U.S. to Raise Stanford’s Rate of Reimbursement

Federal officials have agreed to boost reimbursement for Stanford University’s research costs despite a relationship that soured when the university was accused of overcharging the government, officials said.

University President Gerhard Casper said the government has agreed to a provisional reimbursement rate of 60.3% of costs, up from 55.5%.

“It’s no reason to be jubilant, but it’s progress,” Casper said at a faculty meeting Thursday.

The agreement signals progress toward mending a relationship with the Office of Naval Research that was tarnished when an investigation found that Stanford overcharged the government more than $240 million in research costs between 1981 and 1988, Casper said.

Former President Donald Kennedy and two administrators resigned amid the controversy. However, the university has denied any wrongdoing.

The latest agreement means that the university will recover more than $7 million more than it would have under the 55.5% rate.

The university has been requesting a reimbursement rate of 64%.

The rate was 70% before allegations of overcharging were made, but the school lost $28 million when the rate was slashed to 55.5% last year.

The school and government “have a common goal to move toward a more normal business relationship,” said Peter Van Etten, Stanford’s chief financial officer.