Subject: U. S. to Review 270 Universities' Bills After Research Charges Are Questioned 
Date: Published: 5/10/91 (71 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    U. S. to Review 270 Universities' Bills
    After Research Charges Are Questioned
    ----
    By Hilary Stout
    Staff Reporter of The Wall Street Journal

    WASHINGTON -- The Department of Health and Human Services
 said it plans to review research bills submitted to the
 federal government by 270 universities after auditors
 identified more than $14 million in improper overhead charges
 by a dozen institutions.
    The questionable claims are the latest to come to light in
 a widening examination of universities' overhead costs under
 federal research contracts.  When the federal government
 awards research grants, it agrees to reimburse schools for a
 portion of their operating expenses to cover the indirect
 costs of engaging in research.
    Included as expenses supposedly related to the federal
 research contracts were engraved crystal decanters from
 Neiman Marcus purchased by the University of Texas
 Southwestern Medical Center, plane tickets for a trip to
 Grand Cayman Island by the University of Pittsburgh
 president's wife, and Darmouth College's lawyer bills in two
 antitrust suits, HHS Inspector General Richard Kusserow told
 the House Oversight and Investigations Subcommittee.
    Scrutiny of what colleges are counting as indirect
 research costs began earlier this year, when Stanford
 University admitted to including depreciation of a university
 yacht, the cost of an antique fruitwood commode and other
 items seemingly unrelated to research in cost pools from
 which the government calculates reimbursements for indirect
 research costs.  Stanford delivered a check to the government
 this week for $924,517 as repayment for the charges.
    The $14 million that the auditors identified was included
 in "cost pools" from which the government and the
 universities negotiate a reimbursement rate.  Seven of the 12
 schools have agreed to withdraw a total of about $9.5 million
 of the disputed claims.  Many of the universities called
 attention to the questionable charges themselves, after the
 government said it planned to audit them.
    Dartmouth officials disputed the human services agency's
 claim that the college submitted $1,066,432 of questionable
 expenses for indirect research costs.  John Tansey, the
 college's manager of grant and contract accounting, said
 Dartmouth has agreed to withdraw $47,000 in indirect research
 expenses, including legal fees and the cost of driving the
 college president.
    The government will spend more than $9.2 billion for
 university research contracts this fiscal year and pay an
 additional $2.5 billion in indirect research costs, federal
 officials say.  Indirect costs have been burgeoning in recent
 years.  Last year, the National Institutes of Health spent
 more on indirect research costs than on AIDS research, Mr. 
 Kusserow said.
    Mr. Kusserow identified the following questionable
 indirect research expenses:  Rutgers University $4.9 million;
 University of Southern California $3.1 million; Dartmouth
 $1.1 million; University of Pennsylvania $941,476; Duke
 University $906,245; Washington University at St. Louis
 $985,000; Yale University $720,186; Emory University
 $672,557; University of Chicago $348,050; University of
 Pittsburgh $259,085; Johns Hopkins $175,183; University of
 Texas Southwestern Medical Center at Dallas $32,537.

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