Monday, June 21, 2010

Stem Cell Agency Budget Soars 28 Percent

The California stem cell agency plans to spend $15.7 million next year for its day-to-day operations, up 28 percent from this year's estimated spending of $12.3 million.

The $3.4 million increase is for the fiscal year that begins in 10 days. The hefty hike in spending comes at a time when the rest of state government is mired in a financial crisis that shows no signs of ending. CIRM's funds are provided, however, from state bonds – money borrowed by the state – and cannot be touched by the governor or the legislature under the terms of Prop. 71, which created the agency.

Because CIRM's budget consists of borrowed cash, the ultimate cost of its operations will be substantially higher than the nominal figures provided by the agency. CIRM has access to $3 billion in bonds. With interest, that translates to roughly a $6 billion bill for the state of California. In other words, the agency's operations will really cost nearly $32 million – not $15.7 million. And the $490,008 salary of CIRM President Alan Trounson will actually cost the people of California something a hair shy of $1 million.

But even at $32 million, CIRM's budget can easily be eclipsed by one or two of the beefy rounds of grants that the agency awards for stem cell research.

As we noted last week, the stem cell agency provided a much more detailed look this year at its spending plans, a vast improvement over the information that was offered a year ago. However, CIRM did not calculate percentage increases from this year's actual spending compared to what is proposed for next year. Both the percentage increases reported in this piece, along with the actual dollar increases, are the work of the California Stem Cell Report. They are drawn primarily from numbers on CIRM's “projected expenses” document.

The biggest increase in the budget is for salaries and benefits – a 22 percent ($1.5 million) increase from about $7 million to $8.5 million. The agency, which now has 45 employees, plans to hire five more persons in the coming year. The budget documents do not discuss hiring scenarios if legislation passes that would remove the 50 person cap at CIRM. Increases in state-mandated benefits amount to $400,000. Assuming an average of 47.5 employees for the year, salaries and benefits will consume $178,589 for each staffer.

The second largest item in CIRM's operational budget is for outside contracts. The agency relies heavily on non-state help because of the personnel cap. The figure for the coming year is $2.8 million, up 21 percent from $2.3 million this year.

The cost of meetings for the grant working group, which judges grant applications, will soar 151 percent from $452,000 this year to $1.1 million, a jump of $683,000. The budget documents available online do not explain the increase. But they do report that the figure would cover 12 meetings. The grant group archives show that it held only four meetings during the current fiscal year.

Another big jump will be seen in spending for information technology, particularly for the grant management system, which CIRM has been doggedly wrestling with for several years. Spending in that area will rise 53 percent, from $817,000 to $1.2 million, an increase of about $433,000.

The grant management system is a critical tool for the agency. CIRM is trying to oversee more than $1 billion in grants to more than 300 recipients and, at the same time, hand out many hundreds of millions more in the next year or so. It is building custom programs for entire process, from applications to oversight. Currently, CIRM has a $125,000 RFP out for “systems analysis and software development services” and hopes to have a company on board next month.

CIRM's spending plans (see here for all the budget documents) will be considered today by the directors' Finance Subcommittee in a scheduled one-hour teleconference meeting that has public locations in Cornelius, N.C, San Francisco(2), Los Angeles, San Diego, Stanford, Irvine and La Jolla.

At a San Diego meeting beginning on Tuesday, the full board is expected to approve the budget with no major changes. Teleconference locations for the public are available in Washington, D.C., and the City of Hope in Duarte, Ca.

Out-of-state locations are provided for directors who cannot attend the meetings in person, but the sites are public by law.

The full board meeting can also be heard on the Internet. Instructions for dialing in can be found on the agenda. Addresses of teleconference locations are also on the agenda, but some are so vague that you should call CIRM in advance for additional directions. Sphere: Related Content

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