University Research: Effect of Indirect Cost Revisions and Options for
Future Changes (Letter Report, 03/06/95, GAO/RCED-95-74).
Pursuant to a legislative requirement, GAO reviewed the government's
regulations that allow universities to recover indirect costs associated
with federally funded research, focusing on the effects of the Office of
Management and Budget (OMB) revisions that: (1) established a 26-percent
cap on federal reimbursements for universities' administrative costs;
(2) further clarified and tightened certain indirect cost accounting
procedures; and (3) control indirect cost growth, improve the
consistency of cost treatments, and streamline indirect cost accounting
procedures.
GAO found that: (1) the 26-percent administrative cost cap affected 69
to 82 of the 140 universities surveyed and reduced annual administrative
costs reimbursements by about $104 million; (2) the cap also lead to
more uniform indirect cost rates among the universities; (3) the 1991
revisions eliminated or reduced some previously allowable indirect
costs; (4) the effects of the 1993 revisions are not fully known because
federal agencies are implementing them through renegotiated multiyear
rate agreements; (5) the change in the treatment of tuition remission
costs could reduce the number of science and engineering doctoral
candidates at 4 universities; (6) OMB has proposed several revisions to
its indirect cost principles to control indirect cost growth and improve
accounting procedures; and (7) federal and university officials oppose a
total cap on indirect cost rates because it could adversely affect the
universities' ability to provide modern laboratory facilities and
equipment.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-95-74
TITLE: University Research: Effect of Indirect Cost Revisions and
Options for Future Changes
DATE: 03/06/95
SUBJECT: Colleges/universities
Research programs
Administrative costs
Overhead costs
Accounting procedures
Cost control
Research and development costs
Cost accounting
Research and development contracts
Contract costs
**************************************************************************
* This file contains an ASCII representation of the text of a GAO *
* report. Delineations within the text indicating chapter titles, *
* headings, and bullets are preserved. Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are *
* identified by double and single lines. The numbers on the right end *
* of these lines indicate the position of each of the subsections in the *
* document outline. These numbers do NOT correspond with the page *
* numbers of the printed product. *
* *
* No attempt has been made to display graphic images, although figure *
* captions are reproduced. Tables are included, but may not resemble *
* those in the printed version. *
* *
* A printed copy of this report may be obtained from the GAO Document *
* Distribution Facility by calling (202) 512-6000, by faxing your *
* request to (301) 258-4066, or by writing to P.O. Box 6015, *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time. *
**************************************************************************
Cover
================================================================ COVER
Report to Congressional Committees
March 1995
UNIVERSITY RESEARCH - EFFECT OF
INDIRECT COST REVISIONS AND
OPTIONS FOR FUTURE CHANGES
GAO/RCED-95-74
Universities' Indirect Costs
Abbreviations
=============================================================== ABBREV
GAO - General Accounting Office
HHS - Health and Human Services
NASA - National Aeronautics and Space Administration
NIH - National Institutes of Health
NSF - National Science Foundation
NSTC - National Science and Technology Council
OMB - Office of Management and Budget
ONR - Office of Naval Research
Letter
=============================================================== LETTER
B-259713
March 6, 1995
The Honorable Mark O. Hatfield
Chairman
The Honorable Robert C. Byrd
Ranking Minority Member
Committee on Appropriations
United States Senate
The Honorable Bob Livingston
Chairman
The Honorable David R. Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives
Federal agencies obligated about $12 billion to universities and
colleges for scientific research in fiscal year 1994. The government
pays for direct costs specifically identified with a particular
research project as well as indirect costs for associated
administrative and facilities expenses. For every dollar spent for
the direct costs of universities' research, subject to certain
exclusions, the government pays an additional 50 cents, on average,
to cover its share of universities' indirect costs.
The Conference Report to the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1994, directed us to examine the federal
government's principles, contained in Office of Management and Budget
(OMB) Circular A-21, for allowing universities to recover indirect
costs associated with the performance of federally funded research.
Specifically, we were asked to assess the effect of (1) October 1991
revisions to Circular A-21 that primarily established a 26-percent
cap on federal reimbursements to universities for three components of
their administrative costs and (2) July 1993 revisions that further
clarified and tightened certain indirect cost accounting procedures,
including the specification that the remission of tuition for
graduate students working on federally funded research be treated as
a direct cost. We were also asked to identify alternatives for
further revising Circular A-21's cost principles to control the
growth of indirect costs, improve consistency in the way that
universities treat costs, and/or streamline indirect cost accounting
procedures. This review follows up on our August 1992 report on
universities' indirect costs.\1
The information in this report is based on responses to our
questionnaire sent to 140 major research universities that received
about 88 percent of the federal funds obligated to universities and
colleges for research. We also interviewed cognizant officials from
OMB, the Department of Health and Human Services (HHS), the
Department of Defense, the Department of Energy, the National Science
Foundation (NSF), and the National Aeronautics and Space
Administration (NASA). HHS and the Office of Naval Research, within
Defense, are primarily responsible for negotiating indirect cost
rates with universities.
--------------------
\1 Federal Research: System for Reimbursing Universities' Indirect
Costs Should Be Reevaluated (GAO/RCED-92-203, Aug. 26, 1992). See
the list of related GAO products at the end of this report.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
Among the 140 universities we surveyed, the 26-percent administrative
cap directly affected 69 whose administrative rate had been higher
than 26 percent, thus reducing government spending for these costs by
about $104 million in fiscal year 1993. The cap also resulted in
more uniform overall indirect cost rates among universities--while 29
of the 140 surveyed universities had an overall rate greater than 60
percent in fiscal year 1992, only 19 universities had an overall rate
greater than 60 percent in fiscal year 1995.
The effect of the July 1993 revisions is unclear because they are
being implemented only when each university and its cognizant federal
agency renegotiate the multiyear rate agreement. According to a 1992
federal task force study, the change in the treatment of tuition
remission costs could substantially reduce the number of doctoral
candidates in science and engineering at four universities that
account for a significant portion of all engineering doctoral
students in the United States.
Various alternatives have been proposed to control the growth of
indirect costs, improve consistency in the way that universities
treat indirect costs, and/or streamline accounting procedures for
indirect costs. OMB included several of these proposals, designed to
further tighten and simplify Circular A-21's cost principles, in its
February 1995 Proposed Revision to Circular A-21. Almost all of the
federal officials we interviewed and universities we surveyed oppose
a total cap on indirect cost rates because they believe a cap will
adversely affect universities' ability to provide the modern
laboratory facilities and equipment needed to perform advanced
scientific research.
BACKGROUND
------------------------------------------------------------ Letter :2
OMB Circular A-21, "Cost Principles for Educational Institutions,"
addresses the extent to which universities' indirect costs can be
charged to federally funded research. Circular A-21 is designed to
provide that the federal government bear its fair share of total
costs, determined in accordance with generally accepted accounting
principles, except where restricted or prohibited by law. By
consolidating seven indirect cost components into the administrative
and facilities categories, the 1991 and 1993 revisions have clarified
how universities incur and allocate indirect costs. The capped
administrative category includes general administration and expenses,
departmental administration, sponsored projects administration,
student services, and other miscellaneous costs. The facilities
category includes depreciation and/or use allowance, operations and
maintenance, and library costs.
The average overall indirect cost rate of 118 universities that HHS
tracks grew from 48.8 percent in 1986 to 50.5 percent in 1995.\2
Federal efforts to control indirect cost growth have focused on
administrative rates, which fell 1.7 percentage points in 1993 as a
result of the administrative cap. In contrast, rates for the
facilities category increased by 4.3 percentage points during this
period, so that with the addition of library costs, facilities costs
account for slightly more than half of the overall indirect cost rate
in fiscal year 1995.
The National Science and Technology Council was established by
Executive Order 12881 in November 1993 to oversee federal science and
technology policy. In a November 1994 report, the Council's
Subcommittee on Research recommended ways to stabilize the federal
reimbursement of indirect costs, narrow the range of rates, and
develop a simplified methodology for financing research facilities.
On February 6, 1995, OMB published in the Federal Register a Proposed
Revision to Circular A-21 that implements these recommendations.
--------------------
\2 HHS weighted each university's indirect cost rate by the amount of
federal research funding received.
THE 1991 REVISIONS REDUCED
GOVERNMENT SPENDING FOR
ADMINISTRATIVE COSTS AND MADE
RATES MORE UNIFORM
------------------------------------------------------------ Letter :3
The 26-percent administrative cap has reduced government spending for
universities' administrative costs by about $104 million per year and
has made universities' overall indirect cost rates more uniform. The
cap lowered the administrative rates of 69 of the 140 universities we
surveyed and may have affected 13 other universities whose
administrative rates either rose to or stayed at the 26-percent cap
from fiscal year 1992 to fiscal year 1994. The cap had little or no
effect on the remaining 58 universities, whose administrative rates
remained below 26 percent.
Overall, the cap's greatest impacts were (1) among 11 universities
whose administrative rates dropped more than 10 points to 26 percent
and (2) in the New England and Middle Atlantic regions, where
administrative rates for 31 of 43 universities were capped. The cap
affected 37 public and 32 private universities. Columbia University,
the University of Michigan, the University of Illinois at Chicago,
the University of Southern California, Yeshiva University, and Boston
University accounted for $35 million of the $104 million in reduced
spending.
As a result of the cap, universities' overall indirect cost rates
have become more uniform--in fiscal year 1995, 117 of the 140
universities surveyed had overall rates between 41 and 60 percent, as
compared with 105 of the 140 universities in fiscal year 1992. In
fiscal year 1995, only 19 universities have had overall indirect cost
rates above 60 percent, while 4 had rates below 41 percent. In
contrast, in fiscal year 1992, 29 universities had overall indirect
cost rates above 60 percent, while 5 had rates below 41 percent.
(See the tables in app. I for more information about the cap's
effect.)
The 1991 revisions also added several items to the list of
unallowable and partly allowable costs. Twenty-eight surveyed
universities reported that these revisions reduced their recovery by
more than $25,000 in fiscal year 1993. In particular, they noted
that housing and personal living expenses for university officers and
travel costs for board of trustee members had previously been
allowable but could no longer be claimed. In addition, the 1991
revisions required that 99 of the largest research universities spend
federal payments for use allowance or depreciation within 5 years to
acquire or improve research facilities. Overall, 83 of the 99
universities reported that this provision has had little or no effect
on their ability to acquire or improve facilities, while 15
universities reported only a moderate effect at most, and 1
university did not respond.
THE EFFECT OF THE 1993
REVISIONS IS UNCLEAR
------------------------------------------------------------ Letter :4
The effect of the 1993 changes on universities' ability to recover
costs is unclear because federal agencies are implementing the
changes only when each university renegotiates its multiyear rate
agreement. In addition, the effect of the changes is difficult to
measure because they generally addressed components of cost
categories. Adding student services to the administrative category,
a change that can be estimated, is likely to affect only 19 of the
140 universities surveyed and reduce government spending by about
$7.3 million per year.
The 1993 revision treating tuition remission for graduate students
working on federally funded research as a direct cost will become
effective in October 1997. This revision affects four
universities--the California Institute of Technology, Columbia
University, the Massachusetts Institute of Technology, and Stanford
University. The Office of Naval Research had allowed these
universities to spread tuition remission costs across all salary
accounts of their federally and privately sponsored research instead
of assigning the costs directly to each project that employed
graduate students as research assistants. The four universities,
which account for a significant portion of all engineering doctoral
students in the United States, expressed concern that this change
could substantially reduce the number of doctoral candidates. They
stated that faculty members applying for federal funding will have an
incentive to hire postdoctoral scientists, whose salaries are lower
than the tuition and stipend payments that graduate students receive
as research assistants. The universities emphasized that their
mission includes education and training, as well as research, and
further noted that without the financial support of a research
assistantship, many graduate students may opt to obtain only a
master's degree instead of a doctoral degree. Although these
universities, as well as NSF, have expressed concern about the effect
of this change on doctoral programs in scientific and engineering
fields, federal agencies have not assessed the implications of this
accounting change for such programs. While looking at the potential
supply of doctoral candidates, one also needs to consider the demand
for them by U.S. industry and government. We did not examine these
issues; however, we note that the need for scientists and engineers
with doctorates may have dropped as a result of the end of the Cold
War.
In addition, many universities expressed strong concern about the
effect of the 1993 revisions, stating that departmental
administrative and clerical salaries should normally be treated as
indirect costs. According to university administrators, including
these salaries within the 26-percent administrative cap would cause
many universities to cut back on departmental support staff, thus
leaving faculty to perform these tasks. Federal officials told us
that this provision was designed to reduce the possibility that
administrative and clerical salary costs might be inadvertently
included as both direct and indirect costs for a federally funded
research project. In July 1994, OMB issued a memorandum that
clarified the July 1993 provision by providing six examples
illustrating when administrative and clerical salaries could be
charged directly to a federally funded research project.
ALTERNATIVES PROPOSED FOR
FURTHER REVISING CIRCULAR A-21
------------------------------------------------------------ Letter :5
Various options have been proposed for further revising Circular
A-21. Most of these options have been designed to control costs for
constructing and operating research facilities because facilities
represent the fastest growing indirect cost category and now account
for slightly more than half of all indirect costs. In particular,
the following alternatives would control indirect cost growth,
improve consistency in the way that universities treat costs, and/or
streamline cost accounting procedures:
Overall indirect cost rates could be capped through a system of flat
rates. For example, the Congressional Budget Office, in a March 1994
report, suggested establishing for each university a flat rate of 90
percent of its current overall indirect cost rate. Similarly, NSF
and HHS Inspector General officials supported simplifying Circular
A-21 by establishing a flat-rate system adjusted for locality and
other special circumstances. They stated that the Circular A-21 cost
accounting procedures are too expensive to implement and susceptible
to abuse.
After the 1993 revisions are included, each university's negotiated
administrative rate could be frozen and made a permanent rate that
does not require documentation. In exchange for reducing the burden
on universities to document these costs, a permanent rate would
preclude further administrative rate increases for universities under
the 26-percent cap. The administrative rate might be subject to
renegotiation if a university's total amount of federal research
funding substantially changed.
Circular A-21 allows universities to allocate utility and library
costs to federally funded research either by using a standard
allocation method or by conducting cost analysis studies designed to
more accurately determine actual costs. Cost analysis studies could
be eliminated, and the standard method for allocating utility and
library costs to federally funded research could be revised to better
reflect actual usage.
Universities can recover the acquisition cost of buildings and
equipment by either (1) claiming an annual use allowance of 2 percent
for buildings and 6-2/3 percent for equipment or (2) depreciating an
asset over its useful life. A more uniform approach could be
developed for universities to recover their investment in facilities
and equipment by revising use allowance rates to better reflect the
actual useful lives of research buildings and equipment while either
replacing or simplifying the use of depreciation.
Circular A-21 could be revised in line with elements of OMB's
September 1994 proposed revision to Circular A-122 (Cost Principles
for Nonprofit Organizations) allowing nonprofit organizations to
claim interest on debt for constructing new research facilities. In
particular, the proposed revision would require an institution to (1)
compute interest on the excess of depreciation and interest
reimbursement over the bond principal and interest payments and (2)
subtract this amount from the institution's allowable interest
expense, unless it contributes at least 25 percent of an asset's
cost.
A ceiling could be established on the costs of renovations or
improvements to a building that can be expensed in the year incurred
as opposed to being depreciated over the building's useful life.
Under Circular A-21, a university could expense a major improvements
project even though the costs might be more properly depreciated over
the building's useful life.
Universities could be encouraged to use Circular A-21's simplified
method to calculate indirect costs.\3 For example, HHS' rate
negotiators suggested that the simplified method allow universities
to use either modified total direct costs or wages and salaries as
the base for calculating indirect costs. They stated that this
change would not add substantially to the costs the government pays
smaller universities that use the simplified method.
We did not fully analyze the effect of these suggested options.
Almost all of the agency officials we interviewed and universities we
surveyed opposed capping indirect cost rates--through either a system
of flat rates or an overall cap--because they believe that limiting
cost recovery for facilities would adversely affect universities'
ability to provide the modern laboratory facilities and equipment
needed to perform advanced scientific research. In addition, citing
their commitment to modernize university research facilities, the
Office of Science and Technology Policy and OMB recently concluded
that it would be poor science policy to cap facilities rates. (See
app. II for additional information about each proposed revision.)
--------------------
\3 About 280 of more than 650 universities and colleges that perform
federally funded research use Circular A-21's so-called "long form."
The others, which receive relatively small amounts of funding, use
Circular A-21's simplified method, which provides a general estimate
of indirect costs.
CONCLUSIONS
------------------------------------------------------------ Letter :6
The 1991 revisions to OMB Circular A-21 have reduced federal spending
for administrative costs by about $104 million per year, while the
1993 revisions will further reduce these costs by at least $7 million
per year. These revisions have made universities' overall indirect
cost rates more uniform. Because the 26-percent cap has limited
future growth of administrative costs, further initiatives to control
the growth of indirect costs will primarily affect facilities costs.
OMB's recent Proposed Revision to Circular A-21 would tighten
controls over the growth of facilities rates without imposing a cap
and improve consistency in the way universities treat costs.
One 1993 change modifying the accounting of tuition remission for
graduate research assistants affects four universities that account
for a significant portion of the doctoral degrees in engineering.
These universities and NSF have expressed concern about the effect of
this change on doctoral programs in scientific and engineering
fields. However, federal agencies have not assessed the implications
of this change on (1) the supply of scientists and engineers with
doctorates or (2) graduate students' participation in research.
While looking at the potential supply, one also needs to consider the
future demand. We did not examine these issues, but we note that
U.S. industry's and government's need for scientists and engineers
with doctorates may have dropped as a result of the end of the Cold
War.
RECOMMENDATION
------------------------------------------------------------ Letter :7
Given the universities' concerns about the effects of the tuition
remission change, we recommend that the National Science and
Technology Council evaluate the implications of this change. This
evaluation should take into account the supply and demand for
scientists and engineers with doctorates; whether graduate students'
participation in research is likely to be inhibited by the tuition
remission change; and what, if any, alternatives can best address
this issue.
AGENCY COMMENTS
------------------------------------------------------------ Letter :8
We discussed the information included in this report with cognizant
officials at OMB, HHS, the Departments of Defense and Energy, NSF,
NASA, and the National Science and Technology Council. These
officials included grant policy officials, rate negotiators, research
program managers, and inspector general officials. We also met with
executives from the Council on Governmental Relations and the
Association of American Universities, whose members include many of
the universities surveyed.
Agency officials and university association executives supported the
thrust of our recommendation. In addition, agency officials
generally supported options to further revise Circular A-21's cost
principles without imposing an overall cap on indirect cost rates.
The President of the Council on Governmental Relations stated that
universities would support revisions to Circular A-21 that would
increase incentives for investing wisely in research capacity and
quality and reduce administrative, documentation, and audit
compliance costs. However, the council's president added that
universities cannot support changes that would (1) further reduce
their ability to recover costs for federally funded research or (2)
increase their administrative costs of compliance or documentation.
Agency and university officials also provided clarifying information
to improve the report's technical accuracy, which we incorporated as
appropriate. However, as requested, we did not obtain written
comments on a draft of this report.
---------------------------------------------------------- Letter :8.1
We conducted our review from October 1993 through January 1995 in
accordance with generally accepted government auditing standards.
See appendix III for details of our objectives, scope, and
methodology.
Please contact me at (202) 512-3841 if you or your staff have any
questions. Major contributors to this report are listed in appendix
IV.
Victor S. Rezendes
Director, Energy and
Science Issues
EFFECT OF THE 26-PERCENT
ADMINISTRATIVE CAP
=========================================================== Appendix I
Table I.1
Effect of the Administrative Cap on
Public and Private Universities, Fiscal
Year 1993
(Dollars in millions)
Reduce
Affected Percenta d
Tota universiti ge of outlay
Universities l es total s
------------------------ ---- ---------- -------- ------
Public 87 37 43 $41
Private 53 32 60 63
============================================================
Total 140 69 49 $104
------------------------------------------------------------
Table I.2
Regional Analysis of the 69 Universities
Affected by the Administrative Cap,
Fiscal Year 1993
(Dollars in millions)
Total
Universiti reduce Reduced
Total es d outlays
universiti affected outlay per
Region\a es by the cap s university
---------------- ---------- ---------- ------ ----------
New England 16 13 $20.1 $1.5
Middle
Atlantic 27 18 35.3 2.0
South
Atlantic 22 13 10.6 0.8
East North
Central 16 5 14.4 2.9
East South
Central 6 2 3.0 1.5
West North
Central 9 1 0.1 0.1
West South
Central 16 3 3.3 1.1
Mountain 10 5 4.0 0.8
Pacific 18 9 12.7 1.4
------------------------------------------------------------
\a Regions were taken from Federal Support to Universities, Colleges,
and Nonprofit Institutions: Fiscal Year 1992, National Science
Foundation (NSF 94-329).
Table I.3
Effect of the Administrative Cap on the
20 Universities That Received the Most
Federal Funding in Fiscal Year 1992
(Dollars in millions)
Reduce
Affected d
Tota universiti outlay
Universities l es s
---------------------------------- ---- ---------- ------
Public 9 5 $11
Private 11 6 22
============================================================
Total 20 11 $33
------------------------------------------------------------
Table I.4
Distribution of the Percentage Point
Reduction in the Administrative Rates
for the 69 Universities
Percentage of
reduced
federal
Affected outlays in
Range of percentage point universiti fiscal year
reductions es 1993
-------------------------------- ---------- --------------
Less than 2.0 22 7.7
2.00-3.99 12 13.3
4.00-5.99 13 21.0
6.00-7.99 5 8.6
8.00-9.99 6 23.6
Greater than 9.99 11 25.8
============================================================
Total 69 100.0
------------------------------------------------------------
Note: Because the 26-percent administrative cap for the Baylor
College of Medicine, Dartmouth College, the University of Colorado
Health Science Center, and the University of Oregon went into effect
in 1992, administrative rates for 1991 were used to determine the
effect.
Table I.5
Range of the Overall Indirect Cost Rates
for the 140 Surveyed Universities in
Fiscal Years 1992-95
Universiti Universiti Universiti Universiti
es in es in es in es in
Overall fiscal fiscal fiscal fiscal
rates year 1992 year 1993 year 1994 year 1995
------------ ---------- ---------- ---------- ----------
36-40 5 4 6 4
41-45 32 38 36 32
46-50 32 44 40 45
51-55 27 20 25 26
56-60 15 15 11 14
61-65 16 12 13 11
66-70 7 6 8 7
71-75 4 0 0 0
76-80 1 0 0 1
81-85 0 1 1 0
86-90 1 0 0 0
============================================================
Total 140 140 140 140
------------------------------------------------------------
Appendix II ALTERNATIVES FOR
REVISING OMB CIRCULAR A-21
=========================================================== Appendix 0
Office of Management and Budget (OMB) Circular A-21 is designed to
provide that the federal government bear its fair share of
universities' costs for performing federally funded research,
determined in accordance with generally accepted accounting
principles. Important concerns in considering revisions to Circular
A-21 are controlling the growth of indirect costs, improving
consistency in the way that universities treat costs, and simplifying
indirect cost accounting procedures to reduce administrative burden.
Because the 26-percent cap has substantially limited any future
growth in administrative costs, further initiatives to control the
growth of indirect costs primarily will affect facilities costs.
INDIRECT COST RATE TRENDS
--------------------------------------------------------- Appendix 0:1
As shown in table II.1, the overall weighted average indirect cost
rate for 118 major research universities that the Department of
Health and Human Services (HHS) tracks grew from 48.8 percent in
fiscal year 1986 to a high of 51.1 percent in fiscal year
1992--before the administrative cap was established--and then dropped
to 50.5 percent in fiscal year 1995. The rise in overall rates
primarily reflected an increase in the weighted average of facilities
rates from 19.4 percent to 23.7 percent--a 4.3-point increase
consisting of a 3.3-point increase in use allowance and depreciation
costs and a 1-point increase in operations and maintenance costs. In
comparison, the weighted average of administration rates did not
change from fiscal year 1986 to fiscal year 1992 and then fell 1.7
points in fiscal year 1993 as a result of the cap.
Table II.1
Weighted Average Indirect Cost Rates for
118 Major Research Universities, Fiscal
Years 1986-95
19 19 19 19 19 19 19 19 19 19
Rate category 86 87 88 89 90 91 92 93 94 95
-------------------- -- -- -- -- -- -- -- -- -- --
Facilities 19 20 20 20 21 22 22 23 23 23
.4 .0 .3 .9 .7 .1 .4 .6 .7 .7
Use allowance and 5. 5. 5. 5. 6. 6. 7. 8. 8. 8.
depreciation 0 2 4 9 3 7 1 1 2 3
Operations and 14 14 14 15 15 15 15 15 15 15
maintenance .4 .8 .9 .0 .4 .4 .3 .5 .5 .4
Administration 26 26 26 26 26 26 26 24 24 24
.4 .0 .1 .5 .6 .5 .4 .7 .6 .8
Library 2. 2. 2. 2. 2. 2. 1. 1. 1. 1.
2 0 0 0 0 0 9 9 8 8
Other\a 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
8 8 5 2 2 2 4 2 3 2
============================================================
Total average rate 48 48 48 49 50 50 51 50 50 50
.8 .8 .9 .6 .5 .8 .1 .4 .4 .5
------------------------------------------------------------
\a Includes carry forward of costs from prior years, costs of special
service centers, and other unspecified costs.
Source: HHS.
As a result of these cost shifts, the facilities category increased
from 39.3 percent of total indirect costs in fiscal year 1985 to 47.2
percent in fiscal year 1994. Furthermore, if library costs were
added to reflect the July 1993 revisions to Circular A-21, facilities
would constitute slightly more than half of total indirect costs in
fiscal year 1994.
Despite the increase in the overall weighted average of indirect cost
rates for the 118 major research universities that HHS tracks, the
percentage of funds that the National Institutes of Health (NIH) and
the National Science Foundation (NSF) awarded for indirect costs
actually declined during the past 5 fiscal years. Indirect costs
constituted $1.8 billion, or 30.8 percent, of the $5.8 billion that
NIH awarded to universities for research in fiscal year 1994.\1 In
comparison, indirect costs constituted 31.5 percent of NIH's research
funding awarded to universities in fiscal year 1990. Similarly,
indirect costs constituted $363 million, or 21.9 percent, of the $1.7
billion that NSF awarded to universities for research in fiscal year
1994. Indirect costs constituted 23.9 percent of NSF's research
funding to universities in fiscal year 1990. NSF officials told us
that indirect costs are a low percentage of total funds awarded
because the (1) grant data included a substantial number of equipment
grants that do not have associated indirect costs and (2) some NSF
programs limit the reimbursement of indirect costs.
--------------------
\1 Even though the weighted average of indirect cost rates for the
universities is about 50 percent, indirect costs comprise less than
33 percent of total research costs because indirect cost rates are
based on modified total direct costs, rather than total direct costs.
FACTORS AFFECTING INDIRECT COST
RATES
--------------------------------------------------------- Appendix 0:2
In a May 1992 report, HHS found that most of the wide variation in
indirect cost rates among research universities could be explained by
an institution's (1) status as a private or public university, (2)
regional location in the country, and (3) amount of federal research
funding received (HHS used funding from NIH for its analysis).\2
Overall, the average indirect cost rate for public schools was 47.8
percent, and the average rate for private schools was 60.9 percent.
Public and private schools in New England and the Middle Atlantic
regions and private schools in the Pacific region had the highest
rates of indirect costs. The indirect cost rates for private schools
that received higher funding from NIH were higher than those for
private schools that received lower funding from NIH. However, the
same was not true for public schools.
HHS' analysis did not find that differences in the indirect cost
rates of urban and rural universities were statistically significant
because all but three of the sampled universities were located within
the Standard Metropolitan Statistical Area index that HHS used.
University representatives told us that the urban density around a
university is important because many private universities are located
in the middle of such high-cost cities as Boston, New York,
Philadelphia, and Chicago. HHS analyzed indirect cost rate data for
a period before the 26-percent administrative cap was implemented.
--------------------
\2 Management of Research Costs: Indirect Costs, HHS Working Group
on the Costs of Research (Washington, D.C.: May 1992).
CONDITION OF UNIVERSITY
RESEARCH FACILITIES
--------------------------------------------------------- Appendix 0:3
In August 1994, the Clinton administration released a science policy
paper, Science in the National Interest, that established long-term
national scientific goals. Noting the importance of scientific
research for competing in the global economy, the policy paper cited
the need to provide the physical infrastructure that facilitates
world class research, including access to cutting-edge scientific
instrumentation and to world class information and communications
systems. Specifically, the paper stated that the government could
foster the conditions in which competitive research and quality
education would be conducted at universities and medical schools by
(1) creating stable policies on research funding; (2) establishing
equitable policies for financing the construction, renovation, and
modernization of educational and research facilities; and (3)
modernizing the cost principles for academic buildings and equipment.
According to NSF's 1992 survey of universities' research
facilities,\3 34 percent of the respondents reported that they had an
inadequate amount of research space. Furthermore, these respondents
stated that 35.4 percent of their research space required either
limited or major repair or renovation to be used effectively in 1992
and that 3.1 percent of their research space required replacement.
While these percentages represented an improvement in both the amount
and condition of research space in 1992 as compared with NSF's 1988
and 1990 surveys, NSF estimated that $7 billion to $8 billion would
be needed to complete all needed repairs and renovations and that
additional money would be needed to construct replacement facilities.
NSF also found that the total amount of universities' research space
had not been increasing as much as the planned new construction,
indicating that the new research space may replace obsolete or
inadequate space rather than add to existing space. New construction
initiated from 1986 to 1991 was expected to add over 32 million
square feet of new research space, or 26 percent of existing research
space. In addition, new construction projects initiated in 1992-93
were expected to provide over 12 million square feet of new research
space.
--------------------
\3 Scientific and Engineering Research Facilities at Universities and
Colleges: 1992, National Science Foundation (NSF 92-325).
ALTERNATIVES FOR FURTHER
REVISING CIRCULAR A-21
--------------------------------------------------------- Appendix 0:4
The primary alternatives for revising Circular A-21's cost principles
are to (1) establish a system of flat rates that would set an overall
indirect cost rate for each university or (2) make several smaller
changes designed to improve consistency in the way that universities
treat costs and streamline cost accounting procedures. Controlling
the growth of indirect costs will primarily need to address costs
associated with constructing and operating research facilities
because these costs have been the fastest-growing indirect cost
components. On February 6, 1995, OMB published in the Federal
Register a Proposed Revision to Circular A-21. Of the eight
alternatives we discuss, the proposed revision addressed (1)
allocating utility and library costs to federally funded research,
(2) developing a more uniform approach for universities to recover
their investment in facilities and equipment, and (3) tightening
provisions that allow universities to claim interest on debt for
constructing new research facilities.
CAPPING UNIVERSITIES'
INDIRECT COST RATES BY
ESTABLISHING A SYSTEM OF
FLAT RATES
------------------------------------------------------- Appendix 0:4.1
The Congressional Budget Office, in its March 1994 report entitled
Reducing the Deficit: Spending and Revenue Options, suggested
establishing a flat rate for each university at 90 percent of its
current overall indirect cost rate. Inspector General officials at
NSF and HHS also supported establishing a flat-rate system adjusted
for locality and other special circumstances. These officials stated
that a flat-rate system would simplify Circular A-21's cost
accounting procedures because the government would not verify that
costs were allowable, reasonable, and allocated to the appropriate
cost category. NSF's Inspector General officials added that the
current, complex system is far more expensive and susceptible to
abuse than a simpler flat-rate system.
Citing its commitment to modernize university research facilities,
the Clinton administration concluded in a January 1995 paper that it
would be poor science policy to cap the indirect cost rate associated
with research facilities. In addition, almost all of the federal
agency officials interviewed and universities surveyed opposed
capping universities' facilities rates by establishing either a cap
similar to the 26-percent cap on administrative costs or a system of
flat rates. They stated that limiting cost recovery for facilities
would adversely affect universities' ability to provide modern
laboratory facilities and equipment needed to perform advanced
scientific research. They added that in many cases, universities
would decide not to construct new research facilities or upgrade
existing ones because a cap or flat rate would prevent them from
recovering higher facilities costs for federally funded research.
Two universities we visited also noted that more stringent federal,
state, and local regulations--for example, those that address health
and environmental concerns--have added to facilities costs for
performing federally funded research.
ESTABLISHING PERMANENT RATES
FOR ADMINISTRATIVE COSTS
------------------------------------------------------- Appendix 0:4.2
The July 1993 revision of Circular A-21 gave each university the
option to claim a fixed allowance for administrative costs of either
(1) 24 percent of its modified total direct costs or (2) 95 percent
of its most recently negotiated administrative rate, whichever is
less. Under this alternative, a university would not have to
document its administrative costs. However, only seven surveyed
universities--including the Johns Hopkins University and Harvard
Medical School--stated that they were either very or somewhat likely
to elect the fixed allowance option. For universities at the
26-percent cap, the 24-percent limit effectively would reduce their
administrative rate by 8 percent. In addition, Office of Naval
Research (ONR) rate negotiators said that the fixed allowance option
may not reduce universities' administrative burden substantially
because universities would need these cost data in the future if they
decide to switch back to a negotiated administrative rate.
In fiscal year 1994, the administrative rates of 81 surveyed
universities were at the 26-percent cap, while 28 additional
universities had administrative rates of at least 24 percent.\4 (See
table II.2.) In addition, the July 1993 revisions will place (1)
student services and other miscellaneous costs and (2) certain
departmental administrative and clerical salaries under the
administrative cap when universities next negotiate their rates.
Because these changes will further reduce federal agencies' need to
verify the administrative costs of most of the major research
universities, Circular A-21 could be simplified by making each
university's administrative rate permanent after the 1993 revisions
are included. In exchange for reducing the burden on universities to
document these costs, a permanent rate would control the government's
future outlays by precluding further administrative rate increases
for universities under the 26-percent cap. A university's
administrative rate might be subject to renegotiation if a
university's modified total direct cost base substantially changed.
Table II.2
Administrative Rates of Surveyed
Universities in Fiscal Year 1994
-------------------------------------- ---- ---- ---- --
Administrative rate 19- 22- 24- 26
21 23 25
Number of universities 12 19 28 81
------------------------------------------------------------
--------------------
\4 The number of universities with a 26-percent administrative rate
increased from 79 in fiscal year 1993 to 81 in fiscal year 1994.
ALLOCATING UTILITY AND
LIBRARY COSTS
------------------------------------------------------- Appendix 0:4.3
Circular A-21 allows universities to allocate utility and library
costs to federally funded research either by using a standard
allocation method or by conducting cost analysis studies--so called
"special studies"--designed to more accurately determine actual
costs. Overall, 63 of the 140 surveyed universities conducted
utility cost analysis studies for their most recent indirect cost
rate negotiations, including 17 of 20 universities whose operations
and maintenance component rates were at least 20 percent in fiscal
year 1994. (In addition, 34 universities conducted space use
studies.) Furthermore, 29 universities conducted library studies,
including only 8 of 17 universities whose library rates were at least
3 percent in fiscal year 1994. According to HHS' rate negotiators,
more universities are likely to conduct utility and library cost
analysis studies in the future because (1) some states have begun to
allow their universities to retain recovered facilities costs, giving
them a greater incentive to maximize recovery of these costs, and (2)
some universities are likely to more aggressively seek to recover
real utility costs that they had not pursued in the past to offset
money they cannot recover because of the 26-percent cap on
administrative costs.
Agency officials and university administrators generally agreed that
Circular A-21's standard method for allocating utility costs does not
allow a university to adequately recover such costs incurred in
performing federally funded research and, therefore, needs to be
revised. In particular, the standard method does not distinguish
between laboratory space, which generally has greater demands for
electricity and other utilities, and other nonreimbursable space
within a building. Similarly, the standard method for allocating
library costs between research and instruction may not adequately
reflect graduate students' use of the library in performing research
and, therefore, may not allow a university to adequately recover
these costs.
Agency officials and university administrators have disagreed over
the reliability of both utility and library cost analysis studies.
Many agency officials, including HHS' rate negotiators, believed that
cost analysis studies for utilities and the library should be
eliminated because (1) no uniform, acceptable methodology exists for
conducting these studies and (2) federal rate negotiators often
reject cost analysis studies because they disagree with assumptions
and/or methodology. According to HHS' rate negotiators, cost
analysis studies are a major source of friction between universities
and HHS because the analysis is dependent on making expert judgments
without having adequate supporting statistical data. In addition,
these studies are expensive--five universities that recently
renegotiated their indirect cost rates with HHS each paid engineering
consultants from $100,000 to $215,000 for a utility study. A
university can be reimbursed for a major share of the study's cost
because it is an allowable indirect cost. About half of the surveyed
universities supported developing approved methodologies for
conducting utility and library cost analysis studies, while only a
few universities supported eliminating them.
OMB's Proposed Revision to Circular A-21 would eliminate utility and
library cost analysis studies and announced OMB's decision to develop
standard benchmarks for allocating utility costs to federally funded
research. This proposal would implement the November 1994
recommendation of the Subcommittee on Research of the National
Science and Technology Council's (NSTC) Committee on Fundamental
Science.
REVISING USE ALLOWANCE RATES
------------------------------------------------------- Appendix 0:4.4
Universities can recover the acquisition cost for buildings and
equipment by either claiming an annual use allowance or depreciating
an asset over its useful life. Circular A-21 established a use
allowance rate of 2 percent per year for buildings and 6-2/3 percent
per year for equipment. These rates are equivalent to establishing a
50-year useful life for buildings and a 15-year useful life for
equipment. Alternatively, a university can depreciate a building and
its major systems by using the straight-line accounting method and
the useful life for each on the basis of engineering studies. Table
II.3 shows that most universities surveyed recover the acquisition
cost for both buildings and equipment through the use allowance.
Table II.3
HHS-and ONR-Cognizant Universities That
Recover Costs Through Use Allowance and
Depreciation
HHS- ONR-
cognizant cognizant Total
universities universities universiti
Method \a \a es
-------------------- ------------ ------------ ----------
Buildings
Use allowance 86 12 98
Depreciation 33 8 41
Equipment
Use allowance 64 10 74
Depreciation 39 7 46
Combination\b 16 3 19
------------------------------------------------------------
\a HHS negotiates rates with 119 universities surveyed, and ONR
negotiates rates with 20 universities surveyed.
\b These universities use both use allowance and depreciation,
depending on the class of equipment.
University administrators and agency officials agreed that the use
allowance rates do not reflect the shorter useful lives of (1)
certain major building systems--such as the heating, ventilating, and
air conditioning system--or (2) scientific equipment. In addition, a
research building may become technologically obsolete because it was
not designed with the capability to, for example, provide scientific
needs for greater measuring precision or meet health requirements for
ventilating air from laboratories. Similarly, rapid advances in
computer technology have made much scientific equipment obsolete
before 15 years.
ONR has allowed universities to switch from use allowance to
depreciation more readily than HHS. For example, Cornell University
converted to depreciation for both buildings and equipment, and
Pennsylvania State University converted to depreciation for
equipment. In each case, the amount reimbursed through the use
allowance was subtracted from the original purchase price to
determine the amount that remained eligible for depreciation. In
contrast, HHS' approach for converting either buildings or equipment
from use allowance to depreciation is to allow depreciation charges
only for the remaining useful life of the asset. For example, if a
university wanted to convert from use allowance to depreciation for
recovering construction costs for a 25-year-old building with a
useful life of 40 years, it could claim depreciation only for the
last 15 years, and thereafter it would not be reimbursed for the use
of the building. In this case, the university would have been
reimbursed for 50 percent of the building's cost through the use
allowance and 37.5 percent of the cost through depreciation--an
87.5-percent reimbursement. The university could not claim the
remaining 12.5 percent of the building's cost because of the
conversion. As a result of this approach, many universities overseen
by HHS have decided not to switch from the use allowance method to
the depreciation method. One university that switched, New York
University Medical Center, did so just before major new laboratory
facilities opened in 1993. University of Virginia administrators
told us that they would like to convert to depreciation, but they
would not be able to recover a substantial portion of their
investment in research facilities.
OMB's Proposed Revision of Circular A-21 would adopt the HHS approach
as the standard method for universities to convert from use allowance
to depreciation. OMB also announced its decision to examine and
potentially revise the useful life schedule for equipment. This
decision responds to (1) the NSTC Subcommittee on Research's
recommendation that standard-level use allowances be developed on the
basis of institutional characteristics to replace current
depreciation and use allowance practices and (2) a suggestion by the
university community that only depreciation be used to recover costs
for new buildings, capital improvements, and equipment.
OMB's proposed revision would also raise the dollar-value definition
of equipment from $500 to $5,000. Overall, 108 of the universities
surveyed supported this change, which would (1) reduce the burden of
maintaining inventory records on a substantial amount of equipment
and (2) allow a university to write off equipment costing less than
$5,000 in a shorter period than the 15 years that the use allowance
method permits.
PROPOSED REVISION TO OMB
CIRCULAR A-122 FOR NEW
CONSTRUCTION
------------------------------------------------------- Appendix 0:4.5
In September 1994, OMB published a proposed revision to Circular
A-122 that specifies cost principles for nonprofit organizations that
receive federal funding. The proposed revision would allow these
organizations to claim interest on debt in certain circumstances. In
particular, Circular A-122 would require that nonprofit organizations
(1) compute interest on the excess of the depreciation and interest
reimbursement over the bond principal and interest payments and (2)
treat the computed interest as a reduction in the interest expense to
be reimbursed by the government, unless the nonprofit organization
makes an initial equity contribution of 25 percent or more to
purchase the asset. OMB's Proposed Revision to Circular A-21 would
add a similar provision limiting possible excess interest payments.
HHS officials supported requiring a minimum downpayment for
constructing a research facility. They cited an instance in which a
university raised money for a new $40-million research facility
through a building campaign, yet borrowed a sum equal to almost the
full cost of the facility. The HHS officials noted that a university
could make periodic interest payments to bondholders over the life of
a 30-year bond and a principal payment after 30 years. However,
during the same period, the government would reimburse the university
through its indirect cost rate for the interest payments and
depreciation associated with space used to perform federally funded
research. If the university invested the depreciation payments made
over the 30-year period, it might earn substantially more than the
principal owed to bondholders. HHS' Office of Inspector General
currently is examining financing practices of five universities for
constructing new research facilities.
In addition, the proposed Circular A-122 revision would require that
a nonprofit organization conduct an assessment that demonstrates the
need for an asset in the conduct of federally sponsored activities if
the government's reimbursement is expected to equal or exceed 51
percent of an asset's cost. Alternatively, the university
community's November 1994 working paper suggested using a peer-review
process to assess the reasonableness of the costs of construction and
renovation that exceed certain benchmarks. The working paper
suggested that the peer-review process would be used only for
large-scale projects where federal funding plays a major role, citing
as an example projects costing at least $25 million for which the
government would contribute at least 51 percent of the cost. Both
suggestions respond to a concern that universities can construct
facilities--the cost of which is to be borne in large part by the
government--without any opportunity for the government to assess the
need or costs. Some agency officials noted, however, that a
peer-review process could add substantial administrative burdens and
financial costs to the indirect cost recovery process. OMB's
proposed revision announced the agency's decision to develop
benchmarks for construction and renovation costs for research
facilities for use in charging facility costs to sponsored
agreements.
CAPITALIZING RENOVATION
COSTS
------------------------------------------------------- Appendix 0:4.6
HHS officials suggested establishing a ceiling on the costs of
renovations or improvements that can be treated as expenses in the
year incurred as opposed to being capitalized over the building's
useful life. Because Circular A-21 currently does not set a ceiling,
a university might decide to expense a major improvements project
even though it might more properly be capitalized over the building's
useful life. A $50,000 ceiling was included in OMB's notice of
proposed revisions to Circular A-21 published in the Federal Register
in December 1992. However, it was deleted from the final revisions
published in July 1993, pending further study. Some agency officials
suggested raising the ceiling to $100,000 to allow universities to
expense more small improvements projects.
ENCOURAGING UNIVERSITIES TO
USE THE SIMPLIFIED METHOD
------------------------------------------------------- Appendix 0:4.7
Encouraging universities to switch from negotiating indirect cost
rates to using the simplified method would reduce the administrative
burden for both universities and federal agencies. In return for
reducing the burden in accounting for indirect costs, the simplified
method would limit the amount of indirect costs that a university
could recover. HHS' rate negotiators suggested that universities be
allowed to use modified total direct costs as their base for
calculating indirect costs under the simplified method, stating that
this change would not add substantially to the costs the government
pays smaller universities that use the simplified method. Currently,
only salaries and wages constitute the base.
A second option would enable simplified method users to recover more
of their indirect costs, giving some universities that currently
negotiate an indirect cost rate a greater incentive to shift to the
simplified method. Although this option would also increase federal
outlays to more than 400 universities and colleges that currently use
the simplified method, the outlays account for only a small
percentage of the total federal funding for research at universities
and colleges. The 140 universities in our survey received 88 percent
of the federal funds obligated to universities and colleges for
research in fiscal year 1992. All of these universities as well as
about 140 additional universities use negotiated indirect cost rates.
OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================= Appendix III
The Conference Report to the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1994, directed us to examine the federal
government's principles, contained in OMB Circular A-21, for allowing
universities to recover indirect costs associated with the
performance of federally funded research. Specifically, we were
asked to assess the effect of (1) October 1991 and (2) July 1993
revisions to Circular A-21. We also were asked to identify
alternatives for further revising Circular A-21 to control the growth
of indirect costs, improve consistency in the way that universities
treat costs, and/or streamline indirect cost accounting procedures.
This review follows up on our August 1992 report on universities'
indirect costs.\1
To assess the effect of the 1991 and 1993 revisions to Circular A-21,
we sent a questionnaire to 140 major research universities that
received $9.5 billion, or 88 percent, of the federal funds obligated
to universities and colleges for research in fiscal year 1992. All
140 universities responded to our questionnaire. HHS is the
cognizant agency for 119 of the 140 surveyed universities, ONR is the
cognizant agency for 20 universities, and the Department of Energy is
the cognizant agency for 1 university.
Specifically, we asked each surveyed university to (1) verify
indirect cost rate data that its cognizant federal agency had
provided for fiscal years 1992, 1993, and 1994 and (2) provide its
modified total direct costs for fiscal years 1992 and 1993. If the
university and cognizant agency disagreed, we asked the agency to
reverify its rate information. Rate discrepancies were resolved in
all but two universities--the University of Michigan and Utah State
University--for which we used the universities' rates. We analyzed
these data using the same factors that our August 1992 report
used--whether the institution was a public or private university,
where its geographical region was, and whether the institution was
among the top 20 recipients of federal research funding. These
factors were similar to the three factors that HHS' May 1992 study,
Management of Research Costs: Indirect Costs, had found were
statistically significant. We used NSF's report, Federal Support to
Universities, Colleges, and Nonprofit Institutions: Fiscal Year
1992, to identify the geographical regions and the top 20 recipients
of federal research funding.
To identify alternatives for further revising Circular A-21, we
interviewed cognizant officials at OMB; HHS, including NIH; the
Department of Defense, including ONR; NSF; the Department of Energy;
and the National Aeronautics and Space Administration. These
officials were responsible for negotiating indirect cost rates,
funding university research, and/or verifying the allowability of
costs. In addition, we (1) obtained the views of the surveyed
universities on several indirect cost issues through our
questionnaire, (2) visited Columbia University and New York
University Medical Center to interview senior administrators, and (3)
met with officials of the Council on Governmental Relations and the
Association of American Universities, which represent research
universities.
--------------------
\1 Federal Research: System for Reimbursing Universities' Indirect
Costs Should Be Reevaluated (GAO/RCED-92-203, Aug. 26, 1992). See
the list of related GAO products at the end of this report.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C.
Bernice Steinhardt, Associate Director
Robin Nazzaro, Assistant Director
Richard Cheston, Evaluator-in-Charge
John Johnson, Staff Evaluator
Patton Stephens, Staff Evaluator
Jonathan T. Bachman, Social Science Analyst
Sara Ann W. Moessbauer, Operations Research Analyst
RELATED GAO PRODUCTS
University Research: U.S. Reimbursement of Tuition Costs for
University Employee Family Members (GAO/NSIAD-95-19, Feb. 15, 1995).
Department of Transportation: University Research Activities Need
Greater Oversight (GAO/RCED-94-175, May 13, 1994).
Energy Management: Controls Over the Livermore Laboratory's Indirect
Costs Are Inadequate (GAO/RCED-94-34, Nov. 16, 1993).
Federal Research: Minor Changes Would Further Improve New NSF
Indirect Cost Guidance (GAO/RCED-93-140, June 3, 1993).
Federal Research: System for Reimbursing Universities' Indirect
Costs Should Be Reevaluated (GAO/RCED-92-203, Aug. 26, 1992).
Federally Sponsored Research: Indirect Costs Charged by Selected
Universities (GAO/T-RCED-92-20, Jan. 29, 1992).
Federally Sponsored Research: Indirect Costs Charged by Stanford
University (GAO/T-RCED-91-18, Mar. 13, 1991).