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Washington Highlights

OMB Releases Cost Principles Proposed Guidance

March 1, 2013—The Office of Management and Budget (OMB) Feb. 1 published a “proposed guidance” notice making major changes to the federal cost principles and administrative requirements relating to grants and cooperative agreements. OMB is proposing to consolidate Administrative Requirements (Circulars A-110, A-102, A-89), Cost Principles (Circulars A-21, A-87, A-122), and Audit Requirements (Circulars A-133, A-50) into a single document. In the notice, OMB also stated that the Cost Principles for Hospitals may be addressed at a later date.

Among the significant changes being proposed:

  • Administrative personnel and computing devices can be directly charged when directly allocable to a project;
  • Voluntary committed cost-sharing is not expected and cannot be used as a factor in the review of applications, except when required by statute;
  • Pass-through entities are required to pay the full Facilities and Administrative rate; and
  • Effort reporting is not eliminated, but the “examples” are deleted.

Comments on the proposal are accepted until May 2. 

On Feb. 28, 2012, OMB published an “Advanced Notice of Proposed Guidance” asking for comments on possible grant and cost allocation policy proposals.  The Feb. 1 proposed guidance does not contain any of the more controversial policy proposals to which AAMC had objected strongly in an April 3, 2012, comment letter  [see Washington Highlights, April 6, 2012].


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806