UO’s ICC rate cut – by $4 million per year.

10/6/2009 update: We hear from many disparate sources that this $4 million screw-up came from Frances Dyke’s office, not from Rich Linton’s.

  • Version A is that Frances did not take the DHHS documentation request seriously, and did not submit sufficient documentation.
  • Version B is that Frances took the DHHS documentation request seriously, but so much of the money had been spent on non-research items there was nothing that could be done.
  • Version C (everyone agrees this is part of the story) is that Frances’ accounting system is so messed up she can’t document anything convincingly.
  • Version D is that Version C is on purpose: there have been so many diversions of funds that it is important for the people at the top to be able to argue they don’t know the details.
  • Version E is that the person who had collected the data for the previous review left and Frances forgot to tell the replacement this was part of the job.

Version D would be consistent with her efforts to hide accounting information: removing BANNER codes from the web, exaggerating the cost and delaying efforts to post accounting records online – something OSU did several years ago. We will get to the bottom of this, because that’s what we do here. Thanks to our readers for the plethora of tips on this.

9/29/2009: Back in May we reported on the cut in UO’s F&A ICC overhead rate from 48% to 42%. (It had been 50% until 2000). This rate is negotiated between VP for Research Rich Linton and DHHS every few years and then applies to all federal grants. The idea is that a university has many legitimate expenses related to research, but not covered explicitly in the grants awarded to researchers. The ICC money goes for lab space, startup, GTFs, etc. It’s the bread and butter of research at UO, and amounts to about $30 million per year.

By our math – and keep in mind this is preliminary – this is a hit of about $4 million per year to UO’s research efforts. So the loss will approximately offset all annual research expenditures from the Lokey gifts. Huge. Here is Linton’s memo explaining how he will cut budgets.

We have been trying to figure out how the hell this happened. Here is the memo from the DHHS office that negotiates these rates with Linton’s office, stating the new rates but not explaining the cut. There is some speculation going around campus – like maybe the NIH didn’t think Moseley’s travel expenses and remodeling Frances Dyke’s office counted as legitimate research support? But here at UO Matters we deal in facts and public records – not rumor, innuendo and vitriol. And we will have those public records soon. (Meanwhile, please keep sending rumors and innuendi to uomatters@gmail.com, or post anonymously in the comments.)

Update, from an email from the federal employee in charge of the negotiations with UO:

The University of Oregon submitted a facilities and administrative rate proposal based on the fiscal year ending June 30, 2006. The proposed rate of 46.3% based on actual cost was lower than their current rate of 48%. The University proposed higher rates for the future years based on projections. As a result of our review of the proposal, we made adjustments to the proposed rates for the following reasons:(i) the useful life for the building depreciation was too short, (ii) the organized research base was understated, and (iii) adjusted rooms identified as 100% research to something lower. The University rates were negotiated with University Officials Richard Linton, Laura Hubbard, Paula Roberts. A summary of the proposed rates and our adjustments to the rates were provided to the University’s consultant (Maximus) and the University.

The Maximus website says:

In order to receive the highest rate possible, and to ensure compliance with OMB circular A-21, colleges and universities should consider outsourcing the F&A rate development process to MAXIMUS.

How to interpret what happened? The UO administration has been spending a chunk of the ICC research money that has been coming in for non-research things like Bend, Portland, and their other pet projects. About $4M per year. The feds caught them at it, didn’t believe their promises to stop, and cut them off. We will get more documentation – you can count on it – but can you read this any other way?
5/6/2009:

VP for Research Rich Linton has just announced he’s cutting the ICC grant money he sends back to departments to support research – money that comes from the hard work of UO faculty, and which is legally supposed to support UO research efforts. Any questions about where it’s really going? More on this soon.

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