In response to criticism of the rise in indirect cost rates and their effect on federally funded research, the methods for calculating and applying indirect costs rates according to the new cost principles applicable to sponsored agreements are examined, and specific criticisms are addressed. (MSE)

The Office of Management and Budget's new alternatives for reporting an institution's activities under federal grants are outlined and explained, and possible implementation problems with each alternative are suggested. Options discussed include personnel activity reporting, monitored workload, multiple certification, and statistical sampling.…