Wednesday, July 07, 2010

Watered-Down Reform Bill Moving Ahead; CIRM Looking at Boosting Staff to as High as 60

The California stem cell agency almost certainly will be able to hire a small platoon of additional employees next year as state lawmakers appear ready to remove a voter-imposed staffing cap.

That, however, may sound more troubling than the reality. The agency still has a 6 percent limit on operational spending, which makes the cap of 50 employees both redundant and a bit foolish. CIRM has labored for some time with what amounts to a staff the size of a 24/7 Burger King, and CIRM President Alan Trounson has warned that the quality of work could suffer.

The agency, with only 45 employees, is trying to oversee more than $1 billion in awards to more than 300 researchers and institutions. At the same time, it is attempting to award another $2 billion in increasingly complex grant rounds that reach into clinical trials and involvement with corporate biotech.

Earlier this year, CIRM said it might hire as many as 15 additional employees. Beyond that, it would run into space problems in its existing offices. Hiring additional employees would also “shorten the life span” of the cash available under the 6 per cent limit, which refers to the $3 billion in bond funding.

The bill removing the cap is headed for placement on what is known as the consent calendar. Items in that category are supposed to be noncontroversial (but there are exceptions) and are voted on as a block with no discussion.

The legislation, SB 1064 by Sen. Elaine Kontominas Alquist, D-San Jose, is currently in the Assembly Appropriations Committee after winning approval in the Health Committee, 19-0, on June 30. After passage by the full Assembly, it will return to the Senate for concurrence in Assembly amendments before it goes to the governor. It would take effect at the beginning of 2011.

Given CIRM's support, the first time ever for such legislation, the bill seems certain to be approved. However, approval requires a rare, super, super-majority vote – 70 percent – of both houses, so it only takes a few legislatiors to bring the bill to a halt.

The stem cell agency backed the bill in a compromise that significantly watered down the legislation. Gone are many reforms recommended by the Little Hoover Commission, the state's good government agency, along with provisions sought by the state's top fiscal officer, Controller John Chiang.

They include elimination of a performance audit by a special Prop. 71-created, financial oversight committee chaired by Chiang. Instead CIRM itself would pay ($400,000 plus) for the audit and control its scope. CIRM already has written into the bill a stipulation that the audit does not have to include “a review of scientific performance.”

Excluding a scientific review gives cover for the agency if it wants to isolate problems it does not want examined. Exclusion also avoids outside review of many of CIRM's key assumptions. However, a detailed scientific review may well be beyond the capability of most auditing enterprises, although they could presumably hire a panel of experts.

But perhaps more important is the fact that the agency would pay the audit firm for the work. If CIRM pays the piper, it calls the tune. Just ask Enron, and others. Any audit paid for by CIRM can be fairly criticized for not being objective. It will mean $400,000 or more for the successful bidder. CIRM has already demonstrated it wants its contractors to be cheerleaders. That was a key criteria for selection of the firm that is now evaluating the economic impact of the agency.

Also gone are revisions in the role and election of the chairman, along with other reforms. The previous provisions would have eliminated the conflicting roles of the chairman, who now has executive management responsibilities, and the president. Problems with the dual executive arrangement at CIRM have arisen in the past and are likely to come up again. Also eliminated are provisions that would have given the board more control over selection of its own chairman.

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