The "DCA Best Practices Manual – COGR Interpretations" is a thorough analysis prepared by the Council on Governmental Relations (COGR) to assist universities and research institutions in developing and negotiating Facilities & Administrative (F&A) cost rate proposals. The document interprets and responds to the Department of Health and Human Services Division of Cost Allocation (DCA) Best Practices Manual, aiming to clarify federal requirements, particularly those outlined in OMB Circular A-21, and reconcile them with institutional practices. COGR’s interpretations serve to ensure compliance while also advocating for the practical and financial interests of academic and research organizations.
Key themes addressed include the proper treatment of technical cost categories such as depreciation, use allowances, interest expenses, operations and maintenance, space allocation, and the distinction between direct and indirect costs. COGR provides specific commentary on areas where DCA guidance may lack nuance or conflict with broader policies or institutional realities, such as the handling of federally funded equipment in depreciation calculations and the recognition of interest on certain bond types. The manual also evaluates methodologies for allocating costs related to libraries and departmental administration, supporting more accurate and institution-specific approaches rather than rigid adherence to DCA interpretations.
Throughout the document, COGR underscores the necessity for robust, well-documented, and defensible costing methodologies. It advises institutions to avoid automatic acceptance of DCA positions where these may not align with sound financial or operational practice and encourages direct, professional communication with federal officials to resolve differences. Importantly, the manual promotes ongoing, constructive engagement in the negotiation process and discourages escalation to formal appeals except in extraordinary circumstances. COGR’s overarching goal is to foster equitable F&A rate negotiations that respect federal requirements, institutional resources, and the unique operational contexts of research entities, resulting in fair, transparent, and sustainable outcomes for all parties.
