CASRAI Dictionary

Tag: research administration compliance

  • NIH Grants Policy Statement: What It Requires of Institutions

    The NIH Grants Policy Statement (NIHGPS) is the master terms-and-conditions document for every NIH award: institutions that accept NIH funding are bound by its rules on cost allowability, effort reporting, prior-approval triggers and audit obligations, applied alongside the government-wide cost principles in 2 CFR Part 200. Research administrators use it as the single reference point for what a grant actually obliges a recipient organisation to do.

    The NIH Grants Policy Statement is defined by NIH as the document that “makes available, in a single document, the policy requirements that serve as the terms and conditions of NIH grant awards.” It is not optional guidance — by accepting a Notice of Award, an institution agrees to comply with it unless the notice itself states otherwise.

    What is the NIH Grants Policy Statement?

    The NIHGPS is NIH’s consolidated statement of the terms and conditions attached to every grant, cooperative agreement and, where applicable, contract-adjacent award it issues. It is organised into three parts: general information about NIH and the award lifecycle, the substantive terms and conditions that bind recipients, and a directory of NIH contacts for compliance questions. Institutions do not negotiate these terms award-by-award; the current NIHGPS edition applies by reference from the date on the Notice of Award.

    Because the NIHGPS is revised periodically rather than rewritten from scratch, most institutional research offices track it as a living reference — checking each Notice of Award against the edition in force, since older awards can remain subject to the NIHGPS version current on the date they were issued.

    How does the NIHGPS relate to 2 CFR 200?

    The NIHGPS does not operate in isolation. It sits beneath, and explicitly incorporates, the Office of Management and Budget’s Uniform Guidance at 2 CFR Part 200 — the government-wide cost principles, administrative requirements and audit rules that apply to all US federal grants, not just NIH’s. The NIHGPS then layers NIH-specific interpretation and additional conditions on top of that baseline.

    There is also a departmental layer in between: the HHS Grants Policy Statement, issued by the Department of Health and Human Services, sets terms common to all HHS operating divisions. NIH’s own document tells recipients to consult the HHS Grants Policy Statement for department-wide matters and the NIHGPS for anything NIH-specific — the two are complementary, not duplicative.

    Document Issuing body Scope
    2 CFR Part 200 (Uniform Guidance) Office of Management and Budget Government-wide cost principles and audit requirements for all federal awards
    HHS Grants Policy Statement Department of Health and Human Services Department-wide terms across all HHS operating divisions
    NIH Grants Policy Statement National Institutes of Health NIH-specific terms and conditions layered on the two frameworks above

    What must institutions do to comply?

    Three compliance areas generate the most work for research administration offices: cost allowability, effort reporting, and the award terms that trigger prior approval.

    Cost allowability

    Costs charged to an NIH award must be allowable, allocable, reasonable and consistently treated, per the cost principles in 2 CFR 200 Subpart E, as applied through the NIHGPS. Institutions are expected to maintain financial management systems capable of tracking costs at the individual-award level and reconciling them through periodic Federal Financial Reports.

    Effort reporting

    Where NIH funds pay any part of a researcher’s salary, the institution must certify that the proportion of effort charged reflects the effort actually devoted to the project, consistent with the compensation-for-personal-services standard at 2 CFR 200.430. NIH also applies an annual salary cap, set against Executive Level II of the federal executive pay scale, that limits the salary rate chargeable to NIH awards regardless of an individual’s actual institutional salary.

    Award terms and prior approval

    The NIHGPS lists specific actions that require NIH’s prior written approval before an institution can proceed — commonly a significant change in project scope, a change of principal investigator, a no-cost extension beyond the automatic first extension, or the addition of a foreign component. Institutions that expend federal awards above the Single Audit threshold — raised to $1,000,000 under OMB’s 2 CFR 200 revision effective for fiscal years beginning on or after 1 October 2024 — must also arrange an annual Single Audit.

    • Maintain auditable, award-level financial records under 2 CFR 200 cost principles
    • Certify effort for NIH-funded personnel and apply the current salary cap
    • Seek prior approval for scope changes, PI changes, extensions and foreign components
    • Comply with human subjects, animal welfare, research misconduct and conflict-of-interest policies
    • Report inventions arising from NIH funding under Bayh-Dole Act procedures
    • Meet NIH data-sharing and public-access requirements for funded research outputs

    What changed for FY2026?

    NIH published a revised NIHGPS effective March 2026, applicable to awards issued for Fiscal Year 2026. Research offices should treat each Notice of Award as the definitive marker of which NIHGPS edition governs that specific award, since NIH does not retroactively apply every revision to awards already in force. Comparing the March 2026 edition against the prior version — rather than assuming continuity — is the safest institutional practice each cycle.

    Answer-first Q&A

    Who can apply for an NIH grant?

    Most NIH programmes do not require applicants to hold a specific degree or US citizenship; eligibility is set at the level of the individual funding opportunity. Institutions, not individuals, are the formal recipients of NIH awards, and it is the institution that assumes NIHGPS compliance obligations on behalf of its research staff.

    Can non-US citizens apply for NIH grants?

    Yes. Non-US institutions and researchers can serve as recipients or principal investigators for most NIH mechanisms, though some programmes impose citizenship or residency conditions stated explicitly in the funding opportunity notice. The NIHGPS applies equally to foreign and domestic recipient organisations once an award is made.

    What are the NIH guidelines referenced in grant compliance?

    “NIH guidelines” typically refers to specific technical policies — such as those governing recombinant DNA research — that sit alongside, but are distinct from, the NIHGPS. The NIHGPS is the umbrella terms-and-conditions document; specialised guidelines are incorporated into it by reference where relevant to a given award.

    What is a Type 3 NIH award?

    A Type 3 award is an administrative supplement: additional funds provided during a current project period to cover increased costs within the existing, peer-reviewed scope of work. It cannot extend the award beyond its current end date and is governed by the same NIHGPS terms as the parent award.

    What this means for research administration offices

    For grants and contracts offices, the practical implication is that NIHGPS compliance cannot be delegated to a single reading at award setup. Cost allowability rules, effort-reporting certification cycles and prior-approval triggers recur throughout an award’s life, and each NIHGPS revision can shift specific thresholds or procedures without changing the document’s overall structure. Institutions that build compliance checklists against the current NIHGPS edition — cross-referenced to 2 CFR 200 and the HHS Grants Policy Statement — reduce the risk of disallowed costs and audit findings.

    This layered structure (OMB, HHS, NIH) is a useful model for research administrators more broadly: understanding how a funder-specific policy statement incorporates broader federal cost and audit frameworks is a transferable skill across other US federal sponsors, not just NIH. CASRAI’s research administration content covers this compliance-mapping approach across funders.

    Looking ahead

    NIH continues to revise the NIHGPS on a rolling basis rather than a fixed annual schedule, and institutions should expect further alignment with OMB’s evolving Uniform Guidance, particularly around audit thresholds and data-sharing expectations. Research administration offices that treat the NIHGPS as a living compliance map — rather than a document read once at onboarding — are best positioned to absorb each revision without disruption to active awards.

  • Digital Omnibus AI Act: New 2027 Deadlines

    The Digital Omnibus AI Act agreement, reached by EU co-legislators on 7 May 2026, postpones the AI Act’s high-risk obligations to 2 December 2027 for standalone systems and 2 August 2028 for product-embedded systems, pushes the national AI regulatory sandbox deadline from 2 August 2026 to 2 August 2027, and shortens the AI-generated-content labelling grace period to a new deadline of 2 December 2026. Prohibited-practice and general-purpose-AI (GPAI) obligations already in force are unaffected.

    The Digital Omnibus on AI is the EU’s amending regulation to Regulation (EU) 2024/1689 (the AI Act) that recalibrates several implementation deadlines and simplifies selected compliance requirements without altering the Act’s underlying risk-based framework.

    What Has Changed Under the Digital Omnibus?

    The European Commission published its Digital Omnibus on AI proposal on 19 November 2025, and the Council presidency and European Parliament negotiators reached a provisional political agreement on 7 May 2026. The European Parliament granted final approval on 16 June 2026. As of early July 2026, formal Council adoption and publication in the Official Journal are still pending, with completion expected by 2 August 2026 — the very date the original high-risk deadline would otherwise have taken effect.

    Until the amending regulation is published, the AI Act’s original text remains binding law. This is a narrow but real compliance-planning window: institutions cannot yet treat the new dates as legally settled, only as highly likely.

    The package also adds a new prohibition on AI systems that generate child sexual abuse material (CSAM) or non-consensual sexually explicit content (“nudifier” apps), reinstates the EU database registration requirement for AI systems exempted from high-risk classification, and reverts a proposed relaxation on processing special category data for bias detection back to a strict-necessity test.

    What Are the New AI Act Compliance Deadlines?

    The revised timeline replaces the Commission’s original “standards-linked” mechanism with fixed calendar dates, giving institutions a firm planning horizon rather than a moving target tied to standardisation progress.

    Obligation Original deadline New deadline Change
    Standalone high-risk systems (Annex III: education access, employment/HR, credit scoring, critical infrastructure, law enforcement) 2 August 2026 2 December 2027 16-month delay
    High-risk systems embedded in regulated products (Annex I: medical devices, machinery, toys) 2 August 2027 2 August 2028 12-month delay
    AI-generated content labelling/watermarking (Article 50(2)) 2 August 2026 2 December 2026 Grace period cut to 4 months
    National AI regulatory sandbox establishment (Article 57) 2 August 2026 2 August 2027 12-month delay
    Ban on CSAM/non-consensual intimate AI content Not previously prohibited 2 December 2026 New obligation
    Prohibited AI practices (Article 5) 2 February 2025 Unchanged Already in force
    GPAI model obligations (Articles 53–55) 2 August 2025 Unchanged Already in force

    Per the Council’s 7 May 2026 press release, “the provisional agreement also introduces a fixed timeline for the delayed application of high-risk rules: the new application dates would be 2 December 2027 for stand-alone high-risk AI systems and 2 August 2028 for high-risk AI systems embedded in products.” The same text confirms the sandbox deadline is postponed “until 2 August 2027.”

    Which AI Act Obligations Still Apply in 2026?

    Despite the headline delays, several obligations remain live this year. Institutions should not read “Digital Omnibus” as “AI Act paused.” The Act’s prohibited-practice regime and its general-purpose-AI rules were untouched by the negotiations.

    • Prohibited AI practices under Article 5 (e.g. social scoring, certain biometric categorisation, manipulative systems) have applied since 2 February 2025 and remain fully enforceable.
    • GPAI model provider obligations (transparency documentation, copyright-policy summaries, systemic-risk assessment for the most capable models) have applied since 2 August 2025.
    • Most Article 50 transparency duties — informing individuals they are interacting with an AI system, or that content is AI-generated — still take effect from 2 August 2026; only the specific machine-readable watermarking sub-obligation is delayed to 2 December 2026.
    • The narrowed research exemption in Article 2(6)/(8) is unchanged: it still covers only AI systems developed for the “sole purpose” of scientific research and development, and does not extend to real-world testing outside that narrow scope — a gap industry and legal commentators flagged but the Omnibus did not close.

    What Should Research Institutions Do Now?

    The Annex III high-risk categories map directly onto functions many universities, funders, and research offices already run or procure: “access to education and vocational training,” and “employment-related uses” covering recruitment, performance monitoring, and promotion decisions. Any admissions-scoring tool, proctoring system, or HR-screening AI a research institution uses now has until 2 December 2027 rather than August 2026 to meet high-risk documentation, human-oversight, and conformity-assessment requirements.

    That extra runway does not extend to everything an institution touches:

    • GPAI-based research tools (foundation models used in text/data mining, literature synthesis, or research-assistant products) are already subject to provider transparency obligations since August 2025 — this was not delayed and should already be reflected in procurement due diligence.
    • AI regulatory sandboxes, a route some national research funders and public research bodies planned to use for supervised testing of experimental AI tools, will not be mandatory at national level until 2 August 2027 — a year later than institutions may have budgeted for.
    • The research exemption remains narrow. Institutions running real-world pilots of AI tools (learning-analytics trials, clinical-AI validation studies) outside a controlled research-only environment should not assume blanket exemption; the classification tests apply as originally drafted.
    • AI-content labelling (Article 50(2), now due 2 December 2026) is directly relevant to scholarly publishing workflows: journals, repositories, and preprint servers using generative tools in editorial or production processes should track this date alongside their existing disclosure policies for AI-assisted content.

    Research administration offices coordinating compliance calendars should treat 2 December 2027 and 2 August 2028 as the two hard deadlines for high-risk systems, while keeping the unaffected 2025-dated GPAI and prohibited-practice obligations on their existing tracker — the Digital Omnibus changes the pace of the high-risk regime, not its scope.

    Answer-First Q&A

    What is the timeframe for the AI Act?

    The AI Act entered into force on 1 August 2024. Prohibited practices applied from 2 February 2025 and GPAI obligations from 2 August 2025. Following the Digital Omnibus, standalone high-risk systems now apply from 2 December 2027 and product-embedded high-risk systems from 2 August 2028.

    When do the AI Act’s high-risk obligations now apply?

    Under the provisional agreement, standalone Annex III high-risk systems (education, employment, credit, critical infrastructure) must comply by 2 December 2027. Annex I product-embedded systems (medical devices, machinery) have until 2 August 2028 — 16 and 12 months later than the AI Act’s original dates, respectively.

    Does the Digital Omnibus delay the AI Act sandbox deadline?

    Yes. The national AI regulatory sandbox deadline under Article 57 moves from 2 August 2026 to 2 August 2027, giving competent authorities an extra year to build supervised testing environments for innovators and public bodies.

    What AI Act obligations still apply in 2026?

    Prohibited practices and GPAI model obligations remain fully in force, having applied since 2025. Most Article 50 transparency duties still take effect on 2 August 2026, and the new CSAM/nudifier ban and AI-content watermarking sub-obligation both land on 2 December 2026.

    What Happens Next?

    The amending regulation still requires formal Council adoption and publication in the Official Journal before the new dates become legally binding, a process both the Council and independent legal analysis expect to conclude by 2 August 2026. Research institutions should build compliance calendars around the dates above now, while monitoring the Official Journal publication to confirm the fixed timeline takes definitive legal effect, and continue tracking CEN-CENELEC’s harmonised AI standards, whose slower-than-expected delivery was the stated driver for the entire postponement.

  • UKRI Terms and Conditions: 2025-26 Grant Changes

    UKRI updated its standard terms and conditions for both research grants and training grants for the 2025–26 academic year, with the most consequential changes taking effect on 1 April 2025 and 1 October 2025. The revisions raise the minimum PhD stipend, extend medical leave provisions, change how equipment costs are funded, and add new national-security compliance requirements. Research organisations need to update internal compliance checklists to reflect all four changes before their next award cycle.

    UKRI terms and conditions are the contractual obligations that UK Research and Innovation attaches to every research and training grant it awards, covering governance, eligible costs, reporting, and — since October 2025 — Trusted Research and Innovation compliance. They apply automatically to any research organisation that accepts UKRI funding, regardless of which of the seven research councils, Research England, or Innovate UK makes the award.

    Why UKRI’s terms and conditions changed for 2025–26

    UKRI published its policy statement: review of the training grant conditions on 30 January 2025, setting out a package of changes following an equality, diversity and inclusion (EDI) review of doctoral training conditions. The review drew on the EDI Caucus appraisal of the UKRI training grant conditions, an internal advisory exercise UKRI commissioned specifically to test whether existing rules created barriers for disabled students and those needing extended leave.

    The standard terms and conditions of training grant, and the accompanying training grant guidance, were formally replaced with updated versions on 1 October 2025. UKRI republished the training grant terms and conditions as an accessible HTML document on 1 April 2026, retiring the previous PDF-only format — a change that affects how institutions cite and archive the current wording, not the substance of the obligations.

    What changed in the training grant terms and conditions

    The doctoral training changes are the most visible part of the update. UKRI raised the minimum stipend for UKRI-funded PhD students by 8% to £20,780, effective from 1 October 2025 — described by UKRI as the largest real-terms increase to the minimum stipend in over two decades. This is a floor, not a fixed rate: individual training grants and doctoral training partnerships may set stipends above the minimum.

    Alongside the stipend increase, the revised conditions:

    • Allow doctoral students up to 28 weeks of medical leave, with clearer routes to extend their studentship following medical or other leave.
    • Require research organisations to remove procedural barriers that could prevent disabled students from accessing agreed support.
    • Set out explicit expectations for transparency and fair treatment in how leave, extensions, and part-time study arrangements are communicated to students.
    • Clarify Full-Time Equivalent (FTE) stipend calculation for part-time students and require the expected submission date to be recorded on the student record.
    • Introduce clearer processes for flexible or phased returns to study, including a documented plan of study.

    The same 1 October 2025 update also folded in Trusted Research and Innovation requirements that were previously handled separately, so training grant conditions now sit alongside research grant conditions on national security compliance rather than being addressed only through supplementary guidance.

    What changed in FEC, equipment costing, and Trusted Research rules

    UKRI moved to fund all equipment purchases at 80% of Full Economic Cost (FEC) from 1 April 2025, standardising a rate that previously varied by council and grant type. UKRI also raised the threshold at which a purchase must be classified as capital equipment from £10,000 to £25,000, which is intended to reduce the administrative burden of tracking smaller items through capital asset registers.

    On national security, UKRI’s terms and conditions now require research organisations to identify and, where relevant, notify acquisitions that fall under the National Security and Investment (NSI) Act 2021. UKRI states that grant suspension or repayment is a possible consequence of a breach. This is not a new UK law — the NSI Act has applied since 2021 — but its explicit incorporation into UKRI’s grant conditions is new, and it converts a general legal obligation into a specific, auditable grant term.

    Key UKRI terms and conditions changes, 2025–26
    Change Effective date Applies to
    Equipment funded at 80% FEC 1 April 2025 Research grants
    Capital equipment threshold raised to £25,000 1 April 2025 Research grants
    Revised training grant T&Cs published (stipend, leave, EDI, NSI Act) 1 October 2025 Training grants
    Minimum PhD stipend raised to £20,780 1 October 2025 Training grants
    Training grant T&Cs republished as accessible HTML 1 April 2026 Training grants

    Compliance checklist: what institutions must update now

    Research offices need to work through both the research-grant and training-grant strands separately, since they carry different obligations and effective dates. For research grants, finance and grants teams should confirm that costing models already reflect the 80% FEC equipment rate and the £25,000 capital threshold, and that any live proposals or awards agreed before 1 April 2025 are checked against the older rate where transitional provisions apply.

    For training grants, doctoral college and graduate school teams should verify that:

    • Studentship offer letters and stipend schedules reflect the £20,780 minimum from 1 October 2025.
    • Leave and extension policies explicitly reference the 28-week medical leave provision.
    • Disability support processes have been reviewed for the barriers UKRI’s EDI review identified.
    • Part-time student records capture FTE calculations and expected submission dates correctly.

    Across both strands, institutions need a documented process for identifying transactions or partnerships that could trigger National Security and Investment Act 2021 notification duties under the Trusted Research and Innovation conditions, since this is now an explicit grant term rather than a background legal obligation. Research administration teams responsible for post-award compliance are typically best placed to own this checklist, since it spans finance, HR/student records, and governance functions that individually may not see the full picture.

    Common questions about UKRI terms and conditions

    What are UKRI’s terms and conditions?

    UKRI’s terms and conditions are the contractual rules attached to every research or training grant it funds, covering eligible costs, governance, reporting, and compliance obligations such as open access and national security. Research organisations must accept and comply with them as a condition of receiving and retaining UKRI funding.

    What is the UKRI training grant minimum stipend for 2025–26?

    From 1 October 2025, UKRI’s minimum stipend for UKRI-funded PhD students is £20,780 a year, an 8% increase UKRI describes as the largest real-terms rise in over two decades. Individual doctoral training partnerships and grants may pay above this floor but not below it.

    Do UKRI terms and conditions apply to PhD students?

    Yes — doctoral students funded through UKRI training grants are covered by a dedicated set of standard terms and conditions of training grant, separate from the research grant terms that apply to principal investigators. These were substantially revised on 1 October 2025 to strengthen leave, extension, and disability-support provisions.

    What costs are eligible under UKRI terms and conditions?

    Eligible costs under UKRI’s Full Economic Costing (FEC) terms include directly incurred and directly allocated project costs, with equipment now funded at 80% of FEC from 1 April 2025. Costs must stay within the original grant cash limit, and exceptions funds cannot be used to cover ordinary directly incurred costs.

    What this means for research offices going forward

    The 2025–26 revisions show UKRI treating training grant conditions with the same review cadence it has long applied to fEC research grant terms — a pattern research offices should expect to recur. ARMA UK has previously flagged comparable UKRI fEC and training grant terms updates as requiring coordinated review across finance, HR, and doctoral college functions, and that cross-functional approach is again the practical requirement here.

    Institutions that have not yet reconciled their studentship offer templates, capital asset thresholds, and Trusted Research due-diligence processes against the 1 October 2025 and 1 April 2025 effective dates carry live compliance risk on active awards. The next practical checkpoint is UKRI’s 1 April 2026 republication of the training grant terms in accessible HTML format, which institutions should treat as a prompt to re-verify that internal policy documents still cite the current clause numbering and wording rather than the superseded PDF.

  • NIH Grant Cancellation Legality Under 2 CFR 200

    NIH grant cancellation legality rests on 2 CFR 200.340: a grant may be terminated mid-cycle only if the recipient fails to comply with award terms, both parties consent, or the awarding agency determines the project no longer effectuates programme goals — and in every case NIH must issue written notice and preserve the recipient’s appeal rights before funding stops.

    A grant termination is the enforceable act of ending some or all of an active federal award before its approved project period expires, distinct from the routine non-renewal of a grant at the end of a competitive cycle. Understanding where that line sits — and what procedural protections apply on either side of it — is now a core competency for research administrators, not a hypothetical.

    Federal grant terminations are governed by the OMB Uniform Guidance codified at 2 CFR 200.340, which HHS incorporates into its own grants regulations and which NIH restates in Section 8.5.2 of the NIH Grants Policy Statement (“Suspension, Termination, and Withholding of Support”). This is an administrative-law standard, not a discretionary one: an awarding agency cannot terminate a grant for an unlisted reason, however compelling it finds that reason.

    NIH’s default posture, per its own policy statement, is to suspend a grant and give the recipient an opportunity for corrective action before proceeding to full termination — except where a serious deficiency or risk to health or safety justifies immediate termination.

    What grounds allow NIH to cancel a grant mid-cycle?

    2 CFR 200.340 recognises a closed, not open-ended, list of termination grounds. The Center for Science in the Public Interest’s litigation summary of APHA v. NIH describes these as “three limited circumstances” under the regulation.

    Ground Regulatory basis Typical trigger
    Recipient non-compliance 2 CFR 200.340(a)(1) Failure to meet award terms and conditions, financial mismanagement, or research misconduct findings
    Mutual agreement 2 CFR 200.340(a)(2) Recipient and NIH jointly agree the project is no longer viable (e.g. PI departure)
    Agency priorities / “for cause” 2 CFR 200.340(a)(4) NIH determines the award “no longer effectuates the program goals or agency priorities”

    The third ground is the one currently under judicial scrutiny. It gives the agency real latitude to align funding with shifting priorities, but that latitude is not unlimited: agency reasoning must still satisfy the Administrative Procedure Act’s bar on “arbitrary and capricious” action, meaning NIH must show a reasoned, non-conclusory basis tied to the individual award rather than a blanket, category-wide directive.

    What notice and appeal rights does 2 CFR 200 guarantee?

    Termination is not self-executing. 2 CFR 200.341 requires NIH to provide written notice specifying the reason for termination, the effective date, and whether the termination is full or partial. Where non-compliance is the stated ground, the notice must also disclose that the termination will be reported in the federal System for Award Management (SAM.gov), a public record that can affect an institution’s future funding eligibility.

    Recipients then have a two-tier route to challenge the decision:

    Stage Forum Typical deadline Scope of review
    First-level appeal NIH official named in the termination notice Per notice instructions Procedural and factual objections to the stated grounds
    Formal appeal HHS Departmental Appeals Board 30 days from final NIH decision Whether NIH followed its own regulations and notice requirements

    Disagreement over scientific merit is generally not a valid appeal ground; DAB review focuses on whether NIH complied with its own procedural rules, not on re-litigating peer review.

    How did 2025–26 litigation test these limits?

    The clearest real-world stress test of this framework is American Public Health Association v. NIH (D. Mass., No. 1:25-cv-10787). Beginning in February 2025, NIH terminated a large volume of active grants tied to categories the administration disfavoured, without individualised, award-specific justification.

    On 16 June 2025, District Judge William Young ruled the underlying directives and the resulting terminations arbitrary and capricious under the APA, finding the stated reasons “conclusory and bereft of reasoning.” His 23 June 2025 Partial Final Judgment declared the directives and terminations “of no effect, void, illegal, set aside, and vacated.” The First Circuit unanimously denied the government’s request to stay that judgment on 18 July 2025.

    On 21 August 2025, the Supreme Court issued a narrower, 5–4 emergency-docket ruling: it left the vacatur of the NIH directives in place, but held that district courts likely lack jurisdiction to order restoration of the terminated grants themselves, because such claims sound in contract and belong before the Court of Federal Claims under the Tucker Act. That split — policy directives reviewable in district court, individual grant restoration routed to a separate contract forum — is now the operative jurisdictional map for any institution challenging a termination. As of the case’s most recent public docket update, First Circuit oral argument on the merits appeal was calendared for 6 January 2026, with the outcome not yet reflected in publicly available case summaries at the time of writing.

    Separately, the Government Accountability Office found in August 2025 that NIH’s cancellation of roughly 1,800 grants violated the Impoundment Control Act of 1974, which requires the executive branch to obligate congressionally appropriated funds absent a formal rescission request to Congress. Harvard’s T.H. Chan School of Public Health, tracking the terminations independently, put the broader 2025 total at roughly 2,100 grants worth approximately $9.5 billion.

    Answer-first Q&A: what administrators are asking

    Are NIH grant terminations illegal?

    Not inherently. A termination is lawful when NIH cites one of the three grounds in 2 CFR 200.340, issues proper written notice, and grounds its reasoning in the specific award. A federal court found a 2025 wave of terminations unlawful specifically because NIH skipped individualised justification and relied on blanket, category-based directives instead.

    Can the government cancel a federal grant?

    Yes — federal agencies retain statutory authority to terminate grants “to the extent authorized by law,” including when an award no longer serves programme goals. That authority is bounded by the Administrative Procedure Act, the Impoundment Control Act’s restrictions on withholding appropriated funds, and the agency’s own termination regulations.

    How could researchers get a cancelled NIH grant restored?

    Institutions can pursue NIH’s internal appeal, then the HHS Departmental Appeals Board, or litigate under the APA in district court against the policy directive itself. Per the Supreme Court’s August 2025 ruling, restoration of the underlying funding obligation likely requires a separate contract claim at the Court of Federal Claims.

    How many NIH grants have been cancelled?

    Independent tracking by Harvard’s T.H. Chan School of Public Health documented roughly 2,100 grants worth approximately $9.5 billion terminated during 2025, a volume the litigation record describes as unprecedented against decades in which such terminations were “exceedingly rare.”

    What should research administrators do now?

    Three practical implications follow directly from the legal standard, independent of how any single case resolves:

    • Preserve every termination notice in full — the stated reason under 2 CFR 200.341 determines which appeal forum and deadline apply, and a vague or category-wide reason is itself a procedural defect worth flagging.
    • Track the SAM.gov disclosure trigger — a non-compliance-based termination notice generates a public record that can affect future eligibility, so institutions should confirm the correct ground was cited.
    • Route restoration claims correctly — the 2025 jurisdictional split means a policy challenge and a funds-restoration claim are no longer the same lawsuit, and misfiling in the wrong forum can cost months.

    The underlying legal standard has not changed: NIH still needs one of three grounds, still owes written notice, and recipients still retain a defined appeal path under 2 CFR 200. What 2025–26 litigation changed is the practical burden of proof NIH must meet to invoke the “agency priorities” ground, and the forum in which recipients must seek a remedy. Research administration offices that build both into their grant-monitoring workflow will be far better positioned than those relying on general awareness that “terminations are being challenged in court.”

  • Cooperative Agreement vs Grant: What the Law Actually Requires

    Every research administrator eventually meets an award letter that does not say “grant” at the top. Understanding a cooperative agreement vs grant distinction is not academic housekeeping — it determines who signs off on your data collection plan, how often you report, and whether a federal programme officer can direct the day-to-day conduct of your funded work. The dividing line was set in US law nearly fifty years ago, and it still governs every award letter issued by NSF, NIH, DOE, USDA and dozens of other federal agencies.

    The Federal Grant and Cooperative Agreement Act of 1977 (Public Law 95-224, codified at 31 U.S.C. §§6301–6308) requires every executive agency to classify a funding relationship as one of three legal instruments before it awards money: a procurement contract, a grant agreement, or a cooperative agreement.

    The statute draws the line on two questions, applied in sequence:

    • Is the government acquiring something for its own direct benefit? If yes, the instrument must be a procurement contract under 31 U.S.C. §6303, governed by the Federal Acquisition Regulation (FAR).
    • If the purpose is instead to support or stimulate a public activity, is “substantial involvement” expected between the agency and the recipient? If no, it is a grant agreement (31 U.S.C. §6304). If yes, it is a cooperative agreement (31 U.S.C. §6305).

    Both grants and cooperative agreements are forms of federal financial assistance and sit under the Office of Management and Budget’s Uniform Guidance at 2 CFR Part 200, not the FAR. That single fact explains why grants and cooperative agreements share so much administrative machinery — standard forms, cost principles, audit requirements — while contracts follow an entirely separate acquisition regime.

    Grant vs cooperative agreement vs contract: the three-way test

    The clearest way to see the distinction is side by side. The table below reflects the statutory test as applied consistently across federal science agencies, including the framework published by the US Department of Energy’s Office of Science.

    Feature Grant Cooperative agreement Procurement contract
    Statutory basis 31 U.S.C. §6304 31 U.S.C. §6305 31 U.S.C. §6303
    Purpose Support/stimulate a public activity Support/stimulate a public activity Acquire goods/services for the government
    Federal involvement Oversight and stewardship only “Substantial involvement” expected Direction and control of delivery
    Governing rules 2 CFR Part 200 (Uniform Guidance) 2 CFR Part 200 (Uniform Guidance) Federal Acquisition Regulation
    Who owns the IP Recipient, typically Recipient, typically May transfer to government
    Scope of work Defined by applicant/PI Negotiated jointly Defined by the sponsoring agency

    A cooperative agreement therefore sits between a grant and a contract without being either. It is a financial assistance award — like a grant — but the awarding agency retains an active, defined role in carrying out the funded activity, which is the hallmark of a contract relationship without the acquisition purpose that would make it one.

    Answer-first: common questions on cooperative agreements

    What is a cooperative agreement?

    A cooperative agreement is a legal instrument of federal financial assistance used when an agency expects “substantial involvement” in a project it is funding for a public purpose. Unlike a grant, the agency actively participates — reviewing milestones, coordinating sub-awards, or contributing technical direction — rather than simply monitoring progress from a distance.

    What is the difference between a grant agreement and a contract?

    A grant transfers value to support a public purpose the recipient defines and controls; a contract acquires goods or services for the government’s direct benefit under terms the government specifies. Grants follow Uniform Guidance cost principles; contracts follow FAR-based competition, protest, and deliverable-acceptance rules.

    What is the difference between a grant and a cooperative agreement?

    Both are financial assistance instruments for public-purpose activities, but a cooperative agreement requires anticipated substantial federal involvement — joint design, resource allocation across sites, or active participation in research conduct — while a grant assumes the recipient carries out the work with only routine agency oversight.

    Is a cooperative agreement legally binding?

    Yes. A federal cooperative agreement is a binding award under 31 U.S.C. §6305 with enforceable terms, reporting obligations, and audit exposure. Do not confuse it with a private-sector “cooperation agreement” between two companies — a different, non-statutory instrument that follows ordinary contract law rather than federal assistance regulation.

    Why the distinction matters for research administrators

    The choice of instrument is not cosmetic; it changes real obligations for every principal investigator and sponsored-programmes office.

    • Reporting cadence and content. Cooperative agreements typically carry more frequent, and more detailed, progress reporting than a comparable grant, because the agency needs current information to exercise its involvement rights.
    • Prior-approval requirements. Where a grant might allow a principal investigator to reallocate budget or change key personnel within defined limits without agency sign-off, a cooperative agreement more often requires the agency’s prior approval at defined decision points.
    • Programmatic authority. Under a cooperative agreement, an agency programme officer may participate in study design, site selection, or data-sharing decisions — participation that would be inappropriate, and potentially instrument-converting, under a grant.
    • Audit and subrecipient monitoring. Both instruments sit under Uniform Guidance audit requirements, but the active federal role in a cooperative agreement often means closer scrutiny of how funds move to subrecipients and consortium partners.

    NSF cooperative agreement awards illustrate the pattern well. The National Science Foundation uses cooperative agreements — rather than grants — for its large research infrastructure programmes, including major facilities where NSF staff are directly engaged in oversight of construction, operations, and multi-institution coordination. The same NSF portfolio uses ordinary grants for the vast majority of individual investigator-led research, where the Foundation’s role is genuinely limited to stewardship.

    This is also where the distinction between grant administration vs grant management becomes practically important. Grant administration — the institutional function performed by a sponsored-programmes or research-administration office — covers pre-award compliance review, negotiation of terms, and post-award financial and regulatory oversight, and it must flex significantly for a cooperative agreement’s heavier approval and reporting load. Grant management, by contrast, is the principal investigator’s day-to-day delivery of the funded work. Bodies such as NCURA, EARMA, ARMA and INORMS increasingly treat instrument classification as a first checkpoint in research administration training precisely because misclassifying an award — or failing to staff for a cooperative agreement’s collaborative obligations — creates downstream compliance risk that a standard grant checklist will not catch.

    Institutions building out their research administration compliance frameworks should treat instrument type as a triage question at intake, not an afterthought discovered mid-project when a programme officer asks to review a dataset before publication.

    Looking ahead

    The Federal Grant and Cooperative Agreement Act has not been substantively rewritten since 1977, but its “substantial involvement” test is being tested constantly by newer funding models — public-private consortia, multi-agency infrastructure awards, and international collaborations that blend federal and non-federal sponsors. As funders experiment with more collaborative funding structures, research administrators who can correctly classify an instrument at the proposal stage — and staff accordingly — will be better placed to meet reporting obligations and protect institutional standing than those who treat “grant” as a catch-all label for any federal award. Consulting authoritative terminology resources, including a controlled research administration dictionary, helps ensure proposal teams and compliance offices are using these terms consistently across an institution.

  • University Research Funding Cuts: What the Court Cases Mean for Grant Recipients

    University research funding cuts have moved from budget-line disputes into federal courtrooms. Since April 2025, Harvard, Columbia and coalitions of state attorneys general have filed parallel legal challenges against the National Institutes of Health (NIH) and National Science Foundation (NSF) over grant terminations, funding freezes and new indirect-cost caps. The cases differ in posture — one produced a court ruling, one produced a settlement, others remain active — but together they are setting the procedural rules that will govern how frozen, denied or withdrawn grants get reviewed for years to come.

    For research offices, the practical question is no longer whether litigation is happening but what it is actually requiring agencies and institutions to do while cases proceed. This analysis sets out the pattern, compares the major tracks, and lists what sponsored-programs and general counsel offices should be monitoring now.

    The pattern: why universities are suing over federal funding

    Beginning in early 2025, the administration froze, terminated or delayed thousands of federal research awards to universities, citing diversity, equity and inclusion (DEI) content, alleged civil-rights failures, or new indirect-cost policy. According to a mapping analysis by the Center for American Progress, more than 4,000 grants across over 600 institutions were targeted for termination, with claimed award values between roughly $6.9 billion and $8.2 billion.

    Universities and state attorneys general responded with a consistent legal theory: that agencies violated the Administrative Procedure Act (APA) by acting in an “arbitrary and capricious” manner, skipping required notice-and-comment procedures, or exceeding authority Congress had granted them. In several cases, plaintiffs also raised First Amendment retaliation claims, arguing that funding was cut in response to institutional speech or governance decisions rather than for programmatic reasons.

    • Institutional suits — Harvard sued the federal government directly over a frozen $2.2 billion in grants and contracts.
    • Negotiated settlements — Columbia resolved its dispute through a financial and compliance agreement rather than litigating to judgment.
    • Multi-state actions — coalitions of state attorneys general sued NIH and NSF separately, challenging both DEI-related terminations and the NSF’s 15% indirect-cost cap.

    Harvard, Columbia and the multi-state track record

    The three tracks have produced different outcomes, which matters for institutions trying to predict what a given legal strategy is likely to achieve.

    Track Funding at stake Legal basis Outcome so far
    Harvard v. federal government ~$2.2 billion frozen (April 2025) APA “arbitrary and capricious”; First Amendment retaliation District court ruled the cuts unlawful (September 2025); the Department of Justice subsequently sued Harvard (March 2026) seeking to recoup funds and contest the ruling
    Columbia University ~$400 million cut (March 2025) Civil-rights compliance dispute; no APA suit litigated to judgment Settled for $221 million (July 2025) — $200 million civil-rights, $21 million employment claims; ~$400 million in research funding reinstated; increased federal oversight and reporting requirements
    Multi-state AGs v. NIH Hundreds of grants (DEI, transgender health, vaccine-hesitancy research) APA violations; exceeded statutory authority Settlement committed NIH to its “usual process” for grant review; a court separately ruled roughly 900 terminated grants unlawful and ordered reinstatement, though the administration has appealed
    Multi-state AGs (16 states) v. NSF STEM diversity programmes; 15% indirect-cost cap APA and constitutional claims regarding congressional intent Litigation ongoing; plaintiffs are seeking to block the indirect-cost cap and reverse related terminations

    Harvard’s case is the clearest judicial precedent to date: a U.S. District Court in Boston found the government’s cancellation unlawful and ordered funding restored, only for the Department of Justice to open a separate recoupment suit months later — a reminder that a favourable ruling does not end the underlying dispute. Columbia’s settlement, by contrast, traded a fixed financial payment and expanded oversight for the reinstatement of frozen funds without a court ruling on the merits.

    What the settlements and court orders have required so far

    Three concrete procedural requirements have emerged from this litigation, and they matter more to research administrators than the headline dollar figures:

    • NIH’s court-ordered grant review. Following the ruling that roughly 900 terminated grants were unlawfully cancelled, NIH was ordered to reinstate them and, in a related settlement, committed to returning to its “usual process” for reviewing applications rather than applying ad hoc political criteria.
    • Reinstatement is not automatic. Reporting has repeatedly noted that court-ordered reinstatements are not occurring uniformly across all affected grants or states, and that the administration has filed appeals that keep some awards in limbo even after a favourable ruling.
    • Settlements bundle funding with oversight. Columbia’s agreement did not simply restore money; it added federal reporting obligations on admissions and international-student data and required adoption of the IHRA definition of antisemitism — a template that later negotiations may echo.

    None of this activity has produced a single, uniform national standard. Each institution’s relief depends on its specific docket, its circuit, and whether it litigated to judgment or settled.

    Frequently asked questions

    Why did Harvard get its research funding cut?

    The administration froze roughly $2.2 billion in Harvard grants and contracts in April 2025, citing the university’s response to campus antisemitism concerns and its refusal to comply with a set of governance demands. Harvard sued, arguing the freeze violated the Administrative Procedure Act and the First Amendment.

    Why is Columbia University losing funding?

    Columbia had roughly $400 million in federal grants terminated in March 2025 over alleged civil-rights compliance failures related to campus antisemitism. Rather than litigate, Columbia negotiated a $221 million settlement in July 2025 that restored most of the frozen research funding in exchange for expanded federal oversight.

    Was terminated NIH research funding actually reinstated?

    Partially. A court ordered roughly 900 NIH grants reinstated after finding their termination unlawful, but subsequent reporting found reinstatement was inconsistent across institutions and states, and the administration has appealed the underlying ruling, leaving some awards unresolved.

    What should a research office track during active litigation?

    Research offices should track award status changes, agency guidance updates, court docket entries affecting their sponsors, and internal expenditure and indirect-cost documentation — the same records needed both for compliance and for supporting institutional legal counsel if a grant is challenged.

    What research offices should track while litigation is pending

    Regardless of whether an institution is a named party, sponsored-programs and research-administration offices with active NIH or NSF awards should maintain contemporaneous records across five areas:

    • Correspondence with program officers — emails, termination or stop-work notices, and summaries of calls, since these documents establish the factual record if an award is later challenged.
    • Award terms and modifications — particularly termination, suspension and indirect-cost clauses, which vary by grant vintage and mechanism.
    • Expenditure and indirect-cost documentation — detailed enough to substantiate negotiated facilities-and-administrative rates if a cap or clawback is contested.
    • Docket activity relevant to the sponsoring agency — court orders, appeals and settlement terms that could reinstate, further freeze, or attach new conditions to an award.
    • Contingency and bridge-funding plans — since even a favourable ruling can take months to translate into disbursed funds, as Harvard and NIH grantees have both experienced.

    Institutions should also coordinate closely with general counsel before responding to any new agency demand tied to a settlement template, since Columbia’s agreement shows that funding restoration can come bundled with reporting and governance conditions extending well beyond the original grants at issue.

    Implications and what comes next

    The litigation pattern suggests two durable lessons for institutional research offices. First, a court ruling in an institution’s favour does not guarantee funds will flow on the original schedule — reinstatement has proven uneven, and follow-on actions such as the Department of Justice’s suit against Harvard show that disputes can continue well after an initial win. Second, settlement and litigation are not mutually exclusive strategies within a single funding relationship: an institution can win a ruling on one set of terminated NIH awards while separately negotiating conditions with another agency, or facing new litigation over the same funds.

    For offices managing sponsored research and research administration more broadly, the operational takeaway is procedural discipline rather than prediction. Consult the CASRAI Dictionary for definitions of the compliance and funding terms surfacing in this litigation, and treat every termination notice, court order and settlement condition as part of a single evidentiary record — because in this funding environment, that record is what any given grant’s outcome will ultimately turn on.

  • OMB Uniform Guidance 2026 Overhaul: What Research Offices Should Flag Before the Comment Deadline

    OMB’s omb uniform guidance 2026 overhaul is now a formal proposed rule, not a rumour circulating through listservs. Published in the Federal Register on 29 May 2026 as document 2026-10817 (tracked under docket OMB-2026-0034), the proposal would rewrite 2 CFR Parts 200 and 300 — the framework governing the large majority of academic, non-profit and state federal awards — and rename it the “Uniform Grants Regulation.” The public comment window closes on 13 July 2026, days from now, with a targeted effective date of 1 October 2026, the start of federal fiscal year 2027. For sponsored-programmes offices, general counsel and research administrators, the compressed 45-day comment period means institutions that have not yet reviewed the text are already behind.

    OMB’s three stated objectives for the rewrite

    OMB has organised the proposal around three explicit objectives, set out in the preamble to the Federal Register notice:

    • Transparency, accountability and oversight — expanding federal agencies’ visibility into recipient risk, subaward reporting, conflicts of interest and termination decisions.
    • Regulatory clarity — converting 2 CFR Subtitle A from non-binding “guidance” into a document with regulatory effect in its own right, so future OMB amendments apply government-wide without separate agency rulemakings.
    • Reduced recipient burden — measures such as encouraging multi-year awards, mandating that funding opportunities post to Grants.gov, and using pre-application statements of interest to screen out low-probability applicants before a full proposal is required.

    Much of the substantive detail traces back to Executive Order 14332, “Improving Oversight of Federal Grantmaking” (7 August 2025), which directed OMB to build termination-for-convenience authority and mandatory senior-appointee review into the Uniform Guidance. The 2026 proposal is OMB’s formal vehicle for codifying that order, together with several 2025 executive orders addressing DEI, gender ideology and merit-based opportunity.

    What changes for award recipients

    The proposed rule touches nearly every phase of the award lifecycle. Recipients should not assume that practices considered compliant under the current text will automatically satisfy the revised one — several provisions are new law, not restatements.

    Section Current position Proposed change
    §200.205 – merit review Agency-run scientific/programmatic merit review Senior political appointee conducts “pre-issuance review” of every discretionary award; peer review recommendations are advisory only
    §200.340 – termination Termination chiefly for noncompliance Broad discretionary termination if an award “does not effectuate…the national interest as they exist at the time of termination”; new 90-day suspension authority
    §200.202(e) – R&D awards No domestic-entity restriction “Domestic-first framework” generally limits research and development awards to US-organised entities
    §200.220 (new) – foreign collaboration No equivalent provision Prohibits using federal funds, including indirect cost allocations, for collaboration with “covered foreign countries or entities”
    §200.461 – publication costs Generally allowable Unallowable unless required by statute or approved in advance by the agency
    §200.432 – conference costs Allowable Allowable only if expressly pre-approved in the award’s terms and conditions
    §200.333 – fixed-amount awards Permitted with agency approval Eliminated entirely, in favour of cost-reimbursement structures

    Other proposed changes worth flagging: mandatory E-Verify participation (§200.303(f)); a new requirement that recipients disclose employees who worked at the awarding agency within the prior two years (§200.112–.113); an expanded risk-assessment framework at §200.206(b) that lets agencies weigh an applicant’s Section 117 foreign-gift-disclosure compliance and “questionable practices” history; and a new subrecipient clause (§200.332(i)) obliging pass-through entities to ensure subrecipients do not “significantly damage the reputation” of the funding agency. Notably, OMB has explicitly declined to reopen indirect cost rate methodology in this rulemaking, though the pre-issuance review principle favouring “institutions with lower indirect cost rates” applies indirect downward pressure regardless.

    This is the third revision to the framework since its 2013 consolidation: OMB made administrative updates in August 2020, then a substantive 2024 revision (effective 1 October 2024) that raised the single-audit threshold from $750,000 to $1,000,000. The 2026 proposal is materially broader in scope than either predecessor, extending well beyond audit and cost mechanics into award termination, political review and non-discrimination policy — territory the Uniform Guidance has not previously occupied.

    Common questions about the 2026 Uniform Guidance rewrite

    What is the uniform guidance of 2 CFR 200?

    2 CFR Part 200, informally the Uniform Guidance, is the government-wide framework setting administrative requirements, cost principles and audit requirements for federal grants, cooperative agreements and other financial assistance. Consolidated from eight separate OMB circulars in 2013, it governs how universities, non-profits, states and tribal governments manage federal award funds.

    When did the uniform guidance change?

    OMB has revised the Uniform Guidance three times since 2013: minor administrative updates in August 2020; a substantive revision effective 1 October 2024 that raised the single-audit threshold to $1,000,000; and the sweeping rewrite proposed on 29 May 2026, targeting an effective date of 1 October 2026.

    What is the purpose of Subpart F of the Uniform Guidance in 2 CFR Part 200?

    Subpart F sets the audit requirements for non-federal entities, including the single audit obligation triggered once an organisation spends federal award funds above the statutory threshold. It defines auditee and auditor responsibilities, reporting deadlines and the criteria agencies use to assess an institution’s financial management and internal controls.

    What is the new uniform guidance threshold?

    The most recent confirmed threshold change raised the single-audit trigger from $750,000 to $1,000,000 in annual federal expenditure, effective for fiscal years ending on or after 30 September 2025. The 2026 proposed rewrite does not revisit this figure; it concentrates instead on oversight, termination authority and cost-principle changes.

    How institutions can still comment, and what happens next

    The comment window is short by design: OMB set a 45-day period specifically so that, in its words, “only a single set of government-wide requirements” applies to awards made during fiscal year 2027. Comments may be filed through Regulations.gov against docket OMB-2026-0034 or attached directly to the Federal Register listing for document 2026-10817. As of mid-June 2026 the docket had already drawn more than 14,800 public comments, reflecting the scale of institutional concern.

    Two procedural points matter for anyone drafting a submission before 13 July:

    • Grant-related rulemakings are generally exempt from the Administrative Procedure Act’s requirement that agencies individually respond to every “significant comment,” so OMB may group responses thematically in the final rule’s preamble rather than address each submitter.
    • An agency’s obligation to consider comments in judicial review is limited to the issues those comments actually raise — a specific, well-evidenced submission on a provision an institution intends to challenge later is more likely to preserve that argument than a general objection.

    Research-administration associations, including NCURA and ARMA, are coordinating member briefings and template comment language, and institutions weighing individual versus coalition submissions should consider filing both: a joint comment through a sector body carries collective weight, while an institution-specific comment on provisions with unique operational impact (large multi-year awards, extensive international collaboration, heavy publication or conference spend charged to awards) creates its own record.

    Whether or not the rule is finalised as drafted by 1 October 2026, institutions should not wait for that date to begin preparing. The executive orders underlying most of the proposed provisions — on grantmaking oversight, DEI, and foreign collaboration — are already in effect and already shaping agency behaviour in individual award decisions. Convening a cross-functional review involving the office of research, general counsel, sponsored programmes and research administration compliance staff now, before the final rule lands, is the practical way to avoid a scramble in early October. Given the volume of comments already filed and the litigation risk flagged by multiple legal analyses of the proposal, a modified final rule — rather than the text exactly as proposed — is a realistic outcome, but the direction of travel toward tighter political oversight and narrower allowable costs is unlikely to reverse.

  • The De Minimis Indirect Cost Rate: When the 15% Safe Harbor Works for Your Institution

    Every proposal budget has to answer one question: how will the institution recover the overhead it spends supporting a federally funded project? For organisations without the staff or history to negotiate a formal rate, the de minimis indirect cost rate is a standing, no-negotiation alternative built directly into the federal Uniform Guidance. It lets an eligible non-federal entity recover indirect costs on a federal award without submitting a full indirect cost rate proposal — but the rate itself, and the rules around electing it, changed materially in 2024, and many summaries in circulation still cite the old figure.

    What is the de minimis indirect cost rate?

    The de minimis rate is a fixed indirect cost recovery option set out in 2 CFR 200.414(f), the cost-principles section of the OMB Uniform Guidance that governs federal grants and cooperative agreements. It exists so that organisations without a current Negotiated Indirect Cost Rate Agreement (NICRA) are not forced to either forgo indirect cost recovery entirely or undertake a formal rate negotiation with a cognizant federal agency.

    Effective 1 October 2024, OMB revised 200.414(f) and raised the rate from a flat 10% to up to 15% of Modified Total Direct Costs (MTDC). This is the single most important recent change to the rule, and it altered its character: the rate is no longer automatically 10%, nor is it automatically 15%. The “up to” language means an electing organisation should be able to justify the rate it applies, particularly if its actual indirect costs run below 15% of MTDC.

    MTDC is a defined cost base, not simply total direct costs. It includes direct salaries and wages, applicable fringe benefits, materials, supplies, services, travel, and the first $50,000 of each subaward. It excludes equipment, capital expenditures, patient care charges, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of any subaward beyond $50,000.

    Who qualifies to elect it

    Eligibility is narrower than the phrase “de minimis” suggests. Under 2 CFR 200.414(f):

    • The entity must be a non-federal recipient or subrecipient — a state or local government, Indian tribe, institution of higher education, or non-profit organisation.
    • The entity must not currently hold a NICRA. An organisation that has never negotiated a rate, or whose prior agreement has expired without renewal, is generally the target user.
    • For-profit entities are not eligible. Cost principles for commercial organisations sit under FAR Subpart 31.2, not 2 CFR 200 Subpart E, so the de minimis election in 200.414(f) simply does not apply to them.
    • Once elected, the rate must be applied consistently across all of the entity’s federal awards until it either negotiates a NICRA or its circumstances otherwise change; it cannot be selectively applied to some awards and not others.

    In practice, the de minimis rate is used most often by first-time federal grantees, small non-profits, and institutions with genuinely modest indirect costs — organisations for whom the administrative cost of preparing a full rate proposal would exceed the financial benefit of a more precisely calculated rate.

    De minimis rate vs a negotiated rate (NICRA)

    Choosing between the de minimis rate and a negotiated agreement is a genuine trade-off, not a formality. A NICRA requires submitting a detailed indirect cost rate proposal to a cognizant federal agency, supported by an audited or auditable cost allocation base, and typically takes months to negotiate. The de minimis rate requires no proposal and no negotiation at all.

    Factor De minimis rate (up to 15% of MTDC) Negotiated rate (NICRA)
    Documentation to elect None required; self-certified election Formal indirect cost rate proposal with supporting cost data
    Time to establish Immediate Typically several months of negotiation
    Rate accuracy Fixed ceiling, may under-recover true indirect costs Reflects the institution’s actual cost structure
    Best suited to First-time or small-scale federal recipients with modest overhead Institutions with sustained federal funding and indirect costs above 15% of MTDC
    Flexibility once set Must be applied consistently to all federal awards Rate is fixed for the negotiated period, then renegotiated

    For institutions whose actual indirect costs genuinely sit at or below 15% of MTDC, the de minimis rate is a reasonable long-term choice — it avoids the recurring administrative burden of rate renegotiation. For research-intensive institutions with substantial facilities and administrative costs, a negotiated rate almost always recovers more, because negotiated F&A rates at research universities commonly run well above 15% of MTDC.

    Documentation and compliance requirements

    The de minimis election requires no formal proposal, but it is not a documentation-free zone. Institutions should still:

    • Retain a clear internal decision record showing the rate elected and the justification, especially where the rate applied is below the full 15% ceiling.
    • Apply the cost base correctly — errors in MTDC calculation, such as including full subaward amounts above $50,000 or capital equipment, are among the most common audit findings.
    • Maintain consistency: costs charged as indirect under the de minimis rate cannot also be charged directly to the same award, and vice versa.
    • Track award-level restrictions, since some individual federal programmes cap or exclude indirect cost recovery regardless of an entity’s general de minimis election.

    Common questions

    What is a de minimis indirect cost rate?

    The de minimis indirect cost rate is a standard rate that eligible non-federal entities without a current negotiated agreement may apply to recover indirect costs on federal awards. It is capped at 15% of Modified Total Direct Costs and requires no formal rate proposal to use.

    When did the de minimis indirect cost rate change?

    OMB revised 2 CFR 200.414(f) effective 1 October 2024, raising the de minimis rate from a flat 10% to up to 15% of MTDC for new federal awards. Awards issued before that date may still reference the earlier 10% figure.

    What is the current de minimis rate?

    As of the 2024 Uniform Guidance revision, the current ceiling is 15% of MTDC. Because the regulation uses “up to” language, an organisation should be able to support the specific rate it elects rather than assume 15% applies automatically.

    How do you use the de minimis rate?

    An eligible entity elects the rate by applying it directly to its Modified Total Direct Costs base on a federal award, with no application or negotiation required. Once elected, the entity must use it consistently across all federal awards until it negotiates a formal rate.

    Implications for research administrators

    The de minimis rate should not be confused with a separate and unresolved policy debate: proposed caps on negotiated indirect cost rates. In 2025, NIH and later other federal science agencies proposed capping F&A reimbursement at 15% even for institutions that already hold a NICRA well above that figure — a distinct move from the de minimis election, which has always applied only to entities without a negotiated rate. Those cap proposals drew legal challenges from higher-education associations and remain contested in federal court as of this writing. Research administrators should track the two issues separately: one is a stable, settled recovery option for smaller or first-time recipients; the other is a live policy dispute over whether research-intensive institutions’ existing negotiated rates can be unilaterally reduced.

    For institutions building or reviewing their research administration infrastructure, the practical takeaway is to treat the de minimis election as a genuine strategic choice rather than a default. Model the actual indirect cost recovery under both the de minimis ceiling and a hypothetical negotiated rate before committing, since the consistency requirement makes switching mid-portfolio administratively costly. As federal cost-recovery policy continues to shift, institutions that document their rate rationale clearly will be best placed to adapt.