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Sunday, May 12, 2013

Sunday, May 12, 2013

UCLA Loses LONI: Why Budget Silence Is Bad for Science

There’s been much local coverage of two principal investigators switching from UCLA to USC, and taking with them an estimated 85 people from UCLA's Laboratory of Neuro Imaging (LONI).  The Los Angeles Times has run two stories about it, one of which received over 120 reader comments, and the story was Larry Mantle’s lead on his Airtalk show at KPCC, where he had one of the two departing faculty members as his guest. 

But beyond a big win for the Trojans over the Bruins, why should the public care?

The basics are that USC courted and successfully lured LONI’s director, Arthur Toga, and one of its nine listed faculty, Paul Thompson, along with what Larry Gordon and Eryn Brown report in the Los Angeles Times as most of the lab’s academic staff. As is usually the case in this kind of move:
  • The academic domain is in one or more superhot areas of research, in this case, the intersection of neuroscience and big data.
  • The principals are said to be among the best in the world, and their presence expected to be “transformative,” in the term of the USC president.
  • The scientists need a new building.
  • No one on either side will explain the business deal or talk financial specifics.
  • Everyone praises competition as normal and good for science.  Prof. Thompson told Larry Mantle that UCLA would recruit great new people to replace those who depart. 
  • The quoted public university official states that the loss is not related to cuts to public funding.
  • Everyone else thinks the departure is related to cuts in public funding.
The Times reporters directly contradicted the UCLA official by citing Ronald Ehrenberg, director of the Cornell Higher Education Research Institute, who told them, "This is a major problem for public higher education.” Similarly, one of the Times readers wrote,
everytime a public institution competes with private, the public one will always lose. The public will always equate anything public with greedy government workers and will resent money going to support what they consider unproductive and unaccountable bureaucrats. The public does not distinguish between productive government ventures and those that are a drain on taxpayers.  (“awunganyi” May 10)
In a follow-up story, the chair of the UC Academic Senate, Robert Powell, said that the exit has “reinforced my fears that Sacramento is not paying enough attention to the research mission of UC.”

True, Sacramento doesn’t pay enough attention to UC research. But no one has spelled out the loss to the public in this move of an excellent neuro-imaging lab.  What is the loss here exactly?

There’s a hit to the UCLA brand.  Brand matters to fundraising, to personnel recruitment, and to grant writing.  It is widely assumed that the best people with the most job offers will chose to go to the richest and scientifically hottest place. UCLA has some repair work to do.

There’s a hit to the status of UC and of public universities in general. This is a loss to the image of public universities as being as good as the best.  More people than ever assume that even UC is reverting to the mean in which public means mediocre and private means the best. 

But both of these losses are fairly easy to dismiss.  Universities are now ranked like sports teams, and UCLA will focus on winning the next game.  UCLA apparently didn’t even take the field for this last one—Profs. Toga and Thompson didn’t ask the UCLA department chair to make a counteroffer.   Prof. Thompson was eloquent on Airtalk about the benefits to the discipline overall to have a concentrated facility with a great infrastructure, and promised ongoing synergy with colleagues doing related work at UCLA. Any damage to research seems temporary at worst.  USC may have made a strategic long-term decision to be great in this area and to do what it takes, thus doing more for neuro-imagery than UCLA wants to do. And UCLA had already done quite a bit.  I don’t know LONI’s equipment and infrastructure issues at UCLA, but the only publicized financial information was of the leaders’ salaries: over $1 million / year for Prof Toga, over $420,000 for Prof. Thompson. A good number of highly qualified people will line up for jobs like these.

Here we get to a deeper loss: public understanding of the costs of science. The public salary numbers are the only thing Californians know about the money behind this deal.  When a UCSD lab moved to Rice University two years ago, one of the departing scientists helpfully explained that UC was facing a “support gap” in future years that would reduce the science they could do there.  But usually, and in this case, all the relevant facts about science funding are kept behind a veil of silence. 

(In 2007, Harvard president Drew Gilpin Faust told a BusinessWeek reporter that public universities would have a hard time keeping up in research financing. She was publicly rebuked by the Big 10 presidents. Since then, virtually no family financial business has been mentioned outside the family.)

Part I of the missing storyline is this.  Public research universities can no longer fully support all the science grants their excellent faculty can get. I get stories about absurd shortages of photocopier cartridges and arguments about phone charges from labs at every campus in the system.  They seem to me to be frequent and annoying enough to threaten productivity and morale.

Public universities can’t fully support their grants because extramural funding doesn’t cover the full cost of research.  Labs burn money like a jet burns fuel, which is what they are supposed to do.  LONI spent $12 million a year, as a case in point.  This is peanuts for JP Morgan or the military, but a lot for a university.   As I’ve noted in various posts, universities have to add in on average 25 cents of their “internal funds” for every dollar in extramural grants.  Public universities just don’t have the internal funds to do this like they used to.   The economists Robert Archibald and David Feldman calculated that public university expenditures have fallen from 70 cents on the dollar spent by their private peers 30 years ago to about 50 cents today (p 237-38).

In addition, these labs need advanced facilities and in some cases equipment that they can’t charge to grants. USC will build LONI a new building, one that will support other research as well.  In the case two years ago of a UCSD lab that moved to Rice University, Rice was providing space in a building that had cost it (and Texas taxpayers) north of $140 million.  USC is likely to be doing something similar.

On Airtalk, Prof. Thompson said that they must get one-third of their funding from non-governmental sources.  This puts additional strain on a public university fundraising operation that is also trying to find money for graduate fellowships to replace cut state funds. USC undoubtedly told Toga-Thompson that in contrast to UCLA, USC would put LONI at the head of the fundraising line. They may have named likely seven- and eight-figure donors were the lab to move. But labs like LONI depend on what falls from those trees. USC also charges three times the tuition that UCLA does, which is another source of funds. LONI is a big stick with which to beat the fundraising tree. Large public universities can’t fund the same level of background infrastructure or full-court fundraising for each and every one of its special projects.

The next part involves this comment about how USC is entrepreneurial and UCLA is bureaucratic. When Larry Mantle asked about this (about 16:00), Prof Thompson replied that in fact, “he didn’t see any bureaucracy: at UCLA, which is a wonderful place and gave him his career. What USC did have was a team with the “vision and experience” to manage the logistics for a complex move of 100 people.  Here’s my translation:
  • USC has a central administration on campus. UCLA has UCOP in Oakland.
  • USC had a bigger bureaucracy to throw at one lab, not a smaller one.
  • USC was planning a move that was going to happen. UCLA was managing a large research ecosystem. (LONI wouldn’t make UCLA Medicine’s list of 10 biggest problems to solve today until it was approached with an offer, which it wasn’t.)
My four conclusions are these:

1. UCLA’s core problem is a funding shortage, not surplus bureaucracy. (UCLA is the wealthiest UC campus, so things only get worse from there). 

2. Public universities need to tell the truth about research funding.  This will include the facts that science loses money, that some portion of undergraduate tuition funds offset research costs, and that most funding doesn’t “produce” anything in the near-term--except findings for more research along with a great deal of useful failure.

3. Public universities need to explain why research like LONI’s should be to some large extent at public universities.  Why does it matter to the science, to the public impact, to the education of the next generation of scientists? Perhaps there is more openness and accountability at publics, and therefore more innovation. Perhaps scientists at public universities have a better feel for public needs and do more useful research.  Perhaps public universities uniquely have the necessary scale to train the thousands and millions of researchers in all fields to solve our ever-mounting problems.  We now need a new theory of public universities, before things get even worse.

4. Universities both private and public need to open up  discussion of spending priorities to their academic communities.  Given rising costs and shrinking revenues, choices have to be made. They  need to involve the faculty, from all disciplines, and students of all levels.  This is as true of USC as of UCLA, which has a poor record of consultation and can only buy a limited number of LONI-type labs with (in part) student tuition and non-STEM cross-subsidies.  Privates can now raise tuition only so much. Academic choices need to come from a bottom-up debate of a kind that higher ed has never had.

If we can’t do (1), show public efficiency (poorer but smarter, more research with less money, more degrees for each faculty member [page 16]), the public has no reason to support rebuilt public funding.

If we can’t do (2), tell the truth about funding, the public will keep thinking that science supports itself and doesn't need state money. Funding will stay flat or fall, and the public university research ecology will get gradually weaker. 

If we can’t do (3), say why public is often better than private, the public will be happy to see high-end science like neuro-imaging as done by the 1% for the 1%, and expect the 0.01% to pay for it with charitable donations.

If we can't do (4), achieve common understanding of resource choices, most public university students and faculty won't miss the LONIs as much as they should.


Anonymous said...

``Public universities can’t fully support their grants because extramural funding doesn’t cover the full cost of research. Labs burn money like a jet burns fuel, which is what they are supposed to do. LONI spent $12 million a year, as a case in point. This is peanuts for JP Morgan or the military, but a lot for a university. As I’ve noted in various posts, universities have to add in on average 25 cents of their “internal funds” for every dollar in extramural grants. ''

The claim that extramural funding doesn't cover the full cost of research is based on a RAND Corporation study, where there is a basic assumption that a number of costs are actually paid for by the University.

All laboratory science grant holders know: the costs in the RAND study aren't really covered by the University. Labs are not maintained, infrastructure is not maintained, and in fact a huge portion of the indirect costs charged to grants is redirected into startup funds for new faculty... startup funds have become a competitive marketplace.

So the claim that `Lab burns money like jet fuel' is false and, frankly, ignorant. You can do better.

Chris Newfield said...

my plane's about to take off so apologies for the haste, but I do hope it burns a lot of jet fuel so I can go on to compose other non-ideal metaphors. there are two issues-redirection of ICR within the university which includes the way you note, and the shortfall of initial IDC in relation to overall indirect costs as described by the University. the latter problem makes the former problem worse. I dont think burning fuel means luxury operations, far from it. NSf COGR various source on this. door closing . . .

Chris Newfield said...

reading your comment again off the plane I'm not sure what you're trying to say. $12,000,000 is in fact a lot of money. It's equal to what the state give UC for a year's education for 2000 students. If you're suggesting I think UC properly supports lab infrastructure, that's not correct, e.g. "I get stories about absurd shortages of photocopier cartridges and arguments about phone charges from labs at every campus in the system. They seem to me to be frequent and annoying enough to threaten productivity and morale." I would like to see responsiveness to the core point of the post, which is that secrecy is grossly dysfunctional now even for its own supposed beneficiaries. Will STEM faculty find out what proportion of ICR goes to start-ups (like the ones UCLA will try to find to replace Profs. Toga and Thompson)? Will they have a discussion about whether to set a cap, on the negative impacts of the overall research ecology of competition which managers all think science faculty want, and vice versa? Will STEM faculty call for higher ICR rates rather than follow the tradition at many schools of faculty pressuring admin to lowball overhead needs on the theory their applications will be more competitive? The funding situation is not sustainable, and for more reasons than usual (tuition caps, student debt boom and backlash, sequestration, industry not stepping up, overselling of commercial results of basic research to a now more cynical public. I would like to see meaningfully complete data sets and support from STEM faculty for this kind of disclosure.
The chart in a post for years ago isn't RAND but COGR data (http://utotherescue.blogspot.it/2009/07/is-equity-fair-soft-money-salary.html) compiled by a frustrated UC VCR at the time. COGR didn't want me to acknowledge them as the source of the data. The whole situation of data about ICR withheld from the people that generated it is something that can only be changed if faculty want it to, before shortages get even worse, and the private/ public gulf that much wider.

Gerry Barnett said...

Spot on, Chris. Research, especially certain kinds of research, costs more money--a lot more money-- than the present scheme of direct and indirect costs accounts for. UC, at least, has admitted as much, that its shortfall on research is on the order of $700m a year--and this is largely research administration, indirect cost recoveries, and the "cost sharing" that federal programs anticipate will come from private sources but all too often ends up coming from institutional funds.

That shortfall has in the past been made up, apparently (who can know for sure, since the accounting is kept secret?) from state sources, and with the substantial reductions in state sources, now apparently those losses come (who can know...etc.) from students' tuition, students who are pushed to go into debt (or into the thrall of financial aid officers who require full disclosure of finances, full course loads, and decent GPAs to ensure that loans are properly "de-risked").

The wrong bit, as far as I am concerned, is that the students are not told the deal. Instead, the university makes it appear that they are not paying nearly enough, should pay much more (compared to private universities or a selection of higher tuition-charging "peers"), and are thus whiners if they ask for relief from tuition increases. This bit is not merely insensitive, and it is not simply a nicely clever ruse to keep money flowing, and it is not even a research enterprise so vital to the public that it must be kept going at any cost, for every possible grant that a faculty member feels the need to seek, even if that cost is the performance of the instructional program itself.

Public university research is of course important, but so is public university instruction. These need not be at odds, but also, the research expenditures cannot be predatory on instruction. Were the public research universities to get it clear on the accounting, drop the chronic, failed, damaging rhetoric that aims to mislead the state, the public, the students, and even the faculty as to the nature of its financial condition, we would have a foundation for making the case to rebuild public financial support for public higher education.

As Chris puts it in the comment above, this will happen when the faculty decide it is necessary to happen. When will that be? When the public gives up on university degrees, tired of carrying on their backs a research enterprise dedicated increasingly to the service of venture funds?

Time for a reconciliation of accounts. Time to come clean on what is going on, even if that is hard to do, and inconvenient, and perhaps embarrassing. Time to make a bright new case for research, and a bright new commitment to instruction. Nothing good happens riding the big blimp down, hoping to retire, or leave for private digs, before it finally crashes.

Chris Newfield said...

I omitted the link to the 2012 NSF report - see esp p 16 of http://www.nsf.gov/nsb/publications/2012/nsb1245.pdf
Eugenie Samuel Reich, "Thrift in store for US research," Nature vol 476 (August 25, 2011), p 385 has a useful graphic based on NSF indicators showing that private universities use internal funds to support research at half the proportion (12%) of public research universities (24%).

Anonymous said...

The VC reports ultimately reference the RAND study.

I've not seen secrecy on the uses of indirect costs... for example, here is one report...


The main problem is the drudgery of working through all the numbers... you can see at UC Davis the biggest single category of expenditure is startup (18%, page 8).

But the heart of the matter: UC is under no obligation to spend indirect revenue collected in the manner in which the % are justified. Think about that... UC (and ever other University) justifies a % based on detailed info on depreciation, utilities, etc.

When they get the money, they turn around and spend it any way they want.

As far as the start up funding: every committee of STEM faculty I'm aware of has ultimately come to the viewpoint that: the expenditure of indirect cost money is so totally screwed up that having a small but significant fraction go to startup is a minor victor for sanity.

Phone charges and photocopying? Those are in the same category as horseshoeing and bloodletting. Nobody photocopies much anymore. Most phone communication is by cell, except for safety issues in labs where a landline is important.

Joel Norris said...

"Phone charges and photocopying? Those are in the same category as horseshoeing and bloodletting."

You're losing track of the point. Private sector employers and government labs routinely provide to workers the tools they need to do their jobs -- computer, printer, phones, network, office supplies, etc. UC does not do that for professors. There is a covert attempt to shove all those costs onto sponsored research as direct charges. The agencies disallow that and say those things should be covered by ICR, but UC does not provide the ICR funds to do that. This constant nickel-and-diming does not help morale.

Anonymous said...

Well, I do make as my principal point that the justification of an indirect cost % is made in a way that is totally at odds with how the indirect cost money is ultimately spent.

If in fact computer network costs were in the initial justification of the rate, then paying them out of indirect costs would be totally fine... but it is much worse than that... not only are network costs omitted from the justification, but the indirect funds are already spent in a manner totally disconnected from whatever the initial justification was.

So it is a free-for-all. On top of the existing mess comes in the last few years another argument that the indirect costs charged (mostly on STEM grants) don't pay for the true costs. I'm shocked, shocked!

Sure, STEM faculty end of totally cynical. They pay, get little or nothing back from their indirect cost payments, and then accused by their colleagues in the humanities (mostly) departments of not paying enough.

BTW, a high percentage of donations to non-science departments at UC are charged little or no indirect costs. Somehow donor money is holy and can't pay for all the infrastructure that indirect charges on government grants are supposed to pay...

Gerry Barnett said...

But UC's losses in research administration have nothing to do with any RAND study. They have to do with not running an efficient program of research administration, being too willing to use F&A as private matching dollars, failing to document and negotiate a proper indirect cost rate with the government, using that same poorly negotiated indirect cost rate with private sponsors, among other problems. But these appear not to be part of the discussion, as if everything is just fine if only students are made to take out more debt and faculty can be replaced with on-line teaching robots squired by IT techies.

Joel Norris said...

It's worth pointing out that there are private PI-run research organizations not affiliated with any university that are able to break even at a substantially lower overhead rate than UC. Granted, they don't do big lab science or offer startup, but I think a big factor is that all of the ICR goes back to supporting the PIs and the management is very flat and very accountable to the PIs. That's something that definitely does not characterize UC.

Anonymous said...

It was a RAND study that documented that true research costs do exceed UC's indirect cost rates.

But UC does not use indirect revenue to actually pay for the true research costs that RAND enumerated. In fact, UC neglects many or most of the costs RAND enumerates, with one notable exception... lab infrastructure is upgraded for new assistant professors with start up funding out of established grant's indirect revenue.

Yes, you could say that UC is inefficient, although federal agencies do keep offloading reporting etc to universities, and my experiences is that ORs are fairly lean in that area.

My main point is that UC diverts indirect costs away from the areas UC (and RAND) use to justify indirect costs. Whether or not the areas that actually receive the redirected overhead are efficient or not... I'm not sure. Probably not efficient, but it is all so complicated, it is difficult to trace.

Gerry Barnett said...

The point is only indirectly concerned with inefficiency, and if you have a link to a RAND study, or even its title, that would be great to post.

UC formal written policy requires extramural research to fully recover its costs. UC should change its policy if it is not able to fully cover extramural research costs from sponsors. Formalize the fact that it must find funding from other sources for every extramural project--and report that to those sources--or change how it charges for indirect cost to get the money it needs for its current research administration practices, or change those practices, or gate the research for priorities to limit the losses.

The diversion of indirect cost revenues, and of tuition and student fee revenues, should be of great concern, first because these are done without notice, and second because the diversions run against formal policy, and third because these diversions set up apparent areas of "loss" that UC then exploits publicly to try to raise money for itself.

Research is so important that it must be subsidized by the state or students, even as it is shorted by the administration. Instruction is so important that students must pay more in tuition (still cheap, compared to, uh, Harvard), even as tuition dollars are diverted from instruction, and in a fine irony, UC aims to replace "expensive" faculty with "efficient" on-line "courses."

There is a reason for things being "all so complicated." It is deliberate. It has nothing to do with some inherent complication in providing full funding for research. It has everything to do with financial rhetoric used to create desperate shortfalls in key operations that then will lead (so it is hoped) legislators, donors, and students to pony up more money and faculty to overwork for cheap.

It is a chronic, failed financial rhetoric, as Chris has pointed out numerous times. The "excellence has not been hurt" argument means the cuts were justified and funding doesn't need to be restored.

At the University of Washington, a student committee convened by the Provost has just pitched the idea of higher tuition to give the faculty a pay increase. The UW faculty deserve a pay increase, and there's even litigation on-going that will likely get them that pay increase, but UW spends only 62% of its tuition money, according to its own accounting, on instruction.

If an accounting system is so convoluted one cannot see what is going on, then it ceases to be an accounting system and becomes a financial rhetoric. The open question is whether it is a rhetoric of fraud, or incompetence, or cowardice.

Anonymous said...

RAND report...


Making it all so complicated also encourages internecine intrafaculty squabbles, like Chris Newfield saying "Labs burn money like a jet burns fuel".

The statement that STEM disciplines don't pay for their research at UC is simply not supported by the actual expenditures of indirect funds in UC.

Actually, many humanities grants and donations apply for (and get) complete wavers of indirect costs from the administration.

The financial disorder of the UC administration is the real problem, and all faculty to overlook the small beer to focus on that big problem.

Chris Newfield said...

Anonymous I think you're going to have to forgive me for my jet fuel crack.

I think you're all correct. There's accounting disorder in that PIs don't know where ICR is going or why, and there's no accounting or justification of concrete expenditures to Senate committees or academic departments or to any non-admin group with which I am familiar. There are also aggregate shortfalls in indirect cost recovery as measured by overall research costs, which includes start-up funds for new labs, renewal of facilities including the new building USC is building for LONI (and others), and other costs large and small. UC documented this aggregate shortfall itself, which was covered once by the press in the July 2010 SFC piece by Nanette Asimov that's linked in our Research subsection. I don't understand the basis for this denial -- that "STEM disciplines don't pay for their research at UC is simply not supported by the actual expenditures of indirect funds in UC" -- unless it is taken in the narrow sense of a lab getting grants that include direct and indirect costs, and then actually spending on its own operation less than the sum of those two parts of the grant, because the IDC funding attached to the lab's grant doesn't come back to the lab. In this sense, each lab does pay for "its" research. But we're talking about the overall research enterprise, which has costs that can't be summed by expenses in this or that lab.
There's also the issue of who pushes for these "other" uses of ICR> Administrators would respond to you, Anonymous, and your point that "the justification of an indirect cost % is made in a way that is totally at odds with how the indirect cost money is ultimately spent," by saying, "well, start ups and retention and first-rate facilities are part of sustaining high-quality research and are by the way demanded by you faculty. For example, Chair X of Dept Q came to Dean Y saying their dept's reputation would never be the same if PI Z took the offer from Other Flagship University, and then Dean Y came to me asking for help matching a $1.8 M start up offer at OFU, so we have matched it, and there's more than all the ICR generated by Dept Q's for this year gone to keep the colleague that Dept Q wanted to keep . . . " We all know these stories, but we tend not to put them together into a picture of the overall system.

I agree with Gerry that there are funding politics that have come to distort the administration of grant applications. The outside lobbies and attempts by some industries and major tech players to leverage university research causes major financial problems for univerisites--this is the flip side of philanthropy. I generally assume good motives in people. My view is not that frontline admin or PIs are thoughtless or wasteful or trying to do the wrong thing for short-term gains, but that we're all caught in a negative feedback loop of unintended consequences. Each individual decision makes local sense (retain Prof Z, move money around behind the scenes to pay for it, make sure Chair X's fellow chairs don't know how much Dean Y just spent on the retention so they don't get upset and demand the same for their departments . . ), but the overall outcome is inefficient and opaque.
I do think we can move forward by getting real data and analyzing it--with plenty of arguments along the way. I think STEM faculty are the key actors in making this happen. There's going to be some arts, hum, and social sciences outcry along the way (and STEM outcry as well), as there always is with any step-by-step collaborative process, but I don't think we can fix our funding problems with this. It will be worth the trouble.

Anonymous said...

The June 2010 Azimov article's report was ultimately based on the RAND report.

RAND assumed all sorts of maintenance was not being deferred, and upgrades were being performed. UC simply does not spend on the categories RAND accounts for.

The Azimov article refers to a co-chair of that advisory group, Chancellory Yang of Santa Barbara. Most of the underground infrastructure (sewage, water, electrical) at that campus was built in the 1940's when it was a military base. The upkeep was neglected for years... huge cost savings. Enormous, actually. Most cities do the same thing.

But RAND attributes indirect expenditures to that category. As UC Executive Vice President Nathan Brostrom said in that article:

"He said money for indirect costs is also the "most valuable money" because it has no restrictions on how it can be spent.

Yet it has also been unclear how UC has spent that money, said the advisory group, which called on UC to increase transparency by directing those dollars straight to campuses instead of through the UC president's office."

Gerry Barnett said...

Thanks, Anonymous, for the link. Do you have any immediate evidence that the SFC article and the RAND report are linked, or are you saying that the RAND report made a similar argument, or that UC administrators, a decade after the report, based their own estimates on losses on the methods used in the RAND report? Any of these may be at work--I'm just trying to understand the basis for your confidence that the RAND report has been the sole or primary document that leads to a characterization of losses in research administration.

As Chris says, it's important for there to be accounting provides some clarity, even if that clarity means folks may have to explain themselves or reset their personal narratives of what is going on. As Kahneman observes, "what you see is all there is" is all too often all System 1 responses need--so it is helpful from time to time to try to find more to see than what the common narratives are satisfied with. That's the basis, for instance, of much of the university's research mission. Examining UC's financial rhetoric will show whether it holds up, or it doesn't. And if not, perhaps we start to understand why, and see things in ways that show how we might restore public funding and rebuild both instruction and research to be stronger than they presently are.

Anonymous said...

Well, I've pursued the issue and been referred by administrators to the RAND report as the basis of the claims that UC is being shorted on indirect costs.

However, the same administrators readily admit that UC spends indirect revenue in a manner disconnected from the justifications for those revenues. See Brostrom's comment.

I think the logic is: UC says its obvious they are spending on all the items in the RAND report, just from sources distinct from indirect revenue. But they need to get paid back, somehow. So they negotiate a rate with those funding sources that are somewhat sympathetic.

But there is a lot of give and take in the system... as I've said, donors to the humanities regularly require and receive waivers. And many STEM labs are allowed to decay without expenditures on the items used to justify the indirect cost rate.

When the dust clears, there really is no hard evidence that STEM labs are losing money or making money. The byzantine accounting insures that we'll never figure that out.

But by making the claim that STEM is not pulling its wait, the administration creates internal animosity between the humanities and the STEM fields, which surely is part of their goal. The less unified the faculty, the easier it is to exploit them.

Chris Newfield said...

the dominant claim has always been and continues to be that the "businesses" are doing fine--med centers and extramural grants--but how are we ever going to pay for "Spanish" and "sociology." (See the last long quotation from the higher ed summit hosted by KPCC's Larry Mantle - http://utotherescue.blogspot.it/2013/02/how-public-research-universities-are.html where Mark Yudof tells the state yet again that grants are big moneymakers.) Thus much of the discourse of cross-subsidies has come as a defensive reaction to closure of humanities departments at places like SUNY Albany and Emory, among others. But much has come from transparency advocates. Jane Wellman, formerly of the Delta Cost Project, was a leader here. I have also in my small way been working on simply understanding university accounting since around 2002, and trying to get the facts out. What's in it for the faculty? We have had 2 growing crises that have damaged public universities in particular: deep public mistrust of university management, starting with Sacramento hostility to UCOP, which I know is deep from my own conversations in the legislature. The lack of accounting clarity is the central issue. The second crisis is continuous austerity or even termination of the liberal arts fields that, as "Academically Adrift" documents, have the best learning results. (I include science instruction here-- this is NOT a STEM vs. non-STEM issue, but liberal arts and sciences vs. dozens of "practical" majors that have the big learning problems). Now there's a third full-blown crisis, and that is extramural grant funding, with LONI's move being the recent prompt. But it goes way beyond that as you know. So my suggestion as always is that faculty across the disciplines stop being cynical about "byzantine accounting" and push for full data on funding flows--universities can't even start the negotiations for ICR rates without this accounting to show federal agencies-- let the chips fall where they may, and then have an involved discussion based on actual budgetary facts about what to do. My position is always that I do not want cuts to STEM research. I want research to be fully funded. The patchwork we have doesn't work any more--for any field. Things will continue to deteriorate unless we can drop our longstanding mental habits get clarity on how our own institutions work .

Anonymous said...

Well, I contest these statements, which I believe to be untrue (from Chris' article above):

"This will include the facts that science loses money.."

"...can only buy a limited number of LONI-type labs with (in part) student tuition and non-STEM cross-subsidies."

I've beaten on the jet-fuel comment enough.

I've found that faculty in the humanities have an incredibly neo-liberal view of the sciences: pay money and you get scientific results. They adopt neo-liberalism to trivialize fields outside their own.

The truth is all scientific research communities are complex... the overall environment or ecosystem of the community is as important as the money. Money matters a lot, but so do lots of more subtle effects. One lab jumping ship from UCLA to USC just isn't that big a deal. Effects like how effective the administration is, how interactive, creative, and helpful the related fields are, etc, matter a lot. USC historically wasn't so great, and for a long time has been on the upswing. UCLA somehow isn't quite as productive as UCSF and Berkeley, but that can change too with the ebb and flow of the tides of fate.

Some labs and institutions have gotten huge $, and not amounted to much. Others outperform their budgets. Odd that the humanities and social sciences faculty, of all people, miss that point, and think that science labs are mostly pay-for-play.

On another issue, student tuition and state budget $ subsidize research in *all* departments at UC. My own interactions with friends and relatives in California is that they are deeply suspicious of that subsidy, mainly because they know that an awful lot of teaching at UC could be way better quality.

Some of the privates, from Stanford to Caltech to the Claremont Colleges on to elite traditionally small liberal arts colleges do a better job of teaching. UC has basically failed at improving teaching, going into a knee-jerk rant about how any attention to teaching indicates a path to mediocrity. Lots of serious members of the public aren't fooled, in of all places California, where `have-it-all' was the philosophy.

Just because Harvard, MIT, and Yale have really poor teaching doesn't mean UC should aspire to their models of great names but hollow insides.

And although MOOCs are really messed up, it generally has not been UC that has been leading the way to use contemporary technologies to make teaching incrementally better. UC faculty look dead in the water, but the truth is even more complex; many UC faculty have enthusiastically embraced elements of contemporary technology, but they repeatedly die on vine from lack of oxygen, from either the Senate nor Admin.

Gerry Barnett said...

Well, Anon, trading beliefs is not what we need. You assert that the RAND report is the driver, but that it is flawed, but you don't have data since UC accounting is so convoluted. I don't put much importance on the RAND report. NSF reports of university R&D also indicate such losses and I don't have any indication that the NSF also depends on a decade-old RAND report. Further, universities routinely seek in higher F&A rates than the federal agencies finally allow.

What we need--repeating it--is an actual accounting. Not beliefs, not defenses, not cynicism.

As for the "humanities" grants, universities have policies that if a funding organization has a written policy that it does not pay indirect costs, then the university can waive the indirect cost charge. A similar thing goes for donations directed at research--where much of that activity is in the sciences, engineering, and medicine.

Humanities grants and donations at the big research universities are tiny compared to those in the sciences, engineering, and medicine. At UW, the total extramural funding for the humanities and arts is about 3% of total extramural expenditures. Further, much of this work has no meaningful indirect cost--no IRBs and animal care committees, no IP compliance, no specialized lab facilities with biohazard or radiation safety policies, no MSDS compliance databases, and the like.

Until universities issue annual reports for research that show a full accounting--not just direct revenues and expenditures but also indirect revenues and expenditures--including the sources of funding for indirect expenditures, there's no way to confirm or disconfirm beliefs. It's just cud chewing, Places like UC and UW are fine with that, since cud chewing does not require disclosure, accountability, or change.

There must be a full accounting, one that shows the financial data, and the condition of the financial data, not simply a rhetorical spin using financial information.

To get there, my working hypothesis is that the published numbers indicate major public universities like UC and UW are losing millions--hundreds of millions--in their research enterprise, and in particular in their research administration, and have for years rationalized these losses with accounting decisions (some would call "tricks," others "sophistication"), but the loss of state subsidies now threatens such accounting, and exposes the diversion of tuition funds to cover these (and other costs) rationalized as the "cost of higher education". The high tuition model is directly linked to the expansion of the research enterprise not paying its way in a reduced state subsidy environment. Administrators, however, choose to make it appear that high tuition is caused by higher instructional costs, and thus are happy to consider MOOCs and the like as a ceremonial replacement for expensive faculty who should be getting grants, not teaching.

I want complete, verifiable financial information that shows that this hypothesis is not true. So far, I have not got anything but cud chewing.

Anonymous said...

Gerry Barnett... perhaps you could provide links to the NSF reports you refer to.

Of course, there is the statement of UC Executive VP Brostom above, verifying that UC has no obligation to spend indirect costs on the items that justify those costs; we know from the link from UC Davis that indirect costs are not in actual fact spent on the items used to justify those costs. (I've seen other UC allocations of indirect costs, and they are similar).

The only thing we don't know is whether UC *ever* makes the expenditures used to justify indirect cost rates. In my own experience, the answer is often yes, but often no. I think we agree better accounting and audit is needed. I think as well as a mechanism for those who pay the indirect costs to be assured that they get the services they are paying for should be implemented.

There are lots and lots of STEM grants that have *no* "IRBs and animal care committees, no IP compliance, no specialized lab facilities with biohazard or radiation safety policies, no MSDS compliance databases, and the like.". They pay the indirect costs, however.

Imagine how those STEM grant holders react to your comments about humanities grants having `no meaningful indirect cost'. Do faculty holding those humanities grants use electricity, heating, pavement, computer connections, library services, employment services, workplace management, toilets, etc?

My working hypothesis is that the published numbers *do not* indicate major public universities like UC and UW are losing millions--hundreds of millions--in their research enterprise, and in particular in their research administration.

My working hypothesis is that much of the indirect revenue is never spent on the items that justify collection of that revenue, and further, no spending at all is often made on many of the items used to justify the collected indirect revenue.

Instead, the $ are diffused into general support of UC. I don't have direct experience with UW.

Gerry Barnett said...

Here's one NSF doc. http://www.nsf.gov/nsb/publications/2012/nsb1245.pdf

UC at least makes a show of requiring indirect costs to go to a designated pool, per Circular A-21. UW does not.


Much of what you cite as indirect costs would come within the "Facilities" portion of F&A. The problem comes on the "Administration" side, where federal policy caps the Administration portion at 26%.

As for a report that tries to make a case in support of the idea that no tuition gets spent on support for research, check out https://www.aplu.org/NetCommunity/Document.Doc?id=1296 starting around p. 45. This is the APLU trying to argue that administration of all things students is so great that there couldn't possibly be a subsidy to research. But then the report goes on to fuss about indirect cost rates not covering research costs and that "institutional funds" are (at the time of the report) near 20% of research expenditures. Go figure.

However, to represent in a federal negotiation that a university incurs indirect costs when it does not is essentially fraud. That's quite a charge to make, and it is an interesting working hypothesis that is an alternative to the idea that the idea that research admin is costing more than the research universities are taking in.

At least we agree that an audit would be a good thing.

Anonymous said...

My comments were a bit too long for the comment format, so I posted them on my own blog:

Chris Newfield said...

Gasstationwithoutpumps at the link above has very useful things to say, among other things, about the value of STEM research facilities to undergrad instruction--on the symbiosis between them when the system is working properly. There was a bit more on the USC win over UCLA in the LONI Bowl at http://www.latimes.com/news/local/la-me-usc-ucla-recruit-20130518,0,6963020,full.story but there's no new information about the empty center of the story, which is why the PIs had clearly already decided to leave UCLA even though the move would mean shifting 100 people and a big logistical nightmare. There were clearly major pre-existing conditions, but our Victorian family isn't talking.

Anonymous said...

Well, that NSF report refers to this webpage, which actually does not make the claim asserted in the NSF report:


The claim might be true but it is impossible to check without doing primary research in the NSF database. It would have been more helpful to refer to an actual paper or report that made the case clearly.

Not even the NSF report distinguishes facilities from administration. Facilities indirect cost rates are 25-40%, and I still don't understand why humanities grants are excused from those rates, while STEM grants (many in theoretical research) are not excused.

I think the rules allow UC to spend indirect cost any way they want, and the rules don't insist upon auditing of the justification. The way UC does it is no more fraud than minimization of income taxes is fraud... UC just uses the rules to maximize available funds. As long as administrative and facilities indirect charges are not out of the ordinary they don't get checked.

Perhaps funds are, de facto, transferred from facilities to administrative. Perhaps neither are accurate. The main impression I get is of very poor research into or auditing of these matters.

Nonetheless, near certainty is evinced by Chris Newfield and others that STEM research loses money.

Anonymous said...

Different anonymous to prior anonymous: Bravo!! For those that both (1) bring in indirect funds (in my instance at the high five-/low six-figured range annually) and have to make four phone calls and send three e-mails to get a light bulb replaced in their lab (and then is replaced only after I threaten that it's a safety hazard); and (2) have immensely admired Chris N.'s prior work on UCPB and with the Futures Report, it's refreshing to finally see the echo chamber that utotherescue's become be backed into folks finally admitting that the vaunted monetary loss from STEM research is just a hypothesis---and one that is apparently not at all documented.

As an aside, the one place that I know that a sliver of overhead reliably goes is to fund campus COR grants--and these generally provide a significant portion of the funding of some Humanities/Social Sciences/Arts faculty. But, shockingly, you don't generally hear STEM faculty bemoaning this subsidy like it killed their dog--the way that this blog at times berates (without, apparently, much apparent evidence or cause) the "jet fuel" consumption of the STEM disciplines.

So, I'm saddened that utotherescue has lapsed into this type of divisive posture--it's definitely impacted the readership of this blog, and caused it to be viewed among STEM folks as a fringe-hostile blog (which I think is sad, given CN's past formidable achievements on behalf of all UC faculty).
Kudos to Anonymous, though...perhaps this will generate a bit more thought about: (1) documenting pet hypotheses (everyone agrees that more transparent accounting would be beneficial); and (2) perhaps being a bit more judicious about divisive, echo-chamber-based memes---and underjustified, over-the-top certainty and language.
Thanks again, Anonymous, for an actual fact-check!!!!!

Gerry Barnett said...

Humanities grants amount to 0.5% of the university totals. The bulk of the $60b in annual research expenditures at universities are in STEM and medicine, and that's where the specialized labs, the proposal support, the matching funds, the complicated multi-institutional collaboration and subcontracting, the partnerships with industry involving proprietary rights, the compliance policy, training, certification of training, the.. but oh well.

UC administrators state they are losing $300m a year simply because the feds won't give UC the same IDC rates they give MIT and Harvard. Are they lying? Are they trying to mislead? Are they incompetent and don't know their own accounts? Another $300m according to UC is lost through IDC waivers. Is that a loss on research, or just an attempt to make inappropriate charges to the research revenues, okay if sponsors let them get away with it?

Revenue from sponsors of organized research at UC does not cover the costs of undertaking that research. According to UC, the shortfall is 19% for federally supported research, which is by far the bulk of organized research. The money to make up the difference comes from sources other than sponsors. Good candidate sources are the state and tuition.

Back to Chris's question: why should anyone be worried that big research has moved from UC to USC? or UC to TX? Especially when by UC's account, UC research programs cost more than the sponsors pay? What is the difference to CA if USC hosts the research rather than UCLA? Why should CA care? If USC is more willing to deploy endowment funds, or tuition funds from selectively chosen very well off students, or get huge donations, or recover more IDC costs, or pay more, or dedicate more focused resources to a major center, then why not? There does not appear to be *any public loss* and perhaps a signifiant public gain. Maybe the largest public research universities would be stronger places of learning if they shed a significant fraction of their organized research programs. Keep a few and take care of them. Maybe $200m to $400m is the sweet spot, and after that, it's diminishing returns, not economies of scale.

Anonymous said...

Anonymous 2:
From the perspective of those that actually run labs on a day-to-day basis at UC, the bottom line is that lots and lots of us (STEM researchers) at UC see a minimal, at best, return on their IDC's..but, as the previous poster says, "oh, well."
And, UC *of course* says if they could get an MIT or Harvard higher overhead rate, that they would get more money. That's neither lying nor misleading: it's the simplest of all possible math--really a very trivial conclusion, but it perhaps illustrates a long-standing failure of our administration in being able to generate a higher overhead rate. So, here we have a potential administrative failure that some seem all-too-willing to map into a curtailment of the UC research enterprise.
And the fact that UC gives IDC waivers? Probably a poor plan, but dictated by the policies of state agencies and others. Again, policies that COULD be altered by a long-term, concerted, proactive stance from UC--but again, we have folks who seem to want to use this as a rationale for curtailing research enterprise.
I think the key question is not whether UC should be eliminating some organized research programs, as apparently advocated by Barnett, but rather how, in detail, IDC is spent--and that, as amply illustrated by this exchange, is unclear. Before one proposes eliminating programs, the onus should really be on understanding the current landscape--not imposing trimming based on assertions and poor accounting.

Finally, I'm not at all comfortable asserting whether or not there is "public loss" or not from a research loss from UC to USC in areas like neuroscience. But perhaps others on this thread feel they have a superior concept of the public interest associated with who controls and advances different subdomains of science than I....

Gerry Barnett said...

Discussing a STEM program moving from UCLA to USC is not anti-STEM. Discussing the fact--as stated by UC--that it does not recover its full indirect costs from sponsors of research is not anti-STEM. STEM is wonderful stuff. Not the issue.

According to UC, for every $100K of indirect costs a grant brings in, on average someone else provides an additional $20K or so each year to support that research. Who is that source? If there's data to show that UC is wrong about that $20K, put it forward.

I am not advocating eliminating research programs. To spell it out again: the point is whether research programs might be productively moved to more effective venues. If you were offered a new lab, better pay, and a keen idea who was paying to have you, would you move? Why is that so difficult to grasp? Who in the federal government cares if UCLA gets more funding than Pepperdine? Who in the state of CA? Or does research growth just go on forever, regardless of scale, like a some sacred entitlement? How the indirects are spent is also not the issue--it is the source of the funding on which UC operates its research programs that is the issue. It is the *non-IDC revenue* that is the issue. Of course, it isn't an issue if one curls up in the comfy blanket that there is no non-IDC revenue, and UC is just making up big numbers for, dunno, "effect".

Given that the whole of the publicly funded research enterprise is couched in terms of public benefit, from The New Organon to Science the Endless Frontier to the present, it matters to continue to have a discussion of that benefit, the res publica, the public in "public university." If you can't have that discussion without a sneer, then that's a problem.

TB said...

Actually, while the federal government does not and should not care whether UCLA gets more funding than Pepperdine, the students (and, by extension, the state of CA) should. I am consistently surprised (actually, "annoyed" or "irritated" would be a better word) by your stubborn insistence that the students should neither care nor pay more for a degree from a RESEARCH university. Why is that so difficult to grasp that UCLA is a research university (and a very good one at that) while Pepperdine isn't, not in the STEM fields anyway. If a an undergraduate degree in a STEM field from a first rate research university is worth more than that from a liberal arts college (we can debate that if you want), then I see no philosophical problem with charging a higher price for it. Whether it's the state or the students who shell this extra cash is a part of a deal between the students and the taxpayers -- and I tend to think that the students are getting a progressively rotten deal here -- but it has nothing to do with the STEM fields and university-conducted research.
If a student finds a degree from Pepperdine more valuable than that from UCLA -- she will pursue that degree instead, and it should be much cheaper too according to your logic. Wait, it isn't? I am shocked, shocked! Snide remarks aside, there *are* cheaper options which do not involve cross-subsidizing research, e.g. the CalStates. So, why is that so difficult to grasp that the chief difference between UCLA and Cal State LA is their research status. If the state and the students find this distinction valuable, I see no problem with assigning a higher price tag to a UCLA degree, however they (the taxpayers and the students) decide to split the cost. And doing undergraduate research in modern labs located in maintained buildings with water, electricity and functioning light bulbs is a part of that cost.
You may continue denying it, but what you are actually advocating is washing out a distinction between the UC and CSU systems -- and not by making CSUs more appealing.
What you are also advocating here is stricter adherence to arbitrary regulations, without even trying to question whether these rules are workable. This might come as total surprise to you, but it's not the lack of rules and regulations that has been holding us back. Want more inflexible rules and and the ensuing cancerous growth of bureaucracy in charge of "compliance"???
That said, I do support more accounting transparency; what I am strongly against is another set of inflexible constraints that are already sucking our limited resources. Let us have a meaningful discussion about the *mission* of research universities, and let's judge our managers by how effectively they pursue that mission, not about minute details of money allocations and whether or not they have violated some Section X, Paragraph Y (probably ambiguous anyway) along the way.
I have a strong feeling that we disagree about the mission (with Gerry, anyway), so let's not pollute this discussion with murky and (currently) intractable accounting details.

Anonymous said...

The UC Administration says lots of things... like, Dean Edley will lead an effort to develop MOOCs because they are cost effective. Like, running UC is like running a cemetery, lots of people below you but they're all corpses.

It is a fact that the UC Administration says all those things, and also says it loses money on indirect cost recovery.

The factual data I'm aware of does not support the UC Administration's claims of lost money on indirect costs, or on UC being full of corpses, or on MOOCs being cost effective.

But we can go round and round and round on all these issues. And we have. At this point we just agree to disagree.

Chris Newfield said...

To summarize the data at hand on the Research Funding page, mostly already mentioned:

*ICR Chart Circa 2004. Multiple universities, COGR assembled data, "best case" federal agencies, showing 5-7 cents losses per dollar, among others. http://toodumbtolivearchive.blogspot.co.uk/2013/05/indirect-cost-recovery-shortfall-chart.html

*SFC article reporting on UC Regents meeting summary of extramural research losses (net negative $720 million on gross C&G revenutes of $3.5 billion http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/06/16/BAOC1DTI1V.DTL

*Fox News followup reporting the UC $720 million loss had increased to $800 million loss http://www.foxnews.com/us/2010/07/06/cost-stimulus-cash-vexes-universities/

* Chart of Difference Between Revenue and Direct Expenses by College ASU 2010, showing -$10-20M losses in Engineering, Natural Sciences, Life Sciences each, and +$0-$10m for Humanities, Education, Business, and Social Sciences each http://toodumbtolivearchive.blogspot.co.uk/2013/05/difference-between-revenue-and-direct.html

*UCORP-UCPB report of 2010 on UC ICR practices, identifying $600 M in unrecovered ICR (p 6), saying the accounting is not too complicated and calling for various investigations and clarifications http://www.universityofcalifornia.edu/senate/reports/HP_MGY_ICR.pdf

*Report to UC Regents Committee on Finance, November 2010, noting ICR rates are 20 cents below proposed rates on some campuses, with a chart on under-recovery of indirect costs through waviers, FY2009 (18% Federal, 72% foundation, 27% business, etc. ), also using the annual loss figure of $600 M. http://www.universityofcalifornia.edu/regents/regmeet/nov10/f2.pdf

*NSF Report 2012 "Diminishing Funding and Rising Expectations," reporting p 16 "Institutional funds from universities and colleges comprise the second largest source of funding for academic R&D, accounting for $11.2 billion of the $54.9 billion of academic spending on S&E R&D in 2009."

*Iowa data complied by economists Gary Fethke and Andrew Policano in "Public No More," Table 6.2, p 95, showing institutional subsidies per student credit hour ranging from $1,170.10 in dentistry, $549.80 in Engineering, $371.40 in Education, $71.90 in liberal arts, $34,20 in Business, among others (image not yet available but I will post and link soon).

*Higher ed data guru Jane Wellman, formerly of the Delta Cost Project, in Jeffrey Seligo's College Unbound, appearing in this paragraph on p 29:
"That lack of transparency is the primary reason the public doesn’t trust colleges to spend tuition dollars wisely. It’s difficult to track money because a college campus is like one big trading floor. Money is constantly moving from parts of the operation that make money to subsidize those segments that lose money. For instance, colleges make a profit on large lecture courses because they squeeze hundreds of students paying a flat tuition rate into a classroom with one faculty member and a few teaching assistants. The excess revenue from that class helps cover the additional costs that come with offering small seminars to seniors or lab courses to science majors. “The reality is that English has been subsidizing chemistry as long as there has been chemistry,” Wellman said.


Chris Newfield said...

here is more on the blog, and more out there, unorganized and unsynthesized, but you get the point. Extramurally funded research loses money. It must be subsidized with "internal funds," which generally come from high enrollment departments (via tuition and state funding).

In response, the Anonymi have argued:

1. Research is a social and intellectual good.
2. Research makes a real contribution to undergraduate teaching
3. Research makes a financial contribution that is confiscated and unappreciated
4. the data that contradict 3 and say extramural research mostly loses money are suspect and the data is faulty
5. the data that contradict 3 are corrupted by UC administrators, who falsify / exaggerate research costs
6. UC administrators do this by spending research IDC money on non-research things, and that money shouldn't be counted as research expenses.
7. true research costs (money actually spent in the lab on research) are smaller.
8. Because of 4, labs are self-sustaining
9. it's divisive for humanists to talk about STEM money.
10. you have ruined your blog by talking about STEM money.

OK. 1 and 2 are clearly true (although 2 has to practiced). 3 is also true: ICR doesn't flow in a transparent way back to support the grant's general habitat.

4 and 5 have the preponderance of existing public evidence against them. The Burden of Data is on the Anonymi, who need to produce some.

6 may be partially true: there are judgements here about ecosystems, about future developments: does Prof X's startup help me and my ecosystem or sap its funding. This should be decided deliberatively and locally, with data. Do the Anonymi have standards of practice here and examples.

7. Generally not true. Labs depend on all sorts of externalities that noone wants to pay for (the Grad Dean's admissions staff, for example), so the university has to. that can be allocated fractionally to labs, along with a lot of other things.

8. No sorry. there is no evidence that STEM-type labs support themselves with the grants you knocked yourself dead to get. I wish it were true. The evidence is to the contrary. Real data especially relevant here.

9 & 10. Absolute bollocks. Aside from our right to talk on our blog about whatever we want however we want to--as supported by evidence--the big STEM political strategy of the past 20 years has just blow up and I'm not sure the Anonymi have noticed it. STEM has been saying for years how much profit their grants turn, and getting Mark Yudof to repeat it (last block quote here http://utotherescue.blogspot.co.uk/2013/02/how-public-research-universities-are.html). Well they really believe you now! That means that the world thinks that science has so much money of its own that it doesn't need any of theirs. Feds are capping and sequestering it, states don't want it, business is offloading R&D as much as it can, parents don't want their kids to go into debt subsidizing it.

Budget reality has got to be better than that. For STEM as well as for the whole faculty.

Anonymous said...

A) http://toodumbtolivearchive.blogspot.co.uk/2013/05/indirect-cost-recovery-shortfall-chart.html

Why do you assume that the # submitted by University Administrators reflect actual costs? I certainly don't... it is the opening position by administrators in a negotiation.


This is one where I know how the number was computed, and it most definitely was not based on actual costs.


Fox news, really? In any case, this one reverts to 2) above.


Where does this come from? Can't tell if these are expenses for research or for education, for undergraduate or graduate (Law, Graduate Education) or everything jumbled together. I thought the issue at hand was whether indirect costs for research grants and donations were actually covered by the indirect cost percentage.


I quote, page 3, `Each Year, UC spends $5.2 billon on research and recovers about $700 million in ICR'.

So the *actual* ICR recovery rate looks like 0.7/5.2=13.5%. Well, my grant pays 51%. Maybe the resolution of my disagreement is: so many grants get special privileges they cause the loss that Chris you are concerned about. If that is true, the solution is simple: make all grants pay a uniform rate. Don't make the suckers (like me) pay 51% and then give wavers, to, well, looks like 75% of the grants get waivers to get the average down from 51% down to 13.5%.

"The net recovery of indirect costs is well below the actual overall cost of supporting research at UC (see appendix)." The appendix is not in the document.

"Uses of ICR include commonly used infrastructure, services, and equipment; recruitment and retention, especially start-up expenses; cost-sharing and operating costs for multi-disciplinary units; and supporting the research infrastructure with accounting, human and animal review, telephones, and other expenses "unallowable" on direct costs."

I've never seen ICR used for commonly used infrastructure, services, or equipment in my 25 years in UC; nor for telephones. I have seen spending in the other categories.

On Page 7... "Actual indirect cost recovery from all research sponsors is closer to 25% than the actual negotiated rates on each campus – a dramatic shortfall, as true costs appear to be in the 65-70% range. " Well, the estimate was 13.5% for the actual indirect cost recovery rate. In any case, this seems to verify that the problem is mainly one of UC *not collecting the ICR* on all grants, and giving too many waivers.

Anonymous said...

On Page 8..." It is important to note, however, that disciplines rely on foundation grants to different degrees. Should UC require full overhead on all sponsored research and discourage accepting foundation grants that do not cover full indirect cost, it might adversely impact research in social sciences and humanities that rely to a greater extent on foundations rather than on state or federal agencies. Universities have perverse incentives to minimize research expenditures in high-enrollment departments in the humanities and social sciences: the revenue surplus generated there from enrollments can support indirect costs in science, engineering, and medicine only if little of the surplus is absorbed by research in high-enrollment departments themselves."

This is the core of Chris' argument, I think, that perhaps the extra teaching in the humanities & social sciences justifies low overhead there, and even so, teaching in the social sciences & humanities subsidizes research in STEM. There is clear merit in parts of these arguments. However, I still contest the actual methodology of how indirect expenditures are imputed... my knowledge of that methodology is that it is faulty. I also point out that while many (like me) STEM researchers pay the full ICR rate (about 51%), the average rate collected is only 13.5%. So it looks like the real problem is not the setting of the 51% rate, but the fact that UC gives so many waivers that they don't ever get near the 51%.

F)NSF Report 2012 "Diminis... etc. I don't see the connection of this one with indirect cost recovery. Are these publics & privates? Just UC? Are these $11+ billion all donations that pay IC? Too diffuse to understand.

G)Iowa data complied by... again, is this ICR or not?

H)Higher ed data guru Jane Wellman, ...

Yes, big lecture courses subsidize smaller courses, no doubt about it. This is not ICR. I'd point out, though, Dean Edley's work identified the biggest lecture courses with the most students/class are Calculus, Chemistry, and Physics, which are SM, not TE.


Anonymous said...

Part II:

At best, looks like, `Extramurally funded research loses money' because UC grants so many wavers they drive their actual ICR down to 13.5% from the standard 51% that only faculty who are suckers (like me) pay.

At worst, the accounting and methodology is so unreliable that `Extramurally funded research loses money' cannot be reliably claimed.

"It must be subsidized with "internal funds," which generally come from high enrollment departments."
Careful.. there is a distinction between high enrollment departments, and departments with high enrollment taught by ladder faculty per ladder faculty, and departments with high enrollment per all faculty.

In SM (less so in TE) huge biology, chemistry, physics, and math courses are taught, often, it turns out, by ladder faculty. This fact is important and often overlooked.

1 & 2 we agree on.

3 I'd say now; ``Some research makes a financial contribution that is confiscated and unappreciated", typically by those researchers who pay the full ICR.

4 I agree on, but I think, Chris, you have included many inappropriate or irrelevant references and called them `public evidence'. The UCORP-UCPB report of 2010 would be a full exception (and maybe the only reliable report) **IF ITS APPENDIX WERE THERE**.

5 Falsify/Exaggerate are too perjorative. A certain pattern of financial reporting and methodology has set in as a matter of social practice. Kind of like what happened in the subprime mortgage industry. Career is made really, really tough on upstanding and honest financial people. The tribal pressure to do finances a `certain way' develops everywhere, from Wall Street to Main Street, and leaks into the UC administration too....

6 agree

Anonymous said...

7 Do you mean true ICR are not spent in labs? That is just a fact, I'm sorry, I can't think of a single case to the contrary.

8 I think those of us who pay the full ICR rate of about 50% definitely cover actual costs. That the average actual ICR rate is 13.5%, well, that does not cover actual costs.

9 10 Bollocks back at you. What is divisive is to believe administrator's arguments when they reinforce prejudices that `more education is done in Humanities & SS, and our profits are taken to subsidize STEM', and turn on fellow faculty as a result. My point is that is exactly what administrators want to do, divide the faculty. In actual fact a whole lot of SM faculty do a whole lot of difficult teaching of courses of 300+ students with grueling labs, grading; those faculty independently learned and developed online aspects of their courses. They get massive disrepect from the TE, Humanities, and SS faculty. Bollocks squared to you.

No problem to analyze STEM finances all you want but you may live in a glass house so take a care when you throw stones, and by not discussing things like the perception that Humanities & SS grants need pay no overhead, you make yourself less credible. And I'll say clearly: a huge amount of teaching goes on in the Humanities & SS areas, and it brings a lot of money to UC. The proof that the profits from that money end up inexorably in STEM subsidies is not convincing to me, however.

As for 10, Bollocks Cubed. I've never said that.

End Part II

Gerry Barnett said...

The topic was whether perhaps it might make sense for some research to move from over-capacity, inefficient public universities to more receptive and responsive private venues. CSU is of course public, so I was not covertly advocating that UC research move to CSU.

I don't see how to square the degree envy from research reputation argument with public higher education.

Caltech has 1/3 the research budget of UCLA, Princeton 1/4. Harvey Mudd gets all of $3m/yr in extramural research support. Reputation has nothing to do with the *size* of the research enterprise. UCLA's reputation, even for research, does not vary based on whether it gets $900m or $600m or $400m, except perhaps among folks who suffer from funding envy.

Pricing up tuition based on "research reputation" forces many students to go into debt, have bankers dictate their course loads, acceptable GPAs, academic progress, and scrutinize their personal finances. Attainment goes down in high tuition/high aid environments. It's all around a worse environment for learning.

Thought experiment: Imagine that UC faculty are required to take out personal *loans* for their research, backed by federal financial aid. If their research is so important, then they ought to risk personal credit on it. After all, research coming from UC will have more value than from other places, so it should be a slam dunk. The researchers will disclose their personal finances to bankers, agree to work diligently on their research to the satisfaction of bankers, show progress as defined by bankers, and agree to pay back their loans, presumably with some of the income from their patent licensing revenue. Wealthy faculty, of course, could finance their research without such a loan.

Researchers may well find such a thought exercise repugnant. They should: since that's what students are living through now. It's just that a lot of public university researchers are under the illusion that their research makes money for the university, and it's merely a matter of liars and fools that squander all that profit who knows where. Some, at least, are also under the illusion that public higher education can run to the same same tuition levels as private schools, and somehow still be public higher education.

It is no sign of excellence for a public university to spend huge amounts of grant money if it is losing many millions on that research, cannot make an articulate case to the state or to donors to make up the difference, and instead quietly abandons its commitment to public higher education to run up tuition to preserve the status quo of its research activities funded by student debt.

As for the argument that the status quo is a cozy deal for research faculty and everyone should honor the code of silence and respect the glass house despite the problems of accounting: that's a betrayal of the public trust.

Anonymous said...

GB... UCLA's research budget is high largely because of its medical center. I think you'll find the public is broadly in support of medical research funding.. witness the huge increases in NIH funding over the past 2 decades. And of course all the men in congress love to spend on viagara & prostate cancer research, heart expensive heart disease operations, etc.

In any case, research $ per faculty member is a more reliable guide than total research $. One thing Harvey Mudd & Caltech do way, way better than UC is STEM education, as I've mentioned before. Good STEM education in UC is belittled by research oriented faculty in all sectors of UC.

Why not extend your thought experiment: UC faculty in all endeavors could finance their activities by taking out loans, and then pay rent for teaching facilities, lab equipment, parking etc, and collect fees directly from students who choose to take their course. And also get students to agree to pay 0.02% of their income per year for 30 years after graduation to the faculty member.

If teaching is so important, faculty should risk personal credit on it. And faculty should disclose all personal finances to bankers and students, and agree to pay back their loans, presumably with the revenue streams from their successful students.

I repeat again, the evidence is by no means convincing that UC spends huge amounts of grant money while losing many millions on that research. If anything, Chris Newfield's evidence is that UC does not collect ICR at the rates it advertises; looks like only 13.5% ICR is actually collected, while the official ICR rates are upward of 50%. So many waivers are granted that might be the origin of possible shortfalls.

As for `liars and fools', I *never* have used any of those words; don't put them in my mouth.

TB said...


"Pricing up tuition based on "research reputation" forces many students to go into debt..."
Here we go again... Pricing should be based on the *desirability* of a product, this is simple economics. For as long as desirability of a degree from a specific university is, rightly or wrongly, strongly correlated with its research reputation (which in turn is correlated with the research expenditures), I don't see a problem with running a more expensive research-oriented university. In an ideal world, I would like to see the state to step in and absorb the shock to the students. In a far-from-ideal world that we happen to live in, a university degree seems be considered a private good. Yet regardless of who pays, for as long as our product is desirable, I don't see any good reason to make it less so -- yet it's exactly what you are advocating for.
We *do have* a cheaper, much less research-intensive option - it is called Cal States. Your rhetoric about bankers screwing students would be actually meaningful if that cheaper option were not on the table.
By the way, I never said that you were advocating that UC research move to CSU. What you *are* advocating is that UC sheds its reserch, leaving it to private universities. This may very well make UCs cheaper but it will also make them less desirable. In other words, it will make UCs much more like CSUs. And as the Anonymous before me has pointed out, research $ per faculty member is a far better metric that the total research $. Just do the division, and see if the desirability of Caltech/Princeton/Harvey Mudd vs UCLA degree gets a bit more aligned with that metric.

Yes, research universities *are* expensive to run, and someone (the students or the state) will pay as long as the degrees are deemed worthy. A Mercedes is much more expensive than a Honda Civic, but for as long as "Honda Civics" of higher education (CSUs) are being offered, I can't think of a reason why they should be the *only* option offered. When you buy a car, you make a personal decision whether or not you want to go into debt to the bankers. For the record, I am driving a used Honda I bought for cash. That is not the reason for me to rail against Daimler-Benz or Mercedes dealerships.

As far as you thought experiment is concerned, if I had to go into a personal debt to do research, I would carefully re-evaluate my priorities. I would do the same thing that any sane person should do contemplating a large investment. What exactly was your gedanken experiment supposed to prove?
And before you accuse me in being a cynic, I will repeat my personal belief that education is a public good, and as such should be subsidized by the public. I am not shy advocating my point of view, but as it stands, it appears to be shared by a shrinking minority.

Chris Newfield said...

Various forms of the thought experiment are being seriously discussed, in the name of unbundling the university's eductional functions and bringing in third party providers to perform whatever can be done at lower cost. You can outsource food services, so why not instruction via MOOCs? And why not research to grad students in China where the PI on the contract is an EE prof at Berkeley but who has no direct contact with or control over the results?

WE need to have real answers to these kinds of questions. I don't believe that one valid real answer is "there's no money problem here--with research funding." Everyone is sufficiently confused for that answer to remain in circulation (my exhibit A is you know is Mark Yudof's public statements about profitable medical businesses vs. money-losing academic departments). Those same "everyones" do think they know that teaching is really expensive. So the practical effect discussions like this, when they get deadlocked, is that MOOCs can be brought in to solve the terrible per-student cost problem of remedial algebra at SJSU, which is the only cost problem that we seem to be allowed to discuss. Am I saying that's a Trojan Horse? Yes I am. Call it a market beachhead if you prefer.

Another practical effect of deadlock is that, absent meaningful data disclosure about and discussion of research costs post-LONI, UCLA will be twice as vigilant about avoiding another loss in another big game. Deans and chairs will be more interested in preemptive retention deals, and active retentions will have more money in the counteroffer. The Anon's initial problem with ICR being misspent on non F&A like start-up packages, will get worse. In the fear of losing more big PIs, funds retained for distribution by deans, VCRs, EVCs, et al will get bigger. Whatever everyday working labs want ICR to pay for that they're not getting will get harder to find.


Chris Newfield said...


Our debate has most of the features of a Kuhnian paradigm conflict. Simplistically, data is adduced by one team to show that Paradigm A -- extramural research being at worst self-supporting--should be replaced by Paradigm B, research is a cost that requires cross-subsidy from "internal funds" (justifiable and legitimate, but insufficiently transparent and understood). One of Kuhn's core insights was that the discussion of anomalous data would never resolve the dispute. Nor would piling up more versions of such data ever induce Paradigm A adherents to see it as anything but anomalous (erroneous, insufficient, corrupted, partial, etc.) Kuhn might use as an example of this phenomenon Anon May 22 6:51 am's statement, "If anything, Chris Newfield's evidence is that UC does not collect ICR at the rates it advertises; looks like only 13.5% ICR is actually collected, while the official ICR rates are upward of 50%." Chris Newfield's likely response, that actually collecting 13.5% = losing money on research (and that according to the only published submissions we have, collecting 50% is losing (less) money on research, and that maybe we need an industry-level ICR rate like 115%) would not in this debate be an important victory for Paradigm B but just another irritating repetition of bogus anomalies that leaves Paradigm A untouched.

As was only rarely the case with scientific paradigms, we have run out of time. We are facing perma-austerity in state funding, at least partial tuition caps, federal grant sequestration, insufficient research funding growth, and deteriorating research infrastructure (I accept and would if anything amplify the Anonymi's complaints about lab support). I think we will also be facing the growth of contract research operations in the US and abroad that will increase competition with universities for federal funds by touting their superior mission orientation and/or devotion to the public good (both for-profit and not-for-profit NGOs). Clinical testing is of course a big business and this kind of thing could increasingly eclipse public U labs in other fields as federal agencies look to new providers to face capacity problems. This is a dangerous and probably decisive phase we have entered.

I agree we need to stick together. My preference is for us to stick together around demanding complete data on instructional and research costs and revenues in our universities.

Anonymous said...

"One of Kuhn's core insights was that the discussion of anomalous data would never resolve the dispute. "

Well, politely, bullocks. At least in my research, it is *only* discussion of anomalous data that resolves disputes; those discussions lead to new experiments or studies, which eventually clarify which paradigm is more accurate.

What vice chancellor of research would ever get a good job review from their bosses for lowering ICR? There is an inherent bias. Similarly, there is an inherent bias in researchers who pay full ICR, particularly when they become aware of their sucker hood.

It would seem to me, if the official ICR rates are upward of 50%, and the actual collected rates are 13.5-25%, one could:

A)Raise the official rate to 60 or 80 or 100%

B)Reform the waiver process so a number much closer to 50% is actually collected.

(A) increases cynicism and secrecy in the research system, and (B) upsets the special deals relatively powerful (and sometimes immensely productive) researchers have negotiated.

Seems to me VCRs, who usually negotiated the waivers in the first place, will always lean toward (A),
and researchers who aren't getting waivers (B).

But maybe that whole idea (that ICR is only collected at 13.5-25% while the official rate is 50%) is inaccurate... the data *could* decide, and maybe the Senate report I quote those numbers from is simply wrong. Again, in my research you have to check, check, recheck, check.

As for transparency in accounting... sure we have to push for it. My experience on senate committees is abysmal, however. A large portion of the faculty on the committees maintain silence, IMO, out of desire to have the special deals they have or their close colleagues have not be uncovered. Another portion is dismissive of any faculty member who takes the time to dig deep into the numbers (like, say, Charles Schwartz). The argument is, if your research was going well, you'd not waste time on digging deep.

Senate budget investigations that really dig deep are incredibly rare; most I've seen (and I'm sorry if this offends you, Chris) skim the surface and ride a few surface waves.

And the administration knows this, and conducts dog-and-pony shows, and if anyone (including Schwartz) gets to the bottom of something, they are adept at claiming persecution, or impoliteness on the part of those who did deep, or conducting passive-agressive responses.

Chris Newfield said...

sentence should have read "discussion of anomalous data would never resolve the dispute IN ITSELF." there are institutional interventions, "gestalt" shifts, group dynamics etc. we've proved his point.

Anonymous said...

The authority of a thousand is not worth the humble reasoning of a single individual.

Anonymous said...

Good riddance. Art Toga is an overpaid administrator, not a scientist. He puts himself as author on papers that he does not even read that come out of his group (one of mine included). $1 million can be startup for a whole new lab with many excellent postdocs.

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