Proposed Information Collection Activities OMB Circular A-21; Request for Comments

Federal RegisterAug 12, 1999

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OFFICE OF MANAGEMENT AND BUDGET

Proposed Information Collection Activities OMB Circular A-21;

Request for Comments

AGENCY: Office of Management and Budget, Executive Office of the

President.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: In accordance with the Paperwork Reduction Act (44 U.S.C. 3501

et seq.), the Office of Management and Budget (OMB) invites comment on

the proposed information request. This request proposes a standard

format for submitting facilities and administrative rate proposals by

educational institutions and will be required by OMB Circular A-21,

``Cost Principles for Educational Institutions.'' The standard format

would assist institutions in completing their proposals more

efficiently and help the

[[Page 44063]]

Federal cognizant agency review each proposal on a more consistent

basis. OMB proposed the use of and solicited input on the use of such a

form in its proposed revision to OMB Circular A-21 on September 10,

1997. OMB received 35 comments from Federal agencies, universities and

professional organizations in response to that section of the proposed

revision to Circular A-21. All commenters were in favor of the

development of such a form. OMB, with assistance from Federal agencies

and universities, developed the attached form for inclusion in Circular

A-21. OMB also proposes to revise Circular A-21 as shown below, to

incorporate the new form.

DATES: Comments are due on or before October 12, 1999.

ADDRESSES: Comments should be mailed to Gilbert Tran, Office of Federal

Financial Management, Office of Management and Budget, 725 17th Street,

NW, Room 6025, Washington, DC 20503. Comments up to three pages in

length may be submitted via facsimile to 202-395-4915. Electronic mail

comments may be submitted via Internet to Hai--M.--T[email protected].

Please include the full body of electronic mail comments in the text

and not as an attachment. Please include the name, title, organization,

postal address, and E-mail address in the text of the message.

FOR FURTHER INFORMATION CONTACT: Gilbert Tran, Office of Federal

Financial Management, Office of Management and Budget, (202) 395-3993.

SUPPLEMENTARY INFORMATION: OMB proposed on September 10, 1997 (62 FR

47721), to develop a standard format for the submission of facilities

and administrative (F&A) proposals, that would assist educational

institutions in completing their F&A proposals more efficiently and

help the Federal cognizant agency review each proposal on a more

consistent basis. It would also facilitate the Federal Government's

effort to collect better information regarding educational institution

F&A costs that could be useful in explaining variations in F&A rates

among institutions. In addition, a standard format may allow electronic

submission of F&A proposals to the Federal cognizant agency in the

future.

Federal agencies, universities and professional organizations,

through their submitted comments, favorably support the proposal for

the development of a standard format. Accordingly, OMB, with the

assistance from Federal agencies and university representatives,

developed a standard format that includes two parts:

A summary schedule of the institution's proposed F&A

rates, along with the F&A cost pools and their allocations, and

A listing of support documentation to be submitted with an

F&A proposal.

OMB is proposing, through this notice, to include the standard

format as Appendix C of the Circular. This notice is soliciting

comments from members of the public and affected entities concerning

the proposed information collection to: (1) Evaluate whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information will have practical utility; (2) evaluate the accuracy of

the agency's estimate of the burden of the proposed collection of

information, including the validity of the methodology and assumptions

used; (3) enhance the quality, utility, and clarity of the information

to be collected; and (4) minimize the burden of the collection of

information on those who are to respond, including through the use of

appropriate automated, electronic, mechanical, or other technological

collection technique of other forms of information technology, e.g.,

permitting electronic submission of responses.

This notice also lists the following information:

Title: Appendix C, ``OMB Circular A-21 Documentation Requirements

for Facilities and Administrative (F&A) Proposals Claiming Costs Under

the Regular Method''.

Type of review: New collection.

Respondents: Large Universities.

Number of Responses: 282.

Estimated Time Per Response: 4 hours.

Needs and Uses: The proposed form will standardize the

documentation requirements for facilities and administrative proposals

submitted by large universities to their cognizant agency.

Issued in Washington, DC, August 4, 1999.

Norwood J. Jackson, Jr.,

Acting Controller.

OMB proposes the following revisions to Circular A-21.

1. Add Section G.12 to read as follows:

12. Standard Format for Submission. For facilities and

administrative (F&A) proposals submitted on or after July 1, 2000,

educational institutions shall use the standard format, shown in

Appendix C, to submit their F&A rate proposal to the cognizant agency.

The cognizant agency may, on an institution by institution basis, grant

exceptions from the standard format requirement. This requirement does

not apply to educational institutions which use the simplified method

for calculating F&A rates, as described in Section H.

2. Add Appendix C (shown below):

Appendix C--OMB Circular A-21 Documentation Requirements for Facilities

and Administrative (F&A) Proposals Claiming Costs Under the Regular

Method

The documentation requirements for F&A rate proposals consist of

two parts. Part I provides a schedule of summary data on the

institution's F&A cost pools and their allocations, and the proposed

F&A rates. An example of a completed Part I is included. Part II

describes the standard documentation to be submitted with the

institution's F&A proposal.

Part I--Summary Data Elements for F&A Proposal--Part A

Name of Institution: ____ Organization Number: (Federal Use

Only)

Address:---------------------------------------------------------------

----------------------------------------------------------------------

a. Cognizant Federal Agency Rate Setting: ______ Audit:

______

b. Type of Institution Private ( ) Public/State ( )

c. Fiscal Year ________

d. Population Students: ____ Faculty: ____ Staff:

____

e. Status of Disclosure Statement Required to Submit (Y/N)?

____

Due Dates: Initial: ____ Revised: ____

Date Submitted ____

Approved ( ) Yes ( ) No Date: ____

f. Most Current F&A Rates (i.e., final, predetermined, fixed)

(Last three fiscal years)

[[Page 44064]]

--------------------------------------------------------------------------------------------------------------------------------------------------------

On-campus Off-campus

Type of rate Fiscal year Date of rate On-campus organized On-campus OSA* Off-campus organized Off-campus OSA*

covered agreement instruction research instruction research

--------------------------------------------------------------------------------------------------------------------------------------------------------

(* OSA = Other Sponsored Activities)

g. Base year costs associated with new buildings placed into

service within the last five years (i.e., base year and four

preceding years) by major functions proposed (in thousands).

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA

----------------------------------------------------------------------------------------------------------------

Building Depreciation or Use Allowance

Interest Expense

Operation and Maintenance

----------------------------------------------------------------------------------------------------------------

h. Dollar amounts by major functions proposed--Base Year (in

thousands)

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA

----------------------------------------------------------------------------------------------------------------

Salaries & Wages/Fringes:

--Professional/Professorial

--Other Labor

Non-labor Costs

Modified Total Direct Costs

----------------------------------------------------------------------------------------------------------------

i. Percentage of cost pool dollars allocated to major functions

proposed--Base Year

--------------------------------------------------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA Other Total

--------------------------------------------------------------------------------------------------------------------------------------------------------

Building Depreciation or Use Allowance

Equipment Depreciation or Use Allowance

Interest Expense

Operation and Maintenance

Library

--------------------------------------------------------------------------------------------------------------------------------------------------------

j. Proposed methodology for library costs:

Standard Method: ____

Special Study: ____

k. Procedure for claiming fringe benefit costs:

Specific Identification: ____

Negotiated Rate: ____

Other (see attached): ____

Part I--Summary Data Elements for F&A Proposal--Part B

Name of Institution:---------------------------------------------------

Base (or Data) Year:---------------------------------------------------

Base Year Rate Calculation Summary by Major Function

[Dollars in thousands]

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA

----------------------------------------------------------------------------------------------------------------

FACILITIES GROUP

Depreciation/Use Allowance:

--Buildings........................................ $______ ____% $______ ____% $______ ____%

--Equipment........................................ $______ ____% $______ ____% $______ ____%

--Land Improvements................................ $______ ____% $______ ____% $______ ____%

Interest Expense....................................... $______ ____% $______ ____% $______ ____%

Operation & Maintenance................................ $______ ____% $______ ____% $______ ____%

Library................................................ $______ ____% $______ ____% $______ ____%

----------------------------------------------------------------------------------------------------------------

[[Page 44065]]

ADMINISTRATIVE GROUP

General................................................ $______ ____% $______ ____% $______ ____%

Departmental........................................... $______ ____% $______ ____% $______ ____%

Sponsored Projects..................................... $______ ____% $______ ____% $______ ____%

Student Services....................................... $______ ____% $______ ____% $______ ____%

Adjustment for 26% Limitation.......................... ____% ____% ____%

----------------------------------------------------------------------------------------------------------------

MODIFIED TOTAL DIRECT COST AND F&A RATES

On-Campus.............................................. $______ ____% $______ ____% $______ ____%

Off-Campus............................................. $______ ____% $______ ____% $______ ____%

Other.................................................. $______ ____% $______ ____% $______ ____%

Total.................................................. $______ ____% $______ ____% $______ ____%

----------------------------------------------------------------------------------------------------------------

COMPOSITION OF RATE BASE

Federal Awards:

On-Campus (negotiated rates)....................... $______ $______ $______

Off-Campus (negotiated rates)...................... $______ $______ $______

Research Training Awards........................... $______ $______ $______

Other Awards (not based on negotiated rates)....... $______ $______ $______

Non-Federal Sources.................................... $______ $______ $______

Total.................................................. $______ $______ $______

----------------------------------------------------------------------------------------------------------------

MISCELLANEOUS STATISTICS

Cost Sharing in Rate Base.............................. $______ $______ $______

Assignable Square Feet (ASF) by Major Function......... __________ __________ __________

Percent of ASF Financed................................ ____% ____% ____%

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Part I--Example-Summary Data Elements for F&A Proposal--Part A

Name of Institution: University of XYZ Organization Number:

(Federal Use Only)

Address: 100 Main St

Somewhere, ST 12345

a. Cognizant Federal Agency Rate Setting: HHS Audit: HHS

b. Type of Institution Private ( ) Public/State (X)

c. Fiscal Year July 1, 1997-June 30, 1998

d. Population Students: 12,000 Faculty: 1,759 Staff:

2,798

e. Status of Disclosure Statement:

Required to Submit (Y/N)? Yes

Due Dates: Initial: 06/30/98 Revised: 12/31/98

Date Submitted: 12/10/98

Approved: (X) Yes ( ) No Date: 06/13/99

f. Most Current F&A Rates (i.e., final, predetermined, fixed)

(Last three fiscal years)

--------------------------------------------------------------------------------------------------------------------------------------------------------

On-campus

Fiscal year Date of On-campus organized On-campus Off-campus Off-campus Off-campus

Type of rate covered rate instruction research OSA* instruction organized OSA*

agreement (percent) (percent) research

--------------------------------------------------------------------------------------------------------------------------------------------------------

Pred............................................ 1999 09/15/96 78.0 52.5 38.3 26.0 26.0 20.0

Pred............................................ 1998 09/15/96 78.0 52.5 35.0 26.0 26.0 20.0

Pred............................................ 1997 09/15/96 76.0 53.0 35.0 26.0 26.0 20.0

--------------------------------------------------------------------------------------------------------------------------------------------------------

(* OSA=Other Sponsored Activities)

g. Base year costs associated with new buildings placed into

service within the last five years (i.e., base year and four

preceding years) by major functions proposed (dollars in thousands).

------------------------------------------------------------------------

Organized

Instruction research OSA

------------------------------------------------------------------------

Building Depreciation or Use 729 2,639 0

Allowance.......................

Interest Expense................. 0 1,794 0

Operation and Maintenance........ 1,280 4,632 0

------------------------------------------------------------------------

[[Page 44066]]

h. Dollar amounts by major functions proposed--Base Year (in

thousands)

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA

----------------------------------------------------------------------------------------------------------------

Salaries & Wages/Fringes:

--Professional/Professorial................................. 27,000 57,750 6,050

--Other Labor............................................... 9,400 6,000 5,000

Non-labor Costs................................................. 19,600 21,250 1,950

----------------------------------------------------------------------------------------------------------------

Modified Total Direct Costs..................................... 56,000 85,000 13,000

----------------------------------------------------------------------------------------------------------------

i. Percentage of cost pool dollars allocated to major functions

proposed--Base Year

[In percent]

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA Other Total

----------------------------------------------------------------------------------------------------------------

Building Depreciation or Use 40.0 44.0 2.5 13.5 100.0

Allowance......................

Equipment Depreciation or Use 34.2 27.7 2.1 36.0 100.0

Allowance......................

Interest Expense................ 29.9 32.4 1.9 35.8 100.0

Operation and Maintenance....... 32.8 35.6 2.1 29.5 100.0

Library......................... 75.3 10.9 0.9 12.9 100.0

----------------------------------------------------------------------------------------------------------------

j. Proposed methodology for library costs:

Standard Method: Yes

Special Study: No

k. Procedure for claiming fringe benefit costs:

Specific Identification: No

Negotiated Rate: Yes

Other (see attached) ____

Part I--Example--Summary Data Elements for F&A Proposal--Part B

Name of Institution: University of XYZ

Base (or Data) Year: 07/01/97 to 06/30/98

Base Year Rate Calculation Summary by Major Function

[Dollars in thousands]

----------------------------------------------------------------------------------------------------------------

Organized

Instruction research OSA

----------------------------------------------------------------------------------------------------------------

FACILITIES GROUP

Depreciation/Use Allowance:

--Buildings........................................ 4,861 9.6% 5,278 6.9% 306 2.6%

--Equipment........................................ 3,082 6.1% 2,496 3.3% 194 1.7%

--Land Improvements................................ 1,992 4.0% 133 0.2% 17 0.1%

Interest Expense....................................... 1,944 3.9% 2,111 2.8% 122 1.0%

Operation & Maintenance................................ 8,532 16.9% 9,264 12.1% 536 4.6%

Library................................................ 7,910 15.7% 1,146 1.5% 96 0.8%

----------------------------------------------------------------------------------------------------------------

ADMINISTRATIVE GROUP

General................................................ 1,535 2.7% 2,330 2.7% 356 2.7%

Departmental........................................... 11,991 21.4% 17,239 20.3% 2,797 21.5%

Sponsored Projects..................................... 89 0.2% 2,693 3.2% 412 3.2%

Student Services....................................... 4,166 7.4% 0 0.0% 0 0.0%

Adjustment for 26% Limitation.......................... -5.7% -0.2% -1.4%

----------------------------------------------------------------------------------------------------------------

MODIFIED TOTAL DIRECT COST AND F&A RATES

On-Campus.............................................. 50,400 82.2% 76,500 52.9% 11,700 38.3%

Off-Campus............................................. 5,600 26.0% 8,500 26.0% 1,300 26.0%

Other.................................................. 00.0% 00.0% 00.0%

----------------------------------------------------------------------------------------------------------------

Total MTDC............................................. 56,000 85,000 13,000

----------------------------------------------------------------------------------------------------------------

COMPOSITION OF RATE BASE

Federal Awards:

On-Campus (negotiated rates)....................... 1,000 46,000 900

Off-Campus (negotiated rates)...................... 120 5,000 400

Research Training Awards........................... 0 0 0

Other Awards (not based on negotiated rates)....... 1,680 8,500 2,600

Non-Federal Sources................................ 53,200 25,500 9,100

----------------------------------------------------------------------------------------------------------------

[[Page 44067]]

Total.............................................. 56,000 85,000 13,000

----------------------------------------------------------------------------------------------------------------

MISCELLANEOUS STATISTICS

Cost Sharing in Rate Base.............................. (10,000) 10,000 0

Assignable Square Feet (ASF) by Major Function......... 83,611 90,778 5,256

Percent of ASF Financed (1)............................ 7.0 20.0 30.0

----------------------------------------------------------------------------------------------------------------

Note (1): Ratio of ASF subject to financing divided by total

ASF. If 20% of a building's acquisition cost is financed, then 20%

of the ASF is considered ASF financed.

Part II--Introduction

This Part contains the standard documentation requirements that

are needed by your cognizant agency to perform a review of your

institution's F&A cost proposal. This documentation supports the

development of proposed rates shown in Part I and will be submitted

with your F&A cost proposal.

This listing contains minimum documentation requirements.

Additional documentation may be needed by your cognizant agency

before completing a proposal review.

If there are any questions about these requirements, please

contact your cognizant agency.

Documentation requirements would be cross-referenced to

appropriate schedule(s) within the submitted F&A cost proposal.

General Information

Reference:

____ 1. Copy of CPA audited certified (or State Auditor) financial

statements including any affiliated organizations. The statements

must be reconciled to the F&A base year cost calculation. Copy of

most recently issued A-133 audit reports

____ 2. Copy of relevant detail supporting the financial statement,

including a reconciliation schedule for each cost pool and rate base

in the F&A base year cost calculation. A reconciliation schedule

will show each reclassification and adjustment to the financial

statements to arrive at the cost pools and rate bases in F&A base

year cost calculation. Each reclassification and adjustment must be

explained in notes to the reconciliation schedule

____ 3. Cost step-down schedule showing allocation of each F&A cost

pool to the Major Functions and other cost pools

____ 4. Explanation for each proposed organized research rate

component which exceeds 10% of the prior negotiated rate component

____ 5. Schedule by college or school breaking down the organized

research base into amounts associated with (a) Federal awards

receiving F&A cost based on the negotiated rate agreement, (b)

Federal awards receiving less than the negotiated rates, (c) non-

Federal awards, and (d) cost sharing

____ 6. Schedules clearly detailing composition and allocation

base(s) of each F&A cost pool in base year cost calculation

____ 7. Narrative description of composition of each F&A cost pool

and allocation methodology. If the institution has filed a DS-2

submission, specific references (rather than narrative descriptions)

from the DS-2 may be used

____ 8. Narrative description of changes in accounting or cost

allocation methods made since the institution's last F&A submission

____ 9. Copy of reports on the conduct and results of special

studies

____ 10. Copy of the following:

(a) The Certificate of F&A Costs

(b) Lobbying Certification

by the Federal Government do not subsidize the F&A costs allocable

to awards made by non-Federal sources (e.g., industry, foreign

governments)

(d) Statement concerning the physical inventory requirement to

support claims for depreciation/use allowance charges

(e) Assurance Certification--for those institutions listed on

Exhibit A--concerning disposition of Federal reimbursements

associated with claims for depreciation/use allowances

(f) Assurance statement that institution is in compliance with

Federal awarding agency limitations on compensation (e.g., NIH

salary limitation, executive compensation)

____ 11. If applicable, reconciliation of carry-forward amounts from

prior years used in the current proposal

____ 12. Transmittal letter stipulating the type(s) of rates

proposed, the fiscal year(s) covered by the proposal and the base

year used

Rate Proposal Summary by Major Function

____ 1. Summary of F&A base year rates calculated by Major Function

and special rates (e.g., vessel rates) if applicable by component.

These would be grouped by Administrative Components and Facilities

Components. Total base year calculated rates would be disclosed, as

well as allowable rates after the 26 percent limitation on

Administrative Components

____ 2. Breakout of Modified Total Direct Cost (MTDC) rate base

figures for each major function (and special rates, if applicable)

by:

(1) On-Campus and Off-Campus amounts

(2) Federal awards

a. Based on Negotiated Rates--On-Campus

b. Based on Negotiated Rates--Off-Campus

c. Research Training Awards

d. Other Awards Not Based on Negotiated Rates

(3) Non-Federal Sources

____ 3. Miscellaneous Statistics including:

(1) Cost Sharing (including Mandatory and Voluntary amounts) in

the Rate Base

(2) Assignable Square Feet (ASF) by Major Function

(3) Percentage of ASF which is financed (by Major Function)

(4) Breakout of Direct Salaries and Wages and fringe benefits by

Professional/Professorial and Other (by Major Function)

____ 4. Future rate adjustments, if necessary, related to material

changes since the base year. A clear description of the

justification for each of the following:

(1) Changes by cost pool by year

(2) Changes in MTDC base by year

[[Page 44068]]

(3) Changes in F&A rates for future years

____ 5. Summary of future F&A rates, if necessary, by Major Function

and special rates (e.g., vessel rates) which lists each

administrative and facilities component by year.

Building Use Allowance and/or Depreciation

____ 1. Reconciliation of building cost used to compute use

allowance and/or depreciation with the financial statements. If

depreciation is claimed in the F&A proposal and disclosed on the

financial statements, provide a reconciliation of depreciation

amount with the financial statements.

Note: If an institution's financial statements do not disclose

depreciation expense (those subject to GASB), a reconciliation of

claimed depreciation expense to the financial statements is not

possible.

____ 2. Schedule showing amount by building of use allowance and/or

depreciation distributed to all functions

____ 3. If a method different from the standard square footage

allocation method was used, describe method. Provide justification

for its use and a schedule of allocation. If institution has filed a

DS-2 submission, claimed allocation methodology may be referenced to

specific section of the DS-2

____ 4. If depreciation is claimed, describe what useful lives by

group and component have been used

Equipment Use Allowance and/or Depreciation

____ 1. Reconciliation of equipment cost used to compute use

allowance and/or depreciation with the financial statements. If

depreciation is claimed in the F&A proposal and disclosed on the

financial statements, provide a reconciliation of depreciation

amount with the financial statements.

Note: If an institution's financial statements do not disclose

depreciation expense (those subject to GASB), a reconciliation of

claimed depreciation expense to the financial statements is not

possible.

____ 2. Schedule showing amount by building of use allowance and/or

depreciation distributed to all functions

____ 3. If a method different from the standard square footage

allocation method was used, describe the method. Provide a

justification for its use and a schedule of allocation. If

institution has filed a DS-2 submission, claimed allocation

methodology may be referenced to specific section of the DS-2

____ 4. If depreciation is claimed, describe what useful lives by

asset class and component have been used

Interest

____ 1. Reconciliation of interest cost used in the F&A base year

calculation to the financial statements

____ 2. Schedule showing amount of interest assigned to each

building and a distribution to all benefitting functions within each

building for each proposed Major Function

Space Survey

____ 1. Summary schedule of square footage by school, department,

building and function

____ 2. The same schedule should then be sorted by school, building,

department, and function

____ 3. Copy of space inventory instructions, forms, and definitions

Operations and Maintenance (O&M)

____ 1. Summary schedule of each activity in O&M cost pool. It must

show the costs by S&W/fringe benefits and all non-labor cost