U.S. Will Investigate Med School Finances

Indirect Costs are 'Hard to Believe,' Investigators Say

The Harvard Medical School will soon be a target of a federal probe to determine whether the school has unfairly billed the government for overhead costs on research grants, The Crimson learned from federal investigators yesterday.

The U.S. General Accounting Office will begin looking into the Medical School's ledgers in March after it completes a related investigation at Stanford University, according to members of the House of Representatives Oversight and Investigations subcommittee.

"On March 1, the staff will be available at the General Accounting Office to begin investigating Harvard Medical School," said one congressional investigator who asked to remain anonymous.

At this point, the subcommittee has no evidence of any wrongdoing by Harvard but has decided to investigate the Medical School after discovering incidents of overbilling at Stanford, the investigator said.

The investigative team has not yet informed the University of its intended inquiry, said another investigator who also asked to remain anonymous. He added that the subcommittee will likely inform Harvard in March, shortly before the probe begins.


Asked about the investigation, Vice President and General Counsel Daniel Steiner '54 said the University had not been officially informed of the probe.

"That doesn't mean there is not going to be one," Steiner said. "But we have not been notified of an investigation at this time." Steiner refused further comment on the situation.

Likewise, other Harvard administrators--among them Vice President for Finance Robert H. Scott--said yesterday that they believed Harvard has complied with all government regulations concerning federal funding of indirect costs, expenditures that are supposed to be tagged for research-related needs.

Investigators emphasize that they are examining the Medical School because its high rate of indirect costs is "hard to believe.' Investigators have discovered incidences of overbilling at Stanford and suspect that this practice may occur at other schools with high indirect costs.

One investigator said that "enough problems were raised at Stanford" to consider looking into the management of indirect costs at other schools.

"If Stanford had come up clean," the investigator added, then the team would probably not have decided to look at the Medical School or at any other universities.

The Massachusetts Institute of Technology (MIT) is likely the next target for an inquiry after the Medical School, one investigator said. Columbia, Cornell and Yale may also be investigated.

At MIT, Robert C. Dilorio, associate director of the news office, said the university had not been notified of a federal investigation.

Indirect Costs

When the government awards a research grant to the Medical School, the University receives an additional sum of money, to cover "indirect costs," over and above the amount of the grant.