The document, authored by the COGR Costing Committee, addresses the issue of inconsistent and arbitrary federal agency limitations on cost reimbursement for research conducted at U.S. universities and affiliated institutions. The Council on Governmental Relations (COGR), representing leading research universities, highlights how such inconsistencies—where agencies impose funding restrictions beyond those outlined in official Office of Management and Budget (OMB) guidelines—have led to significant under-recovery of facilities and administrative (F&A) costs by research institutions. The document notes that the scholarly and financial health of U.S. research institutions is intertwined, with inadequate reimbursement compromising both research capability and educational missions. It underscores that many universities, lacking large unrestricted endowments, rely heavily on F&A reimbursements, and when agencies set arbitrary or program-specific caps (such as the NIH K-award program or certain Department of Education programs), institutions are left to absorb billions in unreimbursed costs, as evidenced by data from the National Science Foundation (NSF) and previous studies.
COGR calls for rigorous adherence to federal cost principles—specifically those codified in OMB Circular A-21 and the 2003 OMB Policy Directive—which stipulate that negotiated F&A rates should be uniformly accepted unless statutory exceptions apply. The document criticizes voluntary cost-sharing encouraged by agencies and notes the compliance and administrative burdens imposed by inconsistent policies. To address these issues, COGR recommends several actions: mandating acceptance of negotiated F&A rates by all federal agencies, prohibiting voluntary cost-sharing, enhanced OMB oversight and enforcement, and establishing mechanisms for institutions to report agency non-compliance. Ultimately, COGR argues that honoring federal guidelines will ensure both financial stability and sustained research excellence, positioning federal and institutional partners to share research costs equitably and productively.
