St. Mary's University DAB No. 2025-3 (2025)

REJECTION OF APPEAL

St. Mary’s University (the University) seeks Departmental Appeals Board review of a decision by the National Institutes of Health (NIH) to terminate an Undergraduate Research Training Initiative for Student Enhancement (U-RISE) grant issued under NIH’s National Research Service Award (NRSA) program.  In response to the Board’s request for an agency opinion on jurisdiction, NIH submitted a written opinion asserting that the Board lacks jurisdiction over this matter because the grant termination, and subsequent reconsidered decision, were based on “nonalignment of agency priorities” and do not fall within any of the categories of disputes reviewable by the Board under 45 C.F.R. Part 16, Appendix A or 42 C.F.R. Part 50, Subpart D.  NIH explained that the appealed decision does not represent a disallowance, a termination for failure to comply with the terms of the award, a denial of a noncompeting continuation award for failure to comply with the terms of a previous award, or a voiding.  As discussed below, NIH’s jurisdictional opinion is not clearly erroneous and, therefore, this appeal must be rejected.

Legal Background

The Board’s jurisdiction to hear and decide appeals is limited.  Ca. Dep’t of Finance, DAB No. 1592, at 17 (1996) (“[T]here is no general right to review by the Board . . .”). Board review is available only as provided by statute, regulation, or valid delegation of authority from the Department of Health and Human Services (HHS) Secretary or the head of an HHS operating component.  Experts Are Us, Inc., DAB No. 2342, at 5 (2010); 45 C.F.R. Part 16, App. A, ¶ A.

The Board’s regulations at 45 C.F.R. Part 16 require that the following conditions be met before the Board will accept an appeal:  (1) the appellant must have received a “final written decision” by an HHS component (45 C.F.R. § 16.3(b)); (2) the appellant must have filed its appeal of the decision within 30 days after receiving the decision (id.); (3) the appellant “must have exhausted any preliminary review process required by regulation” (id. § 16.3(c)); and (4) the disputed decision “must arise under a program which uses the Board for dispute resolution” and be the type of decision that the Board is 

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authorized to review, as specified in Part 16, Appendix A (id. § 16.3(a); 45 C.F.R. Part 16, App. A, ¶¶ A-E).  The fourth requirement for Board jurisdiction is at issue here.  Title 45 C.F.R. Part 16, Appendix A, identifies HHS programs that use the Board for dispute resolution and the types of “final written decisions” that may be reviewed by the Board.  45 C.F.R. Part 16, App. A, ¶ A; see also 46 Fed. Reg. 1644, 1645 (1981) (noting that Appendix A is the Board’s “jurisdiction statement” reflecting “disputes which agencies have chosen to submit to the Board”).  The Board is authorized under Part 16 to review certain agency decisions involving grants.  See 45 C.F.R. Part 16, App. A, ¶¶ B, C.  A grant is a type of federal financial assistance that provides support or stimulation to carry out a public purpose as authorized by a law of the United States.  See 45 C.F.R. §§ 75.2 (defining “federal award” and “federal financial assistance”), 75.201; 31 U.S.C. § 6304 (grant agreements).  Research grant awards made by NIH are subject to general terms and conditions depending on the type of grant, as well as any special terms and conditions in the notice of award.  See Targazyme, Inc., DAB No. 2939, at 1-2 (2019).  NIH issues a Grants Policy Statement (NIH GPS) to “make available to NIH recipients, in a single document, the policy requirements that serve as the terms and conditions of NIH grant awards.”  NIH GPS at ii.1

As relevant here, Appendix A provides that the Board reviews “the following types of final written decisions in disputes arising in any HHS program authorizing the award of direct, discretionary project grants or cooperative agreements:” 

• (1)    A disallowance or other determination denying payment of an amount claimed under an award, or requiring return or set-off of funds already received. . . .
• (2)    A termination for failure to comply with the terms of an award.
• (3)    A denial of a noncompeting continuation award under the project period system of funding where the denial is for failure to comply with the terms of a previous award.
• (4)    A voiding (a decision that an award is invalid because it was not authorized by statute or regulation or because it was fraudulently obtained). 

45 C.F.R. Part 16, App. A, ¶ C(a)(1) - (4).2

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When an HHS component, such as NIH, uses a preliminary appeal process, “the ‘final written decision’ for purposes of Board review is the decision issued as a result of that process.”  Id., App. A, ¶ C(b).  One such preliminary appeal process is found at 42 C.F.R. Part 50, Subpart D, which establishes a procedure for resolving certain “grant and cooperative agreement disputes” in programs administered by NIH.  42 C.F.R. §§ 50.401, 50.402.  The preliminary appeal process under Subpart D applies only to certain “adverse determinations under discretionary grants and cooperative agreements,” as specified in section 50.404(a).  Section 50.404(a) mirrors the list of reviewable final written decisions under Part 16, Appendix A, ¶ C(a).3  If a grantee contests an “adverse determination” to which the preliminary appeal process applies, the grantee must exhaust that process before the Board will accept an appeal under Part 16.  42 C.F.R. § 50.403.

The Board Chair determines whether the conditions for Board jurisdiction are satisfied.  See 45 C.F.R. § 16.7(b) (providing that the Board will notify the parties if the Board Chair determines that the appeal does not meet the conditions in section 16.3).  If the Board Chair finds there is “some question” about whether the Board has jurisdiction, the Chair “will request the written opinion of the HHS component which issued the decision.”  Id., App. A, ¶ G.  “Unless the Chair determines that the opinion is clearly erroneous, the Board will be bound by the opinion.”  Id.

Procedural and Case Background

1. 1. Notice of Grant Termination

NIH terminated the University’s U-RISE grant by letter dated April 2, 2025.  NIH Ex. 1.  The letter states that NIH terminated the grant pursuant to the 2024 NIH GPS and 2 C.F.R. § 200.340(a)(2).  Id. at 1.  The letter further states that the NIH GPS is 

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incorporated into all NIH grant awards and provides that NIH may terminate grants as outlined in 2 C.F.R. § 200.340.  Id. (citing NIH GPS at IIA-155).  NIH points to the version of section 200.340 in effect when the grant was approved on April 1, 2024, and asserts that section 200.340(a)(2) authorizes NIH to terminate grants “to the greatest extent authorized by law, if an award no longer effectuates the program goals or agency priorities.”  Id. (quoting 2 C.F.R. § 200.340(a)(2)).  The letter states that this award was terminated because it “no longer effectuates agency priorities” and that “[t]he premise of this award is incompatible with agency priorities, and no modification of the project could align the project with agency priorities.”  Id. at 1-2. 

The letter further noted that the University “may object and provide information and documentation challenging the termination,” which it described as “a first-level grant appeal procedure that must be exhausted before you may file an appeal with the Departmental Appeals Board.”  Id. at 2 (citing 42 C.F.R. Part 50, Subpart D).  NIH instructed the University to submit any request for review to the Acting Director of NIH no later than 30 days after receipt of the termination notice.  Id. at 2.  The University subsequently filed a first-level appeal with NIH. 

By letter dated May 28, 2025, NIH denied the University’s first-level appeal (described as a request for reconsideration) and reiterated that the grant was terminated because “the research activities do not align with the agency’s priorities.”  Reconsidered Decision.4  The letter further states that “[t]he program that supported this award was terminated because it is no longer aligned with NIH/HHS priorities” and, consequently, grants awarded under this program “can no longer be supported.”  Id.  The letter was signed by the Principal Deputy Director of NIH and did not indicate that the University’s appeal was reviewed in accordance with 42 C.F.R. Part 50, Subpart D.  See, e.g., 42 C.F.R. §§ 50.405, 50.406.  NIH did not assert, either in the initial termination notice or reconsidered decision, that the University failed to comply with the terms of the award.  No further appeal rights were offered in the reconsidered decision. 

2. 2. Notice of Appeal and Request for Agency Opinion on Jurisdiction

On June 27, 2025, the University filed a notice of appeal with the Board, claiming that the grant termination was unlawful or unreasonable on procedural and substantive grounds.  Notice of Appeal at 1-2.  The University states that the appeal was filed in accordance with 45 C.F.R. Part 16 and the NIH GPS, following NIH’s denial of its preliminary appeal on May 28, 2025.  Id. at 1.  The notice of appeal asserts, among other things, that the University was “never notified of noncompliance with terms or conditions of the award” or given an opportunity to address any such noncompliance.  Id.  The 

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University requests that the Board reinstate the grant and direct NIH to take other remedial actions.  Id. at 2.

On July 17, 2025, the Board wrote to the parties acknowledging receipt of the notice of appeal but explaining that there were questions about whether the conditions for Board review were met under 45 C.F.R. § 16.3 and Part 16, Appendix A.  The Board Chair, under Part 16, Appendix A, ¶ G, requested that NIH submit an opinion about whether the Board may review the challenged determination.  The Chair directed NIH to address among other issues:  (1) whether the reconsidered decision appealed by the University is reviewable by the Board under Appendix A, ¶ C; (2) whether the reconsidered decision is a type of “adverse determination,” as described in 42 C.F.R. § 50.404(a), to which NIH’s preliminary appeal process applies; and (3) whether any other HHS program regulation or memorandum of understanding authorizes Board review of the parties’ dispute.  In the same letter, the Board advised the University that it could file a response to NIH’s opinion within ten days of receiving it and invited both parties to submit evidence supporting their respective positions.  

3. 3. NIH’s Opinion on Jurisdiction

On July 30, 2025, NIH filed an opinion asserting that the Board lacks jurisdiction over this matter because the grant termination was for “nonalignment with agency priorities” and does not fall within any of the categories of disputes reviewable by the Board.  NIH Op. at 6.  NIH explained that the appealed decision does not fall within any of the four categories under 45 C.F.R. Part 16, Appendix A, ¶ C because it does not represent a disallowance, a termination for failure to comply with the terms of the award, a denial of a noncompeting continuation award for failure to comply with the terms of a previous award, or a voiding.  Id. at 3.

Similarly, NIH opined that the grant termination was not subject to the preliminary appeal process under 42 C.F.R. Part 50, Subpart D, because it does not fall within any of the categories of “adverse determinations” specified in 42 C.F.R. § 50.404(a).  Id. at 4. (“The appealed decision does not represent a termination for failure to comply with the terms of the award, a disallowance of an expenditure charged to the grant or failure to account for grant funds, a determination that a grant is void, or a denial of a noncompeting continuation award for failure to comply with the terms of a previous award.”).  NIH acknowledged that its initial termination letter included “standard language” that referenced the preliminary appeal process under Subpart D but noted that, absent an “adverse determination” as specified in section 50.404(a), the exhaustion and notice requirements under Subpart D are irrelevant and inapplicable.  Id. at 5. 

Finally, in response to the Chair’s question about disputes reviewable under programs not specified in Appendix A (see 45 C.F.R. Part 16, App. A, ¶ A) NIH states that it is “not aware of any program regulation or memorandum of understanding authorizing the Board to review the disputes at issue here.”  Id. at 6.  

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4. 4. The University’s Response

The University did not file a response to NIH’s opinion on jurisdiction. 

Analysis

1. 1. The appeal does not concern a final written decision reviewable by the Board under 45 C.F.R. Part 16, Appendix A.

NIH’s opinion that the Board does not have jurisdiction because the grant termination, and subsequent reconsidered decision, do not fall within any of the categories of disputes reviewable by the Board under Part 16, Appendix A, is not clearly erroneous.  As NIH explained, the grant termination was based on its determination that the grant “no longer effectuates” or is “no longer aligned” with “agency priorities.”  NIH Ex. 1, at 1; Reconsidered Decision.  The University provided no evidence that this matter involves a disallowance, a termination for failure to comply with the terms of the award, a denial of a noncompeting continuation award for failure to comply with the terms of a previous award, or a voiding (i.e., a decision that an award is unauthorized by statute or regulation or was fraudulently obtained).  See 45 C.F.R. Part 16, App. A ¶ C(a)(1) - (4).  In its notice of appeal, the University asserts that it was “never notified of noncompliance with the terms or conditions of the award.”  Notice of Appeal at 1.  Indeed, the award was not terminated due to alleged noncompliance with its terms or conditions; it was terminated because NIH determined it no longer effectuated or aligned with NIH/HHS “priorities.” 

In 2020, the Office of Management and Budget (OMB) issued revised guidance regarding federal award terminations under 2 C.F.R. § 200.340.5  The revised guidance replaced the “for cause” basis for termination with a provision authorizing federal awarding agencies to terminate an award “to the greatest extent authorized by law, if an award no longer effectuates the program goals or agency priorities.”  Compare 2 C.F.R. § 200.339(a)(2) (eff. to Aug. 12, 2020) with 2 C.F.R. § 200.340(a)(2) (eff. Aug. 13, 2020).  OMB stated that it revised section 200.340 “to strengthen the ability of the Federal awarding agency to terminate Federal awards, to the greatest extent authorized by law, when the Federal award no longer effectuates the program goals or Federal awarding agency priorities.”  See 85 Fed. Reg. 49,506, 49,507 (Aug. 13, 2020).  OMB further stated that it was “eliminating the termination for cause provision because this term is not substantially different than the provision allowing Federal awarding agencies to terminate Federal awards when the recipient fails to comply with the terms and conditions.”  Id. at 49,508.  

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OMB retained, as a separate basis for termination, the awarding agency’s authority to terminate an award if a grantee “fails to comply with the terms and conditions” of the award.  Compare 2 C.F.R. § 200.339(a)(1) (eff. to Aug. 12, 2020) with 2 C.F.R. § 200.340(a)(1) (eff. Aug. 13, 2020).  NIH states that it incorporated revised section 200.340 into the NIH GPS and, therefore, made it applicable to all NIH grants.  NIH Op. at 3 (citing NIH GPS at IIA-155).6  HHS, however, has not amended Part 16, Appendix A, or issued other regulations authorizing the Board to review a grant termination based on an awarding agency’s determination that an award no longer effectuates program goals or agency priorities. 

In its jurisdictional opinion, NIH states that it “does not concede” that the dispute is one “arising under an ‘HHS program authorizing the award of direct, discretionary project grants or cooperative agreements,’” apparently suggesting that the dispute may fall outside of Appendix A for that reason as well.  NIH Op. at 3.  I need not decide whether the dispute arises from an HHS discretionary grant or cooperative agreement program.  Even if it does, the termination is not reviewable under Appendix A, ¶ C because it is not one of the types of final written decisions specified in that paragraph.  Moreover, neither party contends that the grant is “mandatory” or that the appealed decision would fall under any other reviewable category in Appendix A.

The University contends that the Board may review this matter because the termination constitutes “final agency action under the Administrative Procedure Act” (APA).  Notice of Appeal at 1.  However, the APA does not govern the Board’s jurisdiction or otherwise prescribe how the Board conducts administrative appeals under 45 C.F.R. Part 16.  The APA instead authorizes federal court review of certain agency actions and defines the scope of judicial review.  5 U.S.C. §§ 704, 706.  The Board’s authority to review disputes involving discretionary grants is found at 45 C.F.R. Part 16, not in the APA.  See Mich. Dep’t of Cmty. Health, DAB No. 2225, at 14 (2009) (noting that the Board’s authority to review a Medicaid disallowance is based, not on the APA, but on 45 C.F.R. Part 16 and the Social Security Act).   

The University also suggests that the Board may review this matter because it “complied with all preliminary appeal requirements.”  Notice of Appeal at 1.  Exhaustion of a preliminary appeal process (even if required) is insufficient, by itself, to obtain Board review because all regulatory conditions for review must be satisfied, including the requirement that the appealed decision be reviewable under Part 16, Appendix A.  See 45 C.F.R. § 16.3; see also Dignity, LLC, DAB No. 3121, at 23 (2023) (holding that the Board has no authority under Part 16 to review whether continued funding under a non-competing continuation award was in the best interests of the federal government, except 

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to the extent that it is based on the grantee’s failure to comply with the terms and conditions of the prior award).

Finally, Appendix A states that “[d]isputes under programs not specified in this appendix” may be reviewed by the Board if such review is authorized by a “program regulation” or “memorandum of understanding between the Board and the head of the appropriate HHS operating component or other agency responsible for administering the program.”  45 C.F.R. Part 16, App. A, ¶ A.  This provision is inapplicable here.  I am aware of no program regulation or memorandum of understanding authorizing the Board to review disputes concerning NIH grant terminations based on the agency’s determination that an award no longer effectuates or aligns with “agency priorities.”

2. 2. NIH’s preliminary appeal process under 42 C.F.R. Part 50, Subpart D is inapplicable.

While the initial termination letter referenced 42 C.F.R. Part 50, Subpart D, the mere reference to Subpart D is insufficient to confer preliminary appeal rights under that subpart.  The preliminary appeal process under Subpart D applies to certain “adverse determinations” under discretionary project grants, none of which apply here.  See 42 C.F.R. § 50.404(a)(1)-(4).  As NIH explained, the appealed decision is not a termination for failure to comply with the terms of the award, a disallowance of an expenditure charged to the grant or failure to account for grant funds, a determination that a grant is void, or a denial of a noncompeting continuation award for failure to comply with the terms of a previous award.  NIH Op. at 4.  The University offered no evidence that this matter involves an “adverse determination” as specified in section 50.404(a).    

Conclusion

NIH’s opinion that the Board lacks jurisdiction over this matter is not clearly erroneous. The Board’s jurisdiction is limited, and no statute, regulation, or delegation of authority confers the Board with jurisdiction to review this matter.  I therefore reject the University’s appeal for lack of jurisdiction.