Overhead rules may change soon



The Office of Management and Budget (OMB) has proposed a major change in the way administrative overhead costs are charged to federal research grants. In the February 12 Federal Register, OMB proposed that charges for the administrative portion of overhead costs be limited to 26% of the direct cost of the research, dropping to a 20% limit next year. The revisions would be made in a document called OMB Circular A-21, which specifies the way in which universities must account for federal research grant money. The proposed change is seen by many university administrators as adding insult to the injury to research funding that they say is caused by Gramm-Rudman-Hollings, the new law that calls for the federal budget deficit to shrink to zero by 1991 (Eos, January 28, 1986, p. 41).