4 ms·

High overhead indicates efficiency, not waste. If you are Bozo University that has no grants, you also have no overhead, because everything you spend is attrib

High overhead indicates efficiency, not waste. If you are Bozo University that has no grants, you also have no overhead, because everything you spend is attributable to that first grant. You spend $50 for tiny little flasks of liquid nitrogen. You buy paper at Staples. If you are UCSF, you have 80% "overhead" because everything is centralized. Your LN2 is delivered by barge. You buy paper from International Paper, net 20, by the cubic meter. You have a central office that washes all the glassware. Your mouse experiments share veterinarians. All of this costs much, much less because of the "overhead".

largbae 2y ago
I am trying to follow this... if a grant is the same $1M and Bozo University gets to spend all million on the actual research at hand, but UCSF only gets 200K, how is UCSF more efficient? Wouldn't the LN2 be traceable to the project either way as direct non-overhead cost, but UCSF efficiency makes that cost lower, achieving the same overhead ratio but either a lower grant cost or more researcher stipend?
- tarlinian 2y ago
  Plenty of actual research costs count as overhead to avoid the need to hire an army of accountants to allocate every single bit of spend. For example, the electricity costs of the lab in which the research is run would typically be paid for by the university and would be considered overhead. It's not "administrative bloat". Most of the particularly gross administrative bloat is on the undergraduate side of things where higher tuition costs have paid for more "activities".
  - rayiner 2y ago
    Well how do you know that if you aren’t accounting for it?
    - PhotonHunter 2y ago
      F&A rates (facilities and administration, “indirects”) are subject to negotiation every 4 (IIRC) years, where those costs are accounted for (perhaps not well enough, but that is a separate point). The administrative component of F&A been capped at 26% for years and R1 universities are maxed out, so the negotiations are over the facilities component.
    - mlyle 2y ago
      You can know what the research organization costs as a whole; and you can know what's "worth" charging to individual projects. The rest is indirect costs, which you can measure and use this data when negotiating indirect cost reimbursement with NSF or NIH.
  - jeffbee 2y ago
    Note that the institution I used as an example doesn't even have undergrads. It is not using NIH grants to cross-subsidize a college. Medical research is the only thing they do. And they are the #2 recipient of grants, after Johns Hopkins.
    - selimthegrim 2y ago
      Caltech has undergrads.
comeonbro 2y ago
If I understand you correctly, what you're claiming is: University 1 gets $100. $10 of it goes to admin, $90 to researcher. Researcher spends $60 on supplies and equipment. This is accounted for as 10% administrative overhead. University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is accounted for as 60% administrative overhead. Is this an accurate characterization of your claim?
- mlyle 2y ago
  > University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is not how it works; this would be 150% overhead. ($60 / $40). Basically, if something is a shared utility (common lab maintenance, supplies that can't be metered and charged to specific projects, libraries on campus, etc.) then it's overhead. Also included in overhead is administrative & HR expenses... and things like institutional review boards, audit and documentation and legal services needed to show compliance with grant conditions. The reasons for high overhead are threefold: 1. Self-serving administrative bloat at universities and labs. We all agree this is bad. 2. Shared services in complex research institutions (IRBs, equipment maintenance, supplies, facilities). This is good overhead. We want more of this stuff, though we want it to be efficiently spent, too. 3. Excessive requirements and conditions on grants that require a lot of bodies to look at them. This is bad, too, but doesn't get fixed by just lopping down the overhead number. Unfortunately, if you just take overhead allowance away suddenly, I think it's just #2 which suffers, along with a general decrease in research. Getting rid of #1 and #3 is a more nuanced process requiring us to remove the incentives for administration growth on both the federal and university side.

largbae 2y ago

I am trying to follow this... if a grant is the same $1M and Bozo University gets to spend all million on the actual research at hand, but UCSF only gets 200K, how is UCSF more efficient? Wouldn't the LN2 be traceable to the project either way as direct non-overhead cost, but UCSF efficiency makes that cost lower, achieving the same overhead ratio but either a lower grant cost or more researcher stipend?

tarlinian 2y ago
Plenty of actual research costs count as overhead to avoid the need to hire an army of accountants to allocate every single bit of spend. For example, the electricity costs of the lab in which the research is run would typically be paid for by the university and would be considered overhead. It's not "administrative bloat". Most of the particularly gross administrative bloat is on the undergraduate side of things where higher tuition costs have paid for more "activities".
- rayiner 2y ago
  Well how do you know that if you aren’t accounting for it?
  - PhotonHunter 2y ago
    F&A rates (facilities and administration, “indirects”) are subject to negotiation every 4 (IIRC) years, where those costs are accounted for (perhaps not well enough, but that is a separate point). The administrative component of F&A been capped at 26% for years and R1 universities are maxed out, so the negotiations are over the facilities component.
  - mlyle 2y ago
    You can know what the research organization costs as a whole; and you can know what's "worth" charging to individual projects. The rest is indirect costs, which you can measure and use this data when negotiating indirect cost reimbursement with NSF or NIH.
- jeffbee 2y ago
  Note that the institution I used as an example doesn't even have undergrads. It is not using NIH grants to cross-subsidize a college. Medical research is the only thing they do. And they are the #2 recipient of grants, after Johns Hopkins.
  - selimthegrim 2y ago
    Caltech has undergrads.

comeonbro 2y ago

If I understand you correctly, what you're claiming is: University 1 gets $100. $10 of it goes to admin, $90 to researcher. Researcher spends $60 on supplies and equipment. This is accounted for as 10% administrative overhead. University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is accounted for as 60% administrative overhead. Is this an accurate characterization of your claim?

mlyle 2y ago
> University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is not how it works; this would be 150% overhead. ($60 / $40). Basically, if something is a shared utility (common lab maintenance, supplies that can't be metered and charged to specific projects, libraries on campus, etc.) then it's overhead. Also included in overhead is administrative & HR expenses... and things like institutional review boards, audit and documentation and legal services needed to show compliance with grant conditions. The reasons for high overhead are threefold: 1. Self-serving administrative bloat at universities and labs. We all agree this is bad. 2. Shared services in complex research institutions (IRBs, equipment maintenance, supplies, facilities). This is good overhead. We want more of this stuff, though we want it to be efficiently spent, too. 3. Excessive requirements and conditions on grants that require a lot of bodies to look at them. This is bad, too, but doesn't get fixed by just lopping down the overhead number. Unfortunately, if you just take overhead allowance away suddenly, I think it's just #2 which suffers, along with a general decrease in research. Getting rid of #1 and #3 is a more nuanced process requiring us to remove the incentives for administration growth on both the federal and university side.