TITLE 25. HEALTH SERVICES

PART 11. CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS

CHAPTER 701. POLICIES AND PROCEDURES

25 TAC §§701.3, 701.7, 701.9, 701.19, 701.27

The Cancer Prevention and Research Institute of Texas ("CPRIT" or "the Institute") adopts the amendments to §§701.3, 701.7, 701.9, 701.19, and 701.27 regarding the definition of Authorized Signing Official; Chief Compliance Officer report frequency; fraud, waste, and abuse; electronic signature policy; and reporting requirements on the Institute’s public website. The amendments were published in the September 2, 2016, issue of the Texas Register (41 TexReg 6629).

Reasoned Justification

§701.3 is amended to include designated alternates in the Institute's definition of "Authorized Signing Official."

§701.7 is amended to require the Chief Compliance Officer to report at least quarterly, instead of annually, to the Oversight Committee regarding grantee compliance with Institute rules.

§701.9 is amended to include fraud, waste, and abuse, as part of the compliance program. The amendment adds reports and investigations of fraud, waste, and abuse to the activities that the Chief Compliance Officer oversees.

§701.19 is amended to replace all of the current text relating to advance payment of grant award funds with text that outlines requirements for Texas location for grant awards and to change the name of the rule to "Texas Location for Grant Awards." The rule sets out specific actions a grantee may take to demonstrate a Texas location sufficient to be eligible for a grant award.

§701.27 is amended to clarify the information that needs to be reported on the Institute's public website. The Institute is required to report all gifts, grants, or other consideration given to an Oversight Committee member, Institute employee, or Program Integration Committee. The amendment makes it clear that the gifts covered by the exceptions specified by Texas Administrative Code Rule § 702.7, related to gifts, grants, or consideration, do not need to be posted on the Institute's public website.

Summary of Public Comments and Staff Recommendation

No public comments to the rule amendments were received.

The rule changes are adopted under the authority of the Texas Health and Safety Code Annotated, §§102.108 and 102.251, which provides the Institute with broad rule-making authority to administer the chapter, including rules for awarding grants.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 17, 2016.

TRD-201605888

Heidi McConnell

Chief Operating Officer

Cancer Prevention and Research Institute of Texas

Effective date: December 7, 2016

Proposal publication date: September 2, 2016

For further information, please call: (512) 463-3190


CHAPTER 702. INSTITUTE STANDARDS ON ETHICS AND CONFLICTS, INCLUDING THE ACCEPTANCE OF GIFTS AND DONATIONS TO THE INSTITUTE

25 TAC §§702.7, 702.9, 702.13, 702.19

The Cancer Prevention and Research Institute of Texas ("CPRIT" or "the Institute") adopts the amendments to §§702.7, 702.9, 702.13, and 702.19, regarding acceptance of gifts; registration fees paid for the Institute conference; gift reporting to the Chief Compliance Officer, how Oversight Committee members, Program Integration Committee members, and Scientific Research and Prevention Programs Committee members provide written notice of conflicts of interest and how those conflicts are disclosed; and how waivers of the restriction on communication granted by the Chief Executive Officer are provided to the Oversight Committee and disclosed publicly. The proposed amendments were published in the September 2, 2016, issue of the Texas Register (41 TexReg 6635).

Reasoned Justification

§702.7 is amended in several ways. The first proposed amendment, to §702.7(c)(3), clarifies that the Oversight Committee may vote by a simple majority accept gifts of cash, stock, bonds, or personal property with a value in excess of $10,000. Section 702.7(c)(4) is amended to require that the Chief Executive Officer prepare a report for the Oversight Committee related to any proposed gifts to the Institute of cash, stock, bonds, or personal property with a value over $1,000,000 and any gifts of real property, regardless of value. Section 702.7(f)(3) is amended to clarify that any registration fees paid to the Institute for a conference hosted by the Institute do not constitute consideration subject to the reporting requirement.

§702.9 is amended to require an Oversight Committee member, Institute employee, or Program Integration Committee member to report any gifts to the Chief Compliance Officer rather than the Chief Executive Officer.

§702.13 is amended to clarify how Oversight Committee members, Program Integration Committee members, and Scientific Research and Prevention Programs Committee members provide written notice of conflicts of interest, and how those conflicts are disclosed. The proposed rule makes it clear that the individual's declaration of conflicts of interest made through the agency's designated electronic portal constitutes appropriate written notice.

§702.19 is amended to clarify the process for making waivers granted pursuant to this section publicly available. The proposed amendment requires the Chief Executive Officer to provide the Oversight Committee written notice of any waiver granted at the time that it is granted and to include the waiver in the Chief Executive Officer's affidavit for grant award recommendations.

Summary of Public Comments and Staff Recommendation

No public comments to the proposed rule amendment were received.

The rule changes are adopted under the authority of the Texas Health and Safety Code Annotated, §§102.108 and 102.251, which provides the Institute with broad rule-making authority to administer the chapter, including rules for awarding grants.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 17, 2016.

TRD-201605879

Heidi McConnell

Chief Operating Officer

Cancer Prevention and Research Institute of Texas

Effective date: December 7, 2016

Proposal publication date: September 2, 2016

For further information, please call: (512) 463-3190


CHAPTER 703. GRANTS FOR CANCER PREVENTION AND RESEARCH

25 TAC §§703.3, 703.5 - 703.8, 703.10 - 703.17, 703.21, 703.23 - 703.26

The Cancer Prevention and Research Institute of Texas ("CPRIT" or "the Institute") adopts without changes the amendments to §§703.3, 703.5 - 703.8, 703.10 - 703.17, and 703.21 regarding institutional limits on grant applications, grant application resubmissions, competitive renewals, submitting more than one application, submission deadline extensions, sources of funding, grant ineligibility, application fees for product development research grantees, review of grant recipient progress reports, when grant application recommendations must be acted on by the Oversight Committee, requirements of Institute employees and Oversight Committee members who attend peer review meetings, Program Integration Committee recommendations sent to the Oversight Committee, how the Chief Executive Officer may recommend considering applications with variations, how the Oversight Committee votes on grant recommendations, grantee responsibilities, single audit determination, no cost extensions, final Financial Status Reports, revenue sharing, who within the Institute is responsible for directing grant award monitoring, grantee documentation of Financial Status Reports, and various typographical corrections that do not substantively change administrative rules. Additionally, the Institute adopts without changes new rules §§703.23 - 703.26 relating to disbursement of grant award funds, financial status reports, grant award budgets, and allowable costs. The adopted amendments and new rules were published in the September 2, 2016, issue of the Texas Register (41 TexReg 6641).

Reasoned Justification

The adopted rule changes and new rules provide clarity for grant applicants and grant recipients related to the review, approval, disbursement, and monitoring of Institute grant award funds.

§703.3 has several adopted amendments affecting grant applications. The first adopted amendment adds §703.3(b)(3) allowing the agency to set a limit on the number of applications that may be submitted by an entity for a particular grant award mechanism. Section 703.3(e) is amended to allow the Institute to limit the number of times a grant application may be resubmitted to the Institute. Section 703.3(g), which explains the process for requesting an extension to the application deadline, is amended to clarify that any extension is at the discretion of the Chief Program Officer and any request for such an extension must be made to the CPRIT Helpdesk via electronic mail within 24 hours of the closure of the application submission deadline. An extension to the submission deadline will only be granted for good cause, which will be documented by the Institute. Section 703.3(i) is amended to clarify that only product development applicants are required to provide a capitalization table that includes individuals or entities that have an investment, stock or rights in the company. Section 703.3(j) is amended to clarify that any grant application submitted by an entity or personnel that is debarred, suspended, and ineligible or otherwise excluded form participation in federal or state grant awards is not eligible to receive a grant from the Institute. Section 703.3(k) is amended to allow the agency to withdraw a product development application if the application fee is not received within seven business days of the application submission deadline.

§703.5 is amended to expand peer review activities of Scientific Research and Prevention Program Committee members to include post award evolution of grant progress reports submitted to the Institute by grant recipients.

§703.6 is amended to clarify that a final grant award recommendation by a review council must be acted on by the Oversight Committee within the same state fiscal year. Section 703.6 is also amended to clarify that Oversight Committee members may attend peer review meetings as non-participating observers. If an Institute employee or Oversight Committee member attends a peer review meeting, the individual must certify in writing that the employee or Oversight Committee member complied with the Institute's conflict of interest rules.

§703.7 is amended to clarify that a list of deferred grant award recommendations, if any, must be provided at the same time the Program Integration Committee submits its list of grant award recommendations to Oversight Committee.

§703.8 is amended to clarify the variances in the grant review process as well as any grant applications that the Chief Compliance Officer is required to identify at the time that the Chief Compliance Officer certifies the grant award recommendations. Section 703.8 is further amended to clarify that the Chief Executive Officer may recommend good cause for considering a process variance reported by the Chief Compliance Officer. The adopted amendment to Section 703.8(3) clarifies that the Oversight Committee may vote on more than one grant award recommendation at a time unless an Oversight Committee member requests taking up a grant recommendation individually. Lastly, Section 703.8(4) is amended to replace "failure to follow" with "not approving."

§703.10 is amended to add two grant contract requirements. The first adopted change requires the grantee to accept legal responsibility for the integrity of the fiscal and programmatic management of the organization. The second adopted change requires the grantee to acknowledge responsibility for the actions of its employees and other research collaborators, as well as enforcing the grantee's standards of conduct.

§703.11 is amended clarify that matching funds may be certified on a project year basis. Additionally, the consequences for not providing matching certification are expanded to include suspension of reimbursements an advances for project costs. Section 703.11 is further amended to clarify that the project year is the period to use when determining whether a grant recipient appropriately expended matching funds.

§703.12 is amended to delete text related to unauthorized expenses. Guidance regarding allowable costs, including a list of unauthorized expenses, is now provided in the new adopted rule Section 703.26.

§703.13 is amended to clarify when a single audit determination form is due. The adopted amendment also increases the annual threshold that triggers the grantee's requirement to submit an audit from $500,000 to $750,000 in state award funds. This section is further amended to include a description of acceptable agreed upon procedures agreement sufficient to fulfill the audit requirement.

§703.14 is includes several adopted amendments. The first amendment adds the de-obligation of grant award funds to the title of §703.14. As reflected in the adopted amendment for new subsection (h), the rule change authorizes the Institute to de-obligate unspent grant award funds when the grant award contract is terminated and make those funds available for any purpose authorized by Texas Health and Safety Code Chapter 102. Section 703.14 is also amended to clarify the process for requesting, considering and approving no-cost extensions. Section 703.14(d) is amended to clarify that the final Financial Status Report is due within 90 days following the end date of the last state fiscal quarter that includes the grant termination date. This adopted amendment distinguishes a final Financial Status Report from other close out documents and clarifies for grant recipients the specific due date of the final Financial Status Report. Section 703.14(e) is amended to clarify that the Institute may make upward or downward adjustments to allowable costs requested for reimbursement up to 90 days following the approval of close out documents or the final Financial Status Report, whichever is later.

§703.15 is amended to replace the current title with "Financial Policies Applicable to Grant Awards." The adopted amendment replaces the current text with requirements related to the grant recipient's financial management systems, fiscal controls and accounting procedures.

§703.16 is amended to clarify how grant award proceeds may be used to pay for costs associated with commercialization activities. Section 703.16 is further amended to remove text that requires a grant recipient to report at least annually describing commercialization activities for the project results. If a grant recipient has received a product development grant award, the grant recipient is already required to provide this information pursuant to terms of the grant award contract. Deleting subsection (d)(6) makes it clear that other grant recipients are not required to report this information.

§703.17 is amended to add a new subsection clarifying that the revenue sharing obligation is continuous so long as the product resulting from the Institute supported project enjoys governmental exclusivity.

§703.21 is amended to clarify that grant award monitoring activities are under the direction of the Chief Compliance Officer. Section 703.21(b)(2) is further amended to remove text concerning financial status reports. The deleted text is moved to new rule §703.24, related to Financial Status Reports. Section 703.21(b)(3)(E) is amended to remove the grant manager as the reviewer of progress reports.

§703.23 is an adopted new rule concerning disbursement of grant award funds. The new rule incorporates text that has been moved from §703.19 (advance payment of grant funds) and clarifies Institute practices concerning reimbursement and advancement of grant funds. The new rule provides limits on the amount of award funds that may be advanced and guidance regarding expending award funds prior to seeking additional advances. The rule makes it clear that the Institute maintains the right to limit or restrict advance funds and may disburse the last 10% of total award funds using reimbursement instead of advancement. The adopted rule also provides guidance related to disbursing grant funds as a reimbursement for expenses already incurred.

§703.24 is an adopted new rule related to a financial status report (FSR). The adopted rule incorporates text that has been moved from §703.21(b)(1) and (2) as well as clarifies requirements for preparing and submitting FSRs, including deadlines and the waiver appeals process.

§703.25 is an adopted new rule related to grant award budgets. The adopted rule addresses appropriate budget categories, budget transfers, and carry forwards of unspent budget funds during a project year.

§703.26 is an adopted new rule concerning allowable costs and incorporates text that has been moved from §703.12. The adopted new rule defines an allowable costs and lists examples of expenses that the Institute considers unallowable costs. The rule clarifies that an allowable costs must be incurred during the contract term, unless a grant recipient has received written approval from the Institute's Chief Executive Officer. The Institute makes it clear that the Institute's decision regarding whether an expense is allowable is final.

Summary of Public Comments and Staff Recommendation

CPRIT received one comment from the public regarding the proposed rule changes. Kimberly Turner, Chief Audit Executive with the Texas Tech University System, indicated that Texas Tech agrees with the proposed rule changes but noted that a reference in §703.13 to OMB Circular A-133 has been superseded. Ms. Turner suggested an updated reference to "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F." CPRIT supports the suggested change; however, the proposed change may be outside of the scope of this rulemaking. CPRIT declines to make the change at this time and will instead address the change in a future rulemaking project.

The rule changes are adopted under the authority of the Texas Health and Safety Code Annotated, §§102.108 and 102.251, which provides the Institute with broad rule-making authority to administer the chapter, including rules for awarding grants.

§703.14.Termination, Extension, Close Out of Grant Contracts, and De-Obligation of Grant Award Funds.

(a) The termination date of a Grant Contract shall be the date stated in the Grant Contract, except:

(1) The Chief Executive Officer may elect to terminate the Grant Contract earlier because the Grant Recipient has failed to fulfill contractual obligations, including timely submission of required reports or certifications;

(2) The Institute terminates the Grant Contract because funds allocated to the Grant Award are reduced, depleted, or unavailable during the award period, and the Institute is unable to obtain additional funds for such purposes; or

(3) The Institute and the Grant Recipient mutually agree to terminate the Grant Contract earlier.

(b) If the Institute elects to terminate the Grant Contract pursuant to subsection (a)(1) or (2) of this section, then the Chief Executive Officer shall notify the Grant Recipient in writing of the intent to terminate funding at least 30 days before the intended termination date. The notice shall state the reasons for termination, and the procedure and time period for seeking reconsideration of the decision to terminate. Nothing herein restricts the Institute's ability to terminate the Grant Contract immediately or to seek additional remedies if justified by the circumstances of the event leading to early termination.

(c) The Institute may approve the Grant Recipient's written request to extend the termination date of the Grant Contract to permit the Grant Recipient additional time to complete the work of the project.

(1) A no cost extension may be granted if the Grant Recipient is in good fiscal and programmatic standing. The Institute's decision to approve or deny a no cost extension request is final.

(2) The Grant Recipient may request a no cost extension no earlier than 180 days and no later than 30 days prior to the termination date of the Grant Contract.

(A) If a Grant Recipient fails to request a no cost extension within the required timeframe, the Grant Recipient may petition the Chief Executive Officer in writing to consider the no cost extension. The Grant Recipient's petition must show good cause for failing submit the request within the timeframe specified in the above subsection.

(B) Upon a finding of good cause, the Chief Executive Officer may consider the request. If a no cost extension request is approved under this subsection, the Chief Executive Officer must notify the Oversight Committee in writing and provide justification for the approval.

(3) The Institute may approve one or more no cost extensions. The duration of each no cost extension may be no longer than six months from the termination date of the Grant Contract, unless the Institute finds that special circumstances justify authorizing additional time to complete the work of the project.

(A) The Grant Recipient's first no cost extension that is less than or equal to six months will be approved so long as the Grant Recipient is in good fiscal and programmatic standing

(B) If a grant recipient requests a second no cost extension or requests a no cost extension greater than six months, the grantee must provide good cause for approving the request.

(4) If the Institute approves the request to extend the termination date of the Grant Contract, then the termination date shall be amended to reflect the change.

(5) Nothing herein prohibits the Institute and the Grant Recipient from taking action more than 180 days prior to the termination date of the Grant contract to extend the termination date of the Grant Contract. Approval of an extension must be supported by a finding of good cause and the Grant Contract shall be amended to reflect the change.

(d) The Grant Recipient must submit a final Financial Status Report and final Grant Progress Report as well as any other required reports as specified in the Grant Contract. For purposes of this rule, the final Grant Progress Report and other required reports shall be collectively referred to as "close out documents."

(1) The final Financial Status Report shall be submitted to the Institute within ninety (90) days of the end of the state fiscal quarter that includes the termination date of the Grant Contract. The Grant Recipient's failure to submit the Financial Status report within 30 days following the due date specified in this subsection will waive reimbursement of project costs incurred during the reporting period. The Institute may approve additional time to submit the final Financial Status Report if the Grant Recipient can show good cause for failing to timely submit the final Financial Status Report.

(2) Close out documents must be submitted with ninety (90) days of the termination date of the Grant Contract. The final reimbursement payment shall not be made until all close out documents have been submitted and approved by the Institute. Failure to submit one or more close out documents within 180 days of the Grant Contract termination date shall result in the Grant Recipient being ineligible to receive new Grant Awards or continuation Grant Awards until such time that the close out documents are submitted unless the Institute waives the final submission of close out documents by the Grant Recipient.

(A) Approval of the Grant Recipient's request to waive the submission of close out documents is at the discretion of the Institute. Such approval must be granted by the Chief Executive Officer.

(B) The Oversight Committee shall be notified in writing of the Grant Recipient's waiver request and the Chief Executive Officer's decision to approve or reject the waiver request.

(C) Unless the Oversight Committee votes by a simple majority of members present and able to vote to overturn the Chief Executive Officer's decision regarding the waiver, the Chief Executive Officer's decision shall be considered final.

(e) The Institute may make upward or downward adjustments to the Allowable Costs requested by the Grant Recipient within ninety (90) days following the approval of the close out reports or the final Financial Status Report, whichever is later.

(f) Nothing herein shall affect the Institute's right to disallow costs and recover Grant Award funds on the basis of a later audit or other review or the Grant Recipient's obligation to return Grant Award funds owed as a result of a later refund, correction, or other transaction.

(g) Any Grant Award funds paid to the Grant Recipient in excess of the amount to which the Grant Recipient is finally determined to be entitled under the terms of the Grant Contract constitute a debt to the state. If not paid within a reasonable period after demand, the Institute may reduce the debt owed by:

(1) Making an administrative offset against other requests for reimbursements;

(2) Withholding advance payments otherwise due to the Grant Recipient; or

(3) Other action permitted by law.

(h) Grant Award funds approved by the Oversight Committee and specified in the Grant Contract but not spent by the Grant Recipient at the time that the Grant Contract is terminated are considered de-obligated for the purposes of calculating the maximum amount of annual Grant Awards and the total amount authorized by Section 67, Article III, Texas Constitution. Such de-obligated funds are available for all purposes authorized by the statute.

§703.15.Financial Policies Applicable to Grant Awards.

(a) The Grant Recipient is responsible for managing the day-to-day operations of the activities supported by the Grant Award and is accountable to Institute for the performance of the Grant Award, including the appropriate expenditure of Grant Award funds by all parties and all other obligations of the Grant Recipient.

(b) The Grant Recipient must maintain a sound financial management system that provides appropriate fiscal controls and accounting procedures to ensure accurate preparation of reports by the Grant Contract and adequate identification of the source and application of Grant Award funds.

(1) The Grant Recipient may use its established controls and policies, as long as the controls and policies are consistent with requirements described in the Institute's administrative rules, the Grant Contract, and other applicable standards.

(2) The Grant Recipient's system of internal controls should encompass segregation of functions, proper authorization of transactions, proper recording of transactions, limited access to assets, and monitoring of internal controls. The extent to which internal controls are established is dependent upon the nature and size of the organization involved.

(3) The Grant Recipient's accounting system must conform to Generally Accepted Accounting Principles applicable to state and federal grant funds and conform to the standards for financial management set forth in the Uniform Grant Management Standards.

(4) The Institute may review the adequacy of the financial management system of any Grant Recipient to ensure that the system is appropriate to fulfill the Institute's administrative rules, the Grant Contract, and other applicable standards.

(c) The Grant Recipient shall use cash basis accounting when reporting expenses to be reimbursed with Grant Award funds.

(1) A Grant Recipient utilizing an accrual basis of accounting in its normal operations must present expenses on a cash basis and reflect actual costs incurred during the payment period.

(2) A subcontractor is not required to record the adjustment in the general ledger; the adjustment should be documented by memo entries along with a reconciliation of the expense reported to the Institute and the expense recorded to the general ledger.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on November 17, 2016.

TRD-201605892

Heidi McConnell

Chief Operating Officer

Cancer Prevention and Research Institute of Texas

Effective date: December 7, 2016

Proposal publication date: September 2, 2016

For further information, please call: (512) 463-3190