COGR Update National Conference on College Cost Accounting (NACCA) Annual Meeting Hyatt Regency, Bethesda MD October 4, 2017 David Kennedy Director, Costing Policies

COGR Overview Council on Governmental Relations (www.cogr.edu), established in 1948 190+ Member Institutions Staff of 6 and 4 Committees: 1) Costing Policies, 2) Research Compliance, 3) Intellectual Property, 4) Research & Regulatory Reform Active Board and Committees, comprised of 25 individuals from Member institutions Regular Collaboration with other Partners

This Session Proposed F&A Cap: Where We Were, Where Are We Going? Regulatory Reform: Great Ideas, Measuring Impact? Single Audit and Compliance Supplement (CS): Comments to CS due October 31st!!! UG FAQs, UG Updates, Procurement and other topics for discussion Q&A

Proposed F&A Cap Spring and Early Summer House and Senate Appropriations Hearings (Former) HHS Secretary Price indicated that changes to indirect costs could reduce budgets without negatively impacting science President’s FY 2018 Budget Proposal NIH provision to limit indirect cost reimbursement to 10% of the total award House Science Hearing Research & Technology and Oversight Subcommittees (NSF-focused) hearing on indirect costs; May 24th

Proposed F&A Cap Into the Summer Letters to (Former) Secretary Price and OMB Director Mulvaney Associations and institutions sent over 115 letters detailing the anticipated effects of a significant F&A rate cut and copied their congressional delegations. Senate Appropriations Hearing Senators spoke out strongly against proposed plans to replace negotiated indirect cost rates with a flat 10% rate at the June NIH appropriations hearing.

Proposed F&A Cap Late Summer and Forward LHHS Appropriations Bill and the Current Continuing Resolution (thru Dec. 8) In making Federal financial assistance, [NIH] shall continue through the date specified in section 106(3) of this Act to apply the provisions relating to indirect costs in part 75 of title 45, Code of Federal Regulations, including with respect to the approval of deviations from negotiated rates, to the same extent and in the same manner as [NIH] applied such provisions in the third quarter of fiscal year 2017. None of the funds appropriated in this Act may be used to develop or implement a modified approach to such provisions, or to intentionally or substantially expand the fiscal effect of the approval of such deviations from negotiated rates beyond the proportional effect of such approvals in such quarter.

Proposed F&A Cap Late Summer and Forward “Dear Colleague Letter” from Reps. DelBene (D) and King (R) … Dear Speaker Ryan and Minority Leader Pelosi Community Letter from 109 Higher Ed and Science Associations … Dear Director Mulvaney and (Former) Secretary Price “Cautious Optimism” that current crisis has been averted, for now … HOWEVER …

Proposed F&A Cap The Beast that Never Dies NOVEMBER 1994 (AUTHOR UNNAMED): To no one's surprise, the controversy over universities' indirect research costs is heating up again. In times past, you could count on this issue to turn up every few years; now it returns so often it never really seems to go away. This time around, the Clinton Administration, led by the [OMB] and the White House [OSTP], is meeting with representatives of university administrators, scientists, and federal research agencies to try to reach a long-term solution to the problem. The group plans to submit recommendations to the Administration and Congress within the next few months.

Proposed F&A Cap Telling the Story Federal Dollar: Duke $, Emory $, MIT $, Stanford $; and we need Publics and both large and smaller volume institutions … Plus the University contribution! Good visuals, even videos (U of Idaho), and real, worst- case scenario stories (some will alter their portfolios, some may get out of the research business?) F&A 101, for Dummies; or is this system simply too hard to explain? Still, is this system the “best”? Nurture Faculty as our allies

Proposed F&A Cap The Foundation Issue The Administration’s budget called out the Gates Foundation and 10%: “… bring NIH's reimbursement rate for indirect costs more in line with the reimbursement rate used by private foundations, such as the Gates Foundation …” COGR outreach with FasterCures, Milken Institute and Foundation community to address baseline F&A, direct charging “Research Operating Costs”, IP/Licensing, Reporting Templates and partnership opportunities to establish common terms and practices.

Regulatory Reform Statutory Requirements 21st Century Cures Act – Dec. 13, 2016 Sets in motion many of the recommendations made by the National Academies Committee on Federal Research Regulations and Reporting Requirements; Optimizing the Nation’s Investment in Academic Research: A New Regulatory Framework for the 21st Century. National Defense Authorization Act (NDAA) – Dec. 23, 2016 American Innovation and Competitiveness Act (AICA) – Jan. 6, 2017

Regulatory Reform 21st Century Cures Provisions Subrecipient Monitoring NIH Director to reduce administrative burden Possible exemption where subrecipient is subject to single audit Review Financial Conflict of Interest Policies Review by the HHS Secretary within two years of enactment Evaluation of Financial Reporting Procedures Avoid duplication between HHS and NIH and minimize burden Clarify or Affirm Alternatives to Effort Reporting HHS Secretary to clarify applicability of the UG for management and certification systems, including those for documentation of personnel expenses.

Regulatory Reform 21st Century Cures Provisions Review of Animal Research Regulations Within two years of enactment NIH, USDA and FDA are charged with identifying and eliminating inconsistent, overlapping or unnecessarily duplicative regulations and policies and improving coordination. FASEB, AAMC and COGR Workshop and Report Workshop on animal research regulatory reform conducted on April 17 in Washington, D.C. Report and recommendations expected in September.

Regulatory Reform 21st Century Cures Provisions OMB to establish a Research Policy Board Federal and non-federal/university members Charged with: Coordinating and improving regulations and policies Discussing policy and regulatory gaps and challenges Ongoing assessment of regulatory burden Expert subcommittees

Regulatory Reform AICA, NDAA, and EOs AICA: Interagency Working Group on Research Regulations AICA: $10,000 MPT (NSF, NASA, NIST) NDAA: $10,000 MPT (All Agencies) Executive Orders 13771 (2 for 1) and 13777 (Agency plans and performance) And to Ponder … Correlation between reducing regulatory burden and F&A rates???

Single Audit and OIG Developments Reimbursement/Advance Payment Methodology. What constitutes “paid”? IT’S NOT WHEN A CHECK IS CASHED! Securing Student Information, Department of Education (ED). Safeguarding data and the information security program; 2018 Compliance Supplement. Annual Compliance Audit, Student Financial Aid (SFA) Cluster. “Annual” required per ED; inconsistent with the UG. October 31, 2017: Deadline for public comments to the 2017 Compliance Supplement. NSF IG; FDP Payroll Certification and Memo to OMB. Pay attention to: monthly/bi-monthly reconciliations and provide full allocations to PIs … & EFFORT ALTERNATIVES ARE FINE ! ?

Also on the List … UG FAQs: Concerns and Comments, TBD UG Updates? DS-2, UCA, Subrecipient Safe Harbor, etc. Procurement: “Instructional Guidance” (NDAA and AICA still need implementation language)! “Go-Live” is July 1, 2018 GAO-17-721: NSF, Actions Needed to Improve Oversight of Indirect Costs for Research (Sept. 2017) OMB Report to Congress; DATA Act (Aug. 10, 2017) Single IRB (effective date extended to Jan. 25, 2018); Costing FAQs NIH/HHS Timely Closeouts (GONE Act)

Questions and Discussion David Kennedy dkennedy@cogr.edu