These ILAF types just can’t help sounding selfishly elitist, can they?

January 22, 2015

Good Gravy.

One David Korn of the Massachusetts General Hospital and Harvard Medical School has written a letter to Nature defending the indirect cost (IDC; “overhead”) rates associated with NIH grants. It was submitted in response to a prior piece in Nature on IDC which was, to my eye, actually fairly good and tended to support the notion that IDC rates are not exorbitant.

But overall, the data support administrators’ assertions that their actual recovery of indirect costs often falls well below their negotiated rates. Overall, the average negotiated rate is 53%, and the average reimbursed rate is 34%.

The original article also pointed out why the larger private Universities have been heard from loudly, while the frequent punching-bag smaller research institutes with larger IDC rates are silent.

Although non-profit institutes command high rates, together they got just $611 million of the NIH’s money for indirect costs. The higher-learning institutes for which Nature obtained data received $3.9 billion, with more than $1 billion of that going to just nine institutions, including Johns Hopkins University in Baltimore, Maryland, and Stanford (see ‘Top 10 earners’).

Clearly Dr. Korn felt that this piece needed correction:

Aspects of your report on US federal funding of direct research costs and the indirect costs of facilities and administration are misleading (Nature 515, 326–329; 2014).

Contrary to your claim, no one is benefiting from federal largesse. Rather, the US government is partially reimbursing research universities for audit-verified indirect costs that they have already incurred.

Ok, ok. Fair enough. At the very least it is fine to underline this point if it doesn’t come across in the original Nature article to every reader.

The biomedical sciences depend on powerful technologies that require special housing, considerable energy consumption, and maintenance. Administration is being bloated by federal regulations, many of which dictate how scientists conduct and disseminate their research. It is therefore all the more remarkable that the share of extramural research spending on indirect costs by the US National Institutes of Health (NIH) has been stable at around 30% for several decades.

Pretty good point.

But then Korn goes on to step right in a pile.

Negotiated and actual recovery rates for indirect costs vary across the academic community because federal research funding is merit-based, not a welfare programme.

You will recognize this theme from a prior complaint from Boston-area institutions.

“There’s a battle between merit and egalitarianism,” said Dr. David Page, director of the Whitehead Institute, a prestigious research institution in Cambridge affiliated with MIT.

Tone deaf, guys. Totally tone deaf. Absolutely counter-productive to the effort to get a majority of Congress Critters on board with support for the NIH mission. Hint: Your various Massachusetts Critters get to vote once, just like the Critters from North and South Dakota, Alabama and everywhere else that doesn’t have a huge NIH-funded research enterprise.

And why Korn chooses to use a comment about IDC rates to advance this agenda is baffling. The takeaway message is that he thinks that higher IDC rates are awarded because His Awesome University deserves it due to the merit of their research. This totally undercuts the point he is trying to make, which is presumably “institutions may be private or public, urban or rural, with different structures, sizes, missions and financial anatomies.“.

I just don’t understand people who are this clueless and selfish when it comes to basic politics.

23 Responses to “These ILAF types just can’t help sounding selfishly elitist, can they?”

  1. Dave Says:

    Even if universities did receive the full, negotiated rate, it would still be less than the actual costs of supporting research, says DeCrappeo

    So, who knows what the ‘true cost of research’ is? DeCrappy doesn’t elaborate, of course.


  2. I work at a West Coast soft money institute with very high IDC rates. This isn’t because of merit (although it is a reasonably respected institute), but because that’s the way the math works. Although you can certainly argue that maybe both soft money institutes and coastal locations aren’t the optimal choices for low IDC.


  3. Comradde PhysioProffe Says:

    Dude, don’t you get it? MGH hosts awesome vertically ascending science, not like those moocher/looters in flyover land.


  4. jmz4 Says:


    But yeah, wow. Way to be a snob, buddy. Also, completely unnecessary editorial. The original one pretty much concluded that IDC’s were not inflated. I’ll believe it when a 60%+ university/institute releases their audits and negotiations.

    We should consider filing a FOIA request to get Harvard, Johns Hopkins, Michigan, and Stanford’s IDC negotiation records (probably want some controls, too).


  5. Dave Says:

    Do public schools release their audit data?

    Fun fact: new building depreciation and maintenance covered by IDC. True cost of research?


  6. drugmonkey Says:

    Yes it is.


  7. Amboceptor Says:


    International Lawyers’ Association of Finland, I guess.


  8. MolecularGeek Says:

    I have no love of the state of Alabama, but I will point out that the largest employer in the state is University of Alabama Birmingham Hospital. It’s not quite as dependent on Federal largess as some of the coastal research institutes, but they would be in a world of hurt if their overhead costs payments were to be cut by a few points (or the medicaid training subsidy, but that’s a whole separate kettle of possums). Given their rather draconian new standards for tenure, it would seem that they might already be over-dependent on indirect cost payments.



  9. DJMH Says:

    I never understood the claim that the “actual” IDC rate was closer to, on average, 34%. They just took all the IDC and divided by all the money to get this rate. But of course, what actually happens is that all grants get the full, promised IDC rate–it’s just that some grants carry a fixed IDC of e.g. 8%, such as with F32s and other training grants, so that the average reimbursement is less than the negotiated IDC.

    If institutions found this so troubling, they could refuse to let their trainees apply for that free cash. But somehow that’s not what happens.

    Meanwhile, I see zero discussion of the fact that everyone claims they have zero equipment in their NIH budgets, then they go out and buy equipment with their grants, so that the university gets IDC monies for equipment, and since NIH never claws that back, your dept refunds that money to you…motivating you to put more equipment on your NIH grants, and never ever include it in your budget.


  10. drugmonkey Says:

    Can you expand on what you seem to think is wrong with equipment purchases? You mean under modular budgeting too? Or just the traditional budgeting?


  11. DJMH, I don’t know how your place works, but buying equipment like that without getting approval from the PO at the funding agency is fraud. It’s a significant deviation from the contract of why the university was awarded the funds. I would be in a world of hurt if I bought equipment with grant money that wasn’t earmarked for that at my place. Somehow, that is where the line is drawn, not that I might be doing other types of research with the funds. This is an issue for me at the moment, because I’m trying to buy a relatively small piece of equipment and don’t have equipment funds to do it. Of course, my institution doesn’t know how to administer government funding. I’m constantly explaining to them how stuff works at respectable places.


  12. Ola Says:

    It’s not that difficult, but there are limits/caps on percent of a grant’s budget that can be redirected to equipment purchase, and that # is pretty large (like 25% IIRC). Provided the equipment is intended for use in the performance of the work outlined in the proposal, a quick email to the program officer is all that’s necessary. You’re correct that doing this without PO approval would be bad, but I’ve never had a PO say no, so what’s wrong with asking?

    Of course, the underlying issue many of us face as mid-career PIs, is that all our original startup funded equipment is now beginning to show its age. Much of it is out of warranty or can’t be covered by maintenance contracts any more. Stuff just breaks after 10 years, especially stuff that’s in a laminar flow hood and exposed to UV sterilizing lamps every day. Unless we either move to a new place and get a new startup, or give the dean a BJ, where exactly are we supposed to come up with 15k for a new benchtop centrifuge?


  13. Philapodia Says:

    “Provided the equipment is intended for use in the performance of the work outlined in the proposal, a quick email to the program officer is all that’s necessary. ”

    Agreed. I recently had to replace a failing 18YO mission critical piece of $50K equipment for a new grant, and the PO basically just said “sure” and that was it. My account tech was more worried about it than the PO was. I’m not sure they will rejigger my IDC next fiscal year because of the capital equipment purchase, but I’ll let the bean counters worry about that…


  14. AcademicLurker Says:

    This has been my experience as well with R01s. NIH is pretty flexible about equipment purchases as long as it’s clearly needed for the work. $30K for an FPLC system? Go for it.

    I’m guessing you need to be edging up towards $100K before NIH would start to seriously give you a hard time.


  15. rxnm Says:

    Should Banana Republic socks cost the same as Old Navy socks? There is a natural order to the world. If you want HarvardResearch(TM), you have to pay for it.


  16. AnonymousLurker Says:

    ILAF :
    Iberian and Latin-American Forum?


  17. Comradde PhysioProffe Says:

    Under the standard terms and conditions of award, you do not need any NIH approval to rebudget up to 25% of that year’s budget from one category to another. That includes rebudgeting to buy equipment.


  18. AcademicLurker Says:

    Unless the rebudgeting is for the purchase of Banana Republic socks, in which case you need special permission from the program officer.


  19. Philapodia Says:

    @CPP the cap is $25K rather than 25% for discretionary equipment purchases without NIH approval.

    Point 5


  20. drugmonkey Says:

    Ivy League Asshole Factory


  21. DJMH Says:

    Well, no one has mentioned any equipment $ cap to me yet. I blew past the $25K nominal limit without the slightest hint of “go talk to your PO.” Maybe they think I already know?

    But thanks for the link, because “Depreciation or use charges on equipment acquired under a federally supported project are unallowable” also comes as a shock. So, recharge rates from the local genetics core or imaging facility are not allowed to be charged to my grant, if they bought the equipment with a P30? Hmmmmm. Hmmmmmmmmm.


  22. Eli Rabett Says:

    Seems to be some strangeness here unless there are different rules for NIH. (Surprise Eli) Generally in the real world, overhead is charged on modified direct costs, which means all costs less equipment, student support including travel, stipend and tuition.

    Since the government paid for it in the first place there is no charge allowed for depreciation, BUT the cost of the service contract can be put in the indirects or charged to various grants. Most places that get major equipment grants build the longest possible service contract in.

    For subcontracts the prime can only charge on the first 26K$ in the first year at the off campus rate in order to recover the cost of administering the subcontract.

    There are different rules for non-profit research places which are individually negotiated. Some of those do 120% of salaries or so.


  23. dr.potnia.theron Says:

    ILAF International Lawyers’ Association of Finland
    ILAF Identically Located Acceleration and Force (US NASA experiment)
    ILAF Independent Local Advisory Forum (health; UK)
    ILAF Interim Liquidity Adjustment Facility (finance; India)
    ILAF Israeli Laboratory Animal Forum (est. 1998)
    ILAF International Laser Aesthetic Franchise


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