Chapter 10, point 11

Stanford University And Government Overhead Payments

In United States the government has a policy to building capacities of universities. The government grants to universities are indirect cost payments designed to compensate for the researchers use of the schools’ facilities. Stanford university received approximately $240 million in federal research funds annually.

But there is problem when an audit of Stanford research program by U.S Navy accountant Paul Biddle revealed that the bill to government is related to president Stanford interest. The School billed the government $3000 for a cedar –lined closet in president Donald Kennedy’s home, $2000 for flowers, $2500 for refurbishing a grand piano, $7000 bed sheets and table lines, $4000 for reception for trustees following Kennedy’s wedding, $184000 for depreciation for seventy-two-foot yacht as part the indirect costs for federally funded research. It means the fund is not entirety channeled to build university facilities.

From this problem, arise a few statement as the funding crisis evolved. Two among other things shall be as follows :

First, we will be reexamining our policies in an effort to avoid any confusion that might result. Moreover. Stanford routinely charges the government less than our full indirect cost precisely to allow for errors and disallowances ( from university statement ).

Second, we certainly ought to prune anything that is not allowable. There is not any question about that, but we were extending that examination to things that ( from an interview with Stanford daily).

However by July 1991, Kennedy announced his resignation, effective august 1992. Ultimately Stanford settled with the federal government for 1,3 million. The federal government also conclude that there was not fraud by Stanford.

The conduct of Stanford president Is not ethic. Actually , Kennedy has responsible and must to used, and channeled it really as researches of school facilities, not to self interest.