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New White House rules restrict use of grant funding to deal with COVID-19 impacts

Sciences COVID-19 reporting is supported by the Pulitzer Center.

New rules on how U.S. universities manage federal research grants leave them with less flexibility to cope with the pandemic. The changes, which rescind many temporary measures adopted this spring as COVID-19 shuttered campuses and froze the economy, come despite continued uncertainty over the fall semester and the status of research on U.S. campuses.

“I am speechless because I just don’t know” what lies ahead, confessed David Mayo, head of sponsored research at the California Institute of Technology (Caltech), during a meeting yesterday of a top-level advisory panel to the National Science Foundation (NSF) at which the changes were discussed.

In March, the White House Office of Management and Budget (OMB) authorized a slew of short-term exceptions to its long-standing guidelines on how federal research dollars could be spent. Most significantly, as personnel costs are usually the largest share of any grant, institutions were allowed to keep paying the salaries of researchers from their grants even if their labs were shuttered. OMB also eased an immediate cash crunch for grantees, allowing them to get reimbursed for travel, meetings, and other activities that had been canceled because of the pandemic. In April, another OMB memo allowed grantees to replace medical equipment they had donated to hospitals to fight the pandemic.

The goal was to preserve as much of the U.S. research enterprise as possible in the face of the unprecedented disruptions caused by COVID-19. “Many of the operational impacts and costs are unknowable at this point,” OMB Deputy Director Margaret Weichert wrote in a 19 March OMB memo that detailed 13 categories of “administrative relief” offered to universities conducting federally funded research.

But there was also a downside. Drawing down on their grants meant once their labs reopened, scientists would have less money left to do the promised research.

Science advocates hope agencies will give researchers more funding to finish their projects. But that would require additional money from Congress, which is divided over the next COVID-19 relief package and also has yet to pass spending bills for the next fiscal year.

In the meantime, university administrators say it’s no fun being left in the dark. “The [March] OMB guidance was hugely appreciated,” says Pamela Webb, a research administrator at the University of Minnesota, Twin Cities. “But there’s also a huge amount of angst and uncertainty over what will happen next.”

“No backups”

The new OMB memo reflects the Trump administration’s stance that things should be getting back to normal despite the continuing rise in COVID-19 cases. “As the Country is now recovering from the Coronavirus pandemic and some areas are starting the re-opening process, the ramp-up effort is also starting for the performance of Federally-funded projects,” the 18 June memo declares.

The memo also assumes that universities have figured out how to deal with the pandemic and no longer require special consideration. “During the Coronavirus pandemic,” it notes, “many recipients learned the capabilities and are now getting the experience to perform the objectives of the Federal programs remotely, with limited access to their physical office.”

Institutions have learned a lot, say those serving on a top-level advisory committee to NSF’s budget and finance office, which discussed the evolving OMB guidance at a virtual meeting yesterday. (Webb and Mayo are members of that panel, and Webb is also chair of the Council on Government Relations, a coalition of hundreds of research institutions that tracks federal grantsmaking policies.) But that hasn’t removed the daunting challenges posed by the pandemic.

Although Caltech is a world-class research institution, Mayo says its small size—310 faculty members—means they are spread very thin across all fields. Any pandemic-related disruptions to Caltech’s research ecosystem—including limits on the number of people in a lab, a prolonged hiring freeze, or a drop in federal support—could have serious consequences. “We have no backups,” he told the advisory panel. “If someone goes down, we could fall into a huge hole.”

Although the latest OMB memo allows institutions to continue to charge salaries of locked-out scientists against the grant, administrators are still puzzling over one new wrinkle that could restrict their ability to use that option. Specifically, it requires grantees “to exhaust other available funding sources to sustain its workforce” before paying out salaries from the grant. They also must “document” their attempts “to reduce overall operational costs.”

However, the OMB memo doesn’t explain how to do that, and research managers are still hoping for clarification from OMB. “Many of our institutions are engaged in broad-based cost-saving measures,” Webb says, noting the widespread imposition this spring of travel restrictions, salary reductions or pay furloughs, and hiring freezes. “If these items were deemed to satisfy this requirement, I think we would have collective confidence that we would meet the intent, and documentation is straightforward.”

Almost all of OMB’s other temporary measures have been rescinded, including provisions to recover the cost of canceled travel plans. (Grantees can still spend their money to replace medical supplies donated before the new memo was issued, but not for future donations.) And OMB’s decision to “sunset” those provisions shouldn’t be surprising, one NSF finance manager told the panel.

“OMB recognized that it would not be business as usual because of COVID,” the manager noted in response to a question from a panel member. “But I don’t see how it could carry forward [that provision] once things begin to reopen.”