Thursday, January 29, 2015

From Fraud Checks to Unspent Funds: California's Proposed Rules for Stem Cell Researchers

The California stem cell agency today put off adoption of  new rules for the way it will hand out its last $1 billion, speeding the money to researchers and attempting to improve the quality of research proposals.

The agency's staff deferred action on the proposal in order to spend more time refining it prior to action in March. The interim grant administration rules are designed to implement the CIRM 2.0 plan laid out by agency president Randy Mills, who has been on the job since last May. 

The rules will apply to the initial phase of CIRM 2.0, which closes the first of its new, rolling application rounds tomorrow, and is subject to adjustment. CIRM (the California Institute for Regenerative Medicine) expects to extend the new rules in one form or another to all upcoming award rounds.

The agency calls the fast-track effort a radical change from previous years. It is certain to have a major impact on many scientists.

The agency is funded by money that the state borrows (bonds). It has handed out roughly $2 billion and figures its remaining $1 billion will last until about 2020 when it will need additional financing.

The new regulations talk about such things as “real-time course corrections,” background fraud checks, early and stringent budget review, restrictions on appeals by rejected applicants and elimination of paper work.

Here are some excerpts from an agency memo identified as coming from the “legal team.”  It unfortunately does not contain a marked-up version showing language that has been deleted from the previous grant administration policy along with the new language.


“Prior to CIRM 2.0, payments to grantees were made primarily based on the calendar – disbursements keyed off the start date of the project and were periodically made based on some given period of time following that date. Under the proposed GAP(grant administration policy), however, for clinical stage projects, CIRM will shift to a milestone-based payment schedule. Thus, this section of the GAP describes the importance of the milestones and how payments on the grant will only be made upon successful completion of the milestones.

“Additionally, in many circumstances the grantee will be allowed to keep unspent CIRM funds upon successful completion of the project, to be spent on any other project of the grantee’s that is consistent with advancing CIRM’s mission. This new process will incentivize grantees to advance the project in the most efficient and shortest time possible, fulfilling CIRM’s goal to accelerate such projects.”

Background checks

“The eligibility section has been drafted to reflect that applicants will undergo a background check to ensure no prior or pending records of fraud or misuse of funds.” 


“This new review will examine the proposed budget to identify where proposed costs diverge from established market rates and where opportunities for budget tightening may be found. To incentivize efficient budgeting, where CIRM determines that a budget differs significantly from market rates, conforming adjustments will have to be made before the application will be brought forward for review by the GWG (the grant review group).” 


“Rather than require submission of extensive documentation regarding compliance with myriad protocols and processes – some CIRM-imposed and others external – the proposed process will rely on certification of compliance by the applicant, with the ability for CIRM to request supporting documentation if cause to do so arises.” 

Elimination of paper work

“Because most prior approval requests were routinely granted, and therefore added little value to the process, prior approval requests for rebudgeting and carryforward have been eliminated. We have also eliminated prior approval requests for no-cost extensions because our new CIRM awards will have project end dates that will be extended automatically as needed to complete the final Operational Milestone. CIRM intends to increase the latitude for grantees to pursue their research, while maintaining visibility into and approval of any changes to key components of clinical trials, manufacturing processes, or any other activities that meaningfully impact milestones or suspension events.” 

Clinical advisory panels (CAP)  for each award

“CAPs will provide real-time course correction and will focus more on acceleration opportunities than pure evaluation. CAPs will be tailored for the needs of each project and will consist of CIRM and external members, more nimbly sized than prior CDAP panels. CAPs will meet on a quarterly basis (instead of annually with CDAP) and examine all relevant information regarding project progression, possible roadblocks, and avenues for progression.” 

Appeals from rejected applicants

“Finally, in light of the rolling nature of the programs which will allow unsuccessful applicants in many instances to reapply with improvements to their applications, CIRM will limit the grounds for appeal of Scientific Review to those based on demonstrable conflicts of interest (as defined in the conflict of interest policy applicable to GWG members).”

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