Foreign governments got research bargains, auditors say Universities were overbilling the U.S. at the same time, according to federal auditors.

January 30, 1992|By Knight-Ridder

WASHINGTON -- Several prominent universities -- including Johns Hopkins University -- conducted research for foreign governments at bargain prices at the same time they were overbilling U.S. taxpayers for research costs, according to federal auditors.

Auditors also told a congressional hearing yesterday that research abuses uncovered last year at Stanford University were repeated at dozens of major universities under investigation. They say Stanford owes taxpayers $231 million for research costs that it improperly billed the government.

"While the magnitude of unallowable charges at each school may vary, the problem of unallowable costs being charged to the government is systemic," Dexter Peach, assistant comptroller general at the General Accounting Office, said at the hearing.

Three schools conducting research for foreign governments ranging from Egypt to Canada -- Hopkins, Duke University and the University of Pittsburgh -- charged the nations little or none of the indirect costs associated with conducting research.

Earlier, federal auditors said Stanford chose not to charge Japan for research-related costs, although it was billing the U.S. government for such questionable expenses as a 72-foot yacht and an antique commode. The school has already reimbursed the government $1.2 million for some of these expenses.

"We are curious why these universities negotiate for top dollar plus some when dealing with the American taxpayers, but give preferential treatment to foreign governments and other people," said Rep. John Dingell, D-Mich.

Moreover, Mr. Dingell, whose House subcommittee on oversight and investigations spearheaded the research fraud investigation, charged that the federal government invited abuse by failing to properly oversee the research universities.

As part of its grants to schools, the federal government pays direct costs, such as salaries of researchers and indirect costs, such as research assistants, laboratories and libraries. In a complicated process, colleges negotiate indirect costs based on a percentage of the amount of their federal research grants.

Stanford spokesman Larry Horton said the hearings showed Stanford was not alone in the way it billed the government for research costs over the years.

"The issues that were noted at Stanford in terms of unallowable costs . . . were issues of concern to other universities," he said. "It was a systemic problem."

The hearing disclosed these new details of prestigious universities overbilling the government:

* Carnegie Mellon charged taxpayers $44,000 for summer study in Egypt and Turkey, including a cruise on the Nile River.

* Syracuse University charged the government $11,295 for a St. Patrick's Day party.

* Pennsylvania State University charged taxpayers $15,000 for billboards promoting the school in the Hershey Amusement Park.

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