This NIH Manual Chapter identifies the temporary policy for preparing and implementing organizational changes at NIH based on guidance received from the Department of Health and Human Services (HHS).

A reorganization is intended to enhance productivity and organizational effectiveness to achieve short-term objectives and advance long-range strategic priorities in alignment with the mission of the National Institutes of Health. Organizations must use structures that provide efficient and effective means for accomplishing assigned functions within the bounds of available resources.

The policy in this chapter applies to all National Institutes of Health (NIH) Institutes, Centers and Offices within the Office of the Director (ICOs) proposing a reorganization that establishes, abolishes, changes the functions of, or retitles an official organizational component.

1. Announcement
   1. Any public announcement of a proposed or approved organizational change (OC) - also known as a reorganization – can only be made after the Notification of Organizational Change (NOC) is distributed by the NIH Reorganization Management (ROM) program area, within the Office of Management Assessment (OMA).
   2. HHS considers proposed reorganizations confidential during the review process. ICO announcement of proposed reorganization must wait until after consultation with ROM, and HHS preclearance.
   3. If public hearings are required, OMA will coordinate with HHS to determine whether informal congressional notifications are required prior to the publication of a Federal Register notice or any other public notifications of a proposed reorganization.
   4. The approval of a reorganization is not an approval of additional resources.  ICOs will continue to use the HR and budget processes for additional resources.
2. Organizational Structure
   1. An organization must clearly demonstrate how the proposed reorganization will strengthen and advance its mission, including measurable benefits to performance, efficiency, or outcomes.
   2. An organization shall not be composed of more than seven (7) organizational layers (not counting the NIH Office of the Director (OD) as a layer).  The seven-layer limit is based on the capacity of certain NIH IT systems.
   3. An organization should be lean and simple. Avoid unnecessary layering. The creation of many small units will complicate the classification system.
   4. If a substructure is established or abolished, it cannot result in only one substructure within the parent component.  The functions of that one component will be merged into the parent component.  Contact ROM to discuss potential exceptions.
   5. After an organizational component or structure is reorganized, any further reorganization must wait until 12 months after the approval of the previous reorganization.
3. Organizational Functions
   1. Contact the Office of Human Resources (OHR) for questions regarding position classification or additional personnel requirements during your reorganization development planning. ROM will participate in the discussion to include relevant information for the packages.
   2. Separate organizational components can be established only if the functions to be assigned are distinct from those of other established organizational components. (e.g., cannot be performed by redistribution of tasks.)
      1. Clearly define organizational functions.
      2. Consider the nature and scope of the functions to be performed.
      3. Group similar functions to avoid overlapping responsibilities and fragmentation.
   3. Use standard organizational nomenclature terms within your ICO to maintain consistency within an organization. (See Appendix 1: Organizational Nomenclature and Title Designations)
   4. The recommended minimum size for an organizational component is six full-time equivalent (FTE) positions (not including contractors).  Understanding that there are several exceptions due to the nature of NIH, this is a recommendation, not a requirement.  
4. Public Hearings
   Public hearings are mandated in the Public Health Service Act (42 U.S. Code § 281) before certain reorganizations can be approved by the authorized official.
   1. Hearings are required for program components, not staff components (some exclusions apply). Contact ROM to discuss the proposed changes. (e.g., NIH is not required to conduct public hearings for changes within OHR).
   2. The statute requires a series of public hearings (2 or more).
   3. A Federal Register notification is required at least 15 calendar days before the public hearing.
   4. Hearings must provide an opportunity for the public to review the proposed changes and provide comment prior to the submission of the preclearance packages.
   5. Hearings cannot be announced or conducted until after NIH receives preclearance from HHS.
5. Submission Requirements
   1. OMA will combine and submit packages to HHS on a quarterly basis. ICO reorganizations that meet the out-of-cycle requirements as cleared by the NIH Principal Deputy Director will be managed separately.
   2. Preclearance (see Process Details section below)
      1. NIH Preclearance
      2. ASFR Strategic Alignment of Resources & Reorganization (STARR)
      3. HHS Preclearance
   3. Package Requirements
      1. Decision Memorandum to the requesting official that includes
         1. Scope
         2. Details of proposed changes
         3. Justification
         4. Details of personnel and budget implications
         5. Impacts to delegations of authority
      2. Current and proposed organizational charts
      3. Current and proposed functional statements
      4. Budget crosswalk
      5. Personnel crosswalk
      6. Reorg Org Chart + FTE Crosswalk (staffing levels in each impacted entity)
      7. Congressional notification letter (if applicable)
      8. Federal register notice (if applicable)
      9. Other pertinent info (e.g. when applicable: Public Hearing information, Legislative references, etc.)
   4. Final Approval: HHS will determine or confirm the delegation of authority whether HHS or NIH can approve the package during the HHS preclearance phase.  
6. Congressional Notification
   1. The Public Health Service Act (42 U.S. Code § 281) requires a 180-day congressional notification period prior to the announcement or implementation of the establishment, abolishment, or change title or function of an IC or any component that was established by legislation. This requirement is limited to the title or function of an IC, title of function of a component established by legislation, or the establishment of abolishment of an IC or component established by legislation. This does not include the reorganization within the ICOs, unless they were established or realigned in legislation.
   2. The annual appropriations act requires a 15-calendar day notification period to the appropriations subcommittee for reorganizations that result in reprogramming of funds, prior to the announcement or implementation of the reorganization.  
   3. The congressional notification period must be completed before an announcement of an approved reorganization.
   4. In some cases, a courtesy notification may be required, determined by HHS during the preclearance phase.
7. Federal Register Notice (FR Notice) updating the SOFDA
   1. FR notices to update the Statement of Organization, Function and Delegation of Authority (SOFDA) is required for changes to components that report directly to the NIH Director.
   2. Additional components may require SOFDA updates, to be determined by ROM during the preclearance process.
   3. ROM will prepare and submit to the NIH Federal Register program area, the FR notification if required.
   4. The announcement of a reorganization requiring a SOFDA update must wait until after the FR notification is published.
8. Announcement of Reorganization
   1. Official announcement of a Reorganization cannot occur until after the Notification of Organizational Change has been submitted.
   2. ROM will submit the official Notification of Organizational Change with a copy of the signed decision memorandum to the required distribution list.

The Office of Management Assessment (OMA), Division of Compliance Management (DCM), Management Operations Branch (MOB), Reorganization Management Team (ROM) prepares all organizational change packages, and manages and maintains the official organizational data for NIH which includes:

• Standard Administrative Codes (SACs)
• Functional statements
• Acronyms
• Official titles

Reorganization packages are prepared for abolishments, establishments, title changes, and revisions to functional statements.

Process Details: OMA/ROM will prepare, submit, and process all steps below.

Note: Proposed changes are considered confidential by HHS through the review process.

1. Preparation
   The NIH ROM within OMA will:
   1. Obtain information required to complete all required documentation in coordination with the requesting ICO to obtain the required information to complete all requirements.
   2. Identify the proposed staffing structure and complete the personnel crosswalk in coordination with OHR and ICO personnel points of contact.
   3. Identify the implications of the proposed changes and complete the budget crosswalk in coordination with ICO budget officer on the budget implications of the proposed changes and complete the budget crosswalk.
   4. Complete the documents needed for all required package submissions.
   5. Verify data and package contents with the ICO stakeholders.

2. Preclearance
   The NIH ROM within OMA will submit and coordinate the clearances with NIH Senior Leadership, OGC, ASFR/STARR, and HHS.

   NIH Preclearance

   1. Preclearance approvals serve to ensure all proposed organizational changes align with contemporaneous agency and federal initiatives.
   2. Stakeholders within the requesting organization will provide PIV signature concurrence for the preclearance package.
   3. Concurrence from the MOB Branch Chief, OMA Director, and NIH Senior Leadership.  
   4. Concurrence from OGC, select OD Offices (dependent upon the proposed reorganization) and program offices within OMA if needed.

   ASFR/HHS Strategic Alignment of Resources and Reorganizations (STARR): 

   1. STARR review is required for all proposed reorganizations before the official preclearance package is submitted to HHS to ensure alignment with the overall goals of HHS.
   2. Prepare and submit an overview to STARR using required NIH template.
   3. Communicate with the ICO to obtain additional information and/or make necessary changes (if required)
   4. Facilitate responses to STARR

   HHS Preclearance: 

   1. NIH/OMA/ROM will submit preclearance packages to HHS quarterly. Packages will be separated by proposed delegated authority:
      1. HHS Secretarial approval
      2. NIH approval
   2. Clearance and concurrence of the preclearance plan is not a pre-approval of the organizational change.
3. Public Hearings
   Announce and conduct public hearings if required. Refer to Appendix 3 for more information about what is required to announce and conduct public hearings.
4. Congressional Notification 
   ROM will prepare and coordinate with OLPA and HHS on the submission of the 15 day (or the rare 180 day) congressional notification if required.

5. Final Approval
   Preclearance approval must be granted by the NIH Principal Deputy Director, STARR, and HHS prior to submission of the final reorganization package.

   The final package will be prepared and routed by ROM to the appropriate delegated official.

   1. Reorganization package requirements include the following:
      • Decision Memorandum to the requesting official
      • Current and proposed organizational charts
      • Current and proposed functional statements
      • Budget crosswalk
      • Personnel crosswalk
      • Reorg Org Chart + FTE Crosswalk (staffing levels in each impacted entity)
      • Congressional notification letter (if applicable)
      • Federal register notice (if applicable)
      • Other pertinent info (e.g. when applicable: Public Hearing information, Legislative references, etc.)
   2. Required templates with the NIH header must be used for all memos without changing the formatting.
   3. The decision-making authorities delegated to NIH from HHS are found in the NIH Delegation of Authority #7.
   4. The day of establishment is the date the proposal is approved, unless a specific established date is indicated in the decision memorandum.
   5. The effective date cannot pre-date the approval date.
   6. Final package approvals internal to NIH will be routed through the ICO.
   7. Final package approvals requiring HHS approval will need 15-day congressional notification and OMB clearance.
6. Communication of Approved Reorganizations
   To ensure NIH is properly informing the public of any reorganizations, the announcement of an approved reorganization will be sent by the NIH/OMA/ROM.
   1. ROM will send a Notification of Organizational Change (NOC) after the completion of the congressional notification period.
      1. An announcement of a proposed reorganization must wait until after preclearance, including the announcement of a public hearing.  This announcement must clarify this is proposed, not approved.
      2. An announcement of an approved organizational change must wait until the NOC has been sent by ROM.
   2. If a Federal Register notice is required, ROM will send the NOC after the publication of the FR notice.
   3. For components that report directly to the NIH Director (or other reorganizations as determined by OMA):
      1. A Federal Register notice is required to update the Statement of Organizations, Functions and Delegations of Authority (SOFDA).
      2. OMA will prepare, submit for approval, and publish the FR notice.
      3. After the FR notice is publicized, OMA will send the Notification of Organizational Change (NOC) to the ICO and the required distribution list.

1. Principal Deputy Director, NIH (PDD): Serves as the NIH final clearance for proposed reorganizations and determines the urgency of reorganizations to be submitted out-of-cycle.
2. Deputy Director for Management, NIH (DDM): Serves as the key NIH official for the management of NIH reorganizations, provides initial clearance of proposed reorganizations, and approves reorganizations that have changes to components reporting directly to the IC Director.  
3. Office of Human Resources, Client Services Division (CSD), Servicing Branch Chief: Provides information on staffing levels, placement of staff, and whether the organizational structure supports the requested positions.
4. Office of Budget, Office of the Director, NIH (OB): Provides final budget review and clearance for proposed reorganizations, ensuring the budget information provided aligns with the NIH budgets.  
5. Institute, Center and OD Office (ICO) Budget Officer: Lead budget contact within the reorganization requesting office.
6. ICO Organizational Change Coordinator (OCC): Serves as reorganization project coordinator for the requesting office.  
7. Office of the General Counsel (OGC): Reviews significant reorganization proposals and provides legal advice regarding other OCs, as needed.

8. Reorganization Management (ROM), Management of Operations Branch (MOB), Division of Compliance Management (DCM), OMA.

   1. Provides reorganization policy and procedure advice and assistance to the OCCs and NIH Senior Leadership.
   2. Reviews legislative and HHS changes that may require revision of the NIH reorganization policy.
   3. Creates and maintains the NIH Reorganization Management policy and procedures.
   4. Communicates and provides training to NIH stakeholders on reorganization policy and procedures.
   5. Prepares and coordinates review and approval of preclearance plans, and final reorganization package.
   6. Liaises with HHS including OGC on all NIH reorganizations.
   7. Maintains the official organizational data for NIH including Standard Administrative Codes (SACs), acronyms and official titles and assigns SACs for newly established components.
   8. Updates NIH IT systems and coordinates with HHS to process all SAC changes within EHCM.
   9. Ensures NIH reorganizations \comply with legislative, HHS policy and NIH policy requirements.
   10. Announces the approved reorganization through distribution of the NOC, signed Decision Memorandum and functional statements to the required distribution list.  
   11. Maintains official records of NIH approved reorganizations.

   When the reorganization approval authority is the DDM, NIH Director or HHS Secretary, ROM:

   1. Requests senior-level NIH clearances for significant reorganizations or other reorganizations determined to require review.  (See NIH Delegation of Authority, General Administration 7).  Coordinates with the OCC for resolution of any questions or issues that arise during senior-level NIH clearance.  
   2. Prepares and obtains concurrence for any required congressional notification letters (per PHS Act 401 and the Annual Appropriations Act).
   3. Routes final reorganization package to the approving official. (or HHS POC when the approval authority rests with the HHS Secretary)
   4. Prepares the Federal Register notice to update the Statement of Organization, Functions and Delegations of Authority (SOFDA).  Requests approval from the NIH Director.  For more information, see https://nih.sharepoint.com/sites/OD-OMA-DCM/FederalRegister/NIH/SitePages/FederalRegister.aspx.

1. NIH Delegations of Authority, General Administration No. 7, Organizational Changes: https://delegations.nih.gov/DOADetails.aspx?id=1607. Accessible by authorized NIH users only.
2. NIH Manual Chapter 1743, Managing Federal Records:  https://policymanual.nih.gov/1743.
3. Section 401 of the Public Health Service Act, 42 USC 281.
4. Federal Register Notice guidance located at https://nih.sharepoint.com/sites/OD-OMA-DCM/FederalRegister/NIH/SitePages/FederalRegister.aspx.
5. Applicable Annual Appropriations Act.
6. HHS Memorandum dated September 27, 1995: Delegation of Authority to Approve a Reorganization. Accessible by authorized NIH users only.
7. HHS Memorandum dated August 12, 2010: Delegation to Sign and Approve Federal Register notices for a Reorganization.  Accessible by authorized NIH users only.

1. Federal Register: The official daily publication for regulations (rules), proposed rules, and notices of the federal agencies and organizations, as well as executive orders and other presidential documents.  Notices provide information of public interest.
2. Function: A responsibility of, or an activity conducted by, an organization to accomplish its mission. A description of which is incorporated into the functional statement of the organizational component.
3. Functional Statement: A written statement of the responsibilities and activities conducted within the organizational component to accomplish its mission.
4. ICO Organizational Change Coordinator (OCC): Appointed by the ICO Executive Officer to review and coordinate the ICO’s reorganizations.
5. Institutes, Centers, and Offices (ICO): Institutes, Centers and Offices within the Office of the Director, NIH.
6. NIH Reorganization Management program office: Manages all NIH reorganizations and maintains the official organizational structure. Located in the Management Operations Branch (MOB), Division of Compliance Management (DCM), Office of Management Assessment (OMA), Office of Management, Office of the Director.
7. Notification of Organizational Change (NOC): The official document that adjusts central organizational records and informs the appropriate officials of the organizational change.
8. Reorganizations: Any one or more of the following actions are considered a reorganization and will require receiving clearance from NIH and HHS, and a complete and approved organizational change package:
   1. Establish
   2. Abolish
   3. Title change
   4. Revision of a functional statement
9. Organizational Component or Component: Any part of the NIH organization that has all the following characteristics:
   1. Established as an organizational component by law, regulation, the Secretary, or by an official to whom such authority has been delegated.
   2. Has been formally assigned functions (i.e., has an established and approved functional statement).
   3. Has an approved official Standard Administrative Code (SAC). NOTE: Organizations created at the IC level for which no official organizational package has been submitted are not recognized as an official organizational component.  Informal organizations such as teams, task forces, and working groups are not considered to be organizational components or entities.
10. Organizational Level: Refers to the hierarchical location of an organizational component, regardless of its title, and is based on the organization’s reporting relationships.  The SAC reflects the organizational level.
11. Organizational Nomenclature: The group of titles used to identify the relative hierarchical position that an organizational component occupies, such as branch, laboratory, section, and office.  
12. Reorganization Package: The standard set of documents required to request an organizational change after the preclearance documentation has been approved.  
13. OrgChart: System used to post the official organizational structure and functions of the NIH.
14. Program Organization: A type of organization that is directly responsible for achieving the specific goals of the organization, whose functions consist of the operating or end purpose activities of the NIH.  Examples of program organizations at NIH are those that are involved in direct biomedical research, research-related grants, and contract activities.  All organizations are either program organizations or staff organizations.
15. Statement of Organization, Functions and Delegations of Authority (SOFDA): Updated with a Federal Register notice.  Used by the Department and other Federal agencies to legally inform the public of a reorganization by identifying and updating the NIH portions of the HHS organization and functions. Publication of this information is generally required by law or regulation.  Also addresses HHS’ compliance with the Freedom of Information Act (5 U.S.C.  § 522(a)(1)6), which requires HHS to publish descriptions of its central and field organizations in the Federal Register for the use of the public.
16. Staff Organization: A type of organization whose functions are comprised of advisory, consultative, service, or support activities related to management or administration that support program organizations.  An example of staff organizations at NIH are those that perform administrative functions such as providing public information, oversight of budget or personnel, management assessments or support services.  All organizations are either staff organizations or program organizations.
17. Standard Administrative Code (SAC): A unique identifier assigned to each organization.  SAC is also referred to as the SAC code, administrative code, organizational code or the Dept ID (used in EHCM). The SAC is the common organizational identifier for all organizations in the Department of Health and Human Services (HHS).  Any SAC that has been previously abolished as a result of an approved organizational change cannot be reissued or activated.