What’s New in Washington: A COGR Update

1. What’s New in Washington:A COGR Update David Kennedy, Director of Costing Policy Council on Governmental Relations (COGR) NCURA Region III – 2008 Spring Meeting Wild Dunes Resort Isle of the Palms, South Carolina Tuesday, May 13, 2008

2. Agenda • COGR Overview • Audit Landscape • 35-percent F&A Cap, DOD • NSF Summer Salary • Other Areas of Interest • Recent COGR Publications

3. COGR • Council on Governmental Relations • 1948 … Staff of 5 • Costing, Compliance, Intellectual Property • Active Board and Committees • 170+ member institutions • www.cogr.edu

4. The COGR Mission Foster strong working relationships with Federal Agencies and their representatives. Primary goals are to facilitate federal rules and regulations, and to advocate for and represent the research and university community with a single voice. √ Federal Register, Comment Letters √ Publications, Surveys √ Updates-Newsletters, Position Papers √ Membership Meetings, 3 per year √ Everything else, as needed

5. COGR Partners • Association of American Universities (AAU) • Association of American Medical Colleges (AAMC) • National Assoc. of State Universities and Land-Grant Colleges (NASULGC) • NCURA, NACUBO, Big XII, Big Ten, SECA-MECA-WECA-NECA, The FDP …

6. COGR and Washington Research Regulatory, Funding Agencies Oversight, Policy HHS- OIG Other OIGs OSTP NSF- OIG HHS- NIH NSF DCAA- ONR HHS- OHRP GAO OMB HHS- DCA HHS- CDC, FDA, CMS DOD- ONR Agency GPS … DOJ BIS USDA USDA- APHIS CONGRESS DOE ED NASA 20 more …

7. COGR and Washington • HHS – Department of Health and Human Services • NIH – National Institutes of Health • NSF – National Science Foundation • OIG – Office of Inspector General (all agencies) • OMB – Office of Management and Budget • DCA – Division of Cost Allocation • ONR - Office of Naval Research • DCAA – Defense Contract Audit Agency • GAO – Government Accountability Office

8. COGR and Washington • OSTP – Office of Science and Technology Policy • OHRP – Office for Human Research Protections • CDC – Center for Disease Control and Prevention • FDA – Food and Drug Administration • CMS – Centers for Medicare and Medicaid Services • BIS – Bureau of Industry and Security (Commerce) • APHIS – Animal & Plant Health Inspection Service • DOJ – Department of Justice • GPS – Grants Policy Statements (all agencies)

9. Audit Landscape

10. Audit Landscape • Effort and Labor – NSF OIG • Administrative and Clerical Salaries – HHS OIG • Financial Conflict of Interest – HHS OIG, NIH • A-133 and the Single Audit

11. NSF OIG • Robust audit program √ To-date; 5 labor audits (www.nsf.gov/oig) √ Next wave of labor/effort audits, ongoing √ Subrecipients, Cost sharing, Program Income • Monitoring and Desk Review by NSF DIAS (not the OIG) – 30 to 40+ per year • Investigations Unit: internal audit reports, general ledger (electronic version)

12. NSF OIG • Labor/Effort findings √ Suitable Means of Verification √ Timeliness √ Independent Internal Evaluation √ Voluntary commitments / Grant apps. √ Estimates / Precision / Significant changes √ Key personnel with zero effort √ Summer effort √ Appt. Letters / Salary Rates / Work Duties • Internal Controls vs. Questioned costs

13. HHS OIG • Relatively quiet … • Administrative and Clerical Salaries √ Unlike Circumstances, Major Projects √ To-date; 2 audits and “benign” (http://www.oig.hhs.gov/reports.html) √ In total, 4 to be completed √ Pay attention???

14. HHS OIG, NIH • But you said “Relatively quiet” ??? • Financial Conflict of Interest – Jan. 2008 √ Evaluation and Inspections, not Audit (http://oig.hhs.gov/oei/reports/oei-03-06-00460.pdf) • Report Recommendations √ NIH needs to increase oversight √ √ NIH ICs to forward all conflict reports to Office of Extramural Research √ √ NIH to collect details on conflicts __

15. HHS OIG, NIH • Report Recommendations – continued NIH believes … responsibilities for identifying and managing financial conflicts of interest must remain with grantee institutions. Furthermore, NIH … collection of specific details … would effectively transfer the responsibility … to the Federal Government. (page iv) • NIH response -- determine value of collecting details. HHS OIG response -- contact 43 institutions; obtain procedures for handling financial conflicts • www.aamc.org/jointcoireport (87 pages) • www.cogr.edu (updated case studies; soon)

16. A-133 and the Single Audit • Report on National Single Audit, June 2007 √ PCIE, ECIE, OMB, IGs, + AICPA √ Sample of 208 (30 colleges/universities) √ A-133 and auditors under the microscope • SAS 112, Communicating Internal Control Related Matters … applicable to A-133 √ Definitions: Control Deficiency, Significant Deficiency, Material Weakness √ Lower bar for A-133 audit findings

17. In Summary • A coalescence of: √ IG activity (NSF, HHS) √ NSF Monitoring and Desk Reviews √ Program Audits from other agencies √ A-133 under the microscope √ Single Audit concept in limbo?, GAO 2007: http://www.gao.gov/new.items/d08213t.pdf • What does this mean ??? …

18. Always a Storm

19. 35-percent F&A Cap, DOD • DOD Appropriations Bill, HR 3222, Section 8105 – November 13, 2007 • Indirect can not exceed 35-percent of total project costs -- different than the MTDC concept and requires more “manual” administration • www.cogr.edu – Recent News, Dec. 19 • FY09 DOD Appropriations Bill; an opportunity to revisit ?

20. NSF Summer Salary • COGR-AAU joint letter sent to the National Science Board (NSB) – July 2007 • Initial concern raised in COGR Effort paper, and subsequent concerns: √ Basis of NSF policy √ Audit risk during summer, 100% salary √ Academic year salary -- Allowability • Solution? -- Flexibility to charge when effort is expended (e.g., academic year), with option to utilize 100% summer if it can be supported

21. NSF Summer Salary • NSB addresses in August 2007 meeting • NSF policy staff charged to “fact-find” √ Uncertain historical basis √ Variance among directorates √ Variance among recipients √ Engage research community • NSF has reviewed the COGR/AAU letter and is considering a response

22. Other Areas of Interest

23. Federal Research Budget • America COMPETES Act √ Signed by President, August 2007 √ Significant funding increases for NSF, Energy- Science Office, NIST … however, next slide … • Basic Research for NIH, USDA, DOD; not good • Declining/flat success rates; ~20% at NIH • As always, tight budgets = Scrutiny

24. America COMPETES • While significant funding increases authorized (e.g., NSF = $6.6b, $7.3b, $8.1b for FY08, 09, 10) -- FY08 appropriations not in-line • Sections 7008, 7009, 7013, 7036 √ Mentoring post-doc researchers (7008) √ Responsible conduct of research (7009) √ Cost sharing (7013) √ Major research instrumentation (7036)

25. America COMPETES • Mentoring (7008) All grant applications that include funding to support postdoctoral researchers must include a description of the mentoring activities – NSF DEVELOPING DRAFT POLICY • Responsible conduct of research (7009) Institutions to describe plan to provide training and oversight in the responsible and ethical conduct of research to undergrads, grads, postdocs – NSF DEVELOPING DRAFT POLICY

26. America COMPETES • Cost sharing (7013) NSB to evaluate 2004 policy that eliminated cost sharing – REPORT RECOMMENDS COST SHARING FOR ERC, EPSCoR, I/UCRC TO BE REINSTATED: (www.nsf.gov/nsb/publications/2008/rprt_congress_cs_policy.pdf) • Major research instrumentation (7036) 30% cost sharing; Director can waive for those not in top 100 per NSF survey – HOWEVER, WAIVER NOT IMPLEMENTED

27. Also On the Radar • NIH Public Access Policy Grants funded since 10/1/07 and contracts after 4/7/08, provide copy of final peer-reviewed manuscript accepted for publication (on or after 4/8/08) to PubMed Central: www.cogr.edu – Recent News, March 20, and NIH Public Access Homepage (with FAQs) at: http://publicaccess.nih.gov/ • NIH 2007-2008 Peer Review Self-Study Establish a minimum Effort threshold at 20%: www.cogr.edu – Recent News, March 17, and http://enhancing-peer-review.nih.gov/

28. Also On the Radar • Department of Commerce, Deemed Export Advisory Committee (DEAC) report Reduce list of covered technologies, less complex rules, simplify licensing -- addresses knowledge transfer barriers to foreign nationals. However, concerns with 7-step decision process, “loyalty assessment”, definition of fundamental research: www.cogr.edu – Recent News, Feb. 20 • Troublesome Clauses New data shows that situation has not improved and restrictions appear to have expanded. COGR/AAU, 2004: http://www.aau.edu/research/Rpt4.8.04.pdf (update to 2004 report, soon to be released)

29. Always a Storm

30. Recent COGR Publications • Finances of Research Universities Recent News, March 6, 2008 • Approaches to Developing an Institutional Conflict of Interest Policy Ed Materials / Conflict of Interest (update soon to be released) • University-Industry Relationships Ed Materials / Intellectual Property, August 2007 • An Analysis … DCA Best Practices Manual Recent News, December 5, 2007

31. Recent COGR Publications • 21 Questions about University Technology Transfer Ed Materials / Intellectual Property, July 2007 • Troublesome Clauses (update soon to be released) • Compensation, Effort Commitments, and Certification -- Policies and Practices … i.e., the “Effort Paper” Ed Materials / Financial Management, March 2007

32. Contact Info David Kennedy dkennedy@cogr.edu 202-289-6655, ext. 12 NOTE: For password protected papers, user name (normally, this is your email address) and password are required. If you cannot gain access or do not remember your password, you will need to go to the “Members Only” section and click on the “Request Access” option.