The time has come for colleges and universities across the country to begin their quarterly reporting on the impact of funds received through the American Recovery and Reinvestment Act of 2009. Institutions must report on the progress of ARRA grant awards, the number of direct-funded jobs created or retained with these grant funds, and the investment made in campus and research infrastructure (through grant funds as well as with state funds made available through the Recovery Act). Given that few people in America understand how research is conducted and funded, I worry that these reports will do nothing more than generate unwarranted controversy and erroneous
accusations of wasteful spending.
A significant portion of most federal grants fund various indirect costs, including the salaries of administrative and support personnel, maintenance of research facilities and compliance with myriad federal, state and local regulations. While the indirect costs associated with a single grant may not create or save an individual job, in aggregate, indirect costs can have a significant impact on a university’s payroll. It is not inexpensive to staff a sponsored research office, which must have employees who are experts in federal grant and contract guidelines, acceptable accounting practices, intellectual property laws, human subjects research regulations, and export/ITAR control regulations, among others. Nonetheless, for the purpose of ARRA reporting, grantees have been instructed that they should report only the number of FTE’s that are funded directly by the grant. As for those employed through indirect costs, the Office of Management and Budget (OMB) says not to worry since the Council of Economic Advisors will be developing a methodology to account for “overall employment impact of the Recovery Act.” Hmm.
Although not specified in the original guidance document, more recently OMB has provided additional clarification that tenured faculty should not be included in the “created or saved” job count, since it is their belief that tenured faculty cannot be fired, regardless of economic circumstances. Perhaps such is the case at some institutions, but at many institutions tenured faculty can be terminated if academic programs are cancelled or if the institution suffers from significant financial difficulties. At some institutions, the faculty agreed to pay cuts and furlough days in order to save facutly and staff jobs.
What OMB’s guidance does not make clear, however, is how grantees should report FTE’s associated with graduate students who perform the bulk of the research on many funded projects. For years it has been in the best interest of universities to not consider graduate student researchers to be employees, and their research has been very carefully described as an educational training activity and not employment. So, will FTE’s associated with graduate student research be included in the count of new or saved jobs for the purpose of ARRA reporting? And if graduate students are included in the FTE count, how will universities determine the number of hours attributed to a graduate student FTE? OMB’s guidance document instructs institutions to calculate FTE’s based on the full-time work schedule of the average employee, but it does not explain how to account for the hours worked by graduate students. Most graduate students work far more than 40 hours per week, and are typically not paid at an hourly rate. I’m sure that graduate students around the country are watching ARRA reports to find out if they are, in fact, now considered to be employees who have jobs rather than students who participate in educational training activities.
Despite these aforementioned challenges, my greatest concern about ARRA reports is that they will be misinterpreted by a general public that does not understand the role that graduate students play in conducting university-based research — a role that allows this labor-intensive field to employ relatively few people. If the public does not understand that only a small fraction of grant funds support salaries, while the bulk of the funding covers materials, supplies, equipment, and various indirect costs, some will divide the total amount of stimulus funding by the relatively small number of jobs created, and make erroneous assertions that either researchers earn Wall Street salaries, or that research dollars were wasted. Will we soon be seeing inflammatory headlines about $10-million grants that created “only” three or four jobs? Beyond that, this sort of quarterly reporting belies the fact that investments in basic research are, in fact, investments not in today, but in the future. Basic research employs relatively few people, but the hope is that today’s basic research findings will be translated into tomorrow’s new products and technologies, which will provide new employment opportunities and contribute to positive economic growth.
In reality, we are unlikely to see the true impact of ARRA research funds for many years to come, but that does not mean it was unwise to use stimulus funds to invest in basic and applied research. Investing in research is like investing in our children — a wise way to plan for a brighter and more promising future. Since we are burdening our children with a backbreaking national debt, it is imperative that we provide them with the means to grow the economy in their lifetime, to payback the debts generated during ours.
