Along with cutting-edge research comes costly overhead for Hopkins, other institutions

Some in Congress fixate on administrative, utility costs as a way to save more money for science

March 07, 2014|Scott Dance, The Baltimore Sun

Along with the Johns Hopkins University's distinction for its nation-leading haul of federal research dollars comes another for charging the government more for utilities, administrative staff and real estate than any other institution.

The federal government spent nearly $172 million in its 2012 fiscal year to reimburse the university for so-called overhead expenses associated with nearly $646 million of federally sponsored research. Both of those figures led the nation that year.

Even as science advocates bemoan cuts to National Institutes of Health's research budget, the overhead costs NIH pays institutions remain a perennial target for some congressional budget cutters. Besides depleting the federal treasury, such costs threaten to consume funding for the real research, critics say. But the universities argue the money is critical to support that research: Without high-tech labs and equipment and administrative support staff, experiments wouldn't get done.

Reimbursements for research-related overhead costs are based on rates institutions negotiate with the federal government. Hopkins' rate is among the 70 highest of nearly 500 higher education institutions, while the University of Maryland, Baltimore's rate falls around the national average, according to NIH data.

Meanwhile, the amount of money available for research has suffered under the automatic federal budget cuts known as sequestration. The cuts took $1.5 billion out of NIH's budget in fiscal 2013. Though $1 billion was restored in December, science advocates worry the agency's research sponsorship is stagnating or declining.

While there are no proposals to cap or trim NIH overhead payments in Congress, questions about them pop up over and over again. Rep. Andy Harris, a Republican who represents Maryland's 1st District, has explored the issue, but he declined to comment for this article.

Rep. Stephen Burgess, a Texas Republican, also has targeted NIH costs. He and others have argued that grants should be awarded competitively based on which institution can perform research for the lowest cost.

"I would like for our oversight committee on Energy and Commerce to ask some questions about that and perhaps even have a hearing, and we're working that way," Burgess said last month.

Even the Obama administration considered establishing a flat reimbursement rate for research costs at all universities before backing away from the idea last year.

A recent Government Accountability Office report found that continued growth in the overhead costs eventually could reduce the number of research projects NIH could support, "posing a risk to scientific discoveries and knowledge."

Higher-education officials and research advocates caution that trimming or capping overhead cost reimbursements will make it more expensive for universities to pursue research. Already, institutions say they don't receive full reimbursement for all they spend on research infrastructure. And new regulations meant to make research safer, more humane and more ethical also add to costs.

"There is no way that I could conduct my research without this assistance," said Dr. Dale Needham, an associate professor of pulmonary and critical care medicine at Hopkins who is the primary investigator on a project exploring ways to improve long-term outcomes for patients who suffer acute respiratory failure.

A federal grant began paying Needham's team $857,000 over four years in July; $328,000 of that came in the form of overhead reimbursements, according to NIH records. That includes the office space the team uses, accounting staff to handle payments to research subjects and purchasing of supplies, administrative staff to oversee regulatory compliance and budget and progress reports, and staff to conduct ethics reviews and compile paperwork, he said.

The help allows Needham to focus on the science, he said.

About 28 percent of NIH research spending historically has gone toward that overhead, or what the agency calls indirect costs, said Sally J. Rockey, NIH deputy director for extramural research, and that ratio hasn't changed.

But the GAO report exploring the indirect costs found that between fiscal years 2003 and 2012, indirect cost reimbursements grew 16.9 percent, while direct costs rose 11.7 percent.

The report, released in September at the request of Alabama Republican Sen. Jeff Sessions, also found that in fiscal 2012, almost 70 percent of indirect cost reimbursements went to 50 universities, about 10 percent of those receiving federal funds. Those top 50 institutions included both Hopkins and University of Maryland.

Universities negotiate with the government to determine the rate at which they can be reimbursed, undergoing a review every few years that scrutinizes how much space and resources are used for research, as opposed to teaching and other purposes.

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