# Presentation: 917416

## OSTP RBM Workshop onCost Accountability

**University of North Carolina**
**November 17, 2003**
- Elizabeth Mora
- Director, Office for Sponsored Research
- Harvard University

## Main Question Universities Ask:

- What happened to _the Partnership_?
- Has it turned into a “Procurement Process”?

## Let’s Step Back for a Moment

- OMB Circular A-21 was introduced in 1958
- During the 1990’s, a time of mistrust,
- An administrative cap was imposed (in 1991)
- A-21 was changed _five_ times. Each time, unfunded mandates were _added_ with little attention to their cost or their added value for rational stewardship and accountability

## It’s time to re-evaluate A-21!

- Was university abuse of regulations widespread?
- Were the changes in A-21 the right “remedies”?
- Can we work together to develop a more effective and efficient costing and regulatory system that appropriately reflects the diversity of research providers?

## Issues

- The principle of _full cost reimbursement_ is vital.
- Actions should not be taken unilaterally with little regard for their implications for the University community
- _Administrative_ compliance should be differentiated from _scientific_ compliance
- No serious attention is given to the radical changes in the costs of information acquisition and exchange produced by digital technology.

## Questions

- All issues are not equally important. Do the rules give the proper relative weight to
- Human subject protection *and* payroll certification?
- Assuring environmental health and safety *and* completing Disclosure Statements (that never get read or reviewed)?
- Securing of biohazardous agents *and* providing lease-purchase analyses?

## Questions (cont)

- Do the program sides of funding agencies communicate adequately with their Inspector Generals on the interpretation and the consequences of rule changes?
- What happened to the operating principles proposed in the PRD-4?

## Potential Solutions

- Actively engage OMB in the dialog on the cap and** **A-21.
- Actively use FDP as a working group
- Some federal agencies are already engaged; engage others (including OMB).
- Pursue pilot projects that have momentum, e.g.,subrecipient monitoring
- Determine why agencies are dragging their feet on other proposed pilot projects

## Potential Solutions (cont)

- Solicit university participation on
- 	PL 106-107 working groups
- What are these groups doing?
- What are the goals and the deliverables?
- Bring funding agencies, the audit community _and_ the university research community closer together to seek agreement on acceptable principles and processes

## Potential Solutions (cont)

- Look at “best practices” across agencies and adopt these across all agencies
*Examples:*
- NSF clarification of cost sharing policy
- NIH letter of credit system

## Potential Solutions (cont)

- Work through FDP – Initiative to Reduce Administrative Burden on eliminating the non-value added unfunded mandates in A-21:
- DS-2 requirement
- Lease purchase analysis
- Monthly cash flow for debt arrangements in excess of $1M

## Potential Solutions (cont)

- Reasonableness cost of new construction
- Requirement to use depreciation recoveries to acquire or improve research facilities
- Requirement to demonstrate the reasonableness of  cost of construction for new research buildings
*	**	**These are low hanging fruit!*
*Let’s pick them off!*

## Potential Solutions (cont)

- Get OMB and OSTP involved in other “bigger” administrative issues to find a simpler method:
- Allocation of space costs
- Effort reporting/payroll certification
- Subrecipient Monitoring
- A-133 audit requirements
- Recognition of costs of digital information exchange