Vibrent Health Claimed Unallowable Costs Under a National Institutes of Health Other Transaction Award

Why OIG Did This Audit

• The National Institutes of Health is one of a small number of Federal agencies with authority to use other transactions (OTs), which is a special award instrument not generally subject to Federal laws and regulations that apply to traditional awards. Between 2016 and 2023, NIH awarded more than $5.3 billion in OTs. Although OTs are subject to fewer restrictions than contracts, grants, or cooperative agreements, they must be awarded and administered in a way that ensures proper stewardship of Federal funds.
• Prior OIG work identified weaknesses in NIH's processes for determining whether costs incurred under OT awards were allowable.
• This audit examined the allowability of costs that Vibrent Health claimed for information technology services provided through NIH's All of Us Research Program.

What OIG Found

• 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.

What OIG Recommends

We recommend that Vibrent Health work with NIH to determine the allowability of the at least $16.5 million in unapproved and unreasonable costs and refund costs deemed unallowable. We also recommend that Vibrent Health create an oversight function to ensure compliance with the terms and conditions of future Federal awards.

Vibrent Health did not indicate concurrence or nonconcurrence with our recommendations; however, it disagreed with our findings.