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The future of Federal grant making is in your hands if you act now!

The Federal government of the United States of America spends more than $600,000,000,000 (or $600 billion) each year in the form of grants and cooperative agreements. Out of the 26 Federal grant-making agencies, the eight largest are the Departments of Health and Human Services, Agriculture, Education, Energy, Homeland Security, Housing and Urban Development, Labor, and Transportation.


A Notice of Proposed Rule-making, published in the Federal Register (FR v79 n39 Feb 28 2012: 11778-11785) states in part that “in order to ensure that the public receives the most value for the tax dollars spent, it is essential that… programs function as effectively and efficiently as possible, and that there be a high level of accountability to prevent waste, fraud, and abuse.” At issue across dozens of proposed reforms is “proper stewardship of Federal funds.”


Reforms to Grant Cost Principles:

Among the Reforms to Cost Principles (in Circulars A-21, A-87, and A-122, and Cost Principles for Hospitals) being considered in 2012 are to:


  1. Consolidate the cost principles into a single document, with limited variations by type of entity
  2. For indirect (‘‘facilities and administrative’’) costs, use flat rates instead of negotiated rates
  3. Explore alternatives to time-and-effort reporting requirements for salaries and wages
  4. Expand application of the Utility Cost Adjustment for research to more higher education institutions
  5. Charge directly allocable administrative support as a direct cost
  6. Include the cost of certain computing devices as allowable direct cost supplies
  7. Clarify the threshold for an allowable maximum residual inventory of unused supplies
  8. Eliminate requirements to conduct studies of cost reasonableness for large research facilities
  9. Eliminate restrictions on use of indirect costs recovered for depreciation or use allowances
  10. Eliminate requirements to conduct a lease-purchase analysis for interest costs and to provide notice before relocating federally sponsored activities from a debt-financed facility
  11. Eliminate requirements that printed ‘‘help-wanted’’ advertising comply with particular specifications
  12. Allow for the budgeting for contingency funds for certain awards
  13. Request that the Cost Accounting Standards Board (CASB) consider increasing the minimum threshold for disclosure statements
  14. Allow for excess or idle capacity for certain facilities, in anticipation of usage increases
  15. Allow costs for efforts to collect improper payment recoveries
  16. Specify that gains and/or losses due to speculative financing arrangements are unallowable
  17. Provide non-profit organizations an example of the Certificate of Indirect Costs
  18. Provide non-profit organizations with an example of indirect cost proposal documentation requirements


Reforms to Grant Administrative Requirements:

In addition, among the Reforms to Administrative Requirements (the Common Rule implementing Circulars A-102, A-110 and A-89) under consideration are:


  1. Create a consolidated, uniform set of administrative requirements
  2. Require pre-award consideration of each proposal’s merit and each applicant’s financial risk
  3. Require agencies to provide 90- day notice of funding opportunities
  4. Provide a standard format for announcements of funding opportunities
  5. Reiterate that information collections are subject to Paperwork Reduction Act approval


Other reforms are under consideration as well. Though April 30, 2012 (an extended deadline!), the public is invited to submit comments to the Office of Management and Budget (OMB) and at


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