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AAMC Submits Comments to OMB on Proposed Changes to Grant Cost Principles

June 7, 2013—The AAMC June 2 submitted comments  to the Office of Management and Budget (OMB) responding to the proposed uniform guidance issued on Feb. 1, Reform of Federal Policies Related to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements (including Single Audit Act).  OMB is proposing major changes to the way research costs are allocated in federally-sponsored research.

The AAMC letter states that the current proposed guidance is a significant improvement over the earlier advanced notice of proposed guidance (ANPG) and commends OMB and the Council on Financial Assistance Reform (COFAR) for addressing many of the issues that AAMC and others identified with the ANPG. However, AAMC did identify additional issues that it said would improve any final guidance.

The AAMC letter states, “We believe the viability of the federal-academic research partnership is critical to advancing new treatments for disease and for catalyzing innovation in health care.  OMB’s proposed guidance begins to address fundamental tensions and problems in the current cost allocation framework that are testing the partnership.  Many of these tensions are the result of legacy policies that do not reflect the current ability of research institutions to manage and allocate costs effectively and accurately.” 

The letter calls for additional changes related to effort reporting, direct charging of administrative and clerical salaries, subrecipient monitoring, and cost sharing.

Concerning effort reporting, the letter indicates that AAMC continues “to believe that federal effort reporting can be further streamlined, while at the same time enhancing accountability.  The solution to the long-standing effort reporting quagmire should be based on official institutional payroll records, paired with appropriate institutional controls and processes.”

The letter also predicts that the impact of “several prescriptive new requirements” OMB is proposing will be “to discourage scientific collaborations by making the establishment of subrecipient agreements much more burdensome.”

AAMC recommends, “OMB should streamline the subrecipient monitoring provisions to eliminate unnecessary administrative burdens and establish ‘safe harbors’ for low risk subrecipients.”


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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