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National Institutes of Health Small Business Innovation Research Awardee Compliance With Award Requirements

The Small Business Innovation Research (SBIR) program helps small businesses participate in Federal research and development (R&D). Each year, every Federal agency with an extramural R&D budget that exceeds $100 million is required to allocate 3.2 percent of that extramural R&D budget to fund small businesses through the SBIR program. From fiscal year (FY) 2016 through FY 2020, HHS obligated $4.6 billion in SBIR award funds, with funds from the National Institutes of Health making up approximately 98 percent of total obligations. To participate in the SBIR program, a business must be organized for profit with a place of business located in the United States, be more than 50 percent owned and controlled by U.S. citizens, and have fewer than 500 employees. OIG has identified areas of potential risk regarding for-profit organizations receiving SBIR awards such as inappropriate or unsupported charges to Federal awards, deficiencies in internal controls related to financial management systems, and eligibility of organizations to participate in the SBIR program. Other OIGs as well as Congress have also raised concerns about risks of fraud, waste, and abuse in the SBIR program. We will determine whether selected SBIR awardees complied with Federal requirements. We may conduct additional audits of high-risk SBIR awardees following this review.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
December 2021 National Institutes of Health National Institutes of Health Small Business Innovation Research Awardee Compliance With Award Requirements Office of Audit Services W-00-22-59466 2023