Questions Submitted by the Faculty to President Shumaker
Concerning the Proposed University of Tennessee Research Foundation
February 18, 2003
The following questions were submitted by faculty members on the Knoxville campus and indicate the breadth of the University faculty’s concerns about the proposed University of Tennessee Research Foundation. Michael Combs, President of the Faculty Senate, eloquently summarized the sentiment of the faculty at a recent Faculty Senate Executive Committee meeting when he stated that in talking with many faculty members he had found no faculty member who either strongly opposed or strongly supported the UT Research Foundation concept, but many were very concerned that the planning process was not adequate and left many unanswered questions and potentially significant risks. To address these perceived problems and allow President Shumaker to directly address many of the questions that have been posed, he invited the President to hold an open meeting with the faculty and staff.
To allow broad participation in this event, written questions were solicited from the Faculty Senate, the Research Council, and the faculty and staff of the Knoxville campus. All of the responses were collected by Lou Gross, Chair of the Faculty Senate’s Budget Committee, and Doug Birdwell, Chair of the Research Council, and are included in this document. Michael Combs, Lou Gross, and Doug Birdwell developed the following structure for the February 18th meeting: Michael Combs will read each question, and the President will have three minutes to present an initial response. One follow-up question may be asked, either from Michael Combs or the floor, and the President will have an additional two minutes to respond. The intent of this format is not to suppress questions or limit answers, but to ensure that as many of the submitted questions as possible are addressed. If additional time is available after these questions have been addressed, questions from the floor will be solicited.
Some faculty members have asked whether the requirement that questions be in writing and submitted in advance was a condition imposed by the President. This was not the case; the format of this event and the requirement for prior submission of questions were decided by Michael Combs, Doug Birdwell, and Lou Gross and were chosen to maximize the breadth of issues that can be addressed and the opportunity to obtain informed responses to these questions.
Minutes of this event are being taken and will posted on the web.
Michael Combs, President, Faculty Senate
Doug Birdwell, Chair, Research Council
Lou Gross, Chair, Faculty Senate Budget Committee
Questions Submitted by the Faculty
Please comment on what considerations lead to the current model for the UT Research Foundation, which seems to assume that nearly all research administration is done by the Foundation. This is in contrast to several other models with more modest responsibilities for a research foundation (an example of a more modest, but successful, model is Florida State).
1. Section IX, A, 2 of the UTRF Business Plan indicates that UTRF will retain a portion of F&A recoveries to do many things. It also states that no State funds will be used to fund UTRF. A quick reading of the formulas used to compute the F&A rate reveals that F&A recoveries, far from being net profit, are based on real but non-direct, largely infrastructural, costs borne by the institution. Within the UT organization, F&A recoveries are used in large measure for such infrastructural costs. If UTRF takes F&A recoveries then the infrastructural costs will have to be borne from another source, probably State funds. In this arrangement, can one accurately maintain that no State funds will be used?
2. The financial plan indicates that substantial new funds will be used for UTRF apparently $1.8 million. In the greater scheme of things, new expenditures have to come from somewhere. F&A recoveries are already being used to pay infrastructural costs associated with sponsored activity programs. What programs will need to be cut to accommodate the new expenditures?
3. Section IX, A, 2 of the UTRF Business Plan indicates that F&A recoveries will be used to fund, among other activities, a faculty incentive plan. Most major components of UT, with the exception of the academic component in the Knoxville area (once referred to as UTK) already have faculty incentive programs which were developed in the context of the particular unit's mission and needs. Does UTRF, by using F&A recoveries from all components of UT intend to supplant existing faculty incentive plans with one which some might call uniform and others might call one-size-fits all? Or, does it intend to use F&A recoveries from all components of UT, together with the commensurate resource shifts, to fund a faculty incentive plan for that component of UT which does not currently have one?
4. With the exception of efforts to assist start-up companies, the other proposed UTRF functions are currently the responsibility of existing units within UT. Much of the justification for UTRF hinges on more efficiently providing services to the research community. Is there some evidence that increased operational efficiency will more than offset the increased bureaucracy costs which are imbedded within UTRF? Moreover, is there any evidence that if operational efficiencies are available that they could not be secured without UTRF and the accompanying increase in bureaucracy and its associated cost. (Stated less tactfully, what makes anyone believe that current problems associated with research services will get any better by changing the organization and adding more administrators?)
1. The State revenue shortfall is slowing the process of appointing a Chancellor at Knoxville to save costs in administrative areas.
(a) Why is the Research Foundation still under consideration given the fact that it will require an upfront investment of more than $5 million?
(b) Why not focus on fixing problems in the current Office of Research?
2. The Research Foundation web site and Q&A sessions with different groups have revealed that the function of the current Office of Research will remain substantially the same but the Research Foundation officers will constitute a large number of officers (Executive Director, Research Services Director, Business Development Director, etc.), which would act as another level of administration.
(a) Does this not represent a major increase in administrative costs?
(b) Don’t current problems in the Office of Research remain?
3. The proposed Research Foundation has the campus Chief Research Administrator reporting to the Chancellor and also being accountable directly to the Foundation’s Executive Director so there are two masters to serve.
(a) Would it not be more direct and responsive to the University’s colleges and faculty simply have a Vice Chancellor reporting directly to the campus Provost/Chancellor?
(b) Won’t an unhealthy situation develop for the Campus if the Research Foundation is established quickly but the Chancellor search is slowed?
4. The primary justification for establishing the Research Foundation is to enhance business flexibility by dealing better with indemnification, confidentiality and jurisdiction since the Foundation will be setup as a 501(c) Corporation.
(a) What is gained from this action compared to the current UTRC which is already a 501(c) Corporation but still has to add the following clause to all of its contracts: “licensee shall at all times during the term of this Agreement indemnify, defend and hold UTRC, the UNIVERSITY, and their respective trustees, directors, officers, employees and affiliates, harmless against all claims, proceedings, demands and liabilities of nay kind, whatsoever…”?
(b) Is it reasonable to assume that the University will not require indemnification in research contracts when University faculty and students are doing the research but the Research Foundation is simply signing the contract?
(c) The Research Foundation proposal simply states that a committee will be set up to resolve this problem but shouldn’t this issue be fully resolved before going forward with the Foundation since it may not be able to deliver on its basic premise.
(d) With regard to the Research Foundations premise of providing confidentiality, is it not true that the State legislature passed a bill two years ago that exempted proprietary research contracts from the Open Records Act? Why hasn’t our current Office of Research implemented this already?
5. Many faculty have expressed a great deal of concern about only two faculty members being on the Research Foundation Board and it is troubling that issues such as “Conflict Monitoring” are the responsibility of the Foundation.
(a) Why can’t these panel members be appointed by Deans and / or the Faculty Senate to represent Campus interests better and achieve real faculty representation?
6. Another basic premise of the Research Foundation is that technology transfer and licensing of patents will generate income for the University, inventors and the Research Foundation.
(a) Given the fact that UTRC has not accomplished this in many years of operation, how can the Research Foundation make money for the University even if it theoretically manages these activities better than UTRC?
(b) Given the large amount of work usually asked of inventors to commercialize an invention, wouldn’t drastically reducing the share of income to inventors as proposed by the new Research Foundation reduce the incentive of faculty to obtain patents and commercialize their work?
7. 25% of the F&A recovered from grants currently is returned to the colleges to help defray operating expenses and to add funds to the research budgets of faculty generating the grants.
(a) Will this practice continue or will this money be used to help fund the proposed Research Foundation?
UT often couples the terms "research” and “creative activity." Our mission statement lists the terms "scholarship" and "artistic activity" as both activities that develop individuals and the society as a whole. Currently some of our F&A recoveries are used to help fund faculty research in the arts and humanities for which there are few outside forms of support. The present charter of the UT Research Foundation has no charge to devote a percent toward the arts. How will the Research Foundation serve to fund artistic or scholarly activities for which there are not external resources? Shouldn't the foundation strive to commit a percentage of its resources toward this purpose?"
1. What model is the UTRF based upon? Is there an existing RF at a Top 25 Research University that UTRF is based upon?
2. How will the UTRF dovetail with the current Office of Research duties?
3. How will faculty who are not patenting research materials benefit/interact with the UTRF?
4. Will overhead of grant monies be diverted to UTRF, even for grants obtained by faculty who are not patenting research materials?
5. How will the UTRF Business Plan be revised in light of the recommendations of the F&A Revenue Task Force report?
My personal list of the most significant impediments to research at UT includes: (1) space, including shortages, space allocation policies, and Physical Plant’s inability to perform renovation / remediation work on existing space within a reasonable period of time and at reasonable cost; (2) the IRIS financial system; (3) inefficiencies and delays within the Office of Research; (4) state and UT purchasing requirements that delay equipment acquisition; and (5) excessive delays and paperwork associated with Human Resources. At the January Research Council meeting, discussions with Dwayne McCay made it clear that current plans are that the UTRF (a) use the existing IRIS financial system and UT Human Resources, (b) allow purchasing to occur outside the established state and UT procedures only for occasional and exceptional cases, (c) use existing personnel within the Office of Research and the academic units to process research proposals and contract awards; and (d) push plans for new UTRF-provided space out into the mid- to long-term time horizon and not affect existing UT space or Physical Plan procedures. In addition, the UTRF plans will add another layer of administrators, in a parallel structure, through which approvals of research proposals and contracts must pass. If UT wishes to establish a research foundation, why don’t current plans address the existing problems, and without addressing these problems, what is the anticipated benefit?
My greatest concern with the current drafts of UTRF documents is the absence of control over the distribution of F&A and the selection of board members. We are about to establish an independent entity whose board members are all appointed by the UT President and whose Bylaws place few restrictions upon the manner in which F&A funds may be distributed or used. While faculty members tend to think very highly of you, our university knows from experience that not all university presidents are trustworthy, and the UTRF is by design an entity that should survive both you and most current faculty members. Federal regulations require a great degree of autonomy of board members of non-profit corporations, so much of the University’s future control depends upon the first approved Bylaws and the appointment process for board members. I believe a much safer course of action would be appointment of members of the board by the Faculty Senate rather than the President, or at least appointment of a majority of the members by the Faculty Senate. Why do you wish to place this power of appointment under the exclusive control of the President of the University, and why don’t the Bylaws place additional constraints upon the financial relationships between the UTRF and the University?
Success breads success, but success in research without reinvestment is at risk. This is due to the high variability of funding patterns in research and, at least in engineering and the physical sciences, the large infrastructure costs that are required to support research laboratories. This university has gradually moved away, at least in some areas such as Engineering, from a research funding model that taxes funded research projects to support general infrastructure and “pet projects” of members of the administration and toward a funding model that reinvests a portion of its indirect cost receipts in the research efforts that generated those receipts. Last year, the Research Council advocated a funding model that would return a portion of F&A receipts directly to sponsored researchers in proportion to their funding. The Research Council’s position, and my personal opinion, is that a funding reinvestment rate of approximately 10% of direct cost research expenditures is necessary, at least in Engineering and most of the physical sciences, to sustain growth of funded research efforts with an acceptable level of risk. With the 25% return of F&A to the College of Engineering and the college’s long-standing policy of returning these funds in their entirety to the departments that generated those funds, and with the adoption of policies by some Engineering departments that return all of these funds to the faculty members responsible for their generation, this 10% reinvestment rate has been achieved for at least some research efforts in Engineering. I believe the results speak for themselves, with the continuing health and growth of established research laboratories in these departments. The UTRF draft documents, and in particular the shift of control of F&A to the UTRF, places these efforts at severe risk, especially given the absence of constraints upon disbursement of these funds. Are you willing to modify these documents in a manner that assures that these established rates of reinvestment will continue, and if not, given that essentially no other funds are available to support the infrastructure of these projects and laboratories, why are you willing to place these research efforts at risk?
Given that the UT Research Corporation has been losing more than $300,000 per year for the past three years, and currently is in debt to UT for more than $1,200,000, how can UT possibly justify the tremendous expenditure (more than $8,000,000) of the University's limited resources to expand such a financially-failing operation, that would benefit a very small fraction of UT faculty, particularly as the Business Plan has no description for how such a Foundation could ever be financially self-sufficient without depletion of the F&A currently being used to fund basic operations throughout UT?
Currently a sizable portion of F&A monies are used to supplement the general operating budget. Where will the monies come from if F&A will be controlled by the UTRF?
Much has been discussed about how the RF will handle getting grants, but little has been said about how purchasing will be done under the new system. How will purchasing rules change? How will accounts be kept?
I also wonder what improved services the RF will offer to UT faculty? Will we get help in identifying grant opportunities? Will we get help with budgets, can they fill out forms for us and package proposals to send to sponsors? At my old institution, the RF did the cover pages, the budgets, and all standard forms (including Current and Pending). They also made the requisite number of copies and transmitted them to the Sponsor. They would even upload files onto Fastlane! This kind of assistance allows the faculty to spend time on the most appropriate things.
We discussed the UT Research Foundation at the department meeting this week and generally people are very enthusiastic about the proposed plan if it is something new. We all feel change is needed. The greatest area of concern with the UT foundation had to do with staffing. Will new people be hired (seen as a requirement for this to mean anything) or will existing staff be imported into the new structure. There is a strong feeling in our department that new, competent people who are facilitators and who will be dedicated to speeding up all issues involving grant submissions and administration are needed. Simply creating a new Foundation with the same people won't work.
(1) The Research Foundation was preceded by another Foundation, which failed. What lessons have been learned from this failure, and how is the new Foundation going to overcome the lessons of the past?
(2) We seem at UTK to be generating funds for infrastructure improvement, yet floors are left unclean and electrical wiring upgrades are one and two years behind request. How will the Foundation address these issues of infrastructure? How will the University address these issues?
(3) Faculty engaged in funded research generate significant F&A monies for the infrastructure of UTK. How do we know that these funds support research on campus, for faculty and students? Who is accountable for these funds, and how does this person report accomplishments?
Most businesses require confidentiality regarding their sponsored research activities. Will the proposed research foundation be able to handle this requirement? If so, how? Earlier, the signature of the Tennessee Attorney General was required by State law; later the law was modified to give Presidents or Chancellors signature authority. It usually took weeks or even months for the earlier case; but I didn't gain enough experience after the law was changed to comment on the willingness of Presidents or Chancellors to sign and thereby support research for private companies. Please keep in mind that most companies require signatures prior to initial discussions. This is one of the major reasons that faculty don't help the private sector except through their private consulting.
What changes, if any, will occur relative to the current way that 25 percent of F&A return is returned to
1. I do not see any performance standards pertaining to the research office or research foundation on your scorecard. The performance of the research office services greatly affects our research productivity as a faculty. Are you going to have performance measures such as goals for time to negotiate contracts, time to process subcontracts, etc.? I feel these are needed.
The continuous delays currently inherent in these processes make our other research goals difficult to attain and many faculty see the process of getting grants from small corporations too painful due to IP and contract negotiations.
Is there any connection between the new UT Research Foundation and the "UT Foundation" established in 2001 as the main fund-raising and development-managing partner of the university?
Can we realistically invest this large amount up front to launch the Foundation when we are being asked to significantly reduce spending because of the state's budget problems? We've postponed new administrative positions, wisely in my opinion. Why would it not be prudent to also postpone starting the Foundation? The additional time required to jump through another hoop is my second concern. We often submit proposals at the eleventh hour because of the time needed to gather the people and incorporate their input, craft a proposal, obtain letters of support from collaborators outside the University, et cetera. Routing proposals through an additional administrative layer before submission adds to the problems of meeting deadlines. Is it necessary? What will it add?
How is a "Research Foundation" different from a "Center of Excellence"? In the final analysis don't both have something to do with finding an egg? I believe that it was gold but I'm not sure. In the present climate this might be a hard-sell in Nashville. You might come back and have to clean some of if (the egg) off of your face. Let me see now, we want a research corporation in order to better educate your children and to discover truth?
The Office of Research Administration continues to be barely able to handle grant proposal submission in a timely fashion, and is still 5-6 months behind on processing new awards, despite very forceful recommendations made by an external auditor. These problems are a result of significant understaffing. It is clear that the way to recruit and retain competent personnel is to offer them competitive salaries plus concrete assurances that they will not be overloaded with work. What provisions are being made to ensure that with the new system, this will happen?
1) Responsibilities without power - How will associate deans for research (ADR) be given to authority to make decisions about responsibilities for cost-sharing, space allocation and resource allocation. At present ADR's do not have authority over these issues. If this status quo is preserved, every time an issue arises with these responsibilities, an ADR will have to go ask the positions with the power to make decisions about these responsibilities. ADRs would be little more than "water-carriers" and a delay-steps in the process with respect to these responsibilities. Also, if every ADR is given such authority, who will resolve disagreements about these responsibilities between ADR's when they are vying over the same space, cost-sharing dollars or other resource allocations?
2) Needs for Specialized Knowledge and Skills - ADR's will now be expected to resolve issues about disclosure processing for technology transfer, commercial lab use for technology transfer, conflict resolution for business development, commercial lab use for business development, and proposal quality for a variety of funding agencies and RFP's. At present ADRs and their staffs do not have such knowledge and skills. How is such expertise going to be established in every College office that handles significant research funding (about 6 such offices)? Is it an effective use of University campus resources to have a plethora of ADR's and their staffs with all or part of this specialized knowledge and skills rather than one central campus office?
3) Inadequate Resources for Handling Responsibilities - The Office of Research has 6 staff members plus 2 administrators and 2 executive secretaries that handle grants and services for the equivalent of about 8 people (the 2+2 do have other responsibilities) doing this work, which is only part of the new responsibilities of the ADR's. The University is handing over $1.59 million in E&G dollars to the UTRF, which includes the funding for the operations of the Office of Research (page 15 of status PDF - Existing UT Funds Transferred - UTK column). So, the University is removing staff and funding to that has been used to support the research mission of the institution, while at the same time expecting ADR's to perform those tasks without the supporting staff and funds. Considering that the College of A&S has $25 million of the $94 million in new awards to the UTK main campus, and $23.6 million of the $55.3 million in research expenditures of the UTK main campus (see 2001 report from Office of Research, which is last available year), and hence, somewhere between about 25% and 45% of the workload (not including funding for instructional or public service grants/contracts) for the campus goes through the ADR office for Arts and Sciences; I estimate that the College will need 3 to 4 staff members for this job, including some with specialized knowledge and
skills. What is the University plan for funding and staffing these positions, as the College and Academic Affairs do not have the funds or personnel?
4) A job for more than one ADR, at least in Arts and Sciences - In most, if not all Colleges, the ADRs, if they exist, have other responsibilities (in my case, they are space-related issues and graduate studies issues), so this new load is being added to already full plates of responsibility. The truth is that in at least A&S and probably at least 3 other colleges, 1 ADR would not be enough. Is the University intending to provide funds to hire an additional set of associate deans (as well as the previously mentions staff) to cover the workload? Which leads to the previous question: would it not be a more efficient use of resources to have a central office for the campus that effectively handled these responsibilities?
As an aside, while the UTRF might be able to claim 24-hr turnaround as a realistic goal, it will only be because so much work is going to have to be done by the ADR's who will be underfunded, understaffed, insufficiently skilled, and likely ignorant about important matters related to grant services, technology transfer and business development. Also, as presently envisioned in the workflow diagrams of the status report, ADR's most likely will lack the authority (power) to execute their responsibilities effectively. Who would want to be an ADR?
I do not know how to respond to a single web page full of ideals and not specifics. There is a saying the devil is in the details. This proposed foundation appears to fall in the category of not being thought out prior to exposure.
My initial concern is --
Will this reduce the overhead cost of conducting research at this institution?
What will become of the overhead monies generated by research?
Who is funding the foundation? and
What is it going to do for my research program?
Currently, the research office on the Ag. Campus can approve proposals in 3 days or less, though they ask for a week. I have a feeling though I do not see this on the Web site that the turnaround time will be significantly increased. How much is the foundation going to cost and where will the funds come from. Are we simply moving people and bodies around to a newbusiness structure? Why are plans to construct new buildings to house the Institution not on the Web page? Much more needs to be specified before this project can be reviewed. I encourage the Research Council to make sure that no more is spent on administration of research activities than we currently spend. If more is spent, then the Foundation will be a drain on our already scarce resources.
Based on the discussion with many faculty members who are active in research, and from concerns expressed by the faculty during the town hall meeting on February 11, it appears that the majority of the faculty is opposed to the proposed Research Foundation. Also, there have been enough legitimate complaints expressed by the legislature about increasing administrative costs in the University over the past decade, and the Foundation is going to further increase administrative costs. At this time, how can you justify forming this foundation to the faculty, students, and the taxpayers?