Stanford agrees to repay taxpayers for boat costs

December 06, 1990|By Jeff Gottlieb | Jeff Gottlieb,Knight-Ridder News Service

STANFORD, Calif. -- Stanford University has been charging taxpayers for depreciation on a 72-foot sailboat with a Jacuzzi and two wood-burning stoves, for use of athletic facilities and for faculty discounts on tickets to basketball and football games -- all in the name of research.

After a congressional subcommittee questioned items Stanford billed the federal government for research, the university agreed to repay $184,286 it charged for depreciation on the yacht and on other athletic department equipment, including smaller sailboats, racing sculls, computers and a prefabricated building.

University officials blamed the charges, which began in 1981 and ended in 1989, on an accounting error.

Larry Horton, Stanford's associate vice president for public affairs, said that during that period there had been millions of transactions. Stanford got about $443 million for overhead expenses during that time.

"We don't want to make excuses, but with this kind of volume, mistakes will happen," he said.

The ticket discounts, along with charges for use of athletic facilities such as the golf course, swimming pools, tennis courts and gyms, are standard fringe benefits, said Stanford attorney Debra Zumwalt.

She said there were no plans to change those billing practices. "It's an accepted way of doing business."

The federal government paid Stanford $29.7 million for fringe benefits as part of the cost of research conducted in fiscal 1988-1989.

The charges for the boats and benefits bring into question not only Stanford's accounting methods, but also how well the federal oversight agencies have been doing their jobs.

Three federal bodies are looking into how Stanford charges the government for its overhead costs of research, including such things as utilities, building depreciation and library use. Stanford's overhead cost rate, now capped at 74 percent, is one of the highest in the nation. The rate means that when a professor wants to perform $100,000 of research, the government must also pay the university $74,000.

Representative John D. Dingell, D-Mich., chairman of the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce, wrote a letter Monday about the yacht to the head auditor at the Defense Department.

When federal officials first raised questions about the boat in October, Mr. Horton told a subcommittee investigator that taxpayers were not paying for the yacht. He reversed himself a month later after federal investigators asked for Stanford's records.

The sailboat was a gift in 1987. Stanford paid $100,000 for the vessel and tried to sell it for $595,000 but now is asking $475,000.

The boat is used to teach students to sail and for recreation for the Stanford community. Community groups have also used it.

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