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2. OSTP RBM Workshop on Cost Accountability University of North Carolina November 17, 2003 Elizabeth Mora Director, Office for Sponsored Research Harvard University

3. 3 Main Question Universities Ask:  What happened to the Partnership?  Has it turned into a “Procurement Process”?

4. 4 Let’s Step Back for a Moment  OMB Circular A-21 was introduced in 1958  During the 1990’s, a time of mistrust,  An administrative cap was imposed (in 1991)  A-21 was changed five times. Each time, unfunded mandates were added with little attention to their cost or their added value for rational stewardship and accountability

5. 5 It’s time to re-evaluate A-21!  Was university abuse of regulations widespread?  Were the changes in A-21 the right “remedies”?  Can we work together to develop a more effective and efficient costing and regulatory system that appropriately reflects the diversity of research providers?

6. 6 Issues  The principle of full cost reimbursement is vital.  Actions should not be taken unilaterally with little regard for their implications for the University community  Administrative compliance should be differentiated from scientific compliance  No serious attention is given to the radical changes in the costs of information acquisition and exchange produced by digital technology.

7. 7 Questions  All issues are not equally important. Do the rules give the proper relative weight to  Human subject protection and payroll certification?  Assuring environmental health and safety and completing Disclosure Statements (that never get read or reviewed)?  Securing of biohazardous agents and providing lease-purchase analyses?

8. 8 Questions (cont)  Do the program sides of funding agencies communicate adequately with their Inspector Generals on the interpretation and the consequences of rule changes?  What happened to the operating principles proposed in the PRD-4?

9. 9 Potential Solutions  Actively engage OMB in the dialog on the cap and A-21.  Actively use FDP as a working group  Some federal agencies are already engaged; engage others (including OMB).  Pursue pilot projects that have momentum, e.g.,subrecipient monitoring  Determine why agencies are dragging their feet on other proposed pilot projects

10. 10 Potential Solutions (cont)  Solicit university participation on PL 106-107 working groups  What are these groups doing?  What are the goals and the deliverables?  Bring funding agencies, the audit community and the university research community closer together to seek agreement on acceptable principles and processes

11. 11 Potential Solutions (cont)  Look at “best practices” across agencies and adopt these across all agencies Examples:  NSF clarification of cost sharing policy  NIH letter of credit system

12. 12 Potential Solutions (cont)  Work through FDP – Initiative to Reduce Administrative Burden on eliminating the non-value added unfunded mandates in A- 21:  DS-2 requirement  Lease purchase analysis  Monthly cash flow for debt arrangements in excess of $1M

13. 13 Potential Solutions (cont)  Reasonableness cost of new construction  Requirement to use depreciation recoveries to acquire or improve research facilities  Requirement to demonstrate the reasonableness of cost of construction for new research buildings These are low hanging fruit! Let’s pick them off!

14. 14 Potential Solutions (cont)  Get OMB and OSTP involved in other “bigger” administrative issues to find a simpler method:  Allocation of space costs  Effort reporting/payroll certification  Subrecipient Monitoring  A-133 audit requirements  Recognition of costs of digital information exchange