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NIH Contract Closeout Process Audit

Announced on  | Last Modified on  | Project Number: A-04-23-03585
Status
Completed
Agency
National Institutes of Health

OBJECTIVE

As one of the largest contracting agencies in the Federal Government, HHS performed contracting actions (i.e., awards and modifications) totaling almost $39 billion in FY 2022. The National Institutes of Health (NIH) was responsible for $8.5 billion, or approximately 22 percent, of HHS contracting actions in FY 2022. NIH invests approximately $41.7 billion annually in medical research and is the largest Federal funding source for health research and development. Prior OIG work identified issues with the HHS contract closeout processes and procedures that are required once a contracting officer receives evidence of completion of the contract. The closeout process: (1) ensures that goods and services were provided as intended, (2) validates final costs and payments, and (3) frees up excess funds for possible use elsewhere. We will determine whether NIH closed contracts according to Federal regulations and HHS policies and procedures.

TIMELINE

REPORT PUBLISHED

NIH Did Not Close Contracts in Accordance With Federal Requirements, Resulting in the Increased Risk of Fraud, Waste, and Abuse (A-04-23-03585)

24-A-04-082.01 to NIH - Closed Implemented
Closed on 09/10/2025
We recommend that the National Institutes of Health complete the administrative closeout requirements for the 29 contracts totaling more than $1.9 billion identified in our audit.

24-A-04-082.02 to NIH - Open Unimplemented
Update expected on 06/01/2026
We recommend that the National Institutes of Health incorporate, by reference, the administrative closeout requirements from the FAR and HHSCCD into the NIH Policy Manual.

24-A-04-082.03 to NIH - Open Unimplemented
Update expected on 06/01/2026
We recommend that the National Institutes of Health update the NIH Policy Manual to address migration of contract file records to new contract management systems; preservation of all contract file records when employees depart the agency; and prevention of contract records from being destroyed before contract closeout has occurred.

24-A-04-082.04 to NIH - Open Unimplemented
Update expected on 06/01/2026
We recommend that the National Institutes of Health establish control activities for monitoring the performance of contract personnel's compliance with administrative closeout requirements.

View in Recommendation Tracker
Work Plan Type
Office of Audit Services
HHS Agencies
National Institutes of Health
Issue Areas
Contracts Departmental Operational Issues Financial Stewardship
Target Groups
-
Financial Groups
Other Funding