Revisions in federal rules defining how universities get reimbursed for scientific-grant expenses could soon bring relief to thousands of researchers involved in billions of dollars in government-sponsored research.
Universities have a lot not to like about the rules, published in a document known as Circular A-21, or at least about the way they’re being interpreted now. Much of the trouble stems from the simple fact that the federal budget is being cut. Because of that, many of the agencies that distribute federal research money, like the National Institutes of Health and the National Science Foundation, are said to be coming up with creative ways of sidestepping the reimbursement rules and reducing the amount of money they spend on each grant.
And another problem, perhaps even bigger, is that the federal government keeps adding to the list of regulations it imposes on universities and their researchers—in areas such as export controls, human-subject protection, and financial conflicts of interest—and the rules don’t allow any corresponding increase in payments for the administrative staff required to comply.
“The increasing regulatory burdens have been killing us,” said Tobin L. Smith, vice president for policy at the Association of American Universities.
The AAU and the Council on Governmental Relations, both associations of research universities, produced a report this summer offering examples. They include a private institution in the Midwest that estimated its administrative costs for sponsored research increased from $4.2-million in 2002 to $7.3-million in 2008, and a leading medical school in the Southeast that reported that its compliance and quality-assurance costs went up from about $3-million in 2000 to $12.5-million in 2010.
The hope for relief is coming from the White House’s Office of Management and Budget, which enforces the reimbursement rules. The budget office assigned a panel in June to consider changes in the rules, and OMB is set to announce its revisions early next year.
The panel has been deliberating in private, but university lobbyists are optimistic. One positive sign, Mr. Smith said, is the expedited pace of the process from an administration that has promised to tackle regulatory burdens governmentwide. Another encouraging indicator, he said, was a recent meeting with university lobby groups where the three co-chairs of the OMB panel made clear their strong understanding of and appreciation for university concerns.
A Plea for Consistency
With universities, their researchers, and state and federal governments all trying to make do with less money, there may be some practical limits to what the review panel can accomplish for cash-strapped institutions.
Recognizing that, the AAU and the Association of Public and Land-Grant Universities, at the top of a list of 20 priorities they set out for the review panel, pleaded for agencies such as the NIH and NSF to at least show more consistency in how they apply the reimbursement rules.
The government’s standard policy is that each university is entitled to a payment for “indirect costs,” covering facilities and administrative expenses, with each grant won by a faculty member. That amount is negotiated with each university, based on its historical costs of operation.
For instance, if a university gets a rate of 52 percent, and a researcher there wins a $100,000 grant from the NSF, the NSF would provide an additional $52,000 to the university to cover overhead costs, such as fire and police protection, and the salaries of administrators. The additional amount might be even less than $52,000, however, since the reimbursement rules forbid counting some costs in the main part of the grant toward the indirect portion.
And the two university associations, along with the Council on Governmental Relations, have complained about an increasing number of instances of agencies tweaking their reimbursement formulas to even further reduce the amounts paid toward indirect costs.
They cite examples such as the NIH’s announcement in May 2010 that it would limit payments for genomic arrays, which are prepackaged kits for analyzing genetic materials. The NIH argues that such tools are unusually expensive, and that its policy on genomic arrays complied with the rules. The universities contend that both high- and low-cost items are factored into each university’s reimbursement rate, and that case-by-case exceptions such as genomic arrays appear designed to stretch government budgets.
“It does make research dollars go farther,” Mr. Smith said. “But it does put the burden back on universities.” And with public institutions facing state budget cuts and private institutions suffering endowment shortfalls, the cost shifting will eventually hit tuition, university administrators warn.
Inevitable Cuts
Even if the rules are made fairer and clearer, however, cuts in indirect-cost payments appear inevitable. The director of the National Institutes of Health, Francis S. Collins, has said he agrees that current federal spending on indirect costs is excessive and has led to cases of overgrown research facilities.
Arthur I. Bienenstock, special assistant to the president for federal research policy at Stanford University, sees the same basic problem but places the responsibility more with the government. Congress doubled spending for the NIH over a five-year period beginning in the George W. Bush administration, and then added another $10-billion with the 2009 stimulus measure. It also approved plans to double the NSF budget, before backing off in recent years.
It’s only natural, said Mr. Bienenstock, who served as a White House science adviser in the Clinton administration, that universities began building their research capacity as a result of such promises. “It was clearly a national priority,” he said.
If Congress no longer has the money to sustain those ambitions, the government could at least help universities by reducing regulatory burdens, including the much-despised “effort reporting” provisions that require researchers to carefully tally the hours they spend on each grant, the AAU and APLU argued.
Other requests by the AAU and APLU include letting researchers charge some of their own administrative costs to their portion of the grant award, so that they can hire less-costly assistants rather than do so much administrative work themselves. The groups also asked OMB to consider extending to all universities a policy that now lets a small group of institutions charge higher indirect costs based on the recognition that research facilities generally incur higher utility costs than other campus buildings.
“We asked for a whole bunch of things,” knowing universities probably wouldn’t get them all, Mr. Smith said, referring to the AAU-APLU list of 20 suggested changes in reimbursement policies. “If we got 20 percent of the things that were in our letter, I think we’d consider this a success.”
