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Panel to Study Overhead Costs

By Karen Kaplan
Executive Editor

While a host of government agencies are externally scrutinizing the way MIT spends federal research money, an ad-hoc committee of faculty and administrators is taking an internal look at the efficiency of research and the funding of graduate student tuition here.

Provost Mark S. Wrighton convened the Committee on Indirect Costs and Graduate Student Tuition to study "the costs of research currently allocated to indirect costs" and the rationale behind the current method of funding graduate research and teaching assistants from the Institute's Employee Benefits Pool, according to a letter dated Nov. 19. In addition, the committee should "establish the priorities of the research faculty with respect to the activities supported with indirect cost dollars," the letter said.

The committee, chaired by Professor of Biology Robert A. Weinberg '64, is charged with making "recommendations for improvements in the graduate education and research enterprise at MIT with emphasis on improving cost effectiveness of areas and services funded with indirect cost dollars," Wrighton said in the letter. The letter set a deadline of March 31 for the committee's recommendations.

Neither Weinberg nor Wrighton could be reached for comment yesterday.

Members of the committee include Jonathan Allen '68, director of the Research Laboratory of Electronics; Suzanne D. Berger, head of the political science department; Robert J. Birgeneau, dean of the School of Science; Professor of Chemistry Sylvia T. Ceyer; Angela Fastry G; Frank E. Perkins '55, dean of the Graduate School; Professor of Mechanical Engineering Steven Dubowsky; Philip S. Khoury, dean of the School of Humanities and Social Science; Vice President for Research J. David Litster PhD '65; Robert B. McKersie, deputy dean of the Sloan School of Management; Joel Moses PhD '67, dean of the School of Engineering; Ronald R. Parker PhD '67, director of the Plasma Fusion Center; and Doreen Morris, assistant to the provost and senior vice president. Morris said that Wrighton also attends committee meetings "when he can."

Although the committee has been meeting since Dec. 20, the Institute chose to announce its formation only last week. Parker said that to some extent, "the committee was convened in response to" the allegations made by Rep. John D. Dingell (D-Mich.) that major research universities are defrauding the government. "That was definitely a stimulus. Also, the provost is genuinely interested in finding cost-cutting measures, reducing the cost of research and finding a mode of operation that makes the government happy with regard to graduate student tuition," he continued.

Emphasis on graduate funding

The "dominant item" on the committee's agenda is how MIT will fund tuition for its graduate students in the future, Allen said. Currently, graduate student tuition is funded through the Employee Benefits Pool, which also funds things like health insurance. "The way it's done now has been challenged" by the federal auditors, and the committee is considering "no fewer than seven alternatives," he said. He noted that three other universities have similar funding processes.

Before 1983, graduate students paid their tuition with stipends they received from MIT. Under that system, graduate student research assistants were expensive to hire, and there was concern that "faculty members would find it less expensive to get [postdoctoral fellows] or anyone without tuition" to work in their labs, Allen said. The current system was devised in order to ensure that graduate students secured educational research jobs.

"I think [the set-up has] been successful in terms of raising the number of research assistants," Allen said. He added that the Office of Naval Research, which oversees research at MIT, has been "satisfied that this is a good thing ... for the health of the university and the health of the nation."

Parker expressed doubt that changing the way graduate students were funded would result in significant cost savings. "From my perspective, most of the effect of [changing graduate student tuition] will be to move the cost from one budgeting column to another. It's an accounting measure more than anything," he said.

Litster said the committee will consider the effects of adopting All But Dissertation status for some students. Such a change would hurt MIT's budget "because MIT's going to have to pay for some of [the consequences] with its own funds," he said.

If the cost of hiring graduate students for research gets much higher, "we'll lose out in competition with other schools," Litster said. On the other hand, if the Institute works out an arrangement to keep the cost of research assistants lower, "there will probably be fewer research assistants here in the future," he said.

Reduction of indirect costs

"Finding ways to reduce indirect costs is high on our list of priorities [in order] to understand better the difficulties MIT is having with various auditing agencies," Parker said. However, committee members said the Institute's indirect cost rate was reasonable.

"Every institution has a different number in terms of percentage of indirect costs," Parker said. "It's almost meaningless to compare schools that way because they direct charge different things... . When you look at the bottom line, you get a number like [$100,000] per person almost everywhere, independent of the way the institution does indirect costs."

Litster also testified to the reasonableness of MIT's indirect cost rate, saying, "I think if you compare them with other universities, it's not bad."

Parker said he doubts that the overall cost of research at MIT will change substantially. "Coming out of this, we will have a more formal process by which overhead costs are continually assessed, and there will be pressure to reduce them... . In the end, I don't think we'll see a big change in the cost of doing research here," he said.