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Before drawing down any award funds in NSF’s Awardee Cash Management Service (ACM$), please ensure you have reviewed any potential tax implications with a tax/accounting professional. It is imperative that you ensure the integrity of your accounting systems and resulting financial statements from the outset of the Phase I project.

To assist, NSF strongly recommends that all you or your accountant watch this video and review this website carefully at the outset of the Phase I award.


The terms and conditions of your Phase I award require that you use best accounting practices to track how you spend your Phase I award funds. Importantly, this includes keeping timesheets for all employees charging salary or wages to your SBIR/STTR award.

Phase II CAP review

When a Phase I awardee is recommended by the NSF program director to receive a Phase II award, the company will be required to provide documentation necessary for NSF to conduct various administrative and financial reviews. This includes an external review by an NSF-selected certified public accounting (CPA) firm of your company’s financial systems, solvency, debt obligations, and liquidity, cash flows, financial commitments, and other factors.

You are also authorized to spend up to $10,000 of your Phase I award budget on CPA services for this purpose, and we suggest you discuss with your program director before thinking about whether or how to allocate these funds.