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Audit of NIH Other Transactions Award Recipients' Costs

Announced on  | Last Modified on  | Project Number: A-04-24-02049
Status
Completed
Agency
National Institutes of Health

OBJECTIVE

The National Institutes of Health (NIH) is one of a small number of Federal agencies with authority to fund programs through instruments known as other transactions (OTs). Between 2016 and 2023, NIH awarded more than $5.3 billion in OTs to fund public health initiatives and biomedical research programs. OTs are a more flexible type of award instrument because, among other things, they are not subject to the Federal Acquisition Regulation, the Uniform Guidance, or other regulations. OTs are intentionally flexible to allow for negotiation of terms and conditions for the program being funded. As such, OTs are considered to be higher risk than traditional awards, such as a contract or grant, and should generally only be used when the objectives of a Federally funded project cannot be accomplished under a traditional award. Prior OIG work identified weaknesses in NIH’s processes for determining that costs incurred under OT awards were allowable. This audit is part of a series of audits of selected OT recipients. Our objective is to determine whether the NIH OT award recipient claimed costs that were allowable in accordance with the terms and conditions of its NIH OT award.

TIMELINE

REPORT PUBLISHED

Vibrent Health Claimed Unallowable Costs Under a National Institutes of Health Other Transaction Award (A-04-24-02049)
  • From August 2020 through December 2023, Vibrent Health claimed $161.2 million for reimbursement under the OT award, of which no more than $144.7 million was allowable.
  • The remaining $16.5 million included $1.9 million of unapproved fringe benefit and indirect costs and at least $14.6 million of unreasonable subcontract costs.

26-A-04-060.01 to NIH - Open Unimplemented
Update expected on 10/01/2026
We recommend that Vibrent Health work with NIH to refund the $1.9 million of unapproved fringe benefits and indirect costs.

26-A-04-060.02 to NIH - Open Unimplemented
Update expected on 10/01/2026
We recommend that Vibrent Health work with NIH to determine the allowability of costs associated with the at least $14.6 million of unreasonable costs that Vibrent paid to related-party subcontractors, and refund any costs that NIH deems to be unallowable.

26-A-04-060.03 to NIH - Open Unimplemented
Update expected on 10/01/2026
We recommend that Vibrent Health create an oversight function to independently ensure it complies with applicable terms and conditions of future Federal awards.

View in Recommendation Tracker
Work Plan Type
Office of Audit Services
HHS Agencies
National Institutes of Health
Issue Areas
Financial Stewardship
Target Groups
-
Financial Groups
-