I have an issue that begs for both a policy question response and a
practical approach.  I would especially like to hear from Land-Grant
Institutions, but any thoughts would be welcome!  So here goes:

 *****Policy Question******
 Has anyone had a difficult time with a federal agency (in our case, USDA)
refusing to accept unrecovered F&A as an allowable match when the F&A
programatically allowed is less than the negotiated rate?
 Originally published guidelines (in effect at the time the proposal was
submitted) for the program in question (USDA Challange Grant) had mentioned
several specifics of what may or may not be used for the matching
committment including the difference between the institution's negotiated
rate and USDA published rate.  However, under the new USDA-AREER  funding,
the agency (USDA) has reneged on the initial guidelines as published and is
insisting on using what appears to be selected parts of law as it has deemed
desirable.
 This is making for some difficult times in reworking budgets, etc. under
the "new" rules. (Especially with the matching components!)  Has anyone else
had this problem and how did you deal with it?

 ******Practical Approach Question*****

In the USDA's response to our inquiry, we were informed that the Agriculture
Secretary's legal counsel interprets the limitation to apply both to
indirect and to the use of indirect for matching.

While our institutional counsel works with the USDA, we are faced with what
we believe are our only options:

1. Hold up (or perhaps, withdraw) proposals that have hard deadlines;

2. Go ahead and charge the difference between the 19% and our negotiated
44.5% federal rate as unrecovered indirect and let the legal counsels of
both USDA and our institution work it out;

3. Submit proposals with itemized operating expenses (usually dealt with as
indirect costs) as matching, (presuming we will have enough that qualify
under CAS)

or

4.   Agree to this new reduced rate and proceed.

If you have other thoughts, suggestions or information of how your
institution or others are coping with this very significant reduction in
indirect match and USDA/CSREES' mid-process creation of a special fee,
please advise.

Rusty Okoniewski, Interim Director,
IFAS Sponsored Programs
University of Florida
McCarty Hall-D (Bldg. 498)
P.O. Box 110110
Gainesville, FL 32611-0110 USA
E-mail: xxxxxx@gnv.ifas.ufl.edu
Voice: (352) 392-2356
Fax: (352) 392-8479
Suncom: 622-2356