August 14, 2025
by Penny Gordon-Larsen
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As I’ve previously shared, in early February, a significant coverage shift despatched a jolt by way of the scientific neighborhood; a proposed 15% cap on the “oblique value” reimbursement from the Nationwide Institutes of Well being (NIH). Different businesses shortly adopted go well with, with some particularly concentrating on greater schooling establishments. Whereas the aim could have been to curb spending, implementing such a drastic cap with out broader reform would have dire penalties for the American analysis panorama and cut back our international competitiveness.
We consider there’s a greater manner ahead — one that mixes accountability whereas adequately supporting lifesaving, economy-driving research. It’s crucial to be good stewards of federal sources whereas being clear about our spending, recognizing that transparency is the important thing to constructing belief.
For the previous a number of months, I’ve had the honour of serving on the Joint Associations Committee on Indirect Costs (JAG). Our mission: to develop a brand new mannequin that replaces the prevailing, decades-old system that’s at the moment below federal scrutiny. After many hours of analysis and dialogue with stakeholders from throughout the U.S., we have now developed a brand new choice that we consider is extra clear, equitable, and higher suited to Twenty first-century science.
The proposed Financial Accountability in Research (FAIR) model is designed to make sure continued American management in innovation by offering unprecedented accountability and transparency. The present federally negotiated oblique price is an mixture measure that offers an establishment a single oblique reimbursement “price”. In contrast to the present mannequin, the FAIR mannequin funds the precise prices of analysis and hyperlinks reimbursement prices on to the analysis being carried out. Because of this analysis occurring in specialised and costly amenities will value greater than analysis occurring in much less specialised area.
This strategy clarifies using federal funds by monitoring prices in particular, allowable classes and aligning a venture’s price range immediately with the kind of analysis being carried out. It sheds gentle on how establishments allocate and recuperate research-related prices. The mannequin is versatile and designed to work for analysis establishments of all sizes and kinds.
The JAG has continued to work in shut partnership with coverage and determination makers in D.C., and the proposed mannequin has been vetted by establishments throughout the nation. Now, I’d wish to reply a few of the most regularly requested questions I’ve acquired on our work:
1. Why do we have to exchange the present mannequin?
Ongoing efforts from Congress to implement caps on federal oblique analysis value reimbursements have been challenged over the previous 5 many years. These caps pose a major menace to the analysis enterprise if they don’t adequately assist analysis. The momentum for change is powerful and with out query change is afoot. To this finish, the JAG was shaped to create an alternate mannequin that ensures the way forward for American science.
The JAG’s new FAIR mannequin is designed to adequately assist the precise prices of analysis and cut back the inefficiencies of the legacy mannequin. It additionally introduces necessary transparency measures. Taxpayers, researchers, directors, and the federal government will be capable of see in black-and-white how prices are spent. In doing so, establishments can show the place their analysis {dollars} go and make sure the public that federal analysis funds don’t assist non-research exercise. The strategy serves to demystify the analysis funding course of and construct belief with all stakeholders.
2. Are we not already clear about our analysis spending?
Briefly, sure! We consider Carolina to be a pacesetter amongst friends in our accounting transparency. We’ve made our all-funds operating budget publicly out there for the final three years. Our price range is accepted by our board of trustees and the UNC System Workplace, guaranteeing our federal oblique funding immediately helps the prices of analysis.
We’ve spent years creating and implementing programs to boost effectivity and transparency throughout our analysis enterprise. We search to all the time be productive companions in figuring out new fashions of transparency and accountability for our sponsors, together with state and federal authorities.
3. Persons are confused by the FAIR mannequin, why is it so difficult?
Change doesn’t come simply, particularly in complicated programs. The FAIR mannequin emphasizes better transparency and a project-centric view of spending that’s fairly completely different from our present mannequin. This may require new programs for accumulating and reporting information to show how funds are getting used.
It would take time to develop these new programs and practices. That’s the reason the FAIR mannequin proposes a 2-year interval that permits establishments time to implement these modifications. The additional advantage of with the ability to show to the general public how we’re spending our cash and calculating our prices is nicely price it. As a public establishment, transparency is paramount.
4. Will this new mannequin be arduous to implement?
Whereas it can take time to arrange the suitable programs, Carolina is nicely positioned to implement the FAIR mannequin or no matter mannequin is chosen to maneuver ahead. As all the time, the Workplace of the Vice Chancellor for Analysis (OVCR) will create the programs to assist our college.
5. Do you anticipate the FAIR being adopted verbatim?
The FAIR mannequin is a proposed mannequin that we’re delivering to Congress and the Workplace of Administration and Price range. Though we have now been in shut communication with each throughout the growth of the FAIR mannequin, we anticipate modifications of the mannequin (and even options) earlier than it’s adopted. Certainly, there will definitely be a interval for public remark as soon as it’s formally launched.
6. As an investigator, would I see variations in how my grants are administered below the FAIR mannequin?
The FAIR mannequin will nonetheless embody direct prices that principal investigators put into their budgets and it’ll reallocate some prices that had been previously categorized as oblique prices to direct prices. A few of these prices are in classes like institutional amenities that can be managed by the establishment as they all the time have been. If a part of grant administration occurs on the department-level, these prices can be supported immediately. It’s essential to notice that the FAIR mannequin makes use of “Whole Prices,” so something that’s moved to “Direct Prices” mustn’t have an effect on the overall award.
We anticipate {that a} system to assist the FAIR mannequin would streamline the budgeting course of and make use of drop-down menus or templates for particular forms of prices. The OVCR would determine and handle that course of.
The aim of the FAIR mannequin is to simplify the federal analysis reimbursement course of over time by changing the complicated, time-consuming oblique price negotiation with a extra streamlined and clear system. Whereas the preliminary implementation can be complicated, the long-term advantages of a extra predictable and auditable system are the primary drivers behind the proposal.
As a scientist myself, I acknowledge the nice privilege that it’s to be entrusted with federal {dollars} to conduct analysis. I’m pleased with the analysis that occurs at our nice college and I’m extremely grateful for the federal funding we obtain.
The continued funding in federally funded analysis drives nearly all our lifesaving therapies, gadgets, merchandise, and applied sciences. This funding has ensured our international management, our well being, nationwide safety, and financial prosperity. The FAIR mannequin strikes us nearer to a future the place American science continues to steer the world.
