This report to the United States Senate deals with the systems and procedures used by various federal agencies to award research funds to universities and the resulting distribution of those funds. More specifically, it is intended to review previous studies of the relationship between the award process and distribution of federal research funds, and to describe certain award procedures of the National Institutes of Health (NIH) and the National Science Foundation (NSF). The document is divided into ten sections. The first two sections provide general background on peer review. Sections three through six describe the NSF and NIH award processes, focusing on the role of external peer reviewers and internal agency officials. The remaining four sections address the issues of fairness and accountability in the awards processes, including what past studies have shown about peer reviews. The appendices include a selected bibliography of studies of peer review, listings of resources and criteria used by NSF and NIH when selecting peer review committees, and a breakout of NSF and NIH support given to under-represented groups, institutions, women, and minorities. (TW)