Concern about indirect costs of research soars Rep. John D. Dingell (D.-Mich.), chairman of the House Energy & Commerce Committee, apparently opened Pandora's box when he publicly assailed Stanford University last month for billing the federal government for expenses inappropriately called indirect costs of research (C&EN, March 18, page 4). Since then, universities have been scrambling to review their accounts, while additional government entities have opened investigations of indirect costs—expenses such as administration, maintenance, and library costs that can't easily be assigned to a particular research grant. Last week alone, another Congressional subcommittee held hearings on the issue, the White House Office of M a n a g e m e n t & Budget announced tighter accounting regulations, and Massachusetts Institute of Technology withdrew $731,000 it had charged over the past five years. "These investigations are only the highly visible tip of an iceberg of muddled university accounting, ambiguous government regulation, and inadequate federal oversight," said Rep. Rick Boucher (D.-Va.), chairman of the House Science, Space & Technology Subcommittee on Science, as he opened two days of hearings. "The subcommittee intends to pursue legislative and administrative changes to the present system." Among actions the subcommittee is considering is a cap on indirect costs. These totaled about $2.5 billion in 1990, roughly one third of the total cost of research grants to universities. Indirect costs have been increasing steadily in recent years both in absolute amount and as a percentage of total funding. And revelations like Stanford's charging depreciation for its yacht as an indirect cost have shaken confidence in the system. Boucher's panel heard testimony from the Office of Naval Research and the Department of Health & Human Services, the two agencies that set indirect cost rates for most universities. Representatives from other funding agencies and from research
institutions also appeared, including Jon C. Clardy, chairman of Cornell University's chemistry department. Clardy describes the issue of indirect costs as the most "corrosive element in the university research establishment today." But before considering a cap on them, he says, it's important to agree on their definition. For example, he tells C&EN, chemical waste disposal is charged as an indirect cost at Cornell, but as a direct cost elsewhere. Without agreement on definitions, what are now indirect costs at some universities would simply reappear as direct costs. OMB will amend its guidelines for indirect costs "to clarify policy and stop the abuse," OMB Director Richard G. Darman announced last
week. Among charges to be ruled unallowable are entertainment and alcoholic beverages, housing and personal living expenses of university officers, defense of fraud, and lobbying. Proposed changes will be published in the Federal Register. The $731,000 in past charges MIT says it is voluntarily withdrawing— even though many are technically allowable—include several unallowable under OMB's n e w rules. Among them is $27,000 in legal expenses for a law firm that assisted MIT officials in hearings before Dingell's committee during its investigation of former MIT researchers David Baltimore and Thereza Imanishi-Kari (C&EN, May 22,1989, page 27). Pamela Zurer
Iraq submits chemical weapons report to UN Key features of the United Nations cease-fire resolution relating to Iraq's weapons of mass destruction were played out last week. Iraq filed two letters describing its chemical, missile, and nuclear programs. And UN Secretary General Javier Perez de Cuellar named Swedish diplomat Rolf Ekeus executive chairman of the special commission charged with inspecting, monitoring, and possibly destroying Iraqi weapons. The U.S. quickly faulted Iraq's disclosures for omissions and incomplete information. State Department spokesman Richard A. Boucher said Iraq's letter to UN headquarters in New York City "shows clearly that the Iraqis have significant stocks of chemical munitions, ballistic missiles, and warheads for these missiles. But the responses appear to fall short of reality." One shortcoming he cited: "Iraq stated it doesn't have biological weapons." Iraq submitted its declarations on nuclear-related items to the International Atomic Energy Agency in Vienna. According to Boucher, that letter declares only the nuclear material under IAEA safeguard. "They declare no nuclear weapons, nuclear-weapons useable material, or other related facilities or activities," he notes. IAEA has written to Iraq asking for more precise information. In its chemical weapons declara-
tion, Iraq lists thousands of artillery shells, bombs, and mortar shells containing mustard gas and the nerve gas Sarin. It claims to have hundreds of tons of bulk stocks of mustard gas, Sarin, and precursors for the nerve gas Tabun, but no finished Tabun. It lists 30 chemical warheads for ballistic missiles, although all the missiles fired at Israel and Saudi Arabia during the Persian Gulf War carried conventional warheads. Iraq also says it has over 300 Sarin-containing "binary-system" bombs.
Ekeus: controls over chemical industry April 29, 1991 C&EN
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