Assuring Reasonableness of Rising Indirect Costs on NIH (National Institutes of Health) Research Grants--A Difficult Problem.
GENERAL ACCOUNTING OFFICE WASHINGTON DC HUMAN RESOURCES DIV
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National Institutes of Health reimbursements to its grantees for indirect costs increased from 166 million in 1972 to 690 million in 1982. Moreover, indirect costs consumed an increasing proportion of the federal research dollar--rising from about 21 to 30 percent during the same period. GAO believes that indirect cost rates have been established with grantees despite 1 difficulties involved in verifying the largest category of indirect costs departmental administratration expenses, 2 relatively few indirect cost audits, and 3 inadequate written explanations for significant year-to-year increases in indirect costs. GAO recommends that the Office of Management and Budget OMB revise its Circular A-21 to establish a fixed allowance for large institutions departmental administration expenses to replace the cost reimbursement method now used. This simplified means of establishing reimbursable departmental administration expense allowances should not require reliance on grantees personnel activity reporting system. It should also minimize difficulties encountered in independently verifying such expenses.
- Economics and Cost Analysis