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HRD-84-3 1 (1984-03-16)

handle is hein.gao/gaobabelg0001 and id is 1 raw text is: REPORT BY THE Comptroller General OF THE UNITED STATES Assuring Reasonableness Of Rising Indirect Costs On NIH Research Grants--A Difficult Problem 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 in- volved in verifying the largest category of indirect costs (departmental administration expenses), (2) rela- tively few indirect cost audits, and (3) inadequate written explanations for significant year-to-year in- creases 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 reim- bursement method now used. This simplified means of establishing reimbursable departmental adminis- tration expense allowances should not require re- liance on grantees' personnel activity reporting sys- tems. It should also minimize difficulties encountered in independently verifying such expenses. 1Pi 123711 -- GAO/HRD-84-3 MARCH 16, 1984