Research may cost U. more

The University may have to absorb more of its research-support costs next year due to proposed federal guidelines which would severely limit how much money schools can charge the government for administrative expenses. The federal Office of Management and Budget last week recommended limiting research administration fees to 26 percent of total research costs at all institutions. The University currently recovers 30.4 percent of its administrative costs from the government. This proposal comes during investigations into how institutions spend their federal dollars which began after the goverment uncovered gross mispending practices at Stanford University. Based on current figures, the current OMB effort could cost the University up to $12 million in research overhead costs next year. OMB's proposal effects the governmental support money, including administrators and research assistants to support research. Besides these administrative expenses, the government also pays for maintenance of research buildings and equipment. Together, the expenses make up indirect research overhead costs, which is money added to a research grant to ensure the research is sufficiently supported. The University currently charges the government a 65 percent indirect overhead rate, which means that for every $100 a researcher receives, the University gets an additional $65 for support costs. A government review of universities' spending practices recently revealed that current guidelines for determining the overhead rate are unclear, provoking massive investigations into how the rates are determined. Federal officials said this week that OMB's new proposal will most likely become law, because it does not need congressional approval. They added that the proposal should help clarify what costs can be charged to the government. "The cap was proposed to get greater control of indirect cost rates to try to establish a more level playing field for the various accounts," an OMB official said this week. The official, who spoke on the condition of anonymity, said OMB may also set a limit on allowable maintenance charges. University Controller Alfred Beers said this week he cannot predict what effect the new limit will have on the University's research spending practices. Beers said the effects of the proposal only will be felt after this year's funding negotiations are completed. But Dennis Fitzgibbons, a spokesperson for Rep. John Dingell (D-Mich.), who heads the Congressional subcommittee investigating overhead spending, said the new limit has come at the wrong time. "As Dingell said, the proposal comes both too early and too late," Fitzgibbons said. "It's too late because there's already been a decade of abuse, and too early because the problem hasn't yet been defined." Beers said he is currently preparing for negotiations with the government over the University's new research overhead rate which will begin next fiscal year. The new rate will be based on expense figures from fiscal year 1991, and will last for five years.

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