Watching grass grow may be more exciting. But this month, U.S. university administrators are poring over hundreds of pages of proposed changes to the rules governing how the federal government manages the money it spends on academic research. The exercise is worth their time because billions of government dollars are at stake. And although the White House Office of Management and Budget (OMB) has embraced very few of the community’s suggested changes, academic financial managers say they are pleased that the Obama administration is at least listening to their concerns and is open to further discussion. On paper, the federal government is committed to reimbursing organizations for what they spend to support federal grant recipients. In 2010, for example, it was roughly $9 billion of the $37.5 billion that flowed from the government to some 700 universities. 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Each institution negotiates its own indirect cost recovery rate, following rules laid down by OMB. The rules have been around for decades but are tweaked periodically, sometimes in reaction to scandals involving the misuse of government funds and other times in the hope of simply saving money. Campus officials have long complained that some of the rules, such as logging the time a scientist spends on a research project, are unnecessary or interfere with research. They say others, such as allowing an agency to set its own reimbursement rate for a particular program, force institutions to bear too much of the cost. And then there are “unfunded mandates”—administrative requirements that cost time and money for which universities are not reimbursed at all. The latest round of changes, which appeared on 1 February in the Federal Register, began almost 2 years ago when the Obama administration announced its plan to achieve “administrative flexibility, lower costs, and better results” and solicited input from the community. One year ago, OMB released a document laying out the issues and asking for more feedback. The community has until 2 May to respond to the proposed policy changes before OMB locks them into place. “We think it’s definitely a positive step in the right direction,” says Tony DeCrappeo, president of the Council on Governmental Relations in Washington, D.C. “They picked up on a number of recommendations” submitted by a coalition of university groups in the summer of 2011, he notes. Under the latest OMB proposal, eight previous circulars would be combined into a new policy document, labeled OMB Circular A-81. The reforms fall into 19 topical areas. Here are brief descriptions of the proposed changes in four categories that have attracted the most attention. Charging administrative support as a direct cost: This category covers what an institution must do to comply with federal regulations both before and after receiving a grant. Those grants generally don’t pay for support staff that can ease the burden on faculty members, who report that such administrative duties eat up 42% of the time they devote to research. Now, those administrative costs are covered by funds in the university’s overall cost recovery pool. But OMB has proposed that “an item or activity may be charged directly to a grant if it is clearly allocable to that award … [t]his principle remains true regardless of whether the work performed is administrative in nature.” Alternatives to time and effort reporting: OMB was not moved by the pleadings of the academic community that such reporting is unnecessary, noting that “time and effort reporting continues to be viewed by the audit community as an important tool for confirming appropriate use of funds.” However, the agency has agreed to broaden the options for satisfying this requirement beyond the three examples of compliance in the existing circular. That’s a big concession, DeCrappeo says, because those examples had become, de facto, the only acceptable approaches. Expanding the pool of institutions eligible for utility cost reimbursements: Some 65 institutions are allowed to add 1.3 percentage points to their indirect cost recovery rate for the utility costs—heating, cooling, electricity, and water—associated with operating lab buildings and research facilities. That surcharge is based on pilot studies of energy usage conducted in the 1990s, DeCrappeo says. “But it’s unfair to all the other schools, which have similar costs.” OMB has proposed two options for these other institutions to calculate their utility costs, either with meters that can identify costs associated with the portion of the building devoted to research or by using a formula based on a building’s overall size. Agency exceptions to negotiated cost rates: This is a chronic sore point for universities, who hunger for federal grants but complain that agencies sometimes try to save money by applying an artificially low recovery rate to specific programs. The Career Development (or K) Awards at the National Institutes of Health (NIH) are a notorious offender, DeCrappeo says, with an indirect cost recovery rate of 8% that falls far below an institution’s actual cost to manage the program. In effect, he says, “what NIH is doing is asking universities to write them a check for millions of dollars.” OMB’s proposed solution is to force agencies “to clarify the circumstances under which [they] may make exceptions to the negotiated rate.” That won’t change “longstanding historical exceptions,” OMB acknowledges, but it should “properly limit these exceptions to help ensure they are justified when they occur.” DeCrappeo doesn’t expect cash-strapped agencies to bump up recovery rates for existing programs, but he hopes the OMB language will discourage them from squeezing them on new programs.