Monday, February 24, 2020

Text of CIRM Statement on $250 Million in Recovered Funds

In response to questions from the California Stem Cell Report, the state's $3 billion stem cell agency prepared the following information on the amount of cash it has recovered from awards over the last 15 years. 

The money has helped to fund more research sponsored by the agency, which is currently running out of money.  (See here for an article on the practice.)

The practice of recovering funds from awards is not common with the National Institutes of Health, which is the largest funding organization in the United States.

Here is the text of what Kevin McCormack, senior director of communications for the agency sent along in response to our questions.  
"Right from the very beginning CIRM has always tried to be good stewards of taxpayer’s dollars so we have always had processes and policies in place that ensured we were closely managing our awards which has resulted in recovered funds.  

"Cancelled awards are a portion of the funds returned but recovered funds also includes unspent funds at the end of an award; reductions during contracting due to rebudgeting, unallowable costs, or inaccurate facilities rates; or a failure to meet a particular a condition of the milestones such as target patient enrollment which results in an award reduction.

"Awards can be canceled for not meeting milestones, changing the scope approved by the GWG, or other non-compliance issues.

"The total amount of recovered funds collected since 2005 is $250M which averages to an estimated $16.6M per year. Although we cannot break this number down by year, recovered funds were significantly smaller in the early days of CIRM as we began launching awards and then increased overtime as the portfolio grew.  Since implementation of operational milestones in 2016, recovered funds have totaled to the following:
2016 - $30M
2017 - $41.9M
2018 - $25.85M
2019 - $30.3M

"The number of awards cancelled is 32 and the total amount for that category is $122.3M.
"I think it is worth highlighting the key role that our Grants Management Team play in recovered funds as they work closely with our grantees to help them administer the funds they have been awarded. They monitor projects closely, including analyzing budgets, examining financial expenditures, and conducting financial compliance site visits, to ensure that the funds awarded are being spent in an appropriate manner and the Grantee is properly accounting for the use of CIRM funds. The goal of the GM team is always to try and help each project succeed and they are always working to provide guidance to our Grantees. However, if it becomes clear that the project is cannot meet its milestones or is not complying with the rules of our agreement then the GM team will take the necessary actions to correct the situation."  

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