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COUNCIL 2001-2002 Year-end Committee Reports


Scheduled for discussion at Council on October 2, 2002

During the 2001-02 academic year the University Council Committee on Research was charged with: (a) review of the Provost's study of the cost of research to the University: (b) examine the cost in time and resources to investigators in complying with regulatory requirements in human and animal studies; and (c) review the revised University policy for postdoctoral fellows. Additionally, the committee was asked to advise the Vice Provost for Research on contracts that potentially violate University guidelines described in The Faculty Handbook. The Committee met six times with appropriate University officials and their findings have been incorporated in this report.

A. Review of the Provost's Analysis of the Cost of Research
to the University

During the past year, the Provost's office completed an analysis of the cost of doing research at Penn entitled: "Calculating the Cost of Research." The purpose of the study was to determine the cost of supporting externally funded research at the University and to ascertain if indirect cost recovery (ICR) was sufficient to offset these expenses. Costs for supporting research fall into three categories: administration, facilities and utilities. Revenue to support these functions are derived from ICR which the University receives from most external research grants. The Provost's study determined that a modified ICR rate required for the University and Schools to meet their expenses for supporting research was 57.5%. It is noteworthy that the calculated rate is nearly equivalent to the 58.5% rate that the University receives on most federally funded grants from the National Institutes of Health, the major source of external research funds to University faculty. The study also reported, based on its analysis of ICR for FY 1999, that the actual ICR rate for external grants was 42%. The study determined that the reduced ICR led to a significant financial shortfall for the University. The major contributing factor for the reduced ICR appears to be due to grants from non government organizations (NGO) which contribute a much lower ICR than the federal rate of 58.5%. In fact, more than 50% of the under recovery could be attributed to the modest ICR provided by NGO grants. The size of the under recovery was also dependent on whether the ICR was based on a depreciated or non-depreciated building rate. These rates include the cost for maintaining research buildings; the depreciated building rate also includes the cost of deferred maintenance as well as major renovations to research buildings and laboratories. Approximately 40% of the under recovery could be accounted for by the difference between the depreciated and non-depreciated rate. The Committee also noted that the study did not include an analysis of the efficiency of University services to determine, for example, if the administrative as well as building and facilities costs are competitive with industry standards and that of peer institutions.

Although concerned with some of the metrics used in the Provost's study, the Committee felt that the analysis underscores the need for each externally funded grant to contribute ICR to enable Schools and the University to recoup the cost for supporting externally funded research. The Committee, however, does not advise establishment of a limit on NGO or other grants that compensate the University with low ICR. Research is core to the mission of the University and the institution derives numerous benefits from supporting a vigorous and robust research program; therefore, the Committee recommends that all research grants be accepted regardless of the ICR rate. Instead, the Committee recommends that for those external grants, for which the ICR is below the University "break-even" rate, consideration should be given to establishing a series of charges that can be encumbered against the direct cost of these grants. These charges would enable the Schools and the University to be reimbursed for administrative and facility costs in relation to the funded research activity. It may be difficult, however, to apply a single formula or rate to all projects; several factors would have to be considered such as the amount of space allocated for research funded by the project.

Finally, the Committee determined that the study has tremendous management potential that could significantly benefit the University, Schools, and faculty. The study was only able to identify the cost of supporting research at the University and School levels; however, the individual schools should be able to utilize the data to determine costs at the department level and for individual faculty. Therefore, the Committee recommends that the Provost work with the Deans who in turn should work with the Department Chairs to use the study for developing faculty incentives. It should be possible for Deans and Chairs to use these data to develop performance benchmarks, for each faculty, that takes into account the cost of supporting their research program (based on assigned lab space, for example). For those faculty whose research funding, i.e., ICR, exceeds the university cost, the faculty should have the choice of either acquiring additional laboratory space and/or sharing (not for personal gain) in the ICR surplus. It is the Committee's recommendation that the establishment of incentives would benefit the entire University community by increasing both research support and activity.

B. Review of the Cost in Time and Resources to Investigators
in Complying with Regulatory Requirements
in Human and Animal Studies

The Committee was charged with determining the cost in time and resources to investigators in complying with regulatory requirements in human and animal studies. It is clear that due to constantly changing federal regulations the process for approval of animal and human subject research protocols has become both complex and laborious. The Committee met with several University officials and found that, although many problems still exist, significant steps have been taken to improve and stream-line the process. The Office of Regulatory Affairs has improved its web sites for both human and animal studies; each site now contains guidelines and all pertinent forms. Another recent addition was the ability of investigators to track protocol (both human and animal) status on BenReports. Perhaps, the most significant advancement was in the area of human research with the establishment of the Office of Human Research; this office provides three services: clinical research development, regulatory compliance monitoring and education. Finally, further streaming of the process is anticipated once the new Electronic Research Administration (ERA) is rolled-out. This system will provide a tool for developing human subject and laboratory animal protocols along with many other useful features. The Committee recommended that this topic be reviewed in the near future once the ERA begins to be phased in.

C. Review of the Revised University Policy for Postdoctoral Fellows

Nearly six years go the University established the first comprehensive policy for Postdoctoral Fellows (PDF). This past year, the Vice Provost for Research, along with the Provost's Council on Research, reviewed the policy and proposed several modifications. The major changes include: (1) the addition of a preamble which essentially defines a PDF; (2) the extension of the policy to cover all PDFs including those in the social and behavioral sciences who were not covered in the present policy; and (3) setting a minimal internal compensation level distinct from NIH guidelines. The Committee reviewed the revised policy and recommends that the policy be accepted.

D. Review of contracts for Sponsored Research Agreements
that Discriminate Against Selected Foreign Nationals

The Committee was asked by the Vice Provost for Research to review a research contract that would potentially violate Section III.F of the Faculty Handbook which states: "Members of the University research community shall not be subject to discrimination based on citizenship with respect to their participation in research activities. While funding agencies may limit their financial support to particular groups (such as U.S. citizens), they may not prohibit the participation of others in University research. Where a research contract deviates from this policy an exception may be granted by the Vice Provost for Research after review by the University Council Committee on Research." The research contract in question involved proprietary software which came under export controls of the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR). The software was approved for export to all countries except those which are restricted for anti-terrorism reasons. These restrictions alone are not in violation of University policy, however, the export controls also stipulate that foreign persons (non-permanent resident aliens) from these restricted countries would not be permitted to have access to this product and hence, not be able to participate in the research. The Committee concluded that the latter restriction would indeed violate the University policy on research as stated in section III.F and did not recommend an exception to the policy. The Committee recognizes that, as a result of events that have taken place this past year along with new research opportunities in the area of bio- and chemical terrorism, this issue will be re-revisited frequently in the future. The Committee's recommendation was to maintain the guidelines of The Faculty Handbook and not waiver from its policy of entering into research contracts that place explicit restrictions on foreign participation. It was also recommended that the Committee continue to examine this issue.

--Bruce J. Shenker, Chair

Research Committee Members 2001-2002: Chair: Bruce J. Shenker (Dental Medicine); Faculty: James Alwine (Medicine), Dan Ben-Amos (SAS), Barbara Bonini (SAS), Robert Boruch (Education), Francisco Gonzales-Scarano (Medicine), Katherin A. High (Medicine), Jennifer Pinto-Martin (Nursing), Robert A. Stine (Wharton) and Andrw B. Rudczynksi (Res. Services). Graduate/professional students: Danielle Bujnak (GSAS); Kim Woolf (GSAS) Undergraduate students: Lincoln Ellis (COL‚03); Chad Sarver (COL‚03) Ex officio: Neal Nathanson (vice provost, research); Andrew Rudczynski (executive dir research svcs)

  Almanac, Vol. 49, No. 6, October 1, 2002