This 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%; and for 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.