Concern over the effect fringe benefits have on basic research budgets caused the chairman of the scientific advisory committee of the Robert A. Welch Foundation, Norman Hackerman, to disallow fringe benefits altogether. The Welch Foundation, with assets in excess of $300 million, supports basic chemistry research in Texas. The Foundation grants a subvention of $3,500 to every grant, regardless of award size, to be used in any way the university dictates, including payment of fringe benefits.
Recent debates over overhead payments to research universities have prompted changes in government guidelines for reimbursing universities for the overhead costs of research. One such revision is the phasing out of the practice by some universities of treating tuition benefits to graduate research assistants as an overhead cost, under fringe benefits. Tuition benefits will now be treated as a direct cost for the research projects on which the research assistants work. Universities must cease including the cost of graduate student tuition remission in a university-wide fringe benefits rate as of September 30, 1997. One option being exercised by some institutions is the use of several fringe benefits rates; a higher fringe benefits rate including tuition is charged on graduate student stipends. A potential problem with this solution is described by John Travis in the August 28, 1992, issue of Science. Because many universities, including the Massachusetts Institute of Technolgy (MIT) and California Institute of Technology, mixed the tuition of students working on research projects into the benefits pool for all university employees, researchers have been able to hire more graduate students than their grants could actually support, with the university as a whole underwriting the extra expense. Under the new system to be phased in by 1997, tuition costs will be charged directly to the projects that use graduate students. At universities that have been distributing tuition costs, this will mean fewer jobs for graduate students and thus fewer students, according to sources quoted by Travis. Postdoctoral investigators, who are paid little more than graduate students and carry no tuition overhead, would likely replace some graduate assistants in the laboratory.
The changes in government guidelines are viewed as an interesting challenge by some research administrators. Douglas J. Zbylut, a research proposal specialist at the University of Nebraska-Lincoln, advocates institutional strategies that educate everyone playing a role in research and research administration about indirect costs. Zbylut wrote in the Winter 1992 issue of SRA Journal:
Concern about indirect cost policies has created a tempestuous relationship between the federal government and universities in recent years. Pressures internal and external to the institution have created changes in the present system of indirect cost recovery. The most likely scenario is that changes will continue to occur over the next few years. While it is difficult to make an impact on policy at the national level, universities can take a proactive stance and develop a new management strategy for indirect costs. A possible alternative is to implement a system that reports the indirect cost categories of individual projects in a line-item format. By reporting indirect cost expenditures in the same format as direct cost categories, faculty, university administrators, and government officials may develop a better understanding of indirect cost distribution.
Zbylut describes the present environment regarding indirect costs as being characterized by a growing belief by funding agencies that universities should cost share the indirect costs on research projects. Funding agencies are looking for "more bang for the research buck."
It is important, when developing proactive strategies such as that recommended by Zbylut, that administrators review what they and their colleagues will include in their line-item formats and what costs are most appropriately shared. …