Regulatory Changes made

The Uniform Guidance (2 CFR Part 200) administrative requirements, cost principles and audit requirements for Federal awards (UG) was developed in part to streamline federal policies and agency requirements to reduce the administrative burden placed on faculty conducting research at institutions of higher education. The Federal Register, volume 78 #248 (12/26/13) lists in the preamble to the UG that the focus on final guidance on overall internal controls mitigates the need for reporting/certification.

Compared to OMB A‐21, the UG allows for additional flexibility in how entities implement processes to meet the accounting standards for compensation. The UG removed: specific examples of appropriate methodologies that supported “effort reporting”, prescribed effort certification/reporting time periods, specification on who must certify/document compensation costs, and certain concepts of independent evaluation. Although there is added emphasis on having a system of internal controls that reasonably reflects work performed, the concept of “effort” reporting is now one of many methods for charging salary to federal projects.

These changes have effectively removed the confusing concept of faculty reporting and certifying their “effort” and set pathways for alternative methods for charging salaries to the federal government. However, many universities remain reluctant to transition away from typical effort reporting systems and policies in fear of an untested audit environment to those alternative methods.

Question raised

Given the national dialogue on faculty burden and the changes considered and made by OMB in response (the UG) to university complaints to this issue, are universities being overly cautious by not pursuing an opportunity to reduce the burden on faculty research and what message does it send to OMB when such changes are not taken advantage of?