**GAO-10-937**                      Published: Sep 08, 2010. Publicly Released: Sep 08, 2010.                  

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## Highlights

In fiscal year 2007, the majority of the Department of Defense's (DOD) basic research obligations were provided to higher education institutions. DOD reimburses these institutions for both direct and indirect costs for research. Two federal agencies, DOD and the Department of Health and Human Services (HHS), negotiate indirect cost rates used to reimburse higher education institutions for indirect costs on federally funded research awards, including DOD awards. GAO was asked to examine the following issues related to higher education institutions performing basic research for DOD: (1) the variation in proposed and negotiated indirect cost rates and factors that may contribute to variations; (2) how and to what extent the administrative cap and the DOD basic research cap limit reimbursement of indirect costs; and (3) the methods DOD uses for overseeing compliance with indirect cost reimbursement for grants. GAO surveyed a generalizable sample of higher education institutions performing basic research for DOD; reviewed agency guidance and policies; and interviewed officials from federal agencies, independent public accounting firms, and higher education institutions.

## Recommendations

## Recommendations for Executive Action

See All 6 Recommendations

## Full Report

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Full Report (71 pages)

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## GAO Contacts

William T. Woods
woodsw@gao.gov

(202) 512-4841

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Sarah Kaczmarek
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## Topics

Government Operations

Administrative costsColleges and universitiesCompensationCost analysisFederal grantsGrant administrationHigher educationResearch and development costsResearch grantsResearch programsCost estimatesFinancial reportingPolicies and proceduresReimbursements from government