[labnetwork] Fwd: Question about the legality of caps

[Ian Harvey]

Hi Milan,

To piggyback on Noah’s note, the other key term is “subsidy”.  The point of all the legal maneuvering is to keep the federal government research grants from subsidizing others’ research activities. From the A-21 circular:

 "Each institution's F&A cost rate process must be appropriately designed to ensure that Federal sponsors do not in any way subsidize the F&A costs of other sponsors, specifically activities sponsored by industry and foreign governments."

**However, it is perfectly ok for federal research grants to be subsidized by the institution.**

In other words, if you set your rates (including ubiquitous caps) in such a way that it is clear the deficit between lab expenses and revenue is covered by the institutional subsidies, then you are good with the Feds even while you get deeper under scrutiny from the accountants within your own institution who wonder why it is so expensive to operate such facilities.

yes, good luck,

—Ian Harvey
Princeton University


Begin forwarded message:

From: Noah Clay <nclay at upenn.edu<mailto:nclay at upenn.edu>>
Subject: Re: [labnetwork] Question about the legality of caps
Date: September 28, 2019 12:25:05 AM EDT
To: "Begliarbekov, Milan" <mbegliarbekov at gc.cuny.edu<mailto:mbegliarbekov at gc.cuny.edu>>
Cc: "labnetwork at mtl.mit.edu<mailto:labnetwork at mtl.mit.edu>" <labnetwork at mtl.mit.edu<mailto:labnetwork at mtl.mit.edu>>, "Alu, Andrea" <aalu at gc.cuny.edu<mailto:aalu at gc.cuny.edu>>

Hi Milan,

Federal Circular A-21, I believe, is the de facto document for such matters.  Visit this link and search for “Applicable Credits”, pages 12-13, sections 5a and 5b

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A21/a21_2004.pdf

My takeaway is that caps (“discounts, rebates, allowances”) are allowable.  The NIH guideline snippet in your original email points to handling cap abuse (“a heavy user”) and may apply more specifically to an NIH core.  As written, it requires definition of a cap abuse threshold and an internal recharge mechanism.  I like the intent/spirit of this.

Lastly, as far as I know, all federal funding granted to an educational institution must be charged uniformly.  So, an NIH grant can’t be charged differently than an NSF grant.

Good luck,
Noah Clay

University of Pennsylvania
Philadelphia, PA

Sent from my iPhone

On Sep 27, 2019, at 15:34, Begliarbekov, Milan <mbegliarbekov at gc.cuny.edu<mailto:mbegliarbekov at gc.cuny.edu>> wrote:

Dear All,

At CUNY some of our administration is questioning the legality of capping user fees. After pointing out that this is a ubiquitous practice for all nanofabs, the administration informed us of the following NIH guideline, in particular this paragraph:


g. Can fee schedules cap the amount charged to a user in a particular time period?

Generally, no. Fee schedules that cap charges at a certain dollar amount per month if more than a certain number of hours or units are used are not consistent with applicable cost principles unless the institution or some other non-Federal funding supports the difference between the allocable cost and the amount charged to a heavy user. If appropriate for a particular facility, it may be possible to create fee schedules that have different charges depending on timing and level of usage as long as the charges are determined and consistently applied in accord with applicable Federal cost principles.


In principle none of our users are NIH funded, but I’m wondering if you ever heard of such a guideline, and if so, how does it impact your operations.

Thank you as always,

Milan


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