U.S. to Limit Research Expenses : Funding: Tighter rules are proposed for reimbursing universities for government-backed studies. The new guidelines stem from abuses at Stanford, other schools.

The White House proposed tighter rules Monday for research-related expenses the government pays to universities, including bans on reimbursing costs of housing for university officials, entertainment and club memberships.

The new guidelines grew out of investigations of alleged spending abuses at Stanford University and other schools.

As announced by Richard Darman, director of the Office of Management and Budget, government research funds also could not be spent on alcoholic beverages, advertising, personal items for university officers or travel for university trustees.

“Recent information shows abuses in reimbursement claimed by universities for indirect costs supporting government-funded research. These require additional guidelines to clarify policy and stop the abuse,” Darman said in Washington.

An aide to Darman said the OMB had no estimate on how much money the new rules could save, although he conceded it would be a “tiny percentage” of the total the government awards to universities for research and related costs. In 1989, that total was $8.5 billion, the aide said.

“It’s going to be relatively small money,” the aide said in an interview about the crackdown’s effect. “But the issue is less the money than the appropriateness.”

The proposals are in response to congressional and public anger about revelations that Stanford partly billed the government for, among other things, a post-wedding reception for the school’s president and an antique commode at his on-campus residence. Stanford has withdrawn about $700,000 in such charges and Caltech and Harvard Medical School have each withdrawn about $500,000 in billings, some of which were for entertainment for professors and school officials.

Meanwhile, the U. S. Department of Health and Human Services has begun or soon will start audits of so-called indirect research spending at 13 universities nationwide. In addition, the congressional subcommittee that investigated Stanford last month is expected to widen its scope to other schools.

Darman described his proposals as a first step toward broader reforms and his aide said that additional changes may be announced in a few weeks.

The new restrictions would amend longstanding but murky rules that both academics and government officials said were invitations to controversy. Academic officials welcomed Darman’s plan, which is expected to take effect in a few months after publication in the Federal Register and an unspecified period for comment and review.

“I’m pleased to see it,” said Robert Rosenzweig, president of the Assn. of American Universities, the organization of top research schools. “I think it’s a first step toward restoring public confidence in the system.” Any resulting drop in federal reimbursement will be “a cost well worth paying” to avoid drastic cuts in government support for research, he added.

Donald Kennedy, Stanford’s president, said in a statement Monday: “We applaud this effort to accomplish a central government policy for the support of university research, and we note that the list of unallowable costs conforms to the practices we have already adopted at Stanford during the current audit.”

The OMB announcement comes as Stanford and the government are concluding negotiations on the rate the school should receive for research overhead. Stanford’s reimbursement rate last year was 74%, one of the highest in the nation. That means that for every $100,000 in pure research money, the school received an additional $74,000 for such indirect costs as utilities, building maintenance and administration. The government is pushing for a sharply lower rate.

The OMB’s proposals would make the rules for university spending the same as those for businesses holding government contracts. The proposal also would forbid billings to the government for contributions or lobbying by a university; partial pass-throughs of any salaries higher than $120,000 a year; unusually high severance pay, and fines or attorneys’ fees resulting from violations of laws.

BACKGROUND

An employee for the federal government in Northern California set into motion what promises to become major changes in federal support for university research. Paul Biddle, the Office of Naval Research representative who oversees all federal research spending at Stanford University, alleged last year that the school may have overbilled the government $200 million in research-related costs over the past decade. A subsequent investigation by the Navy found Biddle’s dollar figure to be exaggerated but agreed that there was some cause for concern. The government is now looking at research-related bills from many other universities and has plans to reform the billing system.