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OFFICE OF MANAGEMENT AND BUDGET SEEKS COMMENTS ON COST PRINCIPLES AND ADMINISTRATIVE REQUIREMENTS
Created by on 03/05/2012

The White House Office of Management and Budget (OMB) released an Advanced Notice of Proposed Rule Making (ANPRM) on February 28th seeking public comments on reform of Federal policies relating to grants and cooperative agreements, as well as cost principles and administrative requirements. Comments are due March 29th and may be submitted electronically.
 
This solicitation, made in advance of any proposed rule changes, reflects a series of discussions involving research institutions and federal agencies, including OMB. Most of the proposals will not directly affect individual investigators. There are two, however, that may be worth closer examination from the perspective of working scientists and engineers, because they offer possibilities for greater flexibility. But they may also result in “cost shifting” from indirect to direct charges and, therefore, be burdensome to individual projects. Both are in Section B. Reforms to Cost Principles (Circulars A-21, A-87, and A-122, and the Cost Principles for Hospitals):
 
5. Charging directly allocable administrative support as a direct cost. This reform idea would involve clarifying the circumstances under which institutions of higher education and other entities where appropriate, may charge directly allocable administrative support as a direct cost. Included are project-specific activities such as managing substances/chemicals, data and image management, complex project management, and security.
 
6. Including the cost of certain computing devices as allowable direct cost supplies. This idea would focus on explicitly including the cost of computing devices not otherwise subject to inventory controls (i.e. cost less than the organization's equipment threshold) as allowable direct cost supplies. Applicants for federal awards would be required to document these items as a separate line-item in their budget requests, but would not be required to conduct the more stringent inventory controls in place for equipment.
 
These clarifications would be aimed at ensuring that charges are appropriately classified in order to provide support for all of the costs directly associated with a federal award, while reducing the burdens of securing special permission to purchase what have become routine supplies. This is not intended to result in a net cost increase, but rather to provide clarity in how allowable costs are routinely charged. FASEB committees will review the ANPRM and take further action, if necessary.


 

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