Thursday, June 05, 2014

Stem Cell Parsimony: California's New Stem Cell CEO Has Sharp Budget Knife

In his first major public act, the new president of the $3 billion California stem cell agency this week whacked away at its proposed operational budget for the coming fiscal year, cutting $200,000 here and $20,000 there.

When he was done, Randy Mills offered up a $17.3 million budget that reflected basically the same level of spending as this year. It could be even less given inflation and the vagaries of estimating expenditures for the current fiscal year.

Current spending is estimated to hit $17.4 million by June 30, the end of the fiscal year. But that estimate is a month old and is likely to change somewhat. The budget proposed in early May by former CIRM President Alan Trounson hit $17.9 million, a 9.5 percent increase over estimated expenditures for this year.

Mills' tight budget sent a parsimonious message to the agency staff and the agency's governing board. It also gave him more maneuvering room in upcoming years. The agency is limited by law to spending no more than 6 percent of its grant awards on administrative expenses. A possibility exists that it could run out of operational funds if it does not carefully watch its spending. Some members of the board have expressed concern in the past that the capped amount is too small for effective management and oversight of the agency's large portfolio of awards.

The new CEO's budget also reflects the first time that the agency has not seen a significant year-to-year increase in its proposed spending compared to actual spending. 

Mills, former CEO of Osiris Therapeutics of Maryland, did not make across-the-board cuts in Trounson's initial CIRM budget. Rather Mills surgically excised the cash, including $50,000 from his own office.

In terms of agency activities, the category of “reviews, meetings and workshops” took the biggest hit. Mills sliced $333,000 from what once was a total of $2.5 million. A meeting for the 600 CIRM grantees was eliminated along with $100,000 worth of meetings with outside advisors on the agency's complex disease team projects. Other outside contracting was lopped by $160,000. But even relatively small items were hit. A plan to spend $5,000 for a sponsorship at a personalized medicine conference fell by the way. Plans for training in the finance department were trimmed by $2,120.

Mills' budget will now go to the full board in a telephonic meeting on June 13 for what is expected to be routine approval. A number of public locations are available where interested parties can listen and comment. The specific locations can be found on the meeting agenda.
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