Feds probing U. research spending

The Department of Health and Human Services, the federal agency which negotiates research overhead proposals with the University, has begun an audit of the University's spending practices as the first step in an expanding federal investigation. According to University Comptroller Alfred Beers, the department is currently reviewing the use of direct research funds. These funds are the basic grants universities receive for research. Health and Human Services receives audit information on universities receiving these grants on a regular basis, but reserves the right to audit on its own. But Beers said these audits are rare. Beers said the investigation was probably brought on by the Congressional probe into the use of indirect government research money at several universities across the country. The Congressional investigation uncovered gross misspending at Stanford University. Indirect research costs, which are determined by negotiations between the University and Health and Human Services, are maintenance and administrative expenses related to federally-funded research which the University charges to the government. The University charges 65 percent indirect overhead for every grant it receives from the government, which means that for every $100 the government gives to a University researcher, the administration charges an additional $65. When the Congressional committee investigates the University, it will look at the negotiated indirect overhead rates Health and Human Services approved. In this investigation, Health and Human Services will also be under scrutiny. As a result, the department will be in the position of auditing the University and facing investigation along with the University at the same time. A Health and Human Services official, who negotiates with the University, said last week the government has no reason to suspect the University has misused federal money, saying the ensuing investigation is a routine review of universities with high indirect overhead costs. The University has the 14th highest overhead research rate in the country, falling behind other schools under review such as Johns Hopkins University and Harvard University Medical School. The department official, who refused to be identified, said the administration's expenses fall within the guidelines set out by the federal Office of Management and Budget. He said negotiations between the administration and the department remove any "unallowable costs" before the University receives government money. Through the negotiations process, the university and the department weed out any extraneous costs and compromise on any questionable dollar amounts, he said. The official explained that the impending Congressional investigation will review the funding proposal approved by Health and Human Services. He said the misspending at Stanford was caused by a mis-negotiation between the Office of Naval Research and Stanford. He insisted that no such negotiations occurred between the University and Health and Human Services.

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