Happy New Year! A81 Is Here!

It’s 2014! Our holiday wishes came true – at least some of them, any way. No shutdown in Washington D.C. – check. At the same time, Congress decided to roll back part of the sequestration cuts and restore funding to many areas of the Federal Government affected by last years deep spending cuts – check. And the Office of Management and Budget – gave us that mega-circular they had been promising for 2 years – CHECK!

That’s a Mouthful!

The new mega-circular, known as Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Final Rule, aims to tame the avalanche of  overlapping or contradictory guidance that was previously in effect with the eight separate circulars published by the OMB over a series of many years. These circulars, (including A-133, A-21, and A-110) applied toinformation overload hospitals, institutions of higher education, non-profit institutions, cities, states, tribal organizations, and other types of organizations, and over the years, interpreting the guidance in these documents became more difficult. A working group came together to combine the circulars into one document that would apply to all non-Federal agencies and aim to simplify the process of managing grants and contracts. These organizations worked with COFAR (the Council on Financial Assistance Reform) and the administration to develop new guidance that reflected the current reality of managing Federal awards.

The new guidance was published on December 26, 2013 in the Federal Register, and it’s over 100 pages long. It is well organized, easy to read and search online, and has a lot of familiar information for research administrators. However, in revising and updating the guidance for managing grants and contracts, the Federal government took the opportunity to incorporate input from organizations and change policies and processes regarding grants management.

What You Should Know

Key aspects of the new guidance include the following:

  • Performance over Compliance for Accountability

The emphasis in the new guidance is definitely on generating results and outcomes that can be shared with other award recipients. The Federal government is not going to allow non-compliance, but they do not want overly burdensome rules to prevent an investigator or a collaborating team from accomplishing a stack-of-paperstheir research aims. As you read the guidance, you’ll see that this is the goal.

  • Family-Friendly Policies Encouraged

The guidance definitely encourages organizations that receive Federal funding to develop (if they do not already have) family-friendly policies. They have updated their policies to include family-friendly issues such as costs related to the identification of day-care providers, and the need to allow parents to document  time out of the workforce on their biosketches.

  • Increasing de minimis Threshold for Indirect Costs to 10%

The new guidance allows organizations that cannot afford to negotiate an indirect rate to budget a 10% de minimis indirect rate with the Federal government. Previously the rate was 8%.

  • Administrative Costs can be Charged as Direct Costs

The guidance also provides specific information, in many ways, for the first time, about how to manage administrative costs as a direct cost. This issue can be difficult because it is often charged as an indirect cost (an in most cases it should be charged that way). This guidance correctly acknowledges the need for charging administrative costs as a direct cost and how to manage this situation.

  • Payment Management System Clues 

The circular provides more information than before on ensuring consistency in allocating costs, and when to secure written approval for assigning a cost to an award. The cost principles  and audit sections of the document are very useful, and it states that there is now a limit of three years for the Federal government to review awards in order to disallow costs. This, combined with the new 90 day rule for reporting on awards at the end of the project period gives us an indicator of how the Federal government will be managing award dollars in the future. Can you say “use it or lose it?”

  • Focus on Delivering Results and Outcomes

There is an entire section in the document that discusses how RFAs  and PAs will be written and what must be included in them. The circular states that RFAs and PAs have to be available 60 days before the opportunity closes – which is an interesting development. It will be fascinating to see if the language on “outcomes” and “milestones” translates into a new format for the funding announcements. Stay tuned.

To see a webcast about the new guidance click here.

Here’s to a great start to 2014 – may your New Year be productive and fulfilling!

Preparation Nation: Shut Down Week 3 – What Happens Now?

Fiscal Cliff 2I’m following the latest on the back and forth negotiations in Washington DC on my iPad like a devotee of Scandal (or Breaking Bad for you guys out there). Will they or won’t they? Who is doing what to whom? When will they open the government? Are we going over the cliff? Oh the drama!

It would be entertaining – if it weren’t so high stakes for the scientists doing research around the world. And not just for the graduate student who traveled all the way from Boston to Antarctica and had to travel all the way home again once he got there (because his research project was cancelled during his trip). Scientists are reporting that the shutdown is having a devastating impact on the ability to obtain specimens, recruit participants, and collect and analyze data – which could set back research in a variety of fields from months to years. You can tap in to conversations that researchers are having online on Reddit here. (Note the team that is working at the South Pole!) You can also follow #shutscience on twitter for more stories from scientists who are on experiencing the shutdown’s devastating impact on their work.

The Status of Negotiations

While it appears that Congress and the President are making some headway towards an agreement that will keep us away from the fiscal cliff (and perhaps negotiating a budget to open the government in the meantime) they will need to achieve that in the next three days. If memory serves, this Congress likes to take us to the last second, we’ll see. If you’d like to track the status of discussions in Washington, a few helpful resources include a visual guide to the negotiations; a series of articles on the shutdown and its impact on science, and to remind us what we’ve lost in all of this, a tally of what the shutdown has cost.

The Washington Post has a live update on the negotiations on their website if you can stomach the roller coaster ride.

Resources To Keep Going During The Shutdown

You may have already figured out some quick fixes when the NSF, NIH and other government websites went dark. Google cache is one easy way to find program announcements, RFAs and access to other website pages that are currently unavailable. There are other homegrown websites and links (see resources above) with additional links and documents. While Federal government agencies have stopped accepting applications (you can submit to grants.gov, but they won’t reach the agency, so most agencies have said not to submit)  preparations for completing grant submissions should continue on schedule.

However, we are learning from NCI Director Howard Varmus just how long it may take for most Federal agencies to come back on-line after the shut down is over.

When the Shutdown is Over

By law, Federal employees had to vacate the premises and leave behind their work computers and devices on the last day of the fiscal year. The shut down was completed within 1/2 day (in reality, I’m sure most agencies saw it coming and were prepared for some time).

Since then, we’ve not heard much, until now, about how the shutdown is affecting agencies and their ability to fund and manage research and how things might work after the shutdown is over. This memo from Harold Varmus gives us a leg up on how we can get ready for questions from our investigators – and as you’d suspect, the news isn’t great. Large and small agencies are going to have a tough time catching up from just a couple of weeks – and as we know, these weeks contained crucial grant and contract deadlines.

We’ll be ready to submit applications, but the systems to accept them will have to be ready for every application, all at once. Grant review meetings will need to be rescheduled as quickly as possible – and all of the missed deadlines and missed meetings will have a cascading effect on upcoming deadlines for every type of extramural application. All of these activities depend on hundreds, if not thousands of faculty and staff altering their plans to participate in rescheduled reviews to bring the process back on-line.

And the longer we’re waiting, the worse the problem becomes.

What Can You Do to Help Your Investigators?

As most program officers are unavailable (they have been furloughed) it’s important to keep up with the latest news in Washington to identify potential impact on your investigator’s research.

  1. Talk to your investigator regularly to determine his/her concerns – a lot of investigators have concerns that are time-dependent. (If the shutdown lasts until X date, I’ll be fine, but if it goes until Y date, this will happen…)
  2. Read academic media to learn what your investigator’s colleagues are doing to cope in the face of the shutdown.
  3. Discuss fiscal strategies for managing research projects given a delayed payment cycle – if you have projects that are in the process of being renewed, how will your investigator manage with his/her current budget?
  4. Investigate available institutional resources, if you’re that fortunate, for these types of situations. Perhaps you can pool institutional resources to care for animals, or share staffing to keep gathering data, etc.
  5. Talk to central offices about what they are hearing regarding the shutdown, and how you can prepare for next steps.
  6. If you find something that was especially effective to assist your investigator in weathering the storm, remember what you did, because you’ll need to do it again in six months!

Remember – expect the worst – and hope for the best, and maybe we’ll end up somewhere in between.

Capitol Hill Showdown: What Will October Bring?

preparationI don’t know about you, but when I’m working on an application deadline, I’d like to think about helping my investigator submit a quality application – not whether the government will be open for business to accept the application on the due date.

Unfortunately, it’s mid-September, so that means our elected officials are squabbling again about whether or not they’d like to fund the federal government through the end of the calendar year.

Unfortunately, this political tango has very real consequences for scientific research – both the currently funded kind, and the research in-need-of-support kind. And for this go-around, we have another hurdle to face with an anticipated battle over the definition and scope of the debt ceiling. Our national legislators are seeking to tie this discussion to other mandates, such as reducing or eliminating funding for the Affordable Care Act, or adjusting the terms of sequestration. Regardless of the outcome, the effect is likely to create uncertainty in federal agencies, and if it goes on too long, could lead to belt-tightening.

This drama is likely to play out during the last few days of September, when Congress considers legislation to fund the President’s 2014 budget, or not. For the past 5 years, we have funded the government on continuing resolutions, which are a series of appropriations bills that have passed both houses of Congress and been authorized to fund the nation’s work for a period of time (from weeks to months, to a year). These appropriations bills are sometimes cobbled together and approved in chunks.

After we pass the first hurdle of keeping the government running (and can submit our applications), we must address the debt ceiling hurdle – which has a decision deadline of October 15, after which the Federal government goes into default on its financial obligations, and cannot pay its bills, such as student loans and Social Security checks. There is some discussion that prudent management of the deficit has given the Treasury some wiggle room for the November 1 pay period, but agencies that have “discretionary” payments are already starting to look at the next couple of months and plan for a battle in Washington.

The political environment is even more complicated – a primary election underway in the state of Kentucky has effectively silenced Senate Majority Leader Mitch McConnell as a more moderate force between Democrats and Republicans in the Senate (as was the case during the last debt ceiling debate in 2011). Similarly, House Speaker John Boehner is in a difficult position between a very conservative wing in the House that is attempting to de-fund Obamacare as a condition for raising the debt ceiling and keeping the government open – which if the government shuts down, may cost him his Speakership.

What does this mean for research administrators?

If you are waiting for a non-competing continuation, a subcontract, or a notice of award – don’t hold your breath. Everyone is going to be in a holding pattern until this is sorted out. If your investigator decides to start work, be prepared to open pre-spending accounts, and direct charge expenses (conservatively) until you know what your funding will look like. Encourage your investigators to talk to their program officers and get a read on what’s going on at their funding agency. Monitor activity and costs closely to manage potential cost share commitments until funding comes through. Keep your PI’s and departments updated on developments – and while you’re at it, load up on the antacid.

Buckle up. It’s going to be a bumpy ride.

Health Care Law Upheld In Large Part by Supremes

For those who have awards funded by the Affordable Care Act, today was an important day – as the Supreme Court upheld the constitutionality most of the legislation. To read more, you can go to the ruling which has an analysis written by the Court itself.

On page 6, the Court stated “Even absent §1303’s command, the Court would have no warrant to invalidate the funding offered by the Medicaid expansion, and surely no basis to tear down the ACA in its entirety.” The Court viewed that the law offered them the ability to sever provisions from other aspects of the legislation and therefore severed one key aspect of the original legislation from all the others. The ruling is complicated, and basically the analysis on news websites indicates that the law now goes back to Congress to determine how it will be funded in future years.

We can look to the November elections for an indication of that – but as many health care experts have also said in recent weeks, many aspects of this law also indicate that the changes that this legislation have reflected are part of the fabric of our changing health care system as a whole. Stay tuned to the political process and watch the movement in Congress.