The document, produced by the Council on Governmental Relations (COGR), discusses the increasing financial burden universities face in supporting research activities, particularly regarding the underrecovery of compliance costs due to federal limitations on facilities and administrative (F&A) cost reimbursement. COGR studies reveal that most major research universities consistently incur administrative costs surpassing the 26% cap imposed in 1991, resulting in significant under-recovery. For instance, in FY 2000, 20 research-intensive institutions experienced an average under-recovery of $2.4 million per institution due to this cap, with supplementary losses when federal agencies further restrict F&A payments. Nationally, the annual under-recovery is estimated between $0.7 and $1.5 billion.
The analysis further highlights that new and expanding federal compliance requirements have sharply escalated institutional costs, with 25 universities projecting $411 million in compliance-related expenditures between 2000 and 2005. These costs predominantly fall within the administrative component, which is already capped and thus not fully recoverable from federal funding. Additionally, increases in research volume and corresponding F&A recoveries have failed to keep pace with rising compliance expenses, causing universities to draw even more heavily on their own funds. This growing university cost-sharing now represents a much larger portion of total research expenditures than in previous decades, underscoring universities' commitment but also signaling the need for a comprehensive solution to maintain the sustainability of the nation’s research infrastructure.
