NIH has issued a notice reminding ARRA recipients that requests for no-cost extensions require additional approvals:
Additional Documentation Required with all Prior Approval Requests for a Second No-Cost Extension
Under the NIH Standard Terms of Award, NIH Recovery Act grantees retain the ability to extend the final budget period of a project period without additional NIH funds without prior written approval. While NIH grants policy allows grantees who require more time to complete their work beyond the additional year to request approval from the NIH awarding Institute/Center for additional time; such requests for ARRA grants will not be approved unless grantees can document that no other source of Federal or non-Federal funds is available to continue funding the work and can provide compelling evidence that closing the grant after a one-year no-cost extension would cause one or more of the following:
1) Irreparable harm to the objectives of the research being conducted under the award,
2) Unnecessary harm or unreasonable risk to any human or animal subjects involved in the research, or
3) Any other deviation from of the Terms and Conditions of the Award.
For the complete Notice: http://grants.nih.gov/grants/guide/notice-files/NOT-OD-10-067.html