The Square: Hardly Hard Hit by the Recession... ...While Leaner Times Set in on the University

Last June, former President Derek C. Bok was ready to leave Harvard for the sprawling, hilly campus of Stanford University to relax near his good pal, Donald Kennedy '52, otherwise known as that school's president.

At that time, Stanford was neck-deep in a public relations debacle, the byproduct of a grueling Congressional investigation into federally-reimbursed research overhead costs.

The school had charged the government for upkeep on a yacht and flowers and cabinets for Kennedy's home. Federal investigators were throwing around figures near $200 million in monies improperly awarded Stanford in reimbursements for research overhead costs, called "indirect costs."

The school's chief financial officer, William F. Massy, had resigned, and its public information office was restructuring its personnel.

Meanwhile, Harvard had avoided the tag of "scandal" in its dealings with the government, conducting an independent audit of Harvard Medical School billing practices and volunteering to repay the government for $500,000 in questionable expenditures. That cooperative move took some bite out of the U.S. General Accounting Office.

It was a "night and day" difference between Stanford and Harvard on the level of cooperation, federal investigators said at the time.

Since then, the difference between the two schools has clouded somewhat. Kennedy, feeling not a little pressure of late, has decided he needs to take a vacation. A permanent vacation. He announced his resignation July 30, effective at the end of the coming academic year.

"I'm the chief executive officer of the institution, and, as has been said, you bear responsibility when you have that job," Kennedy said at his press conference, according to Time.

Meanwhile, the GAO in mid-July questioned the sampling methods used in the University's independent audit--conducted by accounting firm Coopers & Lybrand--and the allowability of $54,000 in expenditures over and above those withdrawn.

A good portion--$140,000--of those voluntarily-withdrawn expenses has been connected to maintaining Bok's off-campus home and operating the office of Daniel C. Tosteson '44, dean of the Medical School, according to The Washington Post. Even costs associated with Bok's official car have been brought into the whole mess.

Within the additional $54,000, the GAO questioned reimbursement requests for Bok's travel expenses and for pension benefits for Graduate School of Design Dean Gerald M. McCue, who will step down this year to return to teaching. In addition, the GAO is examining reimbursements for a shuttle bus service, for athletic facilities, and for $9,500 used to recruit a professor.

"Do we conclude that mistakes were made, or do we think they gave us half a loaf? That's our problem," one federal investigator for the House Subcommittee on Oversight and Investigations told the Boston Globe this summer.

"We had hoped these schools would get out in front and scrub thse accounts before the government got there," the investigator said.

Apparently, Bok and Harvard haven't heard the last of this investigation yet, even though the former president has reportedly arrived on the West Coast and left these troubles for his successor, President Neil L. Rudenstine.

An effort to stay out of trouble by downsizing the Medical School's indirect costs.