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Overhead to be probed

By Dave Watt

MIT is likely to be the next target of a widening investigation into indirect cost rates at universities around the country, according to a press liaison who works for the congressional committee heading the investigation. He said that the investigation of

MIT would begin "as soon as possible."

MIT has not been officially informed of any upcoming investigation, according to James J. Culliton, vice president for financial operations.

The Oversight and Investigation Subcommittee of the House Commerce Committee is heading up the investigation of indirect costs at research universities nationwide. Indirect cost rates cover the overhead costs of conducting research; the funds are taken in addition to federal research grants.

At MIT the indirect cost rate is 57.5 percent, according to Culliton. For every $100 a professor actually spends from a federal research grant, the Institute takes another $57.50 to pay for its overhead costs.

Because of the investigation, Stanford University has agreed to return about $750,000 in federal research funds to the government, according to Dennis Fitzgibbons, press liaison for the House Energy and Commerce Committee. The investigation at Stanford has not been concluded, Fitzgibbons added.

Fitzgibbons downplayed the seriousness of the investigations, denying that any particular university is a "target" the committee is going after. "The committee is only trying to get the facts. That carries no suggestion of wrongdoing," he said.

Fitzgibbons added that the review of universities' procedures will be "case studies" to examine the current method of accounting for indirect cost recovery. The case studies will then be used to decide if further regulation of indirect cost recovery is needed, he said.

Fitzgibbons mentioned that the University of California at Berkeley, the University of Pennsylvania and Johns Hopkins also might be examined. The committee decides which colleges to investigate based on their indirect cost rates, and how much federal support they receive, Fitzgibbons said.

Two organizations will conduct the audits. Auditors are assigned to a university either from the Office of Naval Research (ONR) or the Department of Health and Human Services (HHS), depending on whether a university's research funding is primarily from defense or non-defense money, Fitzgibbons said.

The auditing branch of the ONR will conduct the investigation at MIT, while HHS is carrying out the audit at the Harvard Medical School which began recently, Fitzgibbons added.

Fitzgibbons said it is too early to say what legislative changes might come from these investigations. "The hearings brought out a lot of Stanford-specific information only. Broad generalizing is difficult," he said.