Harvard Benefits From Rule Changes

Harvard and other major research universities have won another victory against what they consider excessive government regulations governing their management of federal grants.

The National Science Foundation (NSF), a prominent supporter of university research, recently loosened its rules requiring colleges to account for its grants. The move may lead to a relaxation of strained relations between the academic and government communities over the issue.

The rules essentially give universities greater flexibility in allocating costs from NSF research projects. Harvard receives about $6-8 million of its approximately $100 million in annual research monies from NSF annually, Financial Vice-President Thomas O'Brien said yesterday.

Harvard would not have encountered problems in several recent Health and Human Services (HHS) audits of its management of its government at grants had other federal agencies operated under similarly loose rules, O'Brien said. "We feel that the problems identified by HHS would just disappear," he added.

Harvard is currently involved in negotiations with HHS officials in Washington over several million dollars in research monies that agency auditors alleged the University mismanaged.

HHS, which is responsible for auditing Harvard's federal grants, primarily contends in the dispute that Harvard improperly transferred money from one grant to pay for the costs incurred by others.

Harvard officials, following the lead of administrators at other universities faced with similar allegations, have said that the government does not understand the way universities are run and has not taken into account the complexity of the multiple-grant operations one professor is often involved in.

The new NSF rules, scheduled to take effect in March, go to the heart of such accounting disputes between universities and the government.

Institutions will low be able to transfer funds between two or more of a professor's "scientifically related" projects. In addition, universities will be allowed to transfer funds more liberally between successive grants for the same research.

A staffer in NSF's division of grants and contracts said yesterday that his foundation has spoken with other federal agencies about adopting similar rule changes but that nothing yet has come out of these informal consultations.

Agencies like HHS are "exploring the possibility" of adopting a system like NSF's, but they want to adjust it to their own peculiar idiosyncrasies, said Stephen R. Williams. He noted that NSF consulted Harvard during its deliberations over its new codes.

But O'Brien expressed skepticism over whether other agencies would join NSF and "recognize the way research is actually done" at universities.

"It's amazing how much the agencies prize their own perogatives," O'Brien said. "Each agency has its own set of rules and interpretations that it jealously guards."