide regulations that NIH follows that are designed to have a prime grant recipient
monitor the activities of a subrecipient, rather than requiring the grant-awarding agency—in
this case NIH—to conduct active monitoring of subrecipients. For foreign subrecipients, the
effectiveness of the prime recipient’s monitoring may depend on the level of cooperation
between the recipient and the subrecipient. In certain countries in which research is
performed, there may be a risk that larger political or governmental issues may impede
cooperation and prime recipients will have limited ability to effectively monitor their foreign
subrecipients. Although documentation indicates that WIV cooperated with EcoHealth’s
monitoring for several years, WIV’s lack of cooperation with the international community
following the COVID-19 outbreak—consistent with the response from China—limited
EcoHealth’s ability to monitor its subrecipient, and greater transparency is needed about
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 29
information from WIV. 36 While the larger risks associated with political or governmental
challenges may be hard to fully address under the grant process, NIH should assess how it can
best mitigate these issues and ensure that it can oversee the use of NIH funds by foreign
recipients and subrecipients.
We believe NIH has begun to take action to address some issues found in our audit. However,
additional work is needed to ensure that NIH is able to fulfill its mission to enhance health,
reduce illness and disability, and ensure grant funds are used for their intended purpose.
RECOMMENDATIONS
We recommend that the National Institutes of Health: 37
1. ensure that EcoHealth accurately and in a timely manner reports award and subaward
information, including in:
a. recipient progress reports;
b. the Federal Funding Accountability and Transparency Act of 2006, Subawarding
Reporting System; and
c. recipient-audited financial statements;
2. implement enhanced monitoring, documentation, and reporting requirements for
recipients with foreign subrecipients;
3. define the process and timeline for what NIH considers “immediate notification” as it
relates to specific award conditions intended to report unexpected research outcomes;
4. ensure that administrative actions such as terminations are performed in compliance
with Federal regulations and HHS policies and procedures, and appropriate notifications
of appeal rights are provided;
5. work with EcoHealth to recover identified unallowable costs, along with salary costs in
excess of the NIH salary cap and bonus costs that were not sampled;
6. work with EcoHealth to determine whether EcoHealth had any unreimbursed costs at
the time award R01AI110964 was terminated;
36
As reported by the National Intelligence Council, China has likely impeded investigations related to the origins of
COVID-19.
37
The recommendations to NIH and EcoHealth are numbered to correspond with how each entity labeled the
corresponding recommendation in its comments on the draft report.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 30
7. assess whether NIAID staff are following the NIAID P3CO policy, including erring on the
side of inclusion when determining whether proposed research should be referred to
the NIAID DURC/P3CO Committee for research proposals that may involve ePPP;
8. based on information provided in this audit and any other information available to NIH,
consider whether it is appropriate to refer WIV to HHS for debarment and exercise
continued monitoring and enforcement activities as appropriate over the course of the
grant awards and subawards; and
9. ensure for any future NIH grant awards that EcoHealth has addressed the deficiencies
noted in the report.
We recommend that EcoHealth Alliance:
1. prepare subaward and consultant agreements that contain all required information and
are accurate,
2. submit progress reports by the required due date,
3. comply with requirements to immediately notify NIH of conditions that materially
impact the ability to meet award objectives,
4. ensure that it has the ability to access all records related to its research conducted at
subrecipient locations,
5. properly identify subawards in financial statements, and
6. report subawards according to FFATA requirements.
We recommend EcoHealth Alliance refund to the Government $89,171 in unallowable costs
consisting of:
1. salary costs claimed in excess of the NIH salary cap totaling $10,627,
2. bonus costs totaling $15,977,
3. indirect and fringe benefits associated with salary and bonus costs totaling $17,836,
4. Ph.D. education tuition costs totaling $13,951 and associated indirect costs of $4,641,
5. indirect costs totaling $13,037 claimed by a subrecipient,
6. travel costs totaling $5,752 and associated indirect costs of $1,876,
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 31
7. visa costs of $2,500 and associated indirect costs of $896,
8. subaward costs of $2,052, and
9. professional fees costs of $19 and associated indirect costs of $7.
NATIONAL INSTITUTES OF HEALTH AND ECOHEALTH COMMENTS
AND OFFICE OF INSPECTOR GENERAL RESPONSE
In written comments, NIH stated that it concurred or generally concurred with our
recommendations and provided actions taken or planned to address them. EcoHealth stated it
concurred with our first recommendation but did not directly state whether it concurred or did
not concur with the remaining recommendations. EcoHealth identified two substantive areas
of disagreement with the reported findings: (1) the timeliness of EcoHealth’s Year 5 progress
report and (2) whether an experiment exhibited “enhanced growth.”
After reviewing the comments, we maintain that all of our findings and recommendations are
valid. Below, we separately describe NIH’s and EcoHealth’s comments and provide OIG
responses, as applicable.
NIH COMMENTS FOR RECOMMENDATIONS 1 THROUGH 9
Regarding recommendations 1, 4, and 8, NIH concurred and provided additional support on
actions implementing the OIG recommendations. On August 19, 2022, NIH notified EcoHealth
of specific award conditions to address accurate and timely reports of award and subaward
information. These conditions included onsite subrecipient facility inspections every 6 months,
withdrawal of automatic no-cost extensions and carryover authorities, and a requirement to
submit semiannual progress reports. Furthermore, NIH stated that it will ensure that
administrative actions are performed in compliance with Federal regulations.
Regarding recommendations 3, 5, 6, and 9, NIH concurred and noted actions that it will perform
within 90 days of the publication of the report that will address the recommendations. The
procedures include revising NIH policies to include a definition for the process and timeline for
immediate notification as it related to unexpected research outcomes, working with EcoHealth
to recover any identified unallowable costs, and determining whether EcoHealth had
unreimbursed costs at the time the R01AI110964 award was terminated. Furthermore, NIH
stated it will work with EcoHealth to ensure that the deficiencies noted in this report are being
satisfactorily addressed.
Regarding recommendation 2, NIH generally concurred and stated that it will evaluate best
practices across the Government for overseeing awards issued to domestic recipients that, in
turn, oversee foreign subrecipients. Regarding recommendation 7, NIH concurred and has
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 32
established a working group to assess the current process for review and oversight of proposed
research involving ePPPs. 38
NIH also provided technical comments on our draft report, which we addressed as appropriate.
NIH’s comments, excluding technical comments, are included in their entirety as Appendix I.
OFFICE OF INSPECTOR GENERAL RESPONSE
We appreciate the cooperation NIH provided during the course of our audit and the proactive
steps taken thus far to address our report findings and recommendations.
ECOHEALTH COMMENTS FOR RECOMMENDATIONS 1, 5, AND 6
Regarding recommendations 1, 5, and 6, EcoHealth noted that it had implemented procedures
or taken actions to address the recommendations and related findings. EcoHealth stated that it
has updated and revised its subaward and consultant agreements to contain required language
and subaward identification, and has instituted measures to correct omissions on the
agreements. EcoHealth further stated that it has instituted policies to ensure that it properly
identifies subawards in its financial statements, and has provided all required FFATA reporting
forms requested by NIH.
OFFICE OF INSPECTOR GENERAL RESPONSE
We appreciate the cooperation EcoHealth provided during the course of our audit and the
proactive steps taken thus far to address our report findings and recommendations.
ECOHEALTH COMMENTS FOR RECOMMENDATION 2
Regarding recommendation 2, EcoHealth stated that it will continue to submit all required
progress reports and indicated disagreement with the OIG finding that EcoHealth submitted its
R01AI110964 Year 5 progress report late. EcoHealth stated that the Year 5 progress report was
written and uploaded to the NIH online portal for submission by EcoHealth staff in July 2019,
ahead of the September deadline. However, when EcoHealth staff attempted to submit the
Year 5 report during late July 2019, the grant had been renewed for an additional 5 years, and
the NIH system locked EcoHealth out from submitting the report. EcoHealth stated that NIH
staff did not follow up with a request to EcoHealth for a Year 5 report, NIH did not answer
EcoHealth’s direct questions, and NIH did not return phone calls. EcoHealth noted the fact that
because the new award was made, work was allowed to continue, and no requests for an
official Year 5 report submission were made by NIH, which suggested to EcoHealth staff that
they were in compliance with the submission requirement.
38
NIH has established the working group of the National Science Advisory Board for Biosecurity, a Federal advisory
committee that addresses issues related to biosecurity and dual-use research, at the request of the Government.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 33
OFFICE OF INSPECTOR GENERAL RESPONSE
We acknowledge in our report that EcoHealth’s Year 5 progress report was initiated on NIH’s
online portal in July 2019; however, we have no evidence that the progress report was fully
uploaded to the online portal at that time. Furthermore, we have no evidence that there was
any correspondence between EcoHealth and NIH describing technical difficulties with uploading
the progress report on time. Ultimately, the progress report was not submitted until August
2021.
ECOHEALTH COMMENTS FOR RECOMMENDATION 3
Regarding recommendation 3, EcoHealth stated it will continue to comply with requirements to
notify NIH of conditions that materially impact its ability to meet award objectives, and
indicated disagreement with the OIG finding that it did not immediately notify NIH of conditions
that materially impact its ability to meet award objectives. On the issue of timely reporting
results to NIH, EcoHealth stated that: (1) the amended annual Notice of Award document did
not use the phrase “immediately notify” and (2) NIH failed to provide a timeframe for
notification in either the letter indicating that these experiments were approved or in the NIH
Notice of Award. EcoHealth further stated that it did, in fact, notify NIH in a timely manner
about these results by reporting the results of the experiment in an earlier progress report. In
addition, EcoHealth stated that OIG made an incorrect statement in the report.
Specifically, EcoHealth stated OIG was incorrect in stating that NIH believed there was evidence
that the research conducted by EcoHealth’s subrecipient WIV during Year 5 resulted in
“enhanced growth,” thus triggering the special term and condition to immediately notify NIAID
and potentially requiring the research undergo review under the HHS P3CO Framework.
EcoHealth stated that the contention that it failed to report enhanced growth that would have
required additional P3CO review as gain-of-function research was based on a misinterpretation
of what the experiment in question actually showed. Specifically, EcoHealth indicated that it
had reported on the same experiment in its Year 4 report submitted on time in 2018, and at
that time EcoHealth had emailed a copy of its submitted Year 4 report to NIH and requested a
timeslot to discuss the Year 4 report, the planned Year 5 work, and a renewal proposal.
OFFICE OF INSPECTOR GENERAL RESPONSE
The Notice of Award dated June 18, 2018, associated with the Year 5 funding, requires
EcoHealth to notify NIAID grants officials immediately if certain benchmarks are met involving
log growth increases and was what we used to determine whether EcoHealth’s actions aligned
with terms and conditions of the award. Furthermore, as we indicate in this report, our audit
did not assess scientific results for any of the experiments or make any determination regarding
the accuracy of NIH’s or EcoHealth’s interpretations of the Years 4 and 5 research results. Our
audit found that NIH’s own evaluation of the Year 5 progress report concluded that the
research was of a type that should have been reported immediately to NIH. In an associated
recommendation to NIH, we recommended NIH define the process and timeline for what NIH
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 34
considers “immediate notification.” We agreed with NIH’s assessment that reporting research
in a progress report does not constitute immediate notification.
ECOHEALTH COMMENTS FOR RECOMMEDATION 4
Regarding recommendation 4, EcoHealth stated that, to the best of its ability, it will do all
possible to ensure it can access and supply all records related to research conducted at
subrecipient locations. However, it finds misleading the reported statement that it was unable
to obtain scientific documentation from a subrecipient. EcoHealth notes a number of events
that impacted its ability to access certain records, specifically that NIH instructed EcoHealth to
cease the provision of funds to WIV 18 months before NIH requested EcoHealth obtain records
from WIV, termination of the R01AI110964 grant, and significant geopolitical pressure and
media coverage related to WIV, EcoHealth, and NIH-funded research.
OFFICE OF INSPECTOR GENERAL RESPONSE
OIG’s report recognizes the impact that the COVID-19 outbreak had on EcoHealth’s ability to
receive cooperation from WIV. Furthermore, we recognize the general limitations associated
with oversight of foreign subrecipients by prime recipients. However, EcoHealth is required by
Federal regulations to ensure access to records from WIV. This record access requirement is
important to ensure grantees are accountable for funds provided and that results of the
research are available to NIH. The challenges EcoHealth experienced in getting records from
WIV provides support for OIG’s recommendation to NIH to enhance monitoring of foreign
subrecipients so that NIH can take steps to mitigate the risks that non-cooperation by foreign
Governments may pose to future awards and associated research.
ECOHEALTH COMMENTS FOR THE NINE MONETARY RECOMMENDATIONS
Regarding the nine monetary recommendations, EcoHealth stated that it reimbursed NIH for
the total reported unallowable costs and provided NIH with details on the amounts of allowable
but unreimbursed costs. However, EcoHealth disagreed with the OIG interpretation of Federal
requirements for some items of cost and is seeking clarification from NIH. Specifically,
EcoHealth stated that bonus costs are incentive payment allocations that may be deemed
allowable under existing Federal guidelines, and that the bonuses and associated fringe benefit
and indirect costs are allowable. EcoHealth disagreed with the questioning of Ph.D. education
tuition costs, as the staff member is undergoing training in research methodology that is within
the scope and type of research conducted through the NIH-funded project. EcoHealth
disagreed with the questioned costs associated with one travel cost that was missing travel
expense documentation but for which EcoHealth submitted corroborating documentation
including price estimates, traveler information, and meeting agendas. EcoHealth disagreed
with the questioned costs for visa costs and stated that the expense was justifiable given the
need to rapidly engage an employee with a highly specialized skill set and background.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 35
OFFICE OF INSPECTOR GENERAL RESPONSE
We maintain that all of our monetary recommendations are valid and in accordance with
Federal regulations and the NIH Grants Policy Statement. Despite EcoHealth not fully agreeing
with our interpretation of some of these requirements, EcoHealth stated that it did, in fact,
repay the full amount of reported unallowable costs to NIH. 39 EcoHealth did not provide us
with any new information or documentation that supported revising any reported unallowable
costs. EcoHealth did request further clarification from NIH on certain costs, and we will review
any guidance provided by NIH.
EcoHealth’s comments are included in their entirety as Appendix J.
39
As part of our audit recommendation followup process, we will request documentation that supports any
repayment of funds to NIH for the unallowable costs we identified in this report.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 36
APPENDIX A: AUDIT SCOPE AND METHODOLOGY
SCOPE
We obtained a list of all NIH grant and cooperative agreement awards to EcoHealth, and all
subawards made by EcoHealth during the period FY 2014 through FY 2021. Our audit covered
three NIH awards to EcoHealth totaling approximately $8.0 million, which included $1.8 million
of EcoHealth’s subawards to eight subrecipients. Appendix E includes a detailed list of
EcoHealth’s NIH awards and subawards.
We selected 150 transactions totaling $2,578,567 from EcoHealth’s accounting system to
determine whether the costs claimed were in compliance with Federal requirements. We used
a nonstatistical methodology to select the transactions, which covered costs claimed under the
three grants in our audit. We focused our selection on ensuring coverage of costs over our
entire audit period, while including a variety of costs such as salaries, fringe benefits,
subawards, professional fees, travel, supplies, telephone, publication, and indirect costs.
Of the 150 transactions we selected for review:
• 92 transactions were from grant number R01AI110964 totaling $1,525,012,
• 43 transactions were from grant number U01AI151797 totaling $751,949, and
• 15 transactions were from grant number U01AI153420 totaling $301,606.
We reviewed the transactions in accord with the cost principles in 45 CFR part 75 and with
additional requirements located in the NIH GPS.
We determined that internal control was significant to our audit objectives. We assessed
internal controls and compliance with laws and regulations necessary to satisfy the audit
objectives, which included a review of NIH and EcoHealth’s policies and procedures related to
using, managing, and monitoring grant funds. However, because our review was limited to
these aspects of internal control, it may not have disclosed all internal control deficiencies that
may have existed at the time of this audit. Any internal control deficiencies we found are
discussed in this report.
We conducted our fieldwork from June 2021 to August 2022, which included visiting
EcoHealth’s offices in New York City.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 37
METHODOLOGY
To accomplish our first audit objective, we:
• interviewed NIH and NIAID officials familiar with the grant award and monitoring
process;
• reviewed email communications and other correspondence between NIH and
EcoHealth to gain insight on the types of interactions that occurred during the
performance of the grant awards;
• reviewed Peer Review Summary Statements;
• reviewed required financial and programmatic reports;
• reviewed NIH oversight of EcoHealth’s compliance with terms and conditions stated in
the Notices of Award;
• reviewed NIH’s oversight and reporting requirements associated with enhanced
potential pandemic pathogens;
• as applicable, reviewed steps NIH took to ensure research was not anticipated to
create, use, or transfer enhanced potential pandemic pathogens; and
• discussed the results of our audit with NIH.
To accomplish our second audit objective, we:
• interviewed EcoHealth officials familiar with the grant award and monitoring process,
• reviewed EcoHealth’s policies and procedures,
• reviewed EcoHealth’s subrecipient agreements,
• reviewed EcoHealth’s subrecipient risk assessments,
• reviewed EcoHealth’s subrecipient monitoring checklists,
• reviewed required financial and programmatic reports that EcoHealth submitted to NIH,
• selected and reviewed 150 transactions across the 3 NIH awards comprised of different
types of transactions for allowability, and
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 38
• discussed the results of our audit with EcoHealth.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 39
APPENDIX B: REQUIREMENTS ASSOCIATED WITH REVIEWING RESEARCH INVOLVING
ENHANCED POTENTIAL PANDEMIC PATHOGENS
NIH describes potential pandemic pathogens as bacteria, viruses, and other microorganisms
that are likely highly transmissible and capable of wide, uncontrollable spread in human
populations as well as highly virulent, making them likely to cause significant morbidity and/or
mortality in humans. On limited occasions, when NIH determines it is justified by compelling
public health need and conducted in very high biosecurity laboratories, NIH has supported
certain research that may be reasonably anticipated to create, transfer, or use potential
pandemic pathogens resulting from the enhancement of a pathogen’s transmissibility or
virulence in humans. The Government and HHS define such research as ePPP research.
NIH-supported ePPP research requires strict oversight and may only be conducted with
appropriate biosafety and biosecurity measures.
The White House Office of Science and Technology Policy and HHS announced on October 17,
2014, that the Government was launching a deliberative process to assess the potential risks
and benefits associated with a subset of life sciences research known as “gain-of-function”
studies. During the period of deliberation, the Government instituted a pause on funding for
any new studies that include certain gain-of-function experiments involving influenza, SARS,
and MERS viruses. Specifically, the funding pause applied to gain-of-function research projects
that may be reasonably anticipated to confer attributes to influenza, MERS, or SARS viruses
such that the virus would have enhanced pathogenicity and/or transmissibility in mammals via
the respiratory route. During this pause, the Government was not funding any new projects
involving these experiments and encouraged those conducting this type of work—whether
federally funded or not—to voluntarily pause their research while risks and benefits were
reassessed. The funding pause did not apply to the characterization or testing of naturally
occurring influenza, MERS, and SARS viruses unless there was a reasonable expectation that
these tests would increase transmissibility and/or pathogenicity.
The HHS P3CO Framework was established in 2017. The HHS P3CO Framework describes
measures responsive to and in accordance with the White House Office of Science and
Technology Policy guidance to assess the potential risks and benefits associated with ePPPs.
The Department’s adoption of the HHS P3CO Framework satisfies the requirement for lifting
the research funding pause on certain gain-of-function research. The HHS P3CO Framework is
intended to guide HHS funding decisions on research that is reasonably anticipated to create,
transfer, or use ePPPs.40
NIAID implemented the HHS P3CO Framework by developing a standard operating procedure
NIAID Extramural Potential Pandemic Pathogen Care and Oversight (P3CO). This procedure
40
The U.S. Government Accountability Office report HHS Could Improve Oversight of Research Involving Enhanced
Potential Pandemic Pathogens, GAO-23-105455, January 2023, available at https://www.gao.gov/products/gao-23-
105455, found unclear policy and other policy gaps that may allow proposed research involving altered pathogens
with pandemic potential to occur without appropriate oversight.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 40
indicates that NIAID’s P3CO risk assessment process begins with a review by program staff of all
applications, proposals, supplements, and progress reports being considered for funding that
involve research with a PPP. When NIAID program staff review proposed research involving a
PPP, they shall err on the side of inclusion and refer proposed research that may be subject to
the HHS P3CO Framework to the NIAID DURC/P3CO Committee to determine whether the
research is subject to the HHS P3CO Framework review process. See Table 4 for roles and
responsibilities of funding agencies and HHS.
Table 4: Summary of Funding Agency and Department Responsibilities
Under the HHS P3CO Framework
Entity Responsibilities
Funding • Conduct standard scientific merit review
Agency
• Refer proposed research that is reasonably anticipated to create,
transfer, or use ePPPs to department-level review
• Provide relevant information necessary to department-level review
• Participate in department-level review process, as requested
• Consider recommendations resulting from department-level review
• Make funding decision, stipulating terms and conditions of award
including additional risk mitigation measures, if appropriate
• Report relevant information on funding decisions to HHS and the
White House Office of Science and Technology Policy
• Ensure implementation of and adherence to required risk mitigation
procedures and other terms and/or conditions of award, if funded
HHS • Convene multidisciplinary group to review proposed research
determined by funding agency as being reasonably anticipated to
create, transfer, or use ePPPs
• Critically evaluate proposed research including risk-benefit assessment
and proposed risk mitigation plan
• Consider eight criteria for guiding HHS funding decisions and additional
relevant factors and information
• Develop recommendations on acceptability for HHS funding, including
suggestions for additional risk mitigation measures and/or terms and
conditions of award, if funded
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 41
APPENDIX C: PEER REVIEW OF ECOHEALTH APPLICATIONS
NIH performed scientific peer reviews of the three EcoHealth grant applications covered under
our audit scope prior to making the awards. The R01AI110964 and U01AI153420 reviews were
conducted by the Clinical Research and Field Studies of Infectious Diseases Study Section,
Infectious Diseases and Microbiology Integrated Review Group. The U01AI151797 review was
performed by the NIAID Special Emphasis Panel Emerging Infectious Diseases Research Centers.
The applications were scored at acceptable levels for further discussion and award approval.
The results of a peer review are provided in a document known as a summary statement. A
summary statement provides an overall summary of a review, critiques by reviewers, priority
scores, budget recommendations, and administrative notes.
The peer review summary statement for the R01AI110964 application noted that the proposed
studies were to determine factors that increase the risk of zoonotic CoV emergence in people
by studying CoV diversity in a critical zoonotic reservoir (bats) at sites of high risk for emergence
(wildlife markets) in an emerging disease hotspot (China). The statement provided that, given
the SARS outbreak in 2002 and the emergence of MERS, the research is significant as it relates
to advancing knowledge of the zoonotic potential of coronaviruses.
The peer review summary statement for the U01AI151797 application noted that the study was
focused on the identification of new, emerging viruses in Southeast Asia, which is a hotspot of
viral activity with significant threat to human health. The approach was based on the
identification of viral spillovers by means of studying the pathogen in wild animals and
performing surveillance targeting high-risk communities.
The peer review summary statement for the U01AI153420 application noted that the study
focused on the Nipah virus and aimed to understand why these virus outbreaks appear to only
occur in the western part of Bangladesh despite the virus, its bat reservoir, and the primary
route of transmission being present throughout the country. It explored human factors, virus
temporal dynamics, and pathogenicity and transmissibility of diverse Nipah virus isolates.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 42
APPENDIX D: PRE-AWARD AND AWARD PROCEDURES
NIH addresses potential risks posed by applicants during the pre-award and award process
using a risk-based approach that considers factors such as an applicant’s financial stability,
quality of management systems, history of performance, whether an entity is foreign or
domestic, reports and findings from audits, and ability to effectively implement statutory,
regulatory, or other requirements imposed on non-Federal entities. Some of the key steps are
outlined below.
• NIH uses the electronic Research Administration (eRA), 41 an automated system that
maintains all of the checklists, worksheets, and progress reports generated to document
the application and review process. In addition, for new or competing continuation
grant awards made to a foreign organization or those with a foreign component, 42 NIH
obtains the necessary clearances from the Department of State.43
• As part of the pre-award process, NIH uses two checklists maintained in eRA to assess
grant applicant risk: the Grants Management checklist and the Program checklist. The
Grants Management checklist covers topics that address administrative requirements to
ensure completeness of an application, compliance with NIH and HHS policies, and
compliance with other Federal regulations and requirements. The Program checklist is
used to verify compliance with programmatic requirements before the issuance of a
competing award and to evaluate the scientific merit of the research.
When completing the Grants Management checklist, NIH reviews information about an
applicant’s eligibility, financial integrity, and past performance.44 Some sources NIH
uses include:
o GSA SAM. GSA SAM is an electronic, web-based system that is used to identify
parties that are excluded from receiving Federal contracts, certain subcontracts, and
other types of Federal financial and nonfinancial assistance and benefits.
o The Federal Awardee Performance and Integrity Information System (FAPIIS). FAPIIS
provides publicly available information about an institution’s integrity, business
ethics, and past performance after receiving a financial assistance award.
41
The eRA is an online interface through which grant applicants, recipients, and Federal staff at NIH can access and
share administration information related to research grants.
42
A foreign component is defined as performance of any significant element or segment of the project outside the
United States either by the recipient or by a researcher employed by a foreign organization, whether or not grant
funds are expended (NIH GPS, section 16.2).
43
NIH’s Grants Narrative Process Cycle Memorandum, September 30, 2018.
44
These risk factors are described at 45 CFR § 75.205.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 43
• Once the preparation of an award is complete, eRA generates an Award Worksheet
which summarizes the budget and results from the Grants Management and Program
checklists. The checklists provide results of an applicant’s risk to determine whether
issuing awards to an organization is appropriate.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 44
APPENDIX E: NIH GRANT AWARDS TO ECOHEALTH AND ECOHEALTH’S SUBAWARDS
Table 5: Funding Awarded to and Spent by EcoHealth*
Award Award Amount
Number Award Title Amount Spent
R01AI110964 Understanding the Risk of Bat Coronavirus Emergence $3,748,715 $3,376,503
Study of Nipah virus dynamics and genetics in its bat
reservoir and of human exposure to NiV across
U01AI153420 1,155,842 478,971
Bangladesh to understand patterns
of human outbreaks
Understanding Risk of Zoonotic Virus Emergence
U01AI151797 3,052,312 1,529,259
in EID Hotspots of Southeast Asia
Award and Expenditure Totals $7,956,869 $5,384,733
* Grants awarded cover the audit period of FY 2014 to FY 2021. Grant expenditures are as of July 2021, the latest available
records at the time the audit fieldwork began.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 45
Table 6: List of NIH Awards to EcoHealth
Issue
Date Award Budget Action Action
FY Number Award Title Year Date Amount
2014 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 1 5/27/2014 $666,442
2015 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 2 6/10/2015 630,445
2016 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 3 7/22/2016 611,090
2017 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 4 5/26/2017 597,112
2018 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 5 6/18/2018 581,646
2019 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 6 7/24/2019 733,750
2019 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 6 8/5/2019 (71,770)
2020 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 6 4/27/2020 (369,819)
2020 R01AI110964 Understanding the Risk of Bat Coronavirus Emergence 6 7/13/2020 369,819
Subtotal $3,748,715
Study of Nipah virus dynamics and genetics in
its bat reservoir and of human exposure to NiV
2020 U01AI153420 1 9/15/2020 $580,858
across Bangladesh to understand patterns
of human outbreaks
Study of Nipah virus dynamics and genetics in
its bat reservoir and of human exposure to NiV
2021 U01AI153420 2 7/1/2021 574,984
across Bangladesh to understand patterns
of human outbreaks
Subtotal $1,155,842
Understanding Risk of Zoonotic Virus Emergence
2020 U01AI151797 1 6/17/2020 $1,546,744
in EID Hotspots of Southeast Asia
Understanding Risk of Zoonotic Virus Emergence
2020 U01AI151797 1 8/28/2020 0
in EID Hotspots of Southeast Asia
Understanding Risk of Zoonotic Virus Emergence
2021 U01AI151797 2 6/11/2021 1,505,568
in EID Hotspots of Southeast Asia
Subtotal $3,052,312
Total Direct NIH Funding to EcoHealth $7,956,869
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 46
Table 7: List of EcoHealth’s NIH-Funded Subawards*
Federal
Award
Foreign/ Funding Federal Award Project Subaward
Subrecipient Domestic Agency Number Period Amount
06/01/2014 -
Wuhan Institute of Virology Foreign (China) NIH/NIAID R01AI110964 $598,611
05/31/2019
Wuhan University 06/01/2014 -
Foreign (China) NIH/NIAID R01AI110964 201,221
School of Public Health 05/31/2019
Institute of Epidemiology Foreign 09/15/2020 -
NIH/NIAID U01AI153420 174,186
Disease Control and Research (Bangladesh) 06/30/2025
International Centre
Foreign 09/15/2020 -
for Diarrhoeal Disease NIH/NIAID U01AI153420 61,853
(Bangladesh) 06/30/2025
Research, Bangladesh
Domestic 06/17/2020 -
Henry M. Jackson Foundation NIH/NIAID U01AI151797 114,372
(Bethesda, MD) 05/31/2025
Foreign 06/17/2020 -
Conservation Medicine NIH/NIAID U01AI151797 241,807
(Malaysia) 05/31/2025
WHO-CC for Research and
Foreign 06/17/2020 -
Training on Viral Zoonoses, NIH/NIAID U01AI151797 215,945
(Thailand) 05/31/2025
Chulalongkorn University
The University of North Domestic 06/17/2020 -
NIH/NIAID U01AI151797 194,375
Carolina at Chapel Hill (Chapel Hill, NC) 05/31/2025
Total of EcoHealth’s NIH-Funded Subawards $1,802,370
* These subawards were in place during the audit period from FY 2014 through FY 2021 and represented the
subawards for which EcoHealth had expenditures as of July 2021, the latest available accounting records from
EcoHealth at the time the audit fieldwork began.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 47
APPENDIX F: FEDERAL REQUIREMENTS FOR TERMINATING AND
SUSPENDING GRANT AWARDS
According to HHS regulations (45 CFR § 75.372), a grant award may be terminated by the:
• HHS awarding agency if the non-Federal entity fails to comply with the terms and
conditions of the award;
• HHS awarding agency for cause;
• HHS awarding agency with the consent of the non-Federal entity, in which case the two
parties must agree upon the termination conditions including the effective date and, in
the case of partial termination, the portion to be terminated; or
• non-Federal entity upon sending to the HHS awarding agency written notification
setting forth the reasons for such termination, the effective date, and, in the case of
partial termination, the portion to be terminated.
Furthermore, HHS regulations (45 CFR § 75.374) require HHS awarding agencies to provide a
non-Federal entity an opportunity to object and provide information and documentation
challenging the suspension or termination actions according to written process and procedures
published by the HHS awarding agency. The HHS awarding agency must comply with any
requirements for hearings, appeals, or other administrative proceedings to which the
non-Federal entity is entitled under any statute or regulation.
NIH GPS Section 8.7 covers grant appeals procedures. It requires the formal notification of an
adverse determination to contain a statement of the recipient’s appeal rights and indicates that
there be an NIH official specified in the notification. Furthermore, if the first level NIH review of
an appeal is adverse to the recipient, or if a recipient’s request for review is rejected, the
recipient has an option to submit a request to the HHS Departmental Appeals Board for further
review within 30 days after receiving the final NIH decision.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 48
APPENDIX G: FEDERAL REQUIREMENTS FOR SUBRECIPIENT MONITORING
According to 45 CFR § 75.342, non-Federal entities are responsible for oversight of the
operations of Federal award-supported activities. The non-Federal entity must monitor its
activities under Federal awards to assure compliance with applicable Federal requirements and
performance expectations are being achieved. Monitoring by the non-Federal entity must
cover each program, function, or activity. Events may occur between the scheduled
performance reporting dates that have significant impact upon the supported activity. In such
cases, the non-Federal entity must inform the HHS awarding agency or pass-through entity as
soon as the following types of conditions become known: problems, delays, or adverse
conditions that will materially impair the ability to meet the objective of the Federal award.
This disclosure must include a statement of the action taken, or contemplated, and any
assistance needed to resolve the situation.
Pursuant to 45 CFR § 75.352(d), EcoHealth in its role as a pass-through entity must monitor the
activities of a subrecipient as necessary to ensure: (1) the subaward is used for authorized
purposes in compliance with Federal statutes, regulations, and the terms and conditions of the
subaward; and (2) subaward performance goals are achieved. Pass-through entity monitoring
of the subrecipient must include:
• reviewing financial and performance reports required by the pass-through entity;
• following up and ensuring that the subrecipient takes timely and appropriate action on
all deficiencies pertaining to the Federal award provided to the subrecipient from the
pass-through entity detected through audits, on-site reviews, and other means;
• issuing a management decision for audit findings pertaining to the Federal award
provided to the subrecipient from the pass-through entity as required by 45 CFR
§ 75.521;
• depending upon the pass-through entity’s assessment of risk posed by the subrecipient
(as described in paragraph (b) of this section), using monitoring tools that may be useful
for the pass-through entity to ensure proper accountability and compliance with
program requirements and achievement of performance goals, including:
o providing the subrecipient with training and technical assistance on program-
related matters and
o performing onsite reviews of the subrecipient’s program operations; and
• considering whether the results of the subrecipient’s audits, on-site reviews, or other
monitoring indicate conditions that necessitate adjustments to the pass-through entity’s
own records; and
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 49
• considering taking enforcement action against noncompliant subrecipients as described
in 45 CFR § 75.371 and in program regulations.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 50
APPENDIX H: SUBRECIPIENT AGREEMENTS LACKED REQUIRED DATA ELEMENTS
Table 8: Required Data Element and Number of Instances of Noncompliance From
Reviewing 11 Subrecipient Agreements Pursuant to 45 CFR § 75.352(a)(1)
Number of
Instances of
Required Data Element Noncompliance
Subrecipient’s Name No Instances
Subrecipient's Unique Entity Identifier No Instances
Federal Award Identification Number 11 Instances
Federal Award Date of Award to the Recipient
11 Instances
by the HHS Awarding Agency
Subaward Period of Performance Start and End Dates No Instances
Amount of Federal Funds Obligated by This Action
No Instances
by the Pass-Through Entity to the Subrecipient
Total Amount of Federal Funds Obligated to the Subrecipient
11 Instances
by the Pass-Through Entity Including the Current Obligation
Total Amount of the Federal Award Committed
11 Instances
to the Subrecipient by the Pass-Through Entity
Federal Award Project Description as Required by FFATA No Instances
Name of HHS Awarding Agency, Pass-Through Entity, and Contact
10 Instances
Information for Awarding Official of the Pass-Through Entity
Code of Federal Domestic Assistance (CFDA) Number and Name; the
Pass-Through Entity Must Identify the Dollar Amount Made Available
10 Instances
Under Each Federal Award and the CFDA Number
at the Time of Disbursement
Identification of Whether the Award Is Research and Development 11 Instances
Indirect Cost Rate for the Federal Award 4 Instances
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 51
APPENDIX I: NATIONAL INSTITUTES OF HEALTH COMMENTS
TMENT OF HEALTH & HUMAN SERVICES Public Health Service
Nctliuru:11 lmslilult,~ u f Httc:tllli
Bethesda, Maryland 20892
www.nih.gov
DAT E: December 20, 2022
TO: Juliet T. Hodgkins
Principal Deputy Inspector General
fROM: Acting Principal Deputy Director, National Institutes of Health
SUBJECT: NIH Comments on Draft Report, "The Nalionallnslitutes ofHealth and
EcoHealth Alliance D id Not Effectively Monitor Awards and
Subawards, Resulting in Missed Opportunities to Oversee Research and
Other Deficiencies" (A-05-21-00025)
Attached are the National Institutes of Health's (NIH) conunents on the draft Office of
Inspector General's (OIG) report, "The National Jnstitiites o_fHealth and EcoHealth
Alliance D id Not Effectively Monitor Awards and Subawards, Resulting in Missed
Opportunities to Oversee Research and Other D eficiencies" (A-05-21-00025).
NIH appreciates the review conducted by OIG and the opportunity to provide the
clarifications on this draft report. If you have questions or concerns, please contact
Meredith Stein in the Office of Management Assessment at 30 l-402-8482.
Isl
Tara A. Schwetz, Ph.D.
Attachments
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 52
COMMRNT S OF THE NATIONAL I NSTITUT ES OF HEALTH ( NIH) ON
THE DEPA RTMENT OF HEALTH AND HUMAN SERV ICES (HHS) OFFICE OF
INSPECTOR GENERAL (OIG) DRAFT REPORT ENTITLED: "THE NATIONAL
INSTITUTES OF H EALTH AND ECOHEALTH ALLIANCE DID NOT EFFECTIVELY
MONITOR A WARDS AND SUBAWARDS. RESULTING IN MISSED
OPPORTUNITIES TO OVERSEE RESEARCH AND OTHER DEFICIENCIES"
(A -05-21-00025)
ll1e National Institutes of Health (NIH) appreciates the review conducted by the Office of
Inspector General (O1G) and the opportunity to provide clarifications on this draft report. NIH
respectfully submits the following general comments.
OJG Recommendation 1:
We recommend that the National Institutes of Health ensure that EcoHealth accurately and in a
timely manner reports award and subaward information, including in:
• Recipient progress reports;
• The Federal Funding Accountability and Transparency Act of 2006, Subawarding
Reporting System; and
• Recipient-audited financial statements
NIH Response:
NIH concurs with OIG's finding and corresponding recommendation that NIH ensure that
EcoHealth accurately and in a timely manner reports award and subaward information.
• ln its August 19, 2022, letter to Eco Health, NIH stipulated for RO JAi 1l 0964 the
following Specific Award Conditions, similar to Specific Award Conditions already
implemented for other NIH grants awarded lo EcoHealth.
o Eco Health must conduct or arTange for the conduct of onsite subrecipient
facility inspections every 6 months to ensure that subaward activities are
being properly executed.
o EcoHealth must provide NIH with copies of updated subaward agreements for
RO lAil 10964 that cotTect the deficiencies noted in the table above and
demonstrate compliance with the NIH GPS !5.2. l Written Agreeme nt. The
subaward agreements must state the correct F&A rate which, for foreign
subrecipients is 8% (see NIH GPS 16.6).
o l l1e expanded authority for automatic no-cost extensions will be withdrawn.
ll1is will require that EcoHealth request and receive written prior approval
from the National Institute of Allergy and Infectious Diseases (NIAID) before
any extensions of the final budget period.
o Automatic carryover authorities will be withdrawn. This will require
Eco Health to request and receive written approval to carry over any
unobligated balances on all awards prior to carrying over unobligated balances
from one budget period to any subsequent budget period.
o EcoHealth is required to submit semi-annual RPPRs and Federal Financial
Reports to NIAID.
o EcoHealth will provide NIAID with copies ofFSRS repo1ting for all
subawards issued m1der the revised R0lAi l 19064.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 53
RAL COMMRNTS OF THE NATIONAL INSTITUT ES OF HEALT H ( NIH) O N
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) OFFICE OF
INSPECTOR GENERAL (OIG) DRAFT REPORT ENTITLED: "THE NATIONAL
INSTITUTES OF HEALTH AND ECOHEALTH ALLIANCE DID NOT EFFECTIVELY
MONITOR A WARDS AND SUBAWARDS. RESULTING IN MISSED
OPPORTUNITIES TO OVERSEE RESEARCH AND OTHER DEFICIENCIES"
(A-05-21-00025)
• 1l1ese specific award conditions will be in place for a period of at least 3 years from
the date of the revised Notice of Award with an annual review to ensure proper
compliance.
OIG Recommendation 2:
We recommend that the National Institutes of Health implement enhanced monitoring,
documentation, and reporting requirements for recipients with foreign subrecipients.
NIH Response:
NIH generally concurs with OIG's finding and the co1Tesponding recommendation.
NIH will evaluate how best to con.sider the OIG recommendation within the framework of
2 C.F.R. §§ 200.331 - 200.333, Subrecipient Monitoring and Management (Unifonn
Administrative Regulations). NIH will also need to consider 2 CFR 200. IO0(c), which states that
"The Federal awarding agency may adjust requirements to a class of Federal awards or non
Federal entities when approved by the Office of Management ,md Budget. ... "
NIH will also evaluate best practices across government for overseeing awards issued to
domestic recipients who in tum oversee foreign subrecipients. The results of this evaluation are
anticipated to infonn how NIH may implement the OIG recommendation.
OIG Recommendation 3:
We recommend that the National Institutes of Health define the process and timeline for what
NIH considers "immediate notification" as it relates to specific award conditions intended to
report unexpected research outcomes.
NIH Response:
IH concurs with OIG's finding and corresponding recommendation.
Within 90 days of the publication of this repo1t, NIH will issue a Guide Notice and revise the
NIH Grants Policy Statement lo include a definition for the process and limeline for "immediate
notification" as it relates to specific award conditions intended to report uneiqiected research
outcomes.
OIG Recommendation 4:
We recommend that the National Institutes of Health ensure that administrative actions such as
tem1inations are perfonned in compliance with Federal regulations and HHS policies and
procedures, and appropriate notifications of appeal rights are provided.
2
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 54
COMMRNTS OF THE NATIONAL INSTITUTES OF HEALTH (NIH) ON
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) OFFICE OF
INSPECTOR GENERAL (OIG) DRAFT REPORT ENTITLED: "THE NATIONAL
INSTITUTES OF HEALTH AND ECOHEALTH ALLIANCE DID NOT EFFECTIVELY
MONITOR A WARDS AND SUBAWARDS. RESULTING IN MISSED
OPPORTUNITIES TO OVERSEE RESEARCH AND OTHER DEFICIENCIES"
(A-05-21-00025)
NIH Response:
NI H concurs with OIG's finding and corresponding recommendation.
NIH will ensure that administrative actions such as terminations are performed in compliance
with Federal regulations and the Department of Health and Human Services (HHS) policies and
procedures, and appropriate notifications of appeal rights are provided.
O IG Recommendatio n 5:
We recommend that the National Institutes of Health work with EcoHealth to recover identified
unallowable costs, along with salary costs in excess of the NIH salary cap and bonus costs that
were not sampled.
NIH Response:
NIH concurs with OIG's finding and corresponding recommendation.
Within 90 days of the publication of this repo1t, NIH will work with EcoHealth to recover
identified unallowable costs, along with salary costs in excess of the NIH salary cap and bonus
costs that were not sampled.
O IG Recommendatio n 6:
We recommend that the National Institutes of Health work with EcoHealth to detenuine whether
EcoHealth had any mu·eimbursed costs at the time award R0IAIJ 10964 was tem1inated.
NIH Response:
NI H concurs with OIG's finding and corresponding recommendation.
Within 90 days of the publication of this repo1t, NIH will work with EcoHealth to detenuine
whether EcoHealth had any unre imbt1rsed costs at the time award R.01 Alll0964 was terminated.
OIG Recommendation 7:
We recommend that the National Institutes of Health assess whether NIAID staff are following
the NIAID P3CO policy, including erring on the side of inclusion when detennining whether
proposed research should be referred to the NIAID DURC/P3CO Committee for research
proposals that may involve PPP.
NIH Response:
NI H concurs with OIG's finding and corresponding recommendation.
ll1e National Science Advisory Board for Biosecurity (NSABB) is currently charged with
evaluating and providing recommendations to the Office of Science and Technology Policy
(OSTP) and HHS on the effectiveness of the cmTent oversight framework for research involving
3
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 55
COMMRNTS OF THE NATIONAL I NSTITUTES OF H EALTH (NIH) ON
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) OFFICE OF
INSPECTOR GENERAL (OIG) DRAFT REPORT ENTITLED: "THE NATIONAL
I NSTITUTES OF HEALTH AND ECOHEALTH ALLIANCE DID NOT EFFECTIVELY
MONITOR A WARDS AND SUBAWARDS. RESULTING IN MISSED
OPPORTUNITIES TO OVERSEE RESEARCH AND OTHER DEFICIENCIES"
(A-05-21-00025)
enhanced potential pandemic pathogens (ePPPs). lbe NIH has established a Working Group of
the NS ABB to address this charge. As part of its evaluation, the NS ABB will assess the CLtJTent
process adopted by HHS (including NIH and NIAID) for the review and oversight of proposed
research involving ePPPs.
OIG Recommendation 8:
We recommend that the National Institutes of Health based on in.fomiation provided in this audit
and other infomiation available lo NIH, consider whether it is appropriate to refer WIV to HHS
for debannent and exercise continued monitoring and enforcement activities as appropriate over
the course of the grant awards and subawards.
NIH Response:
NIH concurs with OIG's finding and corresponding recommendation.
NIH notes that debarment decisions are made by the HHS Suspension and Debannent Official,
not NIH, and that any proposed debarments are subject to the Office of Management and Budget
(0MB) guidelines to agencies on govemmentwide debannenl and suspension (nonprocurement)
in 2 CFR 180.
OIG Recommendation 9:
We recommend that the National Institutes of Health ensure for any future NIH grant awards that
EcoHealth has addressed the deficiencies noted in the report.
NIH Response:
NIH concurs with OIG's finding and corresponding recommendation.
In its August 19, 2022, letter to EcoHealth, NIH stated, "the NIH reserves the right to take
additional compliance actions as needed, such as disallowing funds or imposing additional
specific award conditions, if the HHS Office of Inspector General identifies other noncompliance
and/or recommends such actions as a result of its audit of Eco Health." 1l1erefore, within 90 days
of the publication of this report, NIH will work with EcoHealth to ensure that the deficiencies
noted in this report are being satisfactorily addressed.
4
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 56
APPENDIX J: ECOHEALTH COMMENTS
EcoHealth Alliance
22 December 2022
Sheri L. Fulcher
Regional Inspector General for Audit Services
Office of Audit Services, Region V
233 North Michigan, Suite 1360
Chicago, IL 60601
Re: Report Number. (A-05-21-00025)
Dear Ms. Fulcher,
Thank you for providing a draft of the report entitled The National Institutes of Health and
EcoHealth Alliance Did Not Effectively Monitor Awards and Subawards, Resulting in Missed
Opportunities to Oversee Research and Other Deficiencies. This letter represents an overview
of our responses to the Findings and Recommendations. (Detailed comments, keyed to specific
issues, are contained in the attached Appendix.)
This OIG audit report covers National Institute of Health (NIH) and EcoHealth Alliance (EHA)
compliance with Federal requirements to ensure proper monitoring and use of grant funds for
three NIH awards to EHA totaling approximately $8.0 million for the period covering FY2014
through FY2021. The OIG audit objectives were to determine whether: ( 1) NIH monitored grants
to EHA in accordance with Federal requirements; and (2) whether EHA used and managed its
NIH grant funds in accordance with Federal requirements. EHA welcomes the OIG oversight
and has collaborated fully and transparently with this audit.
We note that the O IG did not find significant issues with EHA's grant oversight and
compliance, summarizing its fi ndings as follows: "EcoHealth had steps in place to conduct risk
assessments of its subrecipients, and also had standardized checklists to document routine
monitoring of its subrecipients." EHA accepts OIG's recommendations on how to ensure that
subawards are compliant with Federal req uirements; how to ensure compliance with
subrecipient monitoring and reporting; and how to comply better with certain public disclosure
requirements associated with reporting subaward funding. In fact, EHA had already corrected
certain procedures addressed by the O IG during the time period covered by the audit, or
corrected them once we were notified of a finding by the OIG audit team.
We note the additional DHHS OIG audit team f inding that EHA "did not always use its grant
funds in accordance with Federal requirements, resulting in $89,171 in unallowable costs." This
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 57
to roughly 1% of the NIH grants awarded to EHA: put another way, the OIG found
that EHA did comply with Federal requirements 99% of the time.
EHA has already reimbursed the NIH for the total in unallowable costs as determined by
the OIG. We found the OIG analysis instructive in several cases where EHA did not follow the
appropriate requirement (in two cases these involved expenses as small as a $19 overpayment
and a miscoded $5 beverage) and have corrected these minor errors. In other cases, EHA
disagrees with the OIG interpretation of the Federal requirements and we are seeking
clarification on these instances with the NIH.
During the audit process, we discovered that EHA has been underpaid by the NIH for
indirect cost allocation equivalent to $126,391. The OIG notes this in the report and EHA has
pursued reimbursement of these funds owed to EHA by the NIH.
There were only two substantive areas of disagreement with the OIG over their findings - one
concerning the timeliness of EHA's progress Year 5 Progress report on a R01 grant from NIAID,
the other an issue around whether an experiment that showed unexpected levels of genome
copies at an early stage constituted "enhanced growth" that required further review. We do not
agree with the OIG's characterization of these two issues, for reasons outlined in detail in the
Appendix.
During the 8-year period covered by this OIG audit, the Federal requirements changed multiple
times, and EHA policies changed to match them. Many of the findings occurred under a different
management team. Additionally, the OIG audit does not reflect a series of new requirements
placed on EHA contracts by NIH that have already been put in place and set standards that are
above and beyond the normal procedures for subrecipients.
The audit process has helped EHA to sharpen its policies and practices to enable even better
compliance with NIH and other Federal rules in the future. We appreciate the professionalism of
the OIG review staff and the analysis provided in your report.
Sincerely,
Peter Daszak, PhD
President, EcoHealth Alliance
520 Eighth Avenue, Suite 1200
New York, NY 10018, USA
www .ecohealthalliance .orq
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 58
:
EcoHealth Alliance responses to DHHS OIG audit report recommendations·
A. We recommend that EcoHea/th Alliance:
1. prepare subaward and consultant agreements that contain all required information and
are accurate,
EcoHealth Alliance Response: We agree with this recommendation and have already
instituted measures to correct omissions on contracts and agreements. Many of the instances
identified by DHHS OIG were from over 5 years ago and were copy-paste errors resu lting from
inadvertent reuse of a prior contract template. EcoHealth Alliance has updated and revised all
its subaward and consultant agreements to contain required language and subaward
identification.
2. submit progress reports by the required due date,
EcoHealth Alliance Response: EcoHealth Alliance will continue to submit all required annual,
semi-annual, or other progress reports by the deadlines set by NIH, to the best of our ability.
The DHHS OIG report suggests that EcoHealth Alliance submitted its R01-Al110964 Year 5
progress report late, and that the report indicates 'enhanced growth' of a recombinant virus in
an approved experiment. We refute this statement: it does not provide a fu ll review of the facts.
We have provided extensive documentation to NIH and to the DHHS OIG to support this point
(see below).
Regarding the timely submission of our report: EcoHealth Alliance's Year 5 progress
report was written and uploaded into the NIH online portal for submission by EcoHealth
Alliance staff in July 2019 •· ahead of the September deadline. When EcoHealth Alliance
staff attempted officially to submit the report during late July 2019, the grant had been renewed
(24 July 2019) for an additional 5 years and the NIH system locked EcoHealth Alliance out from
submitting a Year 5 report. N IH staff did not follow up with a request to EcoHealth Alliance for a
Year 5 report, despite frequent communication among EcoHealth Alliance staff and NIH
program and grants management staff during that time. D irect questions from EcoHealth
Alliance staff remained unanswered by NIH, and phone calls were not returned. The fact that
the new award was made, work was allowed to continue, and no requests for an official Year 5
report submission were made by N IH, suggested to EcoHealth Alliance staff that we were in
compliance. The next communication on this issue from N IH was on 23 July 2021,
approximately two years later, requesting submission of the Year 5 report. EcoHealth rapidly
complied and submitted its Year 5 report within 11 days, but only after considerable intervention
from NIH staff to circumvent its system's lockout. Even though the grant was terminated and
· Text in italics in this Appendix is quoted verbatim from the DHHS OIG Draft Report Findings and
Recommendations.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 59
en suspended, and no funding was available to work on the progress reports, EcoHealth
Alliance continued to comply with N IH reporting requests and has submitted a Year 6 and Year
7 report on this grant.
Regarding the allegation that the report indicated 'enhanced growth' of a recombinant
virus:
3. comply with requirements to immediately notify NIH of conditions that materially impact
the ability to meet award objectives,
EcoHealth Alliance Response: To the best of its ability, EcoHealth Alliance will
continue to comply with requirements to notify NIH of conditions that materially impact its ability
to meet award objectives, and to do this in a timely manner, and as directed. However, we
refute the suggestion that EcoHealth Alliance failed to comply with the timeliness of reporting or
of conditions that materially affect the award objectives.
Firstly, on the issue of the timing of our reporting the resu lts of coronavirus experiments
to NIH: As we have already indicated to the DHHS OIG with documentary evidence in support,
and in previous letters to NIH, NIH did not use the phrase 'immediately notify' in the document
of record for the amended annual award - the Notice of Award. Additionally, N IH failed to
provide a timeframe for notification in either the letter indicating that these experiments were
approved, or in the NIH Notice of Award. Finally, we did, in fact, notify N IH in a timely manner
about these results, having provided this information rapidly after being sent it by the laboratory
that conducted the experiments in China.
Secondly, on the issue of the material nature of the experimental findings in the report:
DHHS OIG states that "according to NIH's evaluation of EcoHealth's progress report for Year 5
of the grant, NIH believed there was evidence that the research conducted by EcoHealth 's
subrecipient WIV during Year 5 resulted in enhanced growth by more than one log, thus
triggering the special term and condition to immediately notify NIAID and potentially requiring
the research to undergo review under the HHS P3CO Framework." This statement is not
factually correct and EcoHealth Alliance has provided both a detailed explanation and
documentation to both the NIH and the DHHS OIG to support EcoHealth Alliance's
statement. The contention that EcoHealth Alliance failed to report "enhanced growth"
that would have required additional P3CO review as "gain of function" research is based
on a misinterpretation of what the experiment in question actually showed.
Specifically, EcoHealth Alliance reported on the same experiment in its Year 4 report
submitted on time in 2018 and at that time (25 April 2018) EcoHealth Alliance emailed a copy of
its submitted Year 4 report to NIH and requested a timeslot to discuss the Year 4 report, the
planned Year 5 work, and a renewal proposal. This call happened on 18 July 2018. At no time
then or until well after this grant was terminated in April 2020, was there any comment
from NIH re. experimental results or the timing of reporting. Additionally, as indicated in our
letter to NIH October 26 th 2021, and in our extensive responses to the DHHS OIG's earlier
drafts of this report, in virological terms, "virus growth" normally refers to viral titer measuring the
concentration of infectious viruses by plaque assay. The experiment we reported to NIH actually
shows genome copies per gram. not viral titers. We have been advised by senior virologists that
data on genome copies per gram usually do not accurately equate to viral titer, since genomic
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 60
from inactivated, incompletely formed, or dead virus are also measured. Viral titers
were not measured in the experiments detailed in the Year 4 or 5 reports. We also note that the
genome copy data for recombinant viruses are only enhanced relative to the WIV1 backbone at
the earliest part of the experiment and by the endpoint, there was no discernably significant
difference among the different viral types, suggesting that these differences, if real, were
transient. Given the small number of mice used, it is also uncertain whether the survival and
weight loss data were statistically relevant, and as no further replications of this experiment
were performed, we are unable to corroborate these initial results. We assume that these were
the rationale N IH used at the lime for not highlighting this work as requiring further clarification
or secondary review under the "gain of function" guidelines.
4. ensure that it has the ability to access all records related to its research conducted at
subrecipient locations,
EcoHealth A llia nce Response : To the best of its ability, EcoHeallh Alliance will continue to do
all possible to ensure that ii can access and supply all records related to its research conducted
at subrecipient locations. However, EcoHealth Alliance finds the DHHS OIG report sta tement
misleading in suggesting that EcoHealth Alliance was simply "unable to obtain scientific
documentation from a subrecipienf' . It is correct that on 5 November 2021 NIH wrote to
EcoHealth Alliance requesting scientific documentation from its subrecipient, the Wuhan
Institute of Virology (WIV). These included lab notebooks and the original data used to produce
graphs for the year 4 and 5 reports to NIH. However, DHHS OIG omitted the following critical
information: 1) 18 months prior to this request (on 19 April 2020) NIH instructed EcoHealth
Alliance "to cease providing any funds from the above noted grant to the WIV', and that
EcoHealth Alliance responded on 21 st April 2020 to confirm that no funds had been sent to WIV
under the award, nor had any contract been signed, and that EcoHealth Alliance would comply
with all NIH's requirements; 2) NIH terminated the award on 24th April 2020 ''for convenience";
3) during 2020 and 2021, the WIV, EcoHealth Alliance, and the research that NIH funded
became subject to significant geopolitical pressure and almost daily misreporting in the media
globally, including repeated unsubstantiated allegations that lab notebooks had been hidden, or
forged , or data corrupted, and these acts covered up. During that time, EcoHealth Alliance was
subjected to political attacks in the USA and abroad, including efforts to remove our eligibility for
federal funding based on disinformation and hearsay.
NIH's request for documenta tion 18 months after a project was de-funded, terminated
and then suspended, and the intense media and political pressure are extraordinary
circumstances that should be noted in the report. These conditions and particularly the political
tensions between the Chinese and US governments at the lime effectively shut down
communications among scientists at the WIV (a Chinese government laboratory) and EcoHealth
Alliance staff, making it impossible for EcoHealth Alliance to secure the requested data. Despite
this, and as DHHS OIG notes, EcoHealth Alliance made reasonable attempts to comply with
N IH's requests, including supplying further unpublished data. EcoHealth Alliance also forwarded
the request to WIV staff, but has not yet received a response.
EcoHealth Alliance always has and continues routinely to share its unpublished data
from its research with its NIH program officers through regular progress reports. Genetic
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 61
relevant to EcoHealth Alliance's work are routinely deposited in the NIH GenBank so
that they can be used by other scientists globally. Indeed, even after NIH terminated EcoHealth
Alliance's award, EcoHealth Alliance continued to file annual reports with NIH to provide
unpublished data. In addition, EcoHealth Alliance submitted analyses of the NIH-supported work
for publication in leading international peer-reviewed journals so that the data and results are
available publicly.
5. properly identify subawards in financial statements, and
EcoHealth Alliance Response: Prior to 2019, our CPA consultant advised EcoHealth Alliance
not to list foreign subawards in financial statements. We have provided documentation to DHHS
OIG to confirm that this was the professional advice we received. Notwithstanding this advice,
for the past 3-years, EcoHealth Alliance has provided full subaward identification in all internal
and public financial statements and has instituted policies to ensure this will continue to be our
practice.
6. disclose subawards according to FFATA requirements.
EcoHealth Alliance Response: EcoHealth Alliance has provided all required FFATA reporting
forms since NIH f irst requested these documents. Copies of FFATA reporting for all subawards
have been provided to NIH upon request and at NI H's current direction continue to be provided
to NIH 30 days following EcoHealth Alliance's submissions to the FFATA system.
B. We recommend EcoHealth Alliance refund to the Government $89,171 in unallowable
costs consisting of:
EcoHealth Alliance Response: EcoHealth Alliance has already refunded this amount to NIH in
full. However, we note that during our review of financial records as part of this audit, we
identified $126.391 in allowable costs on three NIH awards that have not yet been reimbursed
to EcoHealth Alliance. At NIH's request, on 16 December 2022, EcoHealth Alliance provided
details of these unreimbursed costs, which we expect to recover in due course.
Despite our repayment of the $89,171 in costs that DHHS OIG has claimed are unallowable,
EcoHealth Alliance maintains our previously-stated opinion that some of these expenditures are
'allowable' and others are reasonably disputed. We have provided rationale for this in the
detailed responses below:
1. salary costs claimed in excess of the NIH salary cap totaling $10,627,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed this amount to NIH and
agrees with DHHS OIG's finding here. EcoHealth Alliance made minor miscalculations in the
lime allotment of allowable salaries over the NIH GPS 4.2.10 Salary Cap/Salary Limitation. To
address this EcoHealth Alliance employed a new time management system and software that
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 62
captures and segregates all salary charges for NIH funded personnel that exceed
Salary Cap/Salary Limitations.
2. bonus costs totaling $15,977,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed this amount to NIH.
Nonetheless, EcoHealth All iance disagrees with the DHHS OIG interpretation of NIH GPS 7.9. 1
Allowability of Costs/Activities, which clearly allows bonus and incentive payments to be
reimbursed by NIH. EcoHealth Alliance maintains that its policy of providing such payments to
staff is: 1) based on performance and therefore refe rred to as providing "incentive payments"; 2)
based on an "established plan" clearly indicated in the EcoHealth Alliance Employee Handbook;
3) established as an EcoHealth Alliance Board-approved operating procedure for more than 12
years; and 4) something that staff are made fully aware of prior to their performance (i.e.
'services rendered'). EcoHealth Alliance has received legal counsel corroborating its
understanding that EcoHealth A lliance staff incentive payment allocations may be deemed
"allowable" under existing Federal guidelines, and are in accord with standard criteria for
interpreting and applying a statute or regulation.
3. indirect and fringe benefits associated with salary and bonus costs totaling $17,836,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed NIH for this expense.
Nonetheless, EcoHealth Alliance disputes the portion of indirect and fringe corresponding to
DHHS OIG's determination about the allowability of incentive payments to EcoHealth Alliance
staff.
4. Ph.D. education tuition costs totaling $13,951 and associated indirect costs of $4,641,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed NIH for this expense.
Nonetheless, EcoHealth All iance disagrees with the DHHS OIG understanding of N IH GPS
7.9.1 Allowability of Costs/Activities that tuition payments are an unallowable cost. This staff
member and graduate student is undergoing training in research methodology as part of a
doctoral program that is precisely the scope and type of research and work conducted on the
respective NIH funded project. EcoHealth Alliance believes this is an allowable cost because: 1)
the staff member is conducting activities necessary to the Federal award; 2) the expense was
incurred in accordance with established EcoHealth Alliance policies; 3) the tuition payments are
reasonable and fair; 4) the employee is not 'attending Kingston University', since the graduate
program is a part-time 'external candidate' PhD program with no required courses and all by
research and thesis.
5. indirect costs totaling $13,037 claimed by a subrecipient,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed NIH for this expense. This
was a simple error regarding the de minimis overhead rate for a foreign subrecipient on a
contract dating back to 2015. US Federal agencies apply different de minimis rates and this
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 63
was the resu lt of using a single contract template based on an agency that allows a 10%
rate on foreign subrecipients, versus the 8% allowed by NIH.
6. travel costs totaling $5,752 and associated indirect costs of $1,876,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed these costs to NIH. Two of
these were simple miscoding errors. However, one travel cost in the amount of $2,808.43 is a
valid allowable cost. At the time of travel (2016), the printed receipt for this approved, budgeted
foreign travel expense was lost. EcoHeallh Alliance now has a back-up system for receipt
storage or capture and a policy for rapid follow-up with vendors to secure missing receipts,
however that was not our policy at the time. When DHHS O IG requested this receipt in 2021,
EcoHealth Alliance contacted the non-USA-based vendor, but this over-4-year-old expense was
no longer on f ile with the vendor. We submitted corroborating documentation to DHHS OIG,
including verified price estimates, the number of travelers/participants, and meeting-agendas.
However, DHHS OIG did not consider these sufficient.
7. visa costs of $2,500 and associated indirect costs of $896,
EcoHealth Alliance Response: EcoHealth Alliance has reimbursed NIH for this expense.
Nonetheless, EcoHealth Alliance disputes this finding. Expedited H1-B visa processing times
take 15 business days. Regular H1 -B processing times take between 3-to-6 months. At the time
of this expenditure, due to the COVID-19 pandemic, regular processing times were further
delayed. EcoHealth Alliance considered expedited visa expense justifiable given the need to
rapidly engage an employee with a highly specialized skill set and background to work on a
pandemic-delayed project during lock-down at the end of 2020.
8. subaward costs of $2,052, and
EcoHealth Alliance Response: EcoHealth Alliance agrees with this finding. This was a
miscalculation on the part of EcoHealth Alliance's subaward in 2015 and was an error not noted
at the time by the subaward or EcoHealth Alliance personnel. Since that time, we have instituted
redundancy and cross checks in subaward receipts and processing and a commercial receipt
storage and capture system that will reduce the opportunity for similar mistakes.
9. professional fees costs of $19 and associated indirect costs of $7.
EcoHealth Alliance Response: EcoHeallh Alliance agrees with this finding. This was a copy
paste error on the part of program personnel. We have since instituted an internal third review of
all payment requests submitted to our finance team to reduce the opportunity for similar
mistakes.
NIH and EcoHealth Did Not Effectively Monitor Awards and Subawards (A-05-21-00025) 64
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