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Labor, Health and Human Services Subcommittee Holds Hearing on Indirect Costs of Research

The House Appropriations Subcommittee on Labor, Health and Human Services, and Education held a hearing on October 24 on the role of facilities and administrative costs (also known as indirect costs) in supporting NIH-funded research. The hearing included testimony from Dr. Kelvin Droegemeier, Vice President of Research at the University of Oklahoma; Dr. Gary Gilliland, President of the Fred Hutchinson Cancer Research Center; Dr. Bruce Liang, Dean of the University of Connecticut School of Medicine; and Dr. Keith Yamamoto, Vice Chancellor for Science Policy and Strategy at the University of California, San Francisco. Dr. Droegemeier’s written testimony included a history of the collaboration between universities and the federal government to support research, trends in facilities and administrative costs over time, and thorough explanation of the importance of federal support for these costs.

Committee leadership, including Chair Tom Cole (R-OK) and Ranking Member Rosa DeLauro (D-CT), and witnesses agreed that facilities and administrative costs were key to supporting research and should not be arbitrarily restricted. Many committee members agreed with the witnesses that restricting facilities and administrative costs would have a strong negative impact on all research done at universities and that capping the rates at which universities can be reimbursed for these costs should not be used as a budget-cutting measure by Congress or the Administration.

Find more of COSSA’s coverage of facilities and administrative costs here.

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Posted in Issue 21 (October 31), Update, Volume 36 (2017)

GAO Recommends Changes to NSF Indirect Cost Guidance

A new report from the Government Accountability Office (GAO), Actions Needed to Improve Oversight of Indirect Costs for Research, finds that the National Science Foundation (NSF) “does not consistently take steps to ensure it pays no more than its fair share of indirect costs.” Indirect costs, also referred to as facilities and administrative (F&A) costs, represent the portion of NSF awards that cover operational costs, such as maintenance, rent, and utilities. The report notes that while NSF has produced guidance for setting indirect cost rates, it is not implemented consistently. The report makes recommendations to ensure NSF staff follow its guidance more reliably, better document the process of setting indirect cost rates, and maintain consistency with the guidance set by other federal agencies. In a letter responding to the report (Appendix I), NSF concurred with GAO’s recommendations and outlined the steps it will take to implement them. The complete report and a highlights page are available on GAO’s website.

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Posted in Issue 19 (October 3), Update, Volume 36 (2017)

House Science Committee Holds Hearing on Overhead Costs of Research

The Subcommittee on Research and Technology and the Subcommittee on Oversight of the House Committee on Science, Space, and Technology co-hosted a hearing on the overhead costs of research on May 24. The focus of the hearing was the indirect costs incurred from research, reimbursed by the government as part of research grant awards. The subcommittees primarily discussed the indirect costs from awards made by the National Science Foundation (NSF). Witnesses included Dale Bell from the Division of Institution and Award Support at NSF; John Newmann of the Government Accountability Office; James Luther, Vice President for Finance and Compliance at Duke University; and Richard Vedder, Director of the Center for College Affordability and Productivity.

Committee members expressed concern about the rising proportion of federal funds going to reimburse indirect costs, which include administrative and facilities costs. Members also expressed concern that the process for negotiating indirect cost rates is becoming more complicated, benefitting larger and wealthier research institutions.

No consensus on how to address the rising proportion of indirect costs emerged. While some members suggested that indirect costs should be taken into consideration when NSF decides to award a grant, others focused on how NSF can continue to fund quality research despite the rising indirect costs.

This hearing represented a continuation of discussions from the 114th Congress about the administrative burden on federally funded researchers, which Research and Development Subcommittee leadership expressed interest in continuing. Witness testimony and an archived webcast of the hearing is available on the Science Committee website.

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Posted in Issue 11 (May 30), Update, Volume 36 (2017)

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