A bill for an act relating to indirect costs charged to state-funded grants, and including applicability provisions.(See HF 2304.)
Impact
The implementation of HSB642 is expected to directly impact how state-funded grants are managed at the departmental level. By instituting a strict cap on indirect costs, the bill could lead to a reassessment of budgeting practices across state agencies. Departments will be required to implement controls to monitor compliance with the new regulations and ensure that budgets submitted for grants do not exceed the established limits. This change could result in significant financial implications for organizations that depend on such grants, particularly if they currently operate with higher indirect cost rates.
Summary
House Study Bill 642 aims to establish a uniform cap on the indirect costs that can be charged to state-funded grants, set at five percent of the total grant amount. This legislative piece seeks to ensure that public funds are primarily directed towards services and deliverables while promoting transparency in the budgeting and administration processes of grants. The bill mandates that each grant budget distinctly lists both indirect and direct costs, along with a narrative that justifies the indirect cost calculations. It also requires grantees to maintain comprehensive records of their indirect costs for a minimum of ten years.
Contention
While supporters of HSB642 argue that the bill will enhance accountability for the use of public funds and streamline grant management, there may be concerns among grantees regarding the reduced capacity to cover overhead costs. Critics might contend that the stringent cap could inhibit the ability of smaller organizations or those with significant administrative overhead to effectively manage and deliver services under the grant. Additionally, there may be apprehensions about the administrative burden this bill places on state departments to monitor compliance and enforce the new provisions.
A bill for an act relating to the statewide preschool program by modifying provisions relating to eligibility, funding, and compulsory attendance and including applicability provisions.(See HF 2493.)
A bill for an act relating to state government and finances, including by making corrections, and including effective date and retroactive applicability provisions.(See HF 2800.)
A bill for an act relating to the statewide preschool program by modifying provisions relating to eligibility, funding, and compulsory attendance and including applicability provisions. (Formerly HF 2092.) Effective date: 07/01/2026. Applicability date: 07/01/2027.
Federal Grant Accountability ActThis bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs). (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)Specifically, the total amount of indirect costs allowable under a federal research award may not exceed the total amount of indirect costs allowable under private research awards. The Office of Management and Budget must determine the average indirect cost rate applicable to private research awards.Additionally, the Government Accountability Office must study and report on (1) the indirect cost rates allowable under federal research awards to IHEs, including awards made by the National Institutes of Health, the National Science Foundation, and other such organizations; and (2) the indirect cost rates allowable under private research awards to IHEs.
No Subsidies for Wealthy Universities ActThis bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)Specifically, the National Center for Education Statistics (NCES) must annually collect information regarding the endowments of each IHE that has entered into a program participation agreement with the Department of Education.With this collected information, NCES must identify and make lists of (1) each IHE with an endowment of more than $5 billion, and (2) each IHE with an endowment of more than $2 billion (but not more than $5 billion). NCES must submit these lists to the Office of Management and Budget, which must then distribute the lists to federal agencies, Congress, and the public.The bill establishes the following limits on the indirect costs allowable under federal research awards:for an IHE with an endowment of more than $5 billion, the IHE is prohibited from using these awards for indirect costs;for an IHE with an endowment of more than $2 billion (but not more than $5 billion), the IHE is limited to an indirect cost rate of 8%; andfor all other IHEs, an indirect cost rate of 15%.The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.