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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

OMB Issues New “Omni-Circular,” Replacing A-21 and Other Cost Allocation Guidance

December 20, 2013—The Office of Management and Budget (OMB) Dec. 19 released its final guidance on “Uniformed Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”  The guidance, termed the Omni-Circular, supersedes the requirements of various other OMB cost circulars, including OMB Circular A-21, “Cost Principles for Educational Institutions.” 

The guidance continues the cap on the reimbursement of administrative costs to 26 percent of modified total direct costs.  OMB commented that “[f]uture reform efforts may eventually seek to incorporate the Cost Principles for Hospitals” in the Omni-Circular, but for now, “Principles for Determining Cost Applicable to Research and Development Under Grants and Contracts with Hospitals” remain in effect.

The final guidance is scheduled to appear in the Dec. 26 Federal Register. The effective date of the new guidance document is Dec. 26, 2014.  However, the audit requirements appear to “be effective for non-Federal entity fiscal years beginning on or after the effective date of this guidance.”

AAMC submitted comments to OMB on the Feb. 20, 2012 advance notice [see Washington Highlights, April 6, 2012], as well as comments on the Feb. 1, 2013 proposed guidance [see Washington Highlights, June 7].

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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
Email: jkleinman@aamc.org