In direct Costs: Getting A i
University
Bills
Paid
ing with indirect cost of researche atrthenUniversie tyr.arils e
By ROBERT JOHNSTON
Last year the University collected about $6 million from
research sponsors for indirect costs. The figure will be larger this
year. From whom this money is taken and to whom it is given
and why is often, to many at this University, a source of con-
fusion and misunderstanding.
Of the dozen or so persons with whom this reporter has
discussed indirect costs, only the upper-echelon administrators
directly connected with the indirect-cost system seemed to know
how this money was collected, exactly what it was collected for,
and what ultimately happened to it.
To faculty members, deans, department chairmen and center
and institute directors, indirect costs were shrouded in mystery.
Only one was able to discuss indirect costs in any knowledgeable
wa&, and then using information several years old.
Nevertheless, indirect cost reimbursement amounts to $6 mil-
lion per year at the University, and all those connected with grant
and contract administration must take them into account when
research project budgets are made up.
The philosophy of indirect costs runs something like this:
Only a portion of the University's $137 million budget last year
went to pay the direct costs of running this institution, namely
faculty salaries and wages. The rest of the money paid for build-
ings and maintenance, administration, libraries and other expenses
-rangng from the President's salary to lawn mowing on North
Campus.
Inevitable
No matter what the activity, such indirect costs are unavoid-
able, whether the direct costs are salaries for teaching or for
research. The University's state appropriation is in a lump sum,
and pays for both direct and iindirect costs.
But the federal government gives the University money for
specific purposes through the grant and contract system, and it
requires that specific assessments be made for indirect costs.
This University-federal government relationship goes back to
the post-World War II period, when various agencies, notably the
defense department, had problems that they wanted solved and
new fields of science they wanted explored. It was to the universi-
ties, which had performed well during the war, that they turned.
Another reason for federal sponsorship of research soon de-
veloped and has since gained in importance. The University's vice-
president for research, A. Geoffrey Norman, describes this develop-
ment as a "national policy decision to strengthen the scientific
and technical capabilities of the nation." That is, more and better
training for scientists and engineers was made a goal of national
policy.
Distribution Device
The grant and contract system was worked out as a means of
distributing government resources toward attaining these objectives.
This, of course, involved money and, predictably, problems devel-
oped. Rules and procedures were improvised to meet the problems
as they came along.
The direct costs of grants and contracts were calculated and
budgeted without any trouble. Such direct costs included salaries
and wages, travel, equipment, supplies and other expenses involved
in the immediate execution of the research project.
However, nobody really knew what to do about indirect costs.
It was agreed that such costs existed: that there were administra-
tive, building, library and maintenances that were caused by the
presence of research on a campus. The universities and the govern-
ment decided that they needed a simple, efficient way of assess-.
ing indirect costs. Both sides agreed that the simplest solution was
to take 50 per cent of the amount of money budgeted for a project's
salaries and wages and to fix this arbitrarily as the amount which
that project should pay for indirect costs. This was deemed much
simpler than trying to figure out the "actual" amount of indirect
costs, if indeed an "actual" amount could be determined,
Arbitrary
This method of assessing indirect costs was pulled out of the
hat. There was very little study to determine if it was equitable or
if it represented an over- or under-payment to the universities for
indirect costs.
Vice-President for Business and Finance Wilbur K. Pierpont
points out that more sophisticated methods have been developed
since the postwar period when the 50 per cent concept was the
standard. However, the accountants, who produce their figures
eight to nine months after the end of each fiscal year, arrive fairly
closely to the 50 per cent figure anyway.
U.S. Bluebook
The first step in refining the methods for determining indirect
costs took place in 1947-48, when a "Bluebook" of auditing
principles to be used in determining indirect costs was issued,
Pierpont was on the national committee which wrote the book,
which incorporated many changes in previously used systems.
See GOVERNMENT, Page 6
PROBLEMS IN THE
HONORS PROGRAM
See Editorial Page
Sir
~Iait~i
CLOUDY
Low-23
Snow flurries,
windy and warmer
Serenty-Four Years of Editorial Freedom
VOL. LXXV, No. 138 ANN ARBOR, MICHIGAN, FRIDAY. 12 MARCH 1965 SEVEN CENTSTEPAS
Romney's
B lue Ribbon Group
FPA Overrules Trigon 's Right To Appeal
Asks for Flint Postponement
Fr~aternity To Ask
Second Hearing
*
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By JOHN MEREDITH cation in Michigan, will be pre-
community colleges as well as ad-
The relminry raf ofthesented to the entire committee to- minister state support and capital By LAURENCE MEDOW
"ble rbbo" Ctizns ommtte Ho evro a r usual reliable ut cyontains a recommendation The Fraternity Presidents As -
an Higher Sducation calls for post-. source predicted yesterday that that the state board work out i sembly last night denied Trigon1
ponement of the University's plans release of the final report will 5-10 year program to aid the new Fraternity the right to appeal to
to expand Flint College In the be delayed until April, perhaps as community colleges in making the FPA an earlier decision on
fall, the Ann Arbor News report- late as the middle of the month. financial adjustment. Trigon's discrimination case made
ed' yesterday. This contrasts with earlier specu- Recommendations in Line by the Interfraternity Council
Th daf, ivdd nt svea lation that- the report would be James C. Browning, dean of Port Executive Committee. Trigon's ap-
Thedrat, ivied to evealreleased next week, section by sec- Huron Junior College and head oi peal was to have been made at
sections, each of which has been tion. the Committee of Community Col- last night's FPA meeting.
prepared by a subcommhittee ou~s Cite Recommendations lege Administrators, commentec' Last January 12, the IFC exec-
-- In reference to the University'< yesterday that the document's rec- utive committee had found alleg-
plans to make Flint a four-year ommendations appeared to be ir ed religious discrimination in Trn-
insituioninthe fall, the New' line with the views of state com- gon's membership policies - a
article cited several recommenda- munity college officials. violation of IFC bylaws.
~~~~~~~tions in the r epor t that cor res- -Teeeuiecmiterld
pond to Gov. Romney's position January 26 that Trigon niust re-
Ilu e C ang beheld up until theh stt oardtC R g n snxuetme r fches
of Education reviews the project. j-e ble expulsion from IFC.
By ALICE BLOCH University Executive Vice-Pres I Uf ~ iel The motion to deny the ap-
peal was introduced and passed
Sorority housemothers last night detMri iusdcie 7 in response to Trigon's request
voiced their questions and com- comment yesterday on this an or a u acyfor a postponement of the hear-
plaints about the "parallel pniv- threcm ndtnsmentione' ing. Executive officers felt post-
ileges" given to junior sorority in th arce, preferrin to waity OER ENE ponement would be a "great in-
women by the Office of Student uni th eoti fiilyr- B OETBNJLW convenience to all concerned in
Affairs Wednesday. leased in its final form. An emergency meeting of the the IFC and the FPA" and asked
Addressing their remarks to a According to the News, the re University of California regents is that the appeal be denied.
panel of eight Joint Judiciary port contains no specific finan planned for tomorrow to discuss A W w iiOmor to hear an appeal
Council mnembers at an "All-Cam- cial recommendations for this na the issues of student discipline from Trigon may, however, be in-
pus Judiciary Conference," the or the future. However, it does and the resignations of President troduced at the next meeting of
housemothers questioned thie ad- recommend that the state boar( Clark Kerr and Berkeley Chancel- FPA, Richard Hoppe, '66, IFC
visability and practicality of the "stand above the autonomour bor Martin Meyerson. presi~ent, said.
new University rules. The regula- boards which control individua' The resignations followed a "In suite of the motion passed
tions state junior women with tax-supported colleges and uni- "filthy speech movement" on the by FPA denying Trigon's appeal
parental permission will be free versities." IBerkeley campus. I n f o r m e d of the previous executive commit-
to leave and enter "their places Needs Expansion sources said Kerr and Meyerson tee decision of guilty, it is under-
of residence" at all hours starting It further states that medica& were pressured by several regents stood that the question of an ap-
next fall, schools at the University and to take immediate disciplinary peal can be grought before FPA
Wayne State University should be action - against the students in- at a later date. With this in mind',
The main problem the house- expanded before a third medical volved. Kerr had said the matter
mothers and JJC members foresaw school is established in Michigan would go through regular chan- OR E TO
was that of security. While Uni- -a position in line with the con- nels.CO E TO
versity residence halls employ clusions of an earlier renort on' The campus is still mindful of Contrary to a story in yester-
"night assistants" to open and the medical school controversy, the vast student demonstrations day's Daily, the University did
tieslc dono. Terforsengeshose- The preliminary draft, accord- which swept across it in the fall. not receive an increase of 10
mothers expressed fear that care- ing to the News, goes on to ca1' Kerr saidthe did not take harsh per cent over las yar in th
less sorority members would leave MSU's plans for a two-year med aton inth reetcen or hdern nmerfdsa applicants.per
open or forget to re-lock the doors ical program in conflict with th travodreiionfnscdmo- nted appliatiyon.hs ran 2 e
aftr losngthe. b cesexpesed te erle Strong Discipline was 10 per cent ahead of what
.No Definite Suggestions The News states the draft on- The regents, however, seem in the admissions office had pre-
Although JJC members and the poses creation of additional bran"' favor of strong discipline and are dicted.
..-z.~ ni ~ ~ . - ex..pecptedl to name a ma n s-
Residence0
Halls
Sees
Possible
Fee
REV. REEB DIES-:
PledgeFedera Ai nem
By The Associated Press
WASHINGTON - Atty. Gen.
Nicholas Katzenbach yesterday
pledged swift federal prosecution
of Alabama police officers respon-
sible for last Sunday's violence
against marching Negroes in Sel-
ma, Ala.
Katzenbach told a news confer-
ence there is no question that
,ederal 'law has bee n violated
there.
In Birmingham, Rev. Janmes J.
Reeb of Boston, who was beaten
by white men while participating
in a civil rights demonstration in
Selma Tuesday night, died of a
fractured skull.
Earlier in the day, Selma police
arrested a fourth white man and
charged him with the assault. He
is Odel Hoggle, a Selma auto me-
chanic.
He ad the othe thre me
wilface federal charges of cn
spiracy to violate Rev. Reeb's
:ivil rights, as well as murder
charges in Alabama.
-Associated Press
EVENTS IN SELMA, ALA., brought demonstrations across the
nation. Above, federal officials forcibly remove protestors from
Raie
Cutle Cites
Food, Manufacturing,
Counseding Affect
Roomning Char-ges
By LESLEY FINKELMAN
It appears likely that a raise in
residence hall room and board
fees will be recommended for the
fall semester, according to a state-
ment made yesterday by Richard
L. Cutler, vice-president for stu-
dent affairs after a meeting of the
University Residence Halls Board
of Oovernors.
"No definite rate increase has
been decided, but it looks as if
there will be one. We don't know
how much the fee will be in-
creased because many aspects of
dormitory living have yet to be
investigated," Cutler said.
The Board of Governors, ~n
agreement with Cutler's statement
tioning residenc hall sye m isn
necessary," discussed in passing
several topics which may affect
dormitory fees this fall. Among
them were the University debt
service requirement, the rising
cost of livig and the increase in
wages for services, maintenance
and counseling.
SShip Must Float
"Because our 'ship' must float,
each student must pay a small
portion of the University's debt
requirements for residence halls
as he pays for room and board,"
Director of Residence Halls Eu-
gene Haun said. "We also must
pay our help and the cost of more
expensive food," he added.
Based on a report made in No-
vember by Wilbur K. Pierpont
University vice-president for busi-
ness and finance, Haun said an
increase in the minimum wage
would very likely result in in-
creased fees from students in resi-
dence halls so the University can
pay its student employes.
tha wages sould not be lowee
in dormitories, because students
deserve good wages for the hard
work- such as bussing tables -
The board considered some pos-
sible modifications in the resi-
dence hall system to save money,
but it has not decided definitely
to implement them.
Maid Service
One suggestion was to dispense
with maid service in rooms. Haun
expressed concern about whether
the rooms cOuld ' be maintained
without it.
reIncreasing cost offood is also
Cutler sair "For indtnenap e
An' estimated 450 Negroes, led by an area used by mail trucks outside Los Angeles' Federal Bldg.
a Cincinnati minister, had main- Students staged a lengthy demonstration there yesterday.
Bimngham before his death was James Farmer, national direc- in Selma. Ann Arbor CORE will
annuncd. tor of the Congress of Racial be arranging bus trips for anyone
Thnue deosrtinsele f-Equality, has issued a call to all who wants to make the trip.
:).te 2U sLtdents atten~inglI the
conference had no definite sug-
gestions for the improvement of
security measures, JCC stressed
colleges to meet the need to ex
pand higher education facilities ir
;Michigan. Instead, the reoort oro
poses the state be "blocked out
the freedom of each house to im- ;into 29 community college districte
plement University regulations. 'with establishment of 26 new com-
Also, the housemothers feared munity colleges in the districts."
many parents who sign the per- Recommend as Site
mission slip would never see the Ann Arbor is among the citie'
GSA letter explaining the new recommended as the site of a
regulations. new community college, the NewF
JJC members said more copies ,article states. Each community
of the letter would be made avail- college would be independent ir
able and the individual houses respect to "governing board, fac-
should make rules enabling the ulty budget, buildings and salar-
housemothers to keep track of ies."
juniors and seniors. A suggested. The preliminary draft reported-
solution was to require all wom- ly emphasizes that the state board
en leaving the houses after closing should act to coordinate the pro-
to sign out. grams and campuses among the
KICKS OFF FILM FESTIVAL:
By MICHAEL JULIAR
Filmmaker Gregory Markopoulos ,last night brushed aside the
fact that he did not have a prepared speech, tried to ignore a small
element in the audience that annoyingly laughed at some of his
comments and delivered several remarks to kick off the third Ann
Arbor Film Festival.
Attempting to elucidate some of the characterics of the contem-
porary American filmmaking scene for the audience at the Archi-
tecture Aud., Markopoubos emphatically declai'ed that "all the arts
are quite dead, except the film."
siblyforme Chanello Edmud Triori ill dfinitly coside re- rORee's dathtwssannunce.rCOR chapers semarnteon Thoseinteestedin ngong t
Strong ow on eavce, or dudT will dei nipely fronmd FrA- Mry ofe tse resentbsgano d Washington Monday unless Presi- Washington should call the local
Ston, o o laewh ilqTrwng Prsn David Hall, '6," sin freom shos. prsn ea dent Johnson takes strong action CORE office at 663-3475,
tak effective action. Such action TinPrsdnDadHa,'6,sg rdmsng. - ---- - --- ---- - About as many church workers
might, however, "lead to mass said
resignations of the faculty," Jesse Trigon's reasons for requesting -u See WASHINGTON, Page 3
M. Unruh, a member of the board a postponement were 1) that all 11 I-~S ~iilV
of regents, warned, the representatives presenting Trn.-
port is seen as being directly be- last right because of insufficier'
hind Kerr and Meyerson. The notice of the date and 2) that S
campuses of the California cam- changed officers and created con- By JULIE FITZGERALD
pus complex have urged Kerr to flicts in presenting the case.
reconsider his resignation. IIFC contended that the responi- Democratic condidate for mayor Mrs. Eunice Burns said last
Berkeley faculty and students, sibijity for setting the date resisnghtheminaadpyhoogalbtatyfdicmntin
meanwhile, have termed Meyerson with tlm' executive committee, that igh the Aroionals and pe shogyical brutality tisriinpaon
a "popular, fair and effective Trion had sufcin notice of the inAnAbri uta ela h hsclbuaiytkn lc
chancellor" and have expressed date and that the responsibiliev in Selma, Ala.
their desire to have him remain for bemng prepared rests with Tri- Speaking at a coffee hour, she said she had participated in
as chancellor. jon. Wednesday's peace march in Ann Arbor to protest the brutality
- - - ---=-in Selma. Mrs. Burns added the
Abor is mnore subte than in the
South and perhaps for this reason &
the need for anti-discriminatory
C~ At s Dead, xcept Film' measures is harder to get across.
"The Democrats on city coun- CR' AE AMR
cil are trying to extend coverage COESJMSFRE
menits. So I went up to the front of the room and addressed the people of the Fair Housing Ordinance
there, telling them what the 'new' movies were about." and simultaneously would like to To P c e o
Films Old-Fashioned start an educational program to
Later, Markopoulos said "films are still being made in very old-~ change people's attitudes,"' she 6 IVa9e k
fashioned ways, but there are now new ways." He felt these "new commented. ,
ways" are best in evidence in such films as Stanley Brackhage's want torn dodsomthn posite
"Flaming Creatures" (which, by mutual agreement between the rather than just state plattues. The University of Michigan Stu-
filmmaker and the city of New York, cannot be publicly shown be- As mayor she would pledge her- dent Employes Union will picket
cause it is considered "obscene" by the city for its showing of the self to this sort of program, she the Administration Bldg. at 3
sexual organs), Brackhage's four and one-hour production entitled said.
"The Art of Vision" and Markopoulos' own award winning film,'I Also speaking was Mrs. Phylis
O'clock today to demand a $125
minimum wage for student work-