The CARES Act (P.L. 116-136) was passed to provide emergency assistance for individuals, families, and business achieved through two divisions. “Division A” focuses on supporting workers and families as well as the United States healthcare system and economy as a whole through tailored programs. Provisions under Division A provide targeted relief efforts such as the Paycheck Protection Program, Student Loan Relief, Health Coverage for COVID-19 testing, Liability Immunity for Health Care volunteers, Recovery Rebates for Individuals, among many other assistance provisions.
In contrast, “Division B” provides largely unspecified lump-sum emergency appropriations for agencies to use as deemed fit “to prevent, prepare for, and respond to” coronavirus. An agency’s use of lump-sum appropriations is restricted to the language of the appropriation act itself.[1] The CARES Act appropriation language leaves wide discretion to the agencies, while providing some guidance as to which departments within an agency shall be provided funds as well as time limits on the funds and obligations of the agency to report to Congress.
National Institutes of Health Funding
The National Institutes of Health (“NIH”) under Health and Human Services received $945 million in funding, with the National Institute of Allergy and Infectious Disease receiving the bulk of the funds at $706 million.[2] The National Heart, Lung, and Blood Institute and National Institute of Biomedical Imaging and Bioengineering received $103.4 million and $60 million respectively.
How Funding Will Be Disbursed
NIH’s Deputy Director Dr. Michael Lauer announced that funds will be sent to the research community through Urgent and Emergency competing revisions and administrative supplements to existing grant awards. [3] Each of these avenues will help achieve NIH’s goal to leverage resident expertise and fund applications in under three months. NIH compiles a list of COVID-19 specific funding for all institutes under Notices of Special Interest (“NOSI”) on the Coronavirus Disease 2019 (COVID-19): Information for NIH Applicants and Recipients of NIH Funding website.
Emergency Competitive Revision Funding Opportunity Announcements (“FOA”) can only be used by NIH Institutes that received special emergency appropriations to provide research funding based on the Coronavirus declared disaster. Whereas, Urgent Competitive Revision FOA can be used to meet immediate needs to help address applications or progress reports submitted prior to the Coronavirus pandemic. NIH has provided the following points when responding to Emergency or Urgent FOA:
- FOA require applications to be submitted in response to an Emergency or Urgent NOSI.
- Read the instructions in the NOSI and in the FOA it points to carefully. If the instructions in the NOSI differ from those in the FOA, follow those in the NOSI.
- Ensure the specific review criteria specified in the FOA are addressed as well as any mentioned in the NOSI – the criteria is how NIH staff evaluate applications for funding.
- The NOSI requests inclusion of the applicant’s NOSI number in the Agency Routing Identifier field (Box 4b) of the SF424 (R&R) Form.
- This information assists NIH in tracking spent emergency award funds.
- Applications without the NOIS number in Box 4b may not be considered for funding.
- Often the due dates are rolling, so applications should be submitted as soon as they are ready to be considered for funding as quickly as possible.
What Funding Will Be Prioritized?
The National Institute of Allergy and Infectious Diseases (“NIAID”) announced on April 23rd four key research areas necessary to respond to the COVID-19 pandemic.[4] First, research studies need to improve fundamental knowledge of SARS-CoV-2 and COVID-19, including studies to characterize the virus and better understand how it causes infection and disease. Funding will focus on natural history, transmission, and surveillance studies.
Second, studies are needed to develop rapid, accurate diagnostics, and assays to identify and isolate COVID-19 cases. These would include detecting and differentiating SARS-CoV-2 from other related viruses.
Third, research studies should focus on characterizing and testing potential treatments for COVID-19. Such studies include identifying and evaluating drugs approved for other conditions for effectiveness against COVID-19 as well as testing antivirals in multiple clinical trials.
Fourth and last, research will be required to develop a safe and effective vaccine to protect individuals from infection and prevent future SARS-CoV-2 outbreaks. In addressing all four prioritizes, NIAID will leverage current resources and clinical trial networks and seek key collaborations.
Flexibility for Existing or Prospective Research Awards
NIH has also adopted administrative flexibility for academic medical institutions conducting research activities related to or affected by COVID-19, including:
- Late Applications/Reports: NIH will consider accepting late applications/reports on a case-by-case basis. Late applications/reports should be submitted as soon as possible and include a cover letter with detail about the delay for NIH’s consideration. Institutions need not request advance permission to submit late applications/reports, however provide notice to the assigned grant management or program office for late financial and Research Progress Performance Reports.[5] Delays of closeout reports may not exceed one year.
- Pre-Award Costs: Pre-award costs may be incurred from January 20, 2020 through the public health emergency and prior to the date of an award.[6]
- Waiver of Prior Approval: Generally, NIH prior approval is not required to rebudget funds for any direct cost item, unless cost is a change in scope. Recipients not under the Streamlined Non-competition Application Process have discretion to carry forward unobligated balances to support COVID-19 activities so long as costs are in scope of original award. Also, non-SNAP grant projects may extend the final budget period one time for up to 12 months by notifying the assigned grants management specialist.
- Stipends: Institutions affected by COVID-19 may continue to provide stipends to fellows and trainees regardless of work performed. The assigned grant management official should be notified with documentation demonstrating the effect of COVID-19 on work and timeline of impact.
- Travel/Conferences: Grant related travel and conferences that have been canceled and not refunded may be charged to the NIH award if it would have otherwise been an allowable cost.
- Single Audit: Recipients affected by COVID-19 may delay the completion and submission of their Single Audit report for up to 12 months. Institutions expending $750,000 or more in federal funding in a fiscal year are required to submit an annual Single Audit report.
Husch Blackwell has a team dedicated to working with Academic Medical Centers on a variety of issues. We encourage clients to contact us as agencies continue to develop procedures related to appropriated funds and leverage existing relationships with agencies.
[1] Government Accountability Office, GAO-06-382SP, The Red Book, Chapter 6, section B, “Availability of Appropriations”
[2] An additional $736 million was also allocated to the National Institute of Allergy and Infectious Disease in the Coronavirus Preparedness and Response Supplemental Appropriations Act (P.L. 116-123).
[3] NIH “COVID-19 Funding and Funding Opportunities” https://nexus.od.nih.gov/all/2020/04/13/covid-19-funding-and-funding-opportunities/
[4] HHS, National Institutes of Allergy and Infectious Disease, “NIAID Strategic Plan for COVID-19 Research,” https://www.niaid.nih.gov/sites/default/files/NIAID-COVID-19-Strategic-Plan-2020.pdf
[5] NIH Notice Number NOT-OD-20-082, “NIH LATE APPLICATION POLICY Due to Public Health Emergency for United States for 2019 Novel Coronavirus (COVID-19),” March 9th, 2020.
[6] NIH Notice Number NOT-OD-20-086, “Flexibilities Available to Applicants and Recipients of Federal Financial Assistance Affected by COVID-19,” March 12th, 2020.