3 ms·

The problem with indirect costs is that it's well documented that the actual costs to the university are less than the amount received from grants. So the unive

The problem with indirect costs is that it's well documented that the actual costs to the university are less than the amount received from grants. So the university is profiting in a very real sense. This has been written about by former federal agency heads and so forth and so on. Comparing costs to private businesses isn't quite right because some of those costs aren't actually borne by the university, they're done in house, they otherwise get discounts, or they're already covered by other income streams (to a certain extent you get into double charging for the same thing really fast). You can intuit it just by how it's distributed, as a percent of grant funding. This really doesn't make sense, it's not tied to a line item budget or anything. The problem with this is that it creates a perverse incentive for faculty to bring in large grants monetarily speaking, rather than to do good science per se. It's one of the reasons for the pyramid scheme we've seen over the last couple of decades at least, and part of the problem with how academics is incentivized. Indirect costs should be cut completely IMHO (speaking as someone in academics, who has had tenure, and been involved in grants). Yes it will be painful but maybe then there can be a real conversation about what's going on in academics and how people are rewarded. Maybe things should be line item budgeted, maybe universities should just receive a lump sum in exchange for certain practices, maybe states should actually fund public universities in line with what they want them to do, I have no idea but right now the system is broken.

avsteele 4y ago
I'd be interested to see the data for unis showing their costs are lower. I doubt it. For private companies, and an SBIR ,you have to establish an indirect rate based on your actual costs. The rate is the ratio of all indirect costs for the company vs the direct costs for the project (salary times the % of the person's time). It's a bit of work the first time you have to do it. I'd be surprised if the NSF lets the uni just put whatever they want down and it isn't based on submitted budget data.
- dn3500 4y ago
  At the US university where I worked the indirect rate for federal grants was the same across the entire university, and I think it was slightly more than the 53% OP pays. I don't know where the number came from. Most of our industrial grants had language in the contract that said they would pay whatever rate the government was paying.
- Fomite 4y ago
  No data for it, but several times we've told companies if they think it can be done cheaper elsewhere for the same quality that they should do that. We've had no takers. Heck, one of my major sources of consulting income is "Checking the math a private industry research group did."
Fomite 4y ago
At my university when you look at it as a whole, we barely break even on indirects. While there is a lot of need to have a conversation about how the system currently functions, I'd suggest cutting indirects completely as step one is akin to suggesting flooding the room with carbon monoxide until we can sort out that nasty cough you have.
- Aeolun 4y ago
  Why doesn’t the university apply for indirects via a separate grant? It seems weird to tuck it into the research grants. More professors with a research grant do not automatically translate to more indirect costs (e.g. the building has to be cleaned, whether a room is occupied or not)
  - Fomite 4y ago
    It is at least intended to reflect the cost of the grant. The building might need to be cleaned, but one could expect things like the library, a laboratory, support folks in IT and grant administration, the IRB, etc. to go up.
cycomanic 4y ago
In addition there is a world wide trend that the ratio of administrative vs academic staff keeps on increasing, in other words less and less people bring in the money (via teaching/research) that sustains the university. Hence the overheads go up, because those people need to be paid. Even more infuriating is that when processes get reformed/changed it almost always ends up such that the work of admin gets easier at the cost of academic workload (because academics typically don't have set hours and just do the work until its done). To give 2 examples, at a previous uni there was always a lot of buerocracy about putting marks into the system (lots of paperwork, especially if there was some accidental mistake so a mark had to get changed). So during the end of the semester the uni forbid admin staff to do overtime for cost reasons, however the work still had to get done, so academics were doing the admin work as they were not on a fixed working time. Second, at my current uni, when getting travel reimbursements, we are required to fill out an online form, scan all receipts and print out a generated form and send the form and original receipts to finance. So academics end up spending time scanning and printing documents that could just as well be done by a person at the finance.
sophacles 4y ago
> The problem with this is that it creates a perverse incentive for faculty to bring in large grants monetarily speaking, rather than to do good science per se. And it creates a straight-forward incentive to do good science to so grantors give you big grants.

avsteele 4y ago

I'd be interested to see the data for unis showing their costs are lower. I doubt it. For private companies, and an SBIR ,you have to establish an indirect rate based on your actual costs. The rate is the ratio of all indirect costs for the company vs the direct costs for the project (salary times the % of the person's time). It's a bit of work the first time you have to do it. I'd be surprised if the NSF lets the uni just put whatever they want down and it isn't based on submitted budget data.

dn3500 4y ago
At the US university where I worked the indirect rate for federal grants was the same across the entire university, and I think it was slightly more than the 53% OP pays. I don't know where the number came from. Most of our industrial grants had language in the contract that said they would pay whatever rate the government was paying.
Fomite 4y ago
No data for it, but several times we've told companies if they think it can be done cheaper elsewhere for the same quality that they should do that. We've had no takers. Heck, one of my major sources of consulting income is "Checking the math a private industry research group did."

Fomite 4y ago

At my university when you look at it as a whole, we barely break even on indirects. While there is a lot of need to have a conversation about how the system currently functions, I'd suggest cutting indirects completely as step one is akin to suggesting flooding the room with carbon monoxide until we can sort out that nasty cough you have.

Aeolun 4y ago
Why doesn’t the university apply for indirects via a separate grant? It seems weird to tuck it into the research grants. More professors with a research grant do not automatically translate to more indirect costs (e.g. the building has to be cleaned, whether a room is occupied or not)
- Fomite 4y ago
  It is at least intended to reflect the cost of the grant. The building might need to be cleaned, but one could expect things like the library, a laboratory, support folks in IT and grant administration, the IRB, etc. to go up.

cycomanic 4y ago

In addition there is a world wide trend that the ratio of administrative vs academic staff keeps on increasing, in other words less and less people bring in the money (via teaching/research) that sustains the university. Hence the overheads go up, because those people need to be paid. Even more infuriating is that when processes get reformed/changed it almost always ends up such that the work of admin gets easier at the cost of academic workload (because academics typically don't have set hours and just do the work until its done). To give 2 examples, at a previous uni there was always a lot of buerocracy about putting marks into the system (lots of paperwork, especially if there was some accidental mistake so a mark had to get changed). So during the end of the semester the uni forbid admin staff to do overtime for cost reasons, however the work still had to get done, so academics were doing the admin work as they were not on a fixed working time. Second, at my current uni, when getting travel reimbursements, we are required to fill out an online form, scan all receipts and print out a generated form and send the form and original receipts to finance. So academics end up spending time scanning and printing documents that could just as well be done by a person at the finance.

sophacles 4y ago

> The problem with this is that it creates a perverse incentive for faculty to bring in large grants monetarily speaking, rather than to do good science per se. And it creates a straight-forward incentive to do good science to so grantors give you big grants.