Federal Research Grants: Opportunities Remain for Agencies to Streamline Administrative Requirements
Published: 2016-06-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The federal government obligated over $27 billion for university research in fiscal year 2015, according to NSF. To allow for oversight of these funds, Congress and research funding agencies established administrative requirements that universities must comply with as part of grants they apply for and receive. University stakeholders have studied and raised concerns about the workload and costs to comply with the requirements.
GAO was asked to review research grant requirements and their administrative workloads and costs. This report examines (1) the sources and goals of selected requirements, (2) factors affecting universities' administrative workload and costs for complying with the requirements, and (3) efforts by OMB and research funding agencies to reduce the requirements' administrative workload and costs, and the results of these efforts. GAO selected and examined in detail nine areas of administrative requirements at DOE, NASA, NIH, and NSF, and interviewed administrative staff and researchers from six universities. GAO selected agencies and universities that ranged in the amount and type of research funding provided or received.
section_title: What GAO Found
paragraphs: Administrative requirements for federal research grants include (1) Office of Management and Budget (OMB) government-wide grant requirements for protecting against waste, fraud, and abuse of funds and (2) agency-specific requirements generally for promoting the quality and effectiveness of federally funded research. For example, OMB requires grantees to maintain records sufficient to detail the history of procurement for all purchases made with grant funds, and the Department of Energy (DOE), National Aeronautics and Space Administration (NASA), National Institutes of Health (NIH), and National Science Foundation (NSF) require applicants to develop and submit biographical sketches describing their professional accomplishments so agencies can consider researchers' qualifications when deciding which proposals to fund.
Officials from universities and stakeholder organizations GAO interviewed identified common factors that add to their administrative workload and costs for complying with selected requirements: (1) variation in agencies' implementation of requirements, (2) pre-award requirements for applicants to develop and submit detailed documentation for grant proposals, and (3) increased prescriptiveness of certain requirements. They said that these factors add to universities' workload and costs in various ways, such as by causing universities to invest in new electronic systems or in the hiring or training of staff. For example, university officials told GAO that new OMB requirements for purchases made with grant funds will result in added costs for hiring administrative staff to handle an increased volume of purchases that are subject to some form of competition.
OMB and research funding agencies have made continuing efforts to reduce universities' administrative workload and costs for complying with selected requirements, with limited results. These included efforts in three areas: (1) standardizing requirements across agencies; (2) postponing certain pre-award requirements until after making a preliminary decision about an applicant's likelihood of funding; and (3) in some cases, allowing universities more flexibility to assess and manage risks for some requirements. For example, funding agencies have developed a standard set of administrative terms and conditions for research grants and a standard form for research progress reports. Such efforts are in accordance with federal goals, such as those in a 2011 executive order that calls for agencies to harmonize regulations and consider regulatory approaches that reduce burdens and maintain flexibility. However, opportunities exist in each of the three areas to further reduce universities' administrative workload and costs. First, efforts to standardize requirements have not fully addressed variations in agency implementation of requirements, such as agencies' forms and systems for collecting project budgets and biographical sketches. Second, funding agencies have not fully examined pre-award requirements to identify those—such as requirements for detailed budgets—that can be postponed. Third, some requirements—such as those for obtaining multiple quotations for small purchases—limit universities' flexibility to allocate administrative resources toward oversight of areas at greatest risk of improper use of research funds. Further efforts to standardize requirements, postpone pre-award requirements, and allow more flexibility for universities could help ensure agencies do not miss opportunities to reduce administrative workload and costs.
section_title: What GAO Recommends
paragraphs: GAO recommends that OMB, DOE, NASA, NIH, and NSF identify additional areas where requirements, such as those for budgets or purchases, can be standardized, postponed, or made more flexible, while maintaining oversight of federal funds. DOE, NASA, and NIH generally concurred, and OMB and NSF did not comment on the recommendations.

section_title: Letter
paragraphs: University research contributes to American competitiveness and  leadership in science, and the federal government has long played a  central role in funding and setting priorities for university research.  According to National Science Foundation (NSF) data, the federal  government funds the majority of research performed by colleges and  universities, obligating over $27 billion for such research in fiscal year  2015. Many agencies fund specific types of research to support their  missions. For example, the National Institutes of Health (NIH) within the  Department of Health and Human Services (HHS) funds research into  new medical treatments, and the Department of Energy (DOE) funds  research into clean energy technologies. NSF funds a wide range of  research as part of its mission to promote the progress of science in  general.
To allow for oversight of federal research funding, Congress and federal  agencies have established a variety of administrative requirements for the  use of these funds. Some requirements were established or  strengthened in response to cases of researchers improperly spending  funds or out of concerns about the integrity of the research being  conducted. Others were established to meet broader policy objectives,  such as increasing access to research data and results. University  administrators and researchers must comply with certain requirements  when developing and submitting grant applications and with others as  part of the terms and conditions of any awards they receive. For example,  agencies generally require that applicants provide biographical sketches  describing their professional accomplishments when submitting grant  proposals, and require that grantees document the personnel expenses— such as researcher salaries—and the purchases—such as equipment  and supplies—charged to a grant.
During the last two decades, organizations that have studied these  administrative requirements have raised concerns about the workload  and costs for researchers and universities to comply with the  requirements and about the effect of requirements on researchers’ ability  to efficiently conduct research. For example, the National Science Board  reported in 2014 that the administrative workload placed on federally  funded researchers is more than needed to ensure accountability,  transparency, and safety. This report, based on a survey of federally  funded researchers and on discussions with universities’ administrative  staff members, recommended that agencies take actions to reduce the  administrative workload associated with applying for grants and reporting  on research progress, eliminate or modify ineffective requirements, and  improve coordination and harmonization of similar requirements across  funding agencies. Other organizations representing the university  research community have raised similar concerns.
Several executive orders and a presidential memorandum have called for  streamlining regulations and guidance to reduce grant recipients’  administrative workload and costs. For instance, Executive Order 13563  of January 18, 2011 called for greater coordination across agencies to  reduce costs and simplify and harmonize rules, and for agencies to  identify and consider regulatory approaches that reduce burdens and  maintain flexibility. In addition, in December 2013, the Office of  Management and Budget (OMB) consolidated its grants management  circulars into a single document—the Uniform Administrative  Requirements, Cost Principles, and Audit Requirements for Federal  Awards (Uniform Guidance)—to streamline its guidance, promote  consistency among grantees, and reduce administrative burden on  nonfederal entities, as well as to strengthen oversight of federal funds to  reduce risk of waste, fraud, and abuse. Despite these and other federal  efforts to streamline research requirements, universities and stakeholder  organizations continue to cite increasing administrative workload and  costs for complying with requirements. Federal agencies reimburse  universities for their administrative costs up to a cap established in OMB  guidance, and universities pay the remainder.
You requested that we review requirements on federal research funding  that create administrative workload and costs for universities. This report  examines (1) the sources and goals of selected research grant  requirements, (2) the factors that contribute to universities’ administrative  workload and costs for complying with these requirements, and (3) efforts  OMB and research funding agencies have made to reduce the  administrative workload and costs for complying with these requirements,  and the results of these efforts.
We selected and examined in detail administrative requirements in nine  categories that multiple universities and university stakeholder  organizations have cited as contributing to universities’ administrative  workload and costs, have been the subject of recent streamlining efforts  or changes in OMB or agency guidance, or have been part of the  findings of recent reports by agency inspectors general. For example,  these include requirements related to research project budgets, research  personnel, and oversight of subrecipients. Our findings from our reviews  of these requirements cannot be generalized to all administrative  requirements.
To examine the sources and goals of selected requirements, we reviewed  guidance documents, regulations, Federal Register notices, and other  documentation of research requirements at OMB and four research  funding agencies: DOE, the National Aeronautics and Space  Administration (NASA), NIH, and NSF. We selected NIH and NSF  because they are the two largest funders of research at universities and  colleges, according to NSF data. We selected DOE and NASA as  examples of agencies with smaller amounts of university research funding  and different types of research. According to the NSF data, these four  agencies provided about 83 percent of federal funding for research at  universities and colleges in fiscal year 2015. We interviewed officials from  these agencies and from their offices of inspector general on the sources  and goals of these requirements. Our findings from our reviews of these  four agencies cannot be generalized to all agencies that fund research.
To examine the factors that contribute to universities’ administrative costs  for complying with selected requirements, we selected a nongeneralizable  sample of six public and private universities that range in the amount of  research funding they receive and other characteristics. We identified and  selected these universities using NSF data on federal research funding  provided to universities, information on their membership in the Federal  Demonstration Partnership, and audit reports on university research  grants conducted by agencies’ inspectors general. We conducted in- depth interviews with administrative staff and researchers from these  universities to collect qualitative information on the types of administrative  workload and costs resulting from selected requirements, and we  reviewed university policies and documentation related to their processes  for complying with selected requirements. We also interviewed officials  from several university stakeholder organizations. We identified these  organizations based on discussions with agency officials and reviews of  published reports, and selected those organizations that had studied  administrative workload and costs related to our selected categories of  requirements.
To examine the efforts that OMB and research funding agencies have  made to reduce the administrative costs of complying with selected  requirements and the results of these efforts, we interviewed officials from  selected universities and stakeholder organizations about OMB and  funding agency efforts, the efforts’ effects on universities’ administrative  workload and costs, and universities’ and stakeholder organizations’  suggestions for further efforts. We interviewed agency officials and  reviewed agency documents regarding processes for developing and  modifying requirements and efforts to reduce the costs of complying with  requirements. We also interviewed staff from OMB and the Office of  Science and Technology Policy (OSTP) about their roles in establishing  and coordinating government-wide research policies. For more  information on our scope and methodology, including a full list of the  universities and stakeholder organizations included in our review, see  appendix I.
We conducted this performance audit from April 2015 to June 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: More than two dozen federal agencies use grants and other mechanisms  to fund research at universities and colleges, as well as at other nonprofit  and for-profit organizations, in support of agency missions related to  public health, energy security, and space exploration, among others. NIH  provides more than half of all federal funds for university and college  research, and NSF, DOE, NASA, and other agencies provide the  remaining funding (see fig. 1).
OSTP is responsible for advising the President on the federal budget for  research and shapes research priorities across agencies with significant  portfolios in science and technology. OSTP also helps develop and  implement government-wide science and technology policies and  coordinate interagency research initiatives. OMB is responsible for  developing government-wide policies to ensure that grants—including  grants for research and for other purposes such as housing, education,  transportation, and health care—are managed properly and that grant  funds are spent in accordance with applicable laws and regulations. For  decades, OMB has published guidance in various circulars to aid grant- making agencies with such subjects as record keeping and the  allowability of costs, which for research grants may include researcher  salaries and wages, equipment, travel, and other costs. Congress may  pass laws establishing additional reporting and oversight requirements on  grant-making agencies and grantees. Funding agencies implement these  requirements through regulations, agency guidance, and the terms and  conditions of grant awards. In addition, funding agency offices of  inspector general may conduct audits to evaluate grantee compliance  with requirements. When audits result in findings of noncompliance, such  as grantees charging unallowable costs to grants, grantees may need to  repay funding agencies for these costs.
Competitively awarded federal research grants generally follow a life  cycle comprising various stages—pre-award, award, post-award  implementation, and closeout. For competitive research grant programs,  in the pre-award stage, a funding agency notifies the public of the grant  opportunity through an announcement, and potential recipients submit  applications for agency review. In the award stage, the agency identifies  successful applicants and awards funding. The post-award  implementation stage includes payment processing, agency monitoring,  and recipient reporting, which may include financial and performance  information. Grant closeout includes preparation of final reports and  financial reconciliation. Over this life cycle, applicants and recipients must  complete various administrative tasks in order to comply with OMB and  funding agency requirements, particularly in the pre-award and post- award implementation stages. See figure 2 for an overview of the  administrative tasks associated with our nine selected categories of  requirements across the grant life cycle.
Stakeholder organizations representing universities and federal agencies  have raised concerns about the administrative workload and costs for  complying with federal research requirements, and they have issued  several reports with recommendations for agencies to modify  requirements in order to achieve their goals while reducing administrative  workload and costs. For example, in 2012, the Federal Demonstration  Partnership surveyed principal investigators of federally funded research  projects. The report on this survey found that principal investigators  estimated they spent, on average, 42 percent of their time meeting  requirements—including those associated with pre- and post-award  administration and preparation of proposals and reports—rather than  conducting active research. However, the survey did not specify how  much of this time was due to administrative tasks driven by university- specific processes or policies rather than federal requirements, or to  nonadministrative tasks that contribute to the scientific aspects of the  research, such as writing scientific material for proposals and reports. In  addition, the survey did not include universities’ administrative research  staff members, who help universities comply with federal and other  administrative requirements on research awards. In March 2013, the  National Science Board issued a request for information to identify which  federal agency and institutional requirements contribute most to principal  investigators’ administrative workload, and conducted a series of  roundtable discussions with faculty and administrators. The board found  that the most frequently cited areas associated with high administrative  workload included financial management, the grant proposal process,  progress and other outcome reporting, and personnel management,  among others.
There has been a series of legislative and executive goals and directives  for agencies to simplify aspects of the grants management life cycle and  minimize administrative burden for grantees, particularly those that apply  for and obtain grants from multiple federal agencies. Table 1 lists several  of these goals and directives related to streamlining administrative grant  requirements.
There have also been several recent directives intended to strengthen  accountability over federal funds. For example, Executive Order 13520 of  November 20, 2009 adopts a set of policies for transparency and public  scrutiny of significant payment errors throughout the federal government  and for identifying and eliminating the highest improper payments.
In response to such streamlining and accountability directives, in  December 2013, OMB consolidated its grants management circulars into  a single document, the Uniform Guidance. The requirements in the  Uniform Guidance apply broadly to different types of grantees—including  state, local, and tribal governments, institutions of higher education, and  nonprofit organizations—and different types of grants—including grants  for research or other purposes. The Uniform Guidance is implemented  through individual federal agency regulations that were to take effect no  later than December 26, 2014. When issuing the final guidance, OMB  stated that it would (1) monitor the effects of the reforms in the Uniform  Guidance to evaluate the extent to which the reforms were achieving their  desired results for streamlining and accountability and (2) consider  making further modifications as appropriate.
section_title: OMB’s Government- Wide Requirements Generally Govern the Proper Use of Grant Funds, and Agency- Specific Requirements Generally Govern Research Quality and Effectiveness
paragraphs: Selected administrative requirements in OMB’s government-wide grant  guidance generally focus on protecting against waste, fraud, and abuse of  funds. These include requirements we selected related to competing and  documenting purchases, documenting personnel expenses, preparing  and managing project budgets, reporting on subawards, and monitoring  subrecipients. Selected administrative requirements in agency-specific  guidance generally focus on promoting the quality and effectiveness of  federally funded research. These include requirements related to  developing and submitting biographical sketches; mentoring and  developing researchers; identifying, reporting, and managing financial  conflicts of interest; and managing and sharing research data and results.
subsections: section_title: Selected Administrative Requirements in OMB’s Government-Wide Grant Guidance Generally Focus on Protecting against Waste, Fraud, and Abuse of Funds
paragraphs: OMB developed the Uniform Guidance to (1) streamline OMB’s guidance  for federal awards to ease administrative burden and (2) strengthen  oversight of federal funds to reduce risks of waste, fraud, and abuse.  OMB developed the Uniform Guidance over more than 2 years, and it  reflects input from federal agencies, auditors, and recipients of federal  awards, which OMB solicited in an effort to balance its dual goals of  streamlining and accountability. The Uniform Guidance includes  provisions related to a range of administrative requirements on research  grants, including ones we selected related to competing and documenting  purchases, documenting personnel expenses, preparing and managing  project budgets, subaward reporting, and subrecipient monitoring. OMB  required each individual funding agency to implement the Uniform  Guidance by adopting regulations that apply to the agency’s awards.  See appendix II for additional information on selected requirements in the  Uniform Guidance.
The requirements in the Uniform Guidance aim to protect against waste,  fraud, and abuse in various ways, as follows.
Budgets. Funding agencies implement Uniform Guidance  requirements for budget preparation and management by designing  forms and processes to review applicants’ requests for funding, and  grantees’ use of funding, to determine, among other things, whether  costs are allowable. These requirements allow for identification of  questionable requests for funding in applications or unallowable post- award charges to grants.
Personnel expenses. To document personnel expenses, grantees  must maintain a system of internal controls over their records used to  justify the costs of salaries and wages so these records accurately  reflect the work performed. Salary and wage costs generally represent  the largest portion of expenditures on research grants according to  agency officials, and NSF and HHS offices of inspector general have  reported on the need for oversight to prevent improper or fraudulent  salary charges. For example, the NSF Office of Inspector General has  documented instances of researchers charging their full-time salaries  to federal grants at one university while simultaneously working full- time at another university or for-profit company.
Purchases. To meet documentation requirements for purchases  made with grant funds, grantees must maintain records detailing the  procurement history for all purchases. Funding agencies and their  inspectors general use such purchasing records for oversight,  including detection and prosecution of fraudulent purchases. Audit  reports by the NSF and HHS offices of inspector general have found  instances of researchers using grant funds for personal purchases. In  addition, the Uniform Guidance requires that purchases be conducted  in a manner providing full and open competition, and establishes five  methods for purchasing goods or services. These methods include  obtaining price or rate quotations, competitive bids, or competitive  proposals for certain purchases.
Subrecipients. Universities frequently collaborate with and provide  federal research funds to other institutions, domestic and foreign,  through subawards. Awarding agencies rely on grantees to monitor  subrecipients to ensure that they use research funds for authorized  purposes and stay on track to meet performance goals. In addition,  requirements for grantees to report on their subawards provide  agencies, Congress, and the public more information on  subrecipients' use of taxpayer dollars.
section_title: Selected Administrative Requirements in Agency- Specific Guidance Generally Focus on Promoting the Quality and Effectiveness of Federally Funded Research
paragraphs: Funding agencies have established administrative requirements—in  some cases, in response to directives from Congress and OSTP—to  promote the selection and development of qualified researchers, protect  against bias in the conduct of research, and improve access to research  results. Agencies implement these requirements through their grants  guidance documents and the terms and conditions of their awards. See  appendix II for additional information on selected agency-specific  requirements.
Promoting the selection and development of qualified  researchers. Funding agencies require applicants to submit  biographical sketches so the agencies have information they need to  select well-qualified researchers. All four funding agencies in our  review have agency-specific requirements for biographical sketches in  their grants guidance, including requirements for applicants to list  information about past publications and current and prior academic or  professional positions. Also, to promote the professional development  of researchers, two of the four agencies have requirements related to  researcher development or mentoring plans. First, as directed in the  America Creating Opportunities to Meaningfully Promote Excellence  in Technology, Education, and Science Act of 2007, NSF requires that  all proposals with postdoctoral researchers include a plan describing  the mentoring to be provided to these researchers. Second, NIH  encourages institutions to use individual development plans to identify  and promote the career goals of graduate students and postdoctoral  researchers associated with NIH awards, and requires grantees using  individual development plans to describe their use of these plans in  annual progress reports.
Protect against bias in the conduct of research. NASA, NIH, and  NSF have implemented financial conflict of interest requirements to  help protect against bias in the conduct of research, and DOE is in the  process of establishing such requirements. For example, NIH and  NSF require researchers to disclose and universities to review  financial interests to identify potential conflicts, such as investments in  or income from entities that might benefit from a research project.  Since 1995, NIH-funded researchers have been subject to HHS  financial conflict of interest regulations designed to promote  objectivity. HHS revised its regulations in 2011 to address the  growing size and complexity of biomedical and behavioral research  and corresponding concerns about financial ties between researchers  and industry—including pharmaceutical, medical device, and  biotechnology companies. For example, congressional committee  investigations had found cases of financial conflicts of interest that  may have led to bias in NIH-funded research, including researchers  failing to disclose substantial payments from drug and medical device  companies. Similarly, in implementing its financial conflict of interest  policy in 1994, NSF stated that it encourages the involvement of  researchers and educators with industry and private entrepreneurial  ventures but recognizes that these interactions are accompanied by  an increased risk of conflicts of interest—a risk that its policy was  intended to address.
Improve access to research results. In 2013, OSTP directed federal  agencies to support increased public access to the results of federally  funded research, including results published in peer-reviewed journals  as well as digital data. According to the OSTP directive, policies that  provide greater access to peer-reviewed publications and scientific  data maximize the impact and accountability of the federal research  investment. In response to this directive, agencies established  requirements for researchers to develop and comply with data  management plans that describe the scientific data to be collected  and how the researcher will provide access to and reliable  preservation of the data. All four funding agencies in our review  require applicants to include data management plans in their  proposals.
section_title: Selected Universities Identified Common Factors That Add to Their Workload and Costs for Complying with Selected Administrative Requirements
paragraphs: Selected universities and stakeholder organizations identified common  factors that add to their administrative workload and costs for complying  with selected requirements: (1) variation in agencies’ implementation of  requirements, (2) detailed pre-award requirements for applicants to  develop and submit documentation for grant proposals, and (3) increased  prescriptiveness of certain requirements.
subsections: section_title: Variation in Funding Agencies’ Implementation of Administrative Requirements
paragraphs: At all six universities we selected for our review, officials told us that  variation in funding agencies’ implementation of certain administrative  requirements included in our review contributes to workload and costs.  For example, they said variation contributes to universities’ costs because  they have to design and implement multiple processes and may need to  invest in electronic systems to comply with agencies’ requirements, and it  contributes to the workload of researchers and administrative staff  because they must spend time learning the different requirements,  processes, and systems.
Officials we interviewed from stakeholder organizations and the six  universities cited variation in funding agencies’ implementation of three  categories of requirements in particular as adding to administrative  workload and costs: developing and submitting biographical sketches;  identifying, reporting, and managing financial conflicts of interest; and  preparing and managing project budgets. For example, the biographical  sketches agencies require applicants to submit differ in formatting as well  as in content, including the information applicants must provide on past  publications, research collaborators, and academic positions. In addition,  agencies’ financial conflict of interest requirements differ in the types of  financial interests that researchers must disclose to their institutions, the  information that institutions must report to agencies, and requirements for  training researchers on conflicts of interest. Agency implementation of  budget preparation and management requirements differs in several  ways, including the forms and level of detail required in proposed budgets  and the systems for grantee financial reporting. In 2014, the National  Science Board reported that faculty and administrative staff participating  in roundtable discussions and responding to its request for information  cited a lack of consistency and standardization within and among  agencies in all aspects of grant management—including regulations,  guidance, reporting requirements, forms and formatting, and electronic  systems—as a substantial source of administrative workload and costs,  resulting in a loss of research time. Appendix III provides detailed  examples of the differences in agencies’ implementation of selected  requirements.
University officials we interviewed cited specific examples of increases in  administrative workload and costs that resulted from variation in funding  agencies’ implementation of requirements:
Electronic systems costs. Universities have invested in electronic  grant management systems for submitting grant applications and  ensuring compliance with multiple agencies’ application requirements.  Variations in requirements can make it more difficult for applicants to  comply, and applications can be rejected for noncompliance, including  noncompliance with formatting requirements such as page lengths or  fonts. Universities’ systems help minimize such rejections by  identifying noncompliant application elements prior to submission,  according to university officials. To address variation between NIH’s  and NSF’s conflict of interest requirements, five universities in our  review updated their electronic systems, for example, to allow  researchers and administrative staff to differentiate the types and  thresholds for financial interests required to be disclosed by different  agencies, according to university officials.
Administrative staff workload and costs. Officials from the six  universities in our review cited examples of investments in  administrative staff that they made in part to address variation in  agencies’ implementation of requirements. For example, according to  officials we interviewed, four universities in our review employ specific  administrative staff members with specialized expertise in the policies  and procedures of particular agencies to review proposals and help  ensure compliance with those agencies’ requirements. Universities’  administrative staff members may also in some cases manage  proposal processes for multiple agencies, so the universities need to  help them build and maintain expertise in the agencies’ various  application systems and requirements, according to officials.
Researcher workload. Officials at the six universities in our review  said that researchers must spend time learning different agencies’  requirements and customizing and reformatting application materials  for different agencies. For example, according to officials at the six  universities, researchers spend time customizing the content, format,  and length of biographical sketches to agency-specific requirements  and learning how to comply with each agency’s policies on what  information to include in proposed budgets.
section_title: Detailed Pre-Award Administrative Requirements
paragraphs: Funding agencies require researchers to prepare detailed  documentation—including proposed budgets, biographical sketches,  information on subawards, data management plans, and in some cases  information on conflicts of interest and researcher mentoring and  development plans—and submit it to university administrators and  agencies as part of the application process. Agencies require much of this  information to help them select proposals for funding, according to  agency officials and guidance. According to university officials we  interviewed, developing this documentation is time-consuming and adds  to universities’ administrative workload and costs. Moreover, the  likelihood of an agency selecting a proposal for funding is relatively low.  For example, in fiscal year 2015, NIH awarded funding to 18 percent of  applicants and NSF awarded funding to 24 percent of applicants—similar  to funding rates from other years. As a result, for most grant proposals,  universities’ investment of time and resources does not result in their  receiving research funding.
According to officials from five of our selected universities, as well as  reports from stakeholder organizations, pre-award requirements are one  of the main sources of frustration and administrative workload and costs  among researchers and administrative staff. The National Science Board  reported in 2014 that faculty responding to its request for information cited  the proposal and submission process, including preparing supporting  documentation, as one of the grants management areas that contributed  most to their administrative workload. For example, in response to the  National Science Board’s request for information, the Federation of  American Societies for Experimental Biology surveyed researchers, lab  workers, and administrative staff and found that the respondents cited  grant proposal preparation and submission as the greatest source of  administrative burden out of 15 categories of burden in the survey.
Researchers and administrative staff at the six universities in our review  told us that during the pre-award stage, there can be a relatively high  level of uncertainty about specific details of a research project, including  detailed budget information about potential vendors or travel costs,  expected research data and results, and planned contributions by  postdoctoral or graduate researchers. They said that complying with  agencies’ requirements to prepare and submit documents at a stage  when these details remain uncertain is not an efficient use of their time.  Similarly, the Federation of American Societies for Experimental Biology  reported that difficulty in accurately predicting detailed research budgets  when submitting a proposal was specifically raised as a source of  administrative burden in comments on its survey.
section_title: Administrative Requirements That Have Become More Prescriptive
paragraphs: Recent OMB and HHS policy reforms have resulted in changes to  selected requirements that have made them more prescriptive from the  standpoint of universities and that, according to university officials, have  added to their universities’ administrative workload and costs.  Specifically, the Uniform Guidance—which was intended in part to better  protect against waste, fraud, and abuse of grant funds—included revised  requirements for competition and documentation of purchases that were  more prescriptive than those in OMB’s prior circular that applied to  universities. In addition, in 2011, HHS revised regulations governing  financial conflicts of interest—which apply to research funded by NIH and  several other HHS agencies—to address concerns about the objectivity of  the research it funds. These revisions included more prescriptive  requirements for, among other things, the types of financial interests  researchers must disclose. See table 2 for requirements that have  become more prescriptive under recent reforms.
Officials at universities in our review stated that the more prescriptive  requirements add to universities’ workload and costs when, for example,  new or updated systems and processes must be implemented. Officials  cited the following examples of needing to implement new or updated  systems and processes to comply with the more prescriptive  requirements:
Officials at all six universities told us that they expect the new  purchasing competition and documentation requirements—particularly  the new micropurchase threshold for obtaining price or rate quotations  from multiple vendors—will result in added costs for updating their  electronic purchasing systems. For example, prior to the Uniform  Guidance, five of the universities in our review told us that they had  established a higher threshold than the Uniform Guidance for  obtaining multiple quotations, and that there will be a large increase in  the number of transactions exceeding the new threshold. The grantee  community raised concerns to OMB about not being adequately  prepared to comply with the more prescriptive purchasing  requirements, and OMB delayed implementation of the purchasing  requirements for 2 years.
Five of the universities in our review developed and implemented a  new electronic system to comply with NIH’s revised conflict of interest  requirements, according to university officials. Similarly, officials from  the Association of American Medical Colleges who are studying the  effect of NIH’s conflict of interest requirements told us that institutions  have reported incurring costs to implement processes and systems,  such as financial interest-tracking software, to comply with the new  requirements.
Universities have had to hire and train staff to comply with more  prescriptive requirements, according to officials at the six universities in  our review. Officials at four universities said they expect to hire staff to  handle the added workload resulting from an increased volume of  purchases subject to OMB’s revised purchasing competition and  documentation requirements. In addition, officials from all six universities  said that they provided additional training to researchers on NIH’s conflict  of interest requirements—as required by the revised rule—and officials  from three universities said that each university hired an additional  administrative staff member to manage the overall process for reviewing  and reporting on financial conflicts of interest.
In contrast with its revised purchasing requirements, OMB largely  maintained existing subrecipient monitoring requirements in the Uniform  Guidance. Nevertheless, according to officials from universities and  stakeholder organizations we interviewed, the prescriptive nature of the  subrecipient monitoring requirements adds to universities’ administrative  workload and costs. Under these requirements, grantees have the  flexibility to conduct some monitoring activities, such as on-site reviews or  subrecipient training, as they determine appropriate based on their  assessment of a subrecipient’s risk of misusing grant funds. However, the  Uniform Guidance requires grantees to (1) follow-up and ensure that  every subrecipient, regardless of risk, take timely and appropriate action  on all deficiencies pertaining to the subaward detected through audits, on- site reviews, and other means, and (2) issue management decisions for  such deficiencies. University officials we interviewed said that to meet  these requirements, they may have to review audits of hundreds of  subrecipients each year, including lengthy audits of state governments for  subawards provided to public universities. Officials from universities and  stakeholder groups we interviewed said that much of the administrative  workload and costs for complying with the audit review and follow-up  requirements is unnecessary, particularly for low-risk subrecipients such  as those with histories of successfully conducting federally funded  research.
In some cases—particularly for universities subject to state  requirements—the revised requirements did not substantially add to  universities’ administrative workload and costs. The three public  universities in our review have had to comply with state requirements  related to purchasing or conflicts of interest that were already more  stringent than federal requirements in some ways. For example, officials  at one public university told us that the university was well-positioned to  comply with NIH’s conflict of interest requirements because it already had  processes in place to comply with more stringent state conflict of interest  requirements.
Agency officials said that some of universities’ administrative workload  and costs may be due to their interpretations of requirements that are  stricter than agencies intended. For example, OMB staff said grantees do  not have to review audits of subrecipients’ full financial statements and  internal controls systems, since the Uniform Guidance requires grantees  to follow up and issue management decisions only for audit findings that  are related to their subaward. However, officials from universities and  stakeholder groups said that universities are concerned that they need to  interpret and comply with requirements to the standards they believe  agency inspectors general may apply in an audit. These officials cited  recent audit reports by the HHS and NSF offices of inspector general that  found universities had charged unallowable or questionable costs to  research grants. Some of these audit findings stemmed from differences  in how auditors, agencies and universities interpreted requirements.
section_title: OMB and Funding Agencies Have Made Continuing Efforts to Reduce Universities’ Administrative Workload and Costs, with Limited Results
paragraphs: OMB and the four research funding agencies in our review have made  continuing efforts to reduce universities’ administrative workload and  costs for complying with selected requirements. These efforts have  included (1) standardizing requirements across agencies, (2) streamlining  pre-award requirements, and (3) in some cases allowing universities  more flexibility to assess and manage risks for some requirements. In  each of these areas, OMB and agency efforts have resulted in some  reductions to administrative workload and costs, but these reductions  have been limited.
subsections: section_title: OMB and Funding Agency Efforts to Standardize Some Administrative Requirements Have Not Fully Addressed Variations
paragraphs: OMB and funding agencies have made several efforts to reduce grantees’  administrative workload and costs by standardizing selected  requirements, in accordance with federal goals, and several of these  efforts are ongoing. The Federal Financial Assistance Management  Improvement Act of 1999 was enacted in part to improve the  effectiveness and performance of federal financial assistance programs  and facilitate greater coordination among those responsible for providing  such assistance. For example, the act, which expired in 2007, required  agencies to establish a common application reporting system, including  uniform administrative rules for federal financial assistance programs.  More recently, Executive Order 13563 called for agencies to coordinate  and harmonize regulations to reduce compliance costs. In addition, in  2003 OSTP established the Research Business Models working group  (RBM)—which consists of officials from DOE, NASA, NIH, NSF, and other  federal research funding agencies—to facilitate coordination across these  agencies. RBM’s charter calls for it to examine opportunities and  develop options to unify agency research grants administration practices,  and to assess and report periodically on the status, efficiency, and  performance of the federal-academic research partnership.
In accordance with such federal goals, OMB-led efforts to standardize  selected requirements—particularly requirements for budget preparation  and management—include the following:
Grants.gov. In 2003, OMB created Grants.gov—a common website  for federal agencies to post discretionary funding opportunities and for  grantees to find and apply for them. Intended in part to simplify the  grant application process and save applicants costs and time,  Grants.gov allows for standard government-wide submission  processes and forms for research grants.
Standardization of financial and performance reporting forms. As  discussed previously, in December 2013, OMB consolidated its grants  management guidance into a single document, the Uniform Guidance,  which established standard requirements for financial management of  federal awards across the federal government. In particular, it  generally requires the use of OMB-approved government-wide  standard forms for reporting financial and performance information.
Digital Accountability and Transparency Act pilot program. The  Digital Accountability and Transparency Act of 2014 requires OMB to  establish a pilot program to identify ways to standardize financial and  other information that recipients of federal awards are required to  report to agencies across the government, among other things. This  pilot is ongoing and includes testing approaches to (1) allow grant  recipients to submit financial reports in one central system and (2)  develop consistent government-wide financial and other terms and  definitions to simplify recipient reporting and help agencies create  information collection forms.
In addition, research funding agencies have led several efforts through  RBM to standardize selected requirements, including the following:
Federal research terms and conditions. In 2008, RBM developed a  standard core set of administrative terms and conditions for research  grants, which implemented OMB’s grants management guidance in  effect at that time. The research terms and conditions included  standard provisions related to some selected post-award  requirements, such as budget management and financial reporting. In  2014, RBM began a process to develop a revised set of standard  terms and conditions to apply to research grants subject to OMB’s  revised requirements under the Uniform Guidance. Agency officials  said they estimate that the revised standard terms and conditions will  be issued in late 2016 or early 2017.
Research Performance Progress Report. In 2010, RBM issued, and  OSTP and OMB directed agencies to implement, the Research  Performance Progress Report, a uniform format for post-award  performance reporting for federally funded research projects. The  report is intended to reduce recipients’ administrative workload by  standardizing the types of information required in interim performance  reports, such as budget information. In 2015, RBM drafted a revised  version of the Research Performance Progress Report, which is to be  used for both interim and final reports.
SciENcv. In 2013, research funding agencies worked under RBM’s  direction to develop SciENcv, a central electronic portal where  researchers can assemble biographical information, intended to  reduce the administrative workload and costs associated with creating  and maintaining federal biographical sketches. Initially designed for  NIH applications, SciENcv is currently being expanded to allow  researchers to generate and maintain biographical sketches for  multiple agencies, including NSF, in the formats required by those  agencies.
See appendix IV for more information on OMB and funding agency efforts  to standardize selected administrative requirements.
However, OMB’s efforts to standardize requirements did not fully address  the variations in requirements, thereby limiting the potential reductions in  universities’ administrative workload and costs. For example, the Uniform  Guidance does not prohibit agencies from varying in their implementation  of aspects of budget preparation and management requirements.  Specifically, as previously discussed, the four funding agencies in our  review vary in the forms and level of detail required in proposed budgets,  their systems for financial reporting, and other aspects of budget  preparation and management requirements.
Similarly, research funding agency and OSTP efforts have not fully  addressed variation in requirements. For example, (1) RBM has not  initiated a process to standardize pre-award requirements (its standard  terms and conditions and Research Performance Progress Report both  focus on post-award requirements); (2) SciENcv provides a central  system for assembling biographical sketches, but it does not provide  standardized formats and content and it has not been adopted outside of  NIH and NSF; and (3) RBM’s efforts to standardize research terms and  conditions, both prior to and following the issuance of the Uniform  Guidance, allow for agency-specific variations. For example, according to  officials drafting the revised research terms and conditions, RBM  considered establishing a standard 120-day deadline for institutions to  submit final reports required for closing out grants—an increase over the  90-day deadline some agencies had previously established. However, the  officials said that some agencies indicated they would not increase their  closeout deadlines beyond 90 days. The officials said that to gain these  agencies’ agreement to use the standard terms and conditions, the terms  and conditions will allow deviations from the standard closeout time  frames.
According to OMB staff and funding agency officials, several factors can  limit agencies’ ability to standardize administrative requirements on  research grants. First, funding agencies must comply with differing  statutory or other requirements, which can result in differences in their  requirements for grantees. For example, NIH must comply with HHS’s  regulations on conflict of interest requirements and is limited in how it can  change its conflict of interest requirements to align with those of other  agencies without HHS amending its regulations. Second, there are  differences in the types of research or recipients agencies fund that can  limit their ability to standardize requirements. For example, the types of  data that research projects generate, and the constraints on sharing such  data, can vary depending on the type of research universities are  conducting. Researchers may not be able to share personally identifiable  medical data as they would other types of data, for instance. These  differences can limit agencies’ ability to standardize requirements related  to data management and sharing, according to agency officials.
Nevertheless, agencies have opportunities to standardize requirements to  a greater extent than they have already done. In particular, they have  flexibility in how they implement certain aspects of selected requirements  that are not subject to statutory or other requirements or to agency- specific differences in types of research or grant recipients. According to  some funding agency officials we interviewed, aspects of requirements  where agencies have such flexibility include, for example, the format and  content of biographical sketches, the budget forms and content of budget  justifications that agencies require in applications, and the types of budget  revisions agencies allow grantees to make without obtaining prior  approval. Officials at NSF, NIH, and OSTP who co-chair RBM told us that  the group has been fully occupied with ongoing efforts related to  developing standard research terms and conditions and the Research  Performance Progress Report. RBM officials leading these efforts said  that they expect them to be complete in late 2016 or early 2017, and that  RBM is well suited to pursue further efforts to standardize requirements  and to report on its efforts. Such efforts could help ensure that agencies  do not miss opportunities to reduce universities’ administrative workload  and costs and to improve their oversight of funding and support of  research quality.
section_title: Funding Agency Efforts to Reduce Pre-Award Administrative Workload and Costs by Postponing Proposal Requirements Have Not Been Extended to All Applicable Grants or Requirements
paragraphs: DOE, NASA, NIH, and NSF have made efforts to reduce pre-award  administrative workload and costs associated with proposal preparation  by postponing certain requirements until after a preliminary decision  about an applicant’s likelihood of funding. These efforts require  applicants to provide a limited set of application materials—often referred  to as a preliminary proposal—for initial evaluation before possible  submission of a full proposal. Preliminary proposals are intended, in part,  to reduce applicants’ administrative workload and costs when applicants’  chances of success are very small. Such efforts are in line with RBM’s  charter, which calls for agencies to identify approaches to streamline  research grants administration practices. Furthermore, several  organizations representing federal agencies and university researchers,  including the National Science Board and Federation of American  Societies for Experimental Biology, have recommended such efforts to  streamline proposal processes. For example, according to findings from  the National Science Board’s request for information, respondents  suggested that much of the information agencies required at proposal  submission may not be necessary, and the board recommended that  agencies modify proposal requirements to include only information  needed to evaluate the merit of the proposed research and make a  funding determination.
The funding agencies in our review implement a range of preliminary  proposal processes, which can involve postponing requirements related  to budget preparation, biographical sketches, data management plans,  and researcher mentoring and development plans. For example, NSF’s  preliminary proposals generally include a four-page project description  and a one-page description of project personnel, among other elements,  but may not include budgets, budget justifications, data management  plans, or postdoctoral mentoring plans. NIH’s “just–in-time” process  allows some elements of an application to be submitted after the  application has gone through initial peer review and received a qualifying  score from the peer review panel. For example, certain data management  plans can be submitted at the just-in-time stage, but other information,  such as budgets and biographical sketches, must generally be submitted  with the initial application. In some cases, agencies use peer reviewers to  evaluate preliminary proposals and make binding decisions as to whether  applicants can submit full proposals. In other cases, agency program  officers evaluate preliminary proposals and provide feedback either  discouraging or encouraging applicants to submit full proposals. See  appendix IV for more information on funding agency efforts to streamline  selected pre-award administrative requirements through preliminary  proposals.
According to university officials, stakeholder organizations, and  information from the four funding agencies in our review, efforts to  postpone the timing of certain pre-award requirements have generally led  to reductions in universities’ administrative workload and costs. For  example, one NSF division evaluated its preliminary proposal pilot in  2014, and reported that the pilot led to reduced applicant workload by  lessening the number of proposal pages researchers needed to write and  simplifying the documents university administrative offices required of  applicants, since preliminary proposals do not include budgets. According  to NSF data, NSF received approximately 4,900 preliminary proposals in  fiscal year 2014 and discouraged or barred applicants from submitting full  proposals for more than 3,700 of them. As a result, those applicants  avoided the administrative workload and costs of preparing full budgets  and other documentation for proposals that would not be funded. Officials  from the six universities in our review said that application processes that  allow researchers to focus more of their pre-award time developing and  describing the scientific and technical aspects of the proposed research  were a more efficient use of their time than developing detailed budgets  or other information that agencies may not need to make an initial funding  decision and that may change by the time the research is conducted. For  example, as noted above, staff at the six universities told us that budget  details such as potential vendors or travel costs, or other details such as  expected research data and results or planned contributions by  postdoctoral researchers, are often not known with certainty at the pre- award stage. Similarly, according to findings from the National Science  Board’s request for information, respondents suggested that the  administrative workload of both applicants and reviewers can be  substantially reduced through use of preliminary proposals and other  approaches for postponing submission of information.
However, agencies have not extended these pre-award streamlining  efforts to all grant solicitations for which they could be used to reduce  workload and costs. In addition, for certain requirements, agencies still  require documentation that they may not need to effectively evaluate  initial proposals. For instance, NIH’s just-in-time process does not  generally postpone requirements for proposed budgets, disclosure of  significant financial interests, or biographical sketches, among others— requirements that other agencies have determined are not necessary for  preliminary proposals. In addition, pre-award streamlining efforts at DOE,  NASA, and NSF are limited to certain offices or certain programs within  the agencies, in some cases because the efforts are still in pilot phases.  Partly in response to the National Science Board’s 2014  recommendations to reduce administrative workload by expanding the  use of preliminary proposals or just-in-time submissions, NSF took  steps to identify opportunities for expanding pre-award streamlining  efforts agency-wide. Specifically, in 2015, NSF senior leadership directed  officials from NSF’s directorates to review and identify options to reduce  researchers’ administrative workload and costs, including by expanding  use of preliminary proposals and by focusing application reviews on a  minimum set of elements that are needed to meet NSF’s two merit review  criteria: (1) intellectual merit and (2) broader impact, which encompasses  the potential benefit to society. As a result of the directive, three NSF  directorates expanded their use of preliminary proposals, for instance, by  piloting efforts to postpone requirements to submit detailed budgets until  proposals are recommended for award. DOE, NASA, and NIH have not  conducted similar agency-wide reviews to identify opportunities for  reducing administrative workload and costs by expanding their use of  preliminary proposals or just-in-time submissions, according to agency  officials. Such reviews may help ensure that agencies do not miss  opportunities to reduce unnecessary pre-award administrative workload  and costs for applicants that do not receive awards.
According to funding agency officials we interviewed, preliminary  proposals may not be effective in reducing administrative workload and  costs for certain solicitations or certain research grant programs. For  example, DOE officials said they do not use preliminary proposals for  certain specialized grant programs in fields with a small number of  scientists who are likely to apply. Similarly, NSF officials said that  preliminary proposals can create additional workload and costs for  solicitations where the large majority of applicants go on to submit full  proposals. Officials from DOE and NASA also said that researchers value  the opportunity for peer review and feedback on their full proposals  because it helps them improve their future applications.  In addition,  agency regulations may establish time frames that prevent postponing  certain requirements until a smaller pool of likely awardees has been  identified. For instance, under HHS regulations governing NIH’s financial  conflict of interest requirements, researchers who have not previously  disclosed their significant financial interests must do so no later than the  time of application for NIH funds. However, Executive Order 13563  directs agencies to identify and consider regulatory approaches that  reduce burdens and maintain flexibility. For research grant requirements,  such approaches could include modifying regulations to allow for  postponing pre-award requirements. Coordinating and reporting on  opportunities agencies have identified for expanded use of preliminary  proposals would be in line with RBM’s charter.
section_title: OMB and Funding Agency Efforts to Allow More Flexibility Have Not Addressed Some Requirements
paragraphs: OMB and funding agencies have made efforts, in accordance with federal  goals, to reduce administrative workload and costs by allowing  universities more flexibility to assess and manage risks related to certain  administrative requirements. Executive Order 13563 calls for agencies to  identify and consider regulatory approaches that reduce burdens and  maintain flexibility for the public. Accordingly, one of OMB’s stated  objectives for its reforms in the Uniform Guidance was “focusing on  performance over compliance for accountability.” For example, in its  statements in the Federal Register accompanying the final Uniform  Guidance, OMB reiterated its commitment to allow recipients of federal  awards the flexibility to devote more effort to achieving programmatic  objectives rather than complying with complex requirements, such as by  reforming requirements that are overly burdensome. Efforts by OMB and  the funding agencies in our review to allow universities more flexibility to  assess and manage risks related to administrative requirements— particularly requirements for budget preparation and management and  documentation of personnel expenses—include the following:
Expanded authorities. OMB revised its grants guidance in the 1990s  to allow “expanded authorities” for grant recipients. The expanded  authorities allowed funding agencies to waive requirements for  recipients to obtain agencies’ prior written approval before making  certain changes to project budgets, such as rebudgeting funds across  budget categories and carrying forward unobligated balances to later  funding periods. Under RBM’s 2008 standard terms and conditions  that implemented that guidance, DOE, NASA, NIH, and NSF waived  many requirements for recipients to obtain prior approvals for budget  revisions. Agency officials said that since the issuance of the Uniform  Guidance they are continuing many of these waivers.
Revised requirements for documenting personnel expenses. In  the Uniform Guidance, OMB modified requirements for documenting  personnel expenses to focus on establishing standards for recipients’  internal controls over salary and wage expenses, without prescribing  procedures grantees must use to meet the standards. OMB expected  this change to reduce grantees’ administrative workload and costs by  allowing them the flexibility to use internal controls that fit their needs.  In 2011, prior to the Uniform Guidance, four universities, in  coordination with the Federal Demonstration Partnership and  research funding agencies, began piloting a new method for  documenting salary and wage charges to federal awards, known as  payroll certification. OMB and the offices of inspector general at  NSF and HHS agreed that the pilot would include subsequent audits  by the offices of inspector general in order to evaluate the results.
Modular budgets. In 1999, NIH implemented modular budgets, which  generally apply to all NIH research grant applications requesting up to  $250,000 per year. NIH allows recipients to request budgets in  $25,000 increments—or “modules”—and decide after receiving an  award whether to establish detailed budgets or to continue budgeting  in $25,000 increments. In addition, under modular budgets, NIH  allows applicants to provide more limited narratives to support certain  budget line items than they would provide under non-modular  budgets.
See appendix IV for more information on OMB and funding agency efforts  to allow flexibility for grantees related to selected administrative  requirements.
OMB’s and funding agencies’ efforts to allow universities more flexibility  have led to reductions in administrative workload and costs. For instance,  officials from the four funding agencies and six universities in our review  generally agreed that OMB’s expanded authorities reduced grantees’  administrative workload and costs associated with post-award budget  revisions. In addition, officials from both universities in our review that  piloted a payroll certification system said that it resulted in over an 80  percent reduction in the number of forms that principal investigators  needed to review and corresponding reductions in time needed to  develop and process these forms. Officials from both universities also  said the time and costs of training staff were lower under the pilot,  because fewer people were responsible for certifying payroll reports than  had been responsible for certifying effort reports, and the concept of  payroll certification is easier to understand than effort reporting.  Furthermore, agency inspector general audits of two of the universities  participating in the pilot found that the universities’ implementation of  payroll certification did not weaken accountability over federal funds for  salaries and wages; an audit of the third university was inconclusive, and  the fourth audit report had not been issued as of April 2016.
In April 2016, OMB staff said other reforms in the Uniform Guidance also  reduced administrative workload and costs by providing universities and  other grantees more flexibility. For example, the Uniform Guidance  includes provisions specifically allowing the use of fixed amount awards— grant agreements for which accountability is based primarily on  performance and results rather than accounting for incurred costs—which  OMB staff said can reduce administrative workload and costs, for  example, for submission of invoices by the fixed amount award  recipient. Also, in the Uniform Guidance, OMB clarified its prior  guidance by detailing the conditions under which grantees may directly  charge administrative support costs to grants—rather than being  reimbursed for these costs as part of their indirect (or overhead) costs.  OMB staff said this change reduced administrative workload and costs by  better allowing universities to assign administrative staff to specific  research projects so that researchers can focus more of their time on the  scientific aspects of the projects. However, fixed amount awards and  direct charging of administrative support costs were both allowed under  certain circumstances prior to the Uniform Guidance, and we did not  specifically discuss the reforms with universities, so we do not know to  what extent universities believe the reforms reduced their administrative  workload and costs.
Despite efforts to allow universities more flexibility, as previously  discussed, several administrative requirements—in particular, OMB  requirements related to purchases and subrecipients and NIH  requirements related to financial conflicts of interest—limit universities’  flexibility and require them to allocate administrative resources toward  oversight of lower-risk purchases, subrecipients, and financial interests.  These requirements limit universities’ flexibility in the following ways:
Competition and documentation of purchases. In developing the  Uniform Guidance, OMB established the micro-purchase threshold— above which grantees must generally obtain price or rate quotations,  competitive bids, or competitive proposals—based on the threshold  for competition of purchases made under federal contracts.  University officials said that prior to the Uniform Guidance, the  universities had set their thresholds based on consideration of the  potential savings and administrative costs of competition or, in the  case of public universities, state requirements. As previously  discussed, officials at five of the universities in our review told us that  they had each established a higher threshold than the Uniform  Guidance for obtaining multiple quotations. Furthermore, officials from  the six universities in our review said that for relatively small  purchases, the administrative workload and costs associated with  competition may outweigh the savings gained.
Monitoring subrecipients. In developing the Uniform Guidance,  OMB largely based its subrecipient monitoring requirements on those  in its prior guidance and did not provide certain flexibilities to grantees  to assess and manage risks. Specifically, the Uniform Guidance  allows grantees to use a risk-based approach to monitor  subrecipients, but it does not allow a risk-based approach to following  up on audit findings that pertain to the subaward. The requirement for  a university to follow up on audit findings is not risk based in that it  applies to all subrecipients, regardless of their risk as assessed by the  university. Officials we interviewed from the six universities in our  review and stakeholder organizations generally agreed that  administrative resources spent reviewing and following up on audits of  low-risk subrecipients, such as those that have long track records of  conducting federally funded research, could be better targeted on  monitoring higher-risk subrecipients. These officials also noted that  because the Uniform Guidance requires universities to review  financial and performance reports and perform other project-level  oversight of subrecipients, following up on audit findings may result in  little added protection against improper use of funds and poor  performance. OMB staff said that they have drafted an audit reporting  form that universities can use to reduce the workload of reviewing  subrecipients’ audit reports. However, the form had not been issued  as of April 2016, and the draft form does not change the requirement  for universities to follow up on audit findings for all subrecipients,  regardless of risk.
Identifying and managing researcher financial conflict of interest.  Under the HHS regulations governing NIH’s conflict of interest  requirements, researchers must disclose to their institution a range of  financial interests held by them, their spouses, or their dependent  children. These financial interests include investments in or income  from a company involved in similar research, patents or copyrights  that generate income for the researcher, or reimbursed or sponsored  travel, among others. These different types of financial interests vary  in the frequency with which they occur and in the risk they might pose  to the integrity of the NIH-funded research. Officials we interviewed  from the six universities in our review and stakeholder organizations  generally agreed that the additional financial interests that must be  disclosed and reviewed under the revised requirements—particularly  reimbursed or sponsored travel costs, which officials said are  common among academic researchers—rarely result in identification  of actual conflicts that could bias their research.
OMB, in developing the Uniform Guidance, and HHS, in developing the  financial conflict of interest regulations that apply to NIH awards, each  went through multiyear public rule-making processes and incorporated  input from a range of stakeholders concerned about administrative  workload and costs as well as accountability and research integrity. OMB  plans to evaluate the guidance’s overall impact on burden and waste,  fraud, and abuse by January 2017 to identify opportunities to enhance its  effectiveness. Similarly, as stated in the final rule for its conflict of interest  regulation, HHS plans to evaluate the effects of certain provisions of the  regulation. Since issuing these rules, OMB and HHS, as well as  stakeholder organizations, have begun collecting information on the  effects of the rules that the agencies can use in their evaluations. OMB  directed agencies to report, beginning in January 2015, information on  their implementation of the Uniform Guidance, including metrics on the  overall impact on burden and waste, fraud, and abuse. In addition, the  Federal Demonstration Partnership has gathered information from  member universities to report to OMB on how the Uniform Guidance  purchasing requirements will affect universities’ administrative workload  and costs. Similarly, the Association of American Medical Colleges has  gathered information from its member institutions on how HHS’s new  regulation has affected their administrative workload and costs for  disclosing and reviewing financial interests, and how it has affected the  number of actual conflicts of interest institutions have identified. The  additional information agencies and stakeholder organizations are  gathering could allow OMB and HHS to more fully consider the  requirements’ effects on universities’ administrative workload and costs  and balance such considerations against the requirements’ added  protections for accountability and research integrity.
Federal standards for internal control call for agencies to identify risks,  analyze them to estimate their significance, and respond to them based  on their significance and the agency’s risk tolerance. The standards also  state that management may need to conduct periodic risk assessments to  evaluate the effectiveness of risk response actions. Neither OMB nor  HHS has specified whether its evaluation of the Uniform Guidance and  financial conflict of interest regulations, respectively, will include  evaluating options for targeting requirements on areas of greatest risk,  particularly in the areas of competing and documenting purchases,  monitoring subrecipients, or identifying and managing research conflict of  interest. Evaluating such options could help universities focus  administrative resources on areas of highest risk and allow researchers to  maximize the time spent on conducting research versus completing  administrative tasks.
section_title: Conclusions
paragraphs: OMB and research funding agencies—in response to congressional or  executive directives—have established administrative requirements on  research grants. Such requirements help to protect against waste, fraud,  and abuse of funds and to promote the quality and effectiveness of  federally funded research, but they also create administrative workload  and costs for universities. OMB and funding agencies have made a  number of efforts to reduce workload and costs—such as by  standardizing requirements across agencies, streamlining pre-award  requirements, and allowing universities more flexibility to manage risks— and have had some success.
However, opportunities remain for research funding agencies to achieve  additional reductions in administrative workload and costs while still  protecting against waste, fraud, and abuse. RBM—whose charter calls for  it to examine opportunities and develop and report on options to unify and  streamline agency research grants administration practices—is well  suited to pursue such efforts. First, agencies have opportunities to  standardize requirements through RBM to a greater extent than they have  already done, by addressing variations in budget forms, biographical  sketches, and conflict of interest requirements, among others. Such  standardization could reduce universities’ administrative workload and  costs associated with investing in systems and spending researcher and  administrative staff time learning and complying with agencies’ varying  requirements. Second, NSF senior leadership has called for an agency- wide review to identify options for expanding preliminary proposals or  other pre-award streamlining efforts, but DOE, NASA, and NIH have not  called for similar reviews. Agency-wide reviews to identify opportunities to  use preliminary proposals or similar approaches where applicable could  reduce administrative workload and costs associated with proposal  preparation, particularly for the large majority of applicants that do not  receive awards.
Opportunities also remain for OMB and HHS to reduce administrative  workload and costs by allowing universities more flexibility to assess and  manage risks related to certain administrative requirements, as they have  already done with requirements for documenting personnel expenses and  preparing and managing budgets and as called for in federal streamlining  directives. Specifically, (1) OMB’s planned evaluation of the Uniform  Guidance presents an opportunity for OMB to consider targeting  requirements for purchasing and subrecipient monitoring on areas of  greatest risk to proper use of research funds and (2) HHS’s planned  evaluation of its revised conflict of interest requirements presents an  opportunity for HHS to consider targeting conflict of interest requirements  on areas of greatest risk to research integrity. By evaluating options for  targeting these requirements, OMB and HHS may identify ways to reduce  universities’ administrative workload and costs while maintaining  accountability over grant funds.
section_title: Recommendations for Executive Action
paragraphs: We are making four recommendations for identifying and pursuing  opportunities to streamline administrative requirements on research  grants to universities.
To further standardize administrative research requirements, the  Secretary of Energy, the NASA Administrator, the Secretary of Health and  Human Services, and the Director of NSF should coordinate through  OSTP’s Research Business Models working group to identify additional  areas where they can standardize requirements and report on these  efforts.
To reduce pre-award administrative workload and costs, particularly for  applications that do not result in awards, the Secretary of Energy, the  NASA Administrator, and the Secretary of Health and Human Services  should conduct agency-wide reviews of possible actions, such as further  use of preliminary proposals, to postpone pre-award requirements until  after a preliminary decision about an applicant’s likelihood of funding and,  through OSTP’s Research Business Models working group, coordinate  and report on these efforts.
To better target requirements on areas of greatest risk, while maintaining  accountability over grant funds,  the Secretary of Health and Human Services, as part of the planned  evaluation of the HHS regulation governing financial conflicts of  interest in NIH-funded research, should evaluate options for targeting  requirements on areas of greatest risk for researcher conflicts,  including adjusting the threshold and types of financial interests that  need to be disclosed and the timing of disclosures, and  the Director of OMB, as part of OMB’s planned evaluation of the  Uniform Guidance, should evaluate options for targeting requirements  for research grants to universities, including requirements for  purchases and subrecipient monitoring, on areas of greatest risk for  improper use of research funds.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE, HHS, NASA, NSF, OMB, and  OSTP. DOE, HHS—responding on behalf of NIH—and NASA provided  written comments, which are reproduced in appendixes V, VI, and VII,  respectively, and NSF and OMB provided oral comments. DOE, HHS,  and NASA generally concurred with our findings and recommendations  and provided specific comments which we discuss in more detail below.  NSF and OMB did not comment on our recommendations. DOE, HHS,  NSF, and OMB also provided technical comments, which we incorporated  as appropriate.
DOE, HHS, and NASA concurred with our first recommendation to  coordinate through RBM to identify additional areas where they can  standardize requirements. In their comments, the agencies said they  would continue to build on RBM’s previous efforts to standardize  requirements and report on their efforts according to RBM’s charter. NSF  did not formally state whether it concurred with the recommendation, but  NSF officials told us that research funding agencies already coordinate  effectively through RBM and other groups, on such efforts as the  standard research terms and conditions and the Research Performance  Progress Report. However, these current efforts are expected to be  complete in late 2016 or early 2017, and we continue to believe that  agencies have opportunities to standardize requirements in areas that  have not yet been addressed by current efforts, and achieve additional  reductions in administrative workload and costs while still protecting  against waste, fraud, and abuse.
DOE and HHS concurred, and NASA partially concurred, with our second  recommendation to conduct agency-wide reviews of possible actions to  postpone pre-award requirements until after a preliminary decision about  an applicant’s likelihood of funding. DOE stated that it would review pre- award requirements and coordinate through RBM to define actions to be  taken to reduce burdens of these requirements, and HHS stated that NIH  will review what components of grant applications are strictly needed to  provide information for balanced and fair review and funding  considerations, and what components can be added to the information  requested during the just-in-time stage. In its technical comments, HHS  stated that in 2014, NIH charged its Scientific Management Review Board  to conduct an evaluation to recommend ways to further optimize the  process of reviewing, awarding, and managing grants and maximize the  time researchers can devote to research.  In line with our second  recommendation, the Board’s report also found that the use of preliminary  proposals could be expanded and included a recommendation that NIH  pilot test preliminary proposals. In its comments, NASA agreed to review  existing documents and reports to identify best practices that postpone  pre-award requirements, but stated that program offices should determine  whether or not these practices are in the best interest of the program  mission.  We acknowledge in our report that preliminary proposals may  not be effective in reducing administrative workload and costs for certain  research grant programs or solicitations, and our recommendation allows  for program offices to use discretion in determining what actions to take, if  any, to postpone pre-award requirements until after a preliminary decision  about an applicant’s likelihood of funding.
HHS concurred with our third recommendation to evaluate options for  targeting its financial conflict of interest requirements on areas of greatest  risk for researcher conflicts. HHS stated in its comments that it has   partnered with the Association of American Medical Colleges to measure  the effectiveness of the financial conflict of interest requirements and  identify areas that may create administrative burden.
OMB did not formally state whether it concurred with our fourth  recommendation to evaluate options for targeting requirements for  purchases and subrecipient monitoring on areas of greatest risk for  improper use of research funds. However, OMB staff told us that they  agree that opportunities remain for streamlining administrative  requirements. In addition, in technical comments on our draft, OMB staff  stated that its grants policy applies to all types of grants and recipients— not just research grants to universities. We have revised our report to  clarify that OMB’s requirements apply to all types of grants and recipients.  With regard to our recommendation, it is important to note that the  Uniform Guidance states that OMB may allow exceptions to requirements  for classes of federal awards or recipients—for example, when doing so  would expand or improve the use of effective practices in delivering  federal financial assistance. We believe that our recommendation that  OMB evaluate options for targeting requirements for research grants to  universities could lead to such improvements for universities and  potentially for other types of recipients. In particular, if implemented by  OMB, our recommendation could help universities focus administrative  resources on areas of highest risk and allow researchers to maximize the  time spent on conducting research versus completing administrative  tasks.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Director of the National Science  Foundation, the Director of the Office of Management and Budget, the  Director of the Office of Science and Technology Policy, the Secretary of  Energy, the Secretary of Health and Human Services, the Administrator  of the National Aeronautics and Space Administration, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or neumannj@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made key contributions to  this report are listed in appendix VIII.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report examines (1) the sources and goals of selected research  grant requirements, (2) the factors that contribute to universities’  administrative workload and costs for complying with these requirements,  and (3) efforts the Office of Management and Budget (OMB) and  research funding agencies have made to reduce the administrative  workload and costs for complying with these requirements, and the  results of these efforts.
To address these objectives, we selected four agencies that fund  research grants to universities and focused on nine categories of  requirements associated with these agencies’ research grants:
The four funding agencies were the Department of Energy (DOE),  National Aeronautics and Space Administration (NASA), National  Institutes of Health (NIH) within the Department of Health and Human  Services, and National Science Foundation (NSF). We selected NIH  and NSF because they are the two largest funders of research at  universities and colleges, according to NSF data. We selected DOE  and NASA as two agencies providing smaller amounts of research  funding, and funding for different types of research, to universities and  colleges. According to NSF data, these four agencies provided about  83 percent of federal funding for research at universities and colleges  in fiscal year 2015. Our findings from our reviews of these four  agencies cannot be generalized to all agencies that fund research.
The nine categories of administrative requirements on research grants  were (1) competition and documentation of purchases, (2)  documenting personnel expenses, (3) preparing and managing  project budgets, (4) subaward reporting, (5) subrecipient monitoring,  (6) biographical sketches, (7) financial conflicts of interest, (8)  managing and sharing research data and results, and (9) researcher  mentoring and development. We chose these requirements based on  several factors. In particular, we chose requirements that multiple  universities and university stakeholder organizations had cited as  contributing to universities’ administrative workload or costs. In  addition, we chose requirements that had been the subject of recent  streamlining efforts or of recent changes in OMB or funding agency  guidance, or that had been part of the findings of recent reports by  agency inspectors general on research grants to universities. Our  findings from our reviews of these requirements cannot be  generalized to all administrative requirements. See appendix II for  more information on these requirements, including their definitions,  sources, and goals.
To examine the sources and goals of these nine categories of  requirements, we reviewed documents related to establishing the  requirements and any changes that had been made. These documents  included public laws; Federal Register notices and other documentation  related to OMB’s development of the Uniform Administrative  Requirements, Cost Principles, and Audit Requirements for Federal  Awards (Uniform Guidance); and other documentation of government- wide requirements, such as the February 2013 Office of Science and  Technology Policy (OSTP) memorandum on increasing access to the  results of federally funded scientific research. We also examined DOE,  NASA, NIH, and NSF documents related to their implementation of the  nine categories of requirements, including agency-specific guidance on  grant proposal and award policies and procedures and agency  regulations implementing the Uniform Guidance. To ensure the accuracy  and completeness of the information we collected, we obtained input from  the four agencies in our scope by obtaining their edits and additions to a  matrix we prepared summarizing the sources and goals of the nine  requirements. For further information, we interviewed OMB staff about the  development of the Uniform Guidance, including its provisions specific to  university research grants, and we interviewed DOE, NASA, NIH, and  NSF officials responsible for developing research grant requirements at  their agencies. We also reviewed audit reports issued by the DOE, NASA,  NIH, and NSF offices of inspector general related to research grants and  the nine categories of requirements included in our scope to determine  how the inspectors general apply the requirements, and we interviewed  office of inspector general officials from each of the four agencies.
To examine factors that contribute to universities’ administrative workload  and costs for complying with selected requirements, we selected a  nongeneralizable sample of six universities to conduct in-depth interviews  of officials regarding each of the nine categories of requirements in our  scope and to collect qualitative information on the types of administrative  workload and costs resulting from the requirements—such as  administrative staff costs, researcher time, and investments in systems  and processes. The six universities were George Mason University;  Johns Hopkins University; Massachusetts Institute of Technology;  University of California, Riverside; University of Massachusetts, Amherst;  and University of Southern California. We selected these universities  because they ranged in the amount of federal research funding they  received in fiscal year 2014, as reported by NSF, and because they  provided a diverse sample that included both public and private  institutions and both member and nonmember institutions in the Federal  Demonstration Partnership—a cooperative initiative of 10 federal  agencies and 155 university recipients of federal funds that works to  reduce the administrative burdens associated with research grants and  contracts. We also considered whether these universities had participated  in pilot streamlining efforts related to one or more of the nine categories of  requirements included in our scope.
At each of the six universities, we reviewed university policies for  implementing federal requirements and other relevant documentation,  and we interviewed officials from the central offices for administration of  grants, principal investigators who led research projects funded by grants,  and administrators within the academic departments where principal  investigators hold positions. In particular, we discussed the officials’ views  on the effects of prior, current, and proposed changes to requirements  and their suggestions for streamlining requirements. For further context  on universities’ administrative workload and costs, including suggestions  for streamlining and views on changes to requirements, we interviewed  officials from and reviewed studies conducted by the following  stakeholder organizations: the Association of American Medical Colleges,  Council on Governmental Relations, Federal Demonstration Partnership,  Federation of American Societies for Experimental Biology, National  Academy of Sciences, and National Science Board. We identified these  organizations based on discussions with agency and university officials  and reviews of published reports, and selected those that had studied  administrative workload and costs related to our selected categories of  requirements.
To examine OMB and agency efforts to reduce the administrative  workload and costs for complying with the requirements included in our  scope and the results of these efforts, we focused on government-wide  efforts led by OMB and OSTP as well as on agency-specific efforts at  DOE, NASA, NIH, and NSF. We identified current and past streamlining  efforts by reviewing agency documents, attending presentations by  agency officials at Federal Demonstration Partnership and other public  meetings, and interviewing OMB and OSTP staff as well as officials from  the four research funding agencies in our scope. To determine the results  of these streamlining efforts, we reviewed agency documents, including  assessments of the results of their efforts, and interviewed agency and  university officials. We also interviewed agency officials regarding  government-wide efforts to coordinate development and implementation  of requirements among agencies and the feasibility of suggestions for  streamlining requirements. We interviewed OMB staff regarding their  plans to review the effects of the Uniform Guidance, including the effects  on universities’ administrative workload and costs, and we interviewed  OSTP and agency officials on streamlining and coordination efforts by the  Research Business Models working group within the National Science  and Technology Council’s Committee on Science. Finally, we interviewed  officials from offices of inspectors general at the four funding agencies in  our scope about the potential effects of changes to requirements on the  ability of grant-making agencies to ensure transparency and  accountability, and about the NIH and NSF inspector general audits of a  pilot program at four universities to streamline requirements for  documenting personnel expenses.
We conducted this performance audit from April 2015 to June 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Sources and Goals of Selected Administrative Requirements
paragraphs: Table 3 lists the sources and goals of selected administrative grant  requirements.
section_title: Appendix III: Examples of Differences in Selected Administrative Requirements across Agencies in GAO’s Review
paragraphs: Table 4 shows examples of differences in selected administrative  requirements across agencies in our review.
section_title: Appendix IV: Office of Management and Budget and Selected Research Funding Agency Efforts to Reduce Administrative Workload and Costs Related to Selected Requirements
paragraphs: Table 5 provides information on Office of Management and Budget  (OMB) and selected funding agency efforts to standardize forms,  systems, processes, and provisions related to our selected administrative  requirements on research grants. The efforts listed in table 5 all share the  goal of reducing universities’ and other grantees’ administrative workload  and costs, according to agency officials and documents.
Table 6 provides information on agency efforts to streamline selected pre- award administrative requirements, in particular by postponing certain  requirements until a preliminary decision has been made about the  likelihood of a proposal being funded. The efforts listed in table 4 all share  the goal of reducing applicants’ administrative workload and costs for  developing proposals—particularly in cases where the chance of the  proposal being funded is small.
Table 7 provides information on OMB and agency efforts to reduce  grantees’ administrative workload and costs related to selected  requirements, by allowing them more flexibility in their grant management  approaches.
section_title: Appendix V: Comments from the Department of Energy
section_title: Appendix VI: Comments from the Department of Health and Human Services
section_title: Appendix VII: Comments from the National Aeronautics and Space Administration
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: John Neumann, (202) 512-3841 or neumannj@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Joseph Cook (Assistant Director),  Ellen Fried, Cindy Gilbert, Elizabeth Hartjes, Terrance Horner, Miles  Ingram, Richard Johnson, Sarah Martin, Dan Royer, and Monica Savoy  made key contributions to this report.