A Point Of Tension

Earlier this month The New York Times reported that the federal government was seeking the return of $219 million in interest that federal auditors said many universities had earned improperly by banking government research money instead of spending it immediately.

Although Harvard officials say that the University does not delay the distribution of federal funds. The Times report is one indication of an adversarial relationship existing between federal agencies and institutions like Harvard over the management and accountability of government-funded research.

Because of a sharp rise during the past decade in the number of federal regulations controlling government-sponsored grants. University management of these funds has grown increasingly complex.

During the late '70s the maze of regulations and Congressional worries about the way federal monies were being spent led to major audits of federally funded research projects.

The speed at which universities adapted to the new regulations and a difference of opinion over the way these audits should be conducted proved to be a major source of government-university tension.

To help improve this relationship with the government and to address critics that say Harvard is not serious about accounting for the government's money, the University's accountants recently undertook an experimental audit of government-sponsored research at Harvard.

While the audit--conducted by the firm Coopers and Lybrand--showed that Harvard accounts for its federal grants with a high degree of accuracy. It also demonstrated that the University must better document the financial systems that handle this money, says Thomas O'Brien, the University's financial vice president.

"Our systems, because of our decentralization, have the potential for abuse," he says, adding that "tightening up" these systems will enable Harvard to better stay within the government's strict guidelines on research monies.

The audit, the results of which were announced in last December's financial report, showed specifically that there was no fraud in the University's handling of the $78 million it received from the government in 1978 and that Harvard accounted correctly for almost 98 percent of this money.

In fact, on some projects the University has spent more of its own money than was called for by federal regulations, says Robert H. Scott, director of financial systems for the University.

Scott, as well as other Harvard officials, unanimously voice the hope that the recent audit will calm government fears that Harvard is not spending its money correctly.

Although the pilot audit was not the first audit of research money to be undertaken at Harvard by either federal or University auditors, it was the most extensive. Audits in the past have focused on one particular grant or on one particular department, while the Coopers and Lybrand account was a comprehensive survey that cut across grants and departmental lines.

In fact, one of the major problems that Harvard officials see in previous federal audits is their failure to take into account the lack of what Scott calls "precise accounting divisions" in universities.

For example, these officials point out it is nearly impossible for auditors to determine the exact amount of time a professor spent on various projects when trying to determine where money from one grant ended and that from another began. This failure, they contend, reflects the government's lack of understanding of the way a university is run.

Howard J. Levy, associate dean of the School of Public Health, which itself was the subject of an extensive government audit in the late 1970s, says that by trying to second guess professors over the exact provisions of a grant, the government auditors have "been spinning their wheels trying to do something that can't be done, when their time would be better spent tracking down out and out fraud."

The School of Public Health along with the Medical School, is a prime recipient of federal grants to Harvard.

But at least one government official scoffs at charges that the government does not understand the nature of universities. All the government asks is that University officials "manage federal resources the same way they manage Harvard resources," says Edward A. Parigian, the regional inspector general for the Office of Audits.

Parigian adds that the results of the Coopers and Lybrand audit merely confirm what is already known to the government through previous audits--that there is no fraud, but a "lack of much documentation" in Harvard's management of federal funds.