California's $40 Million Stem Cell Genomics Center: Its Fate and Outcomes

California's stem cell agency hit something of a milestone six years ago when it approved $40 million to create a genomics center that was aimed at positioning the state as a global leader in stem cell genomics. 

The round triggered complaints about irregularities, unfairness, score manipulation and the role of its then president, Alan Trounson. The $40 million, at the time the largest single research award by the agency, was ultimately divided three ways and now has been spent. 

The California Stem Cell Report queried the agency this week about the award, its status and results. Here is the response in Q&A format.

Q: How was the $40 million shared and with which institutions?
A: The genomics grant was split into three awards: $22.7M to Stanford (GC1R-06673-A), $13.2M to the Salk Institute (GC1R-06673-B), $4M to UC Santa Cruz (GC1R-06673-C). (The application numbers carry links to the progress reports on the CIRM website.) 

Q: Is there any requirement for the grantees to come up with a plan for continued funding? 

A: There was no requirement for the grantees to come up with a plan for continual funding in the concept RFA.  Stanford and Salk provided co-funding to support the centers during the award period.

Q: If not, what prevents the doors from closing at the genomics center(s) in the next couple of years?

A: The Stanford sequencing center established by the genomics awards continues to operate with other sources of funding.  The Stem Cell Data Hub established by UCSC continues to be supported.  UCSC has no plans to shut down the site even though its CIRM award has ended. 

Q: How much time remains on the grant(s)? I See there was at least one extension given, but it is unclear why there was delay.

A: All three genomics grants have ended as of May 31^st.  The sequencing centers at Stanford and the Salk were given six month award extensions to continue supporting projects with technical delays in sequencing activities.  The data hub at UCSC was given a 12 month extension to process data generated by the sequencing centers.

Q: What else do readers need to know about this award? 

A: A number of outputs were generated from genomic center projects, including:

• 60 publications connected to CESCG funding
• 10 data analysis/visualization tools created
• 1 new sequencing technique developed
• 300 new iPSC lines created
• Central online data hub created with standard metadata, analysis pipelines, restricted access
• Data repository of human single cell global transcription in heart, pancreas, blood, brain, brain
• 84TB data generated from sequencing activities across projects

*********

​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

Stem Cell Agency Hires Tech Chief to Solve a Myriad of Problems

In a move that was long overdue, the $3 billion California stem cell agency last week hired a director of information technology to straighten out key problems ranging from its grants management system to how it handles its website.

The new hire comes as the CIRM governing board faces the results of its first-ever performance audit, which is markedly critical of how the agency handles its information. Half of the audit's 20 highest priority recommendations for improvement focus on information deficiencies, including critical information necessary for CIRM executives to determine the agency's performance.

Solving those problems will fall on the shoulders of Bill Gimbel, who is no stranger to CIRM. He has been working with the agency as an information technology advisor since 2010 through a contract with Infonetica, Inc., of Pleasanton, Ca., according to CIRM spokesman Kevin McCormack.  Gimbel is now the first staff person in a chief technology position at CIRM since October 2007, when about 25 percent of CIRM employees left.

Bill Gimbel

A graduate of MIT, Gimbel, who will be paid $180,000 annually, has a broad range of experience in computer technology and software dating back to 1992. According to his Linkedin web site, he was most recently director of IT at Infonetica. He lists himself as owner of aptReader, an app for reference books. He has also worked for LearningExpress and Scholastic, Inc.

The stem cell agency has been wrestling with information technology issues for years. The critical grants management system has been an issue at least since 2007, when directors were told its costs would not exceed $757,000. No figures for the total spent since then have been made public by CIRM, which is attempting to build a custom system, but the amount clearly and easily surpasses the 2007 estimate, based on some of the outside consulting costs. Although the agency hopes to resolve many of the problems by the end of this calendar year, the grant system was the target of considerable attention by Moss Adams, the firm that prepared the performance audit.

Over the years, CIRM directors have received intermittent, sketchy CIRM staff reports about the grants management system, but the Moss Adams discussion is the most comprehensive.

Among other things, the Moss Adams report said in bureaucratically delicate language,

 "Integration of website content management has not been an integral part of the GMS (grants management system) development process, which could result in suboptimal operational efficiency and effectiveness.

"Grants management system development is effectively managed at a tactical level, but it lacks dedicated, strategic governance and oversight, which has resulted in an elongated development process and requirements conflicts."

Moss Adams said,

"The new grants management system intellectual property module, currently under development, does not include provisions to address commercialization activity."

The performance audit additionally said,

"CIRM board members and senior management do not receive regularly updated, enterprise-level performance information. The ability to evaluate performance against strategic goals is critical to effective leadership and program monitoring, evaluation, and reporting. CIRM does not currently have a formal performance reporting program."

Moss Adams continued on other information technology topics:

"Data and document access are inefficient as a result of CIRM operating without a document management system.....In most cases, CIRM staff cannot access information without human interface. Information is stored in multiple locations, which are not linked or indexed."

The audit said that the agency has tried to solve its information problems without a plan. 

 "CIRM’s information system needs have been met by a variety of tools, including in-house developed applications, off-the-shelf applications, databases, and spreadsheets, most of which are not integrated," the audit stated.

One of the effects of all this is much wasted time when CIRM's tiny staff tries to extract information from the hodge-podge of systems. It is time that cannot be spared as the workload increases in the next few years, as it is certain to do. 

CIRM's 29-member board is scheduled to consider the performance audit at its meeting this Thursday. 

IP to Grant Oversight: Study Calls for Host of Improvements at California Stem Cell Agency

The $3 billion California stem cell agency is laboring under a range of problems that include protection of its intellectual property and management of its nearly 500 grants plus an inadequate ability to track its own performance, a seven-month study said yesterday.

The performance audit by the Moss Adams accounting firm of Seattle, Wash., made 27 recommendations for improvements, including more effort to ease strain connected to the agency's controversial dual executive arrangement. The study said that the nearly eight-year-old agency has many "opportunities" to "enhance performance reporting and decision making, strengthen effectiveness and efficiency, retain essential human resources and leverage technology."

In response to the report, the stem cell agency said, "(M)anagement concurs with the findings and recommendations....The recommendations are focused and constructive. CIRM is already implementing many of these recommendations, and we will be investigating the others in the coming months."

The performance audit is the first ever made of the California Institute for Regenerative Medicine. The audit is required by state law and was commissioned by the agency at a cost of $234,944. For years, the agency for years had resisted calls for a performance audit until it sought legislative approval in 2010 for removal of a 50-person cap on its staff. Originally, the performance audit legislation would have put the study in the hands of the only state body charged with oversight of the agency and its board. CIRM, however, was successful in lobbying to have that provision removed.

The 54-page report identified once again a number of issues that have troubled the stem cell agency for some years. Moss made 12 top priority recommendations, many of which dealt with information technology and grants management. Many of the recommendations focused on providing better and faster information on performance outcomes, which the audit said has been slow to come and hard to generate.

The report said,

"Key performance information is not readily available to CIRM leadership and other stakeholders on an ongoing basis. CIRM board members and senior management do not receive regularly updated, enterprise-level performance information. The ability to evaluate performance against strategic goals is critical to effective leadership and program monitoring, evaluation, and reporting."

The audit stated,

"CIRM does not effectively communicate outcome-based performance internally or externally. As such, CIRM does not focus on performance metrics as part of its (staff) meeting process."

The report additionally said,

"CIRM does not have an integrated financial information system....The use of spreadsheets results in labor intensive processes to generate reports and respond to information inquiries, since data must be pulled from multiple spreadsheets, a process that may be prone to error. ...Spreadsheets are not linked to each other or a master report. CIRM does not have a comprehensive list of spreadsheets or instructions for how to maintain the files or generate reports from them."

Moss Adams said that CIRM needed to do a better job in "bond forecasting," a reference to the California state bonds that finance virtually every aspect of the agency's operations. CIRM directors were caught by surprise a few years ago when they suddenly learned the agency was up against a major cash crunch.

Some of the recommendations will require more work from CIRM grantees and their technology transfer offices in an effort to track intellectual property and grant outcomes. The report also recommended a speed-up in CIRM's review of progress reports from grant recipients, which have been lagging completion by several months.

The dual executive arrangement, which was written into law by Prop. 71, has troubled CIRM since nearly day one. CIRM's own external review panel also identified it as problem two years ago. The executive structure is virtually impossible to change because of the political difficulty in making alterations in the ballot initiative.

Moss-Adams said,

"The working relationship between the chairman’s office and the president’s office has vastly improved over the past year, but there are still opportunities for improvement."

The performance audit recommended,

"Make every effort to manage and operate as one cohesive organization, while recognizing the varying roles, responsibilities, and authorities that exist with positions in both the chairman’s office and president’s office."

One of the top 12 recommendations involved CIRM's public relations/communications effort. CIRM Chairman J.T. Thomas told directors last June that the agency was in a "communications war."

Moss-Adams said,

"CIRM does not have a communication plan, and there is lack of clarity on how to address mission-based communication to CIRM’s various target audiences, especially the general public....The best way to facilitate results-based communications is to 1) quantify goals and outcomes in CIRM’s strategic plan and 2) report on achievement of those goals and outcomes by enhancing CIRM’s annual report with additional performance-based information."

Another performance assessment of the stem cell agency is also underway. It is being conducted by the prestigious Institute of Medicine and is costing CIRM $700,000. That report is expected this fall.

CIRM's board of directors is scheduled to consider the Moss Adams report at its meeting May 24.

Our take: While the findings and recommendations of the performance audit were delicately worded in many cases, they brought out issues that need to be addressed, many of which have been around for a great deal of time. At their meeting next week, CIRM directors should act very directly on the recommendations. They can do that by requiring a written report each month from CIRM Chairman J.T. Thomas and CIRM President Alan Trounson on the specific steps that they are taking to implement the performance audit's recommendations. Otherwise, the inevitable drift will set in.

Stem Cell Directors Moving on $243 Million Program and Industry-Friendly Efforts

Directors of the California stem cell agency will meet next week to begin the first stage of giving away $243 million in their pursuit to push a stem cell therapy into the clinic.

The immediate effort involves $3.3 million in planning grants for the second round of the CIRM disease team program. Applications are targeting cancer, HIV, Alzheimer's, ALS, Huntington's Disease, Parkinson's and muscular dystrophy, among others. The next step in the disease team effort will be much larger – $240 million, to be awarded next summer with roughly $20 million for each grant.

For the smaller planning grants to be awarded next week, 36 researchers applied for cash of up to $100,000. Nineteen were approved for funding by the grants review group, which is tantamount to full CIRM board approval. Their scores ranged from 87 to 62. One application was approved for funding but no score was listed. However, that application was ranked below the application with a score of 62. CIRM provided no explanation for failing to publish the score. Names of applicants were not disclosed in keeping with the agency's longstanding practice.

The disease team round was open to both business and academic researchers. We have queried CIRM about whether any businesses applied. The stem cell industry has been less than happy with its meager share of CIRM grants. The $3 billion agency's new chair, Jonathan Thomas, has indicated he wants to make CIRM more industry friendly.

The board meeting next week will be Thomas' first full session as chairman. The meeting was originally scheduled for two days, which was not uncommon under the tenure of former Chairman Robert Klein. But next week's session has been reduced to one day under Thomas. The agenda also seems not as fully packed as under Klein, although it has two executive sessions that could consume a fair amount of time. One deals with the evaluation of CIRM President Alan Trounson. The other deals with proprietary matters on grant applications.

Heavy agendas during the Klein era often generated quorum problems because of the supermajority requirements for voting by the board. It took so long to work through the material that competing priorities among board members meant that some – sometimes quite a few – had to leave.

Today – with eight business days before the Aug. 25 meeting – the agenda has a fair amount of background material posted, giving interested parties a chance to examine the information in a timely fashion.

Included on the agenda is a document about CIRM's ongoing issues, including security, with its self-developed, computerized grants management program, a listing of its translational grant portfolio and a plan to extend its $44 million researcher recruitment effort.

The CIRM board also has plans to take up a report from its new Intellectual Property Subcommittee.  The full board agenda contained no indication of what the report would deal with, but presumably it will involve a new, $30 million program aimed at the stem cell industry. That program will be acted on by the IP subcommittee next Monday, preceding the full board meeting. The panel's recommendation would normally go to the full board meeting on Aug. 25.

Also missing from the agenda is any explanation of the purpose of the discussion of the translational grant portfolio or analysis of the portfolio. Additionally, still to come is the latest version of changes in the grant review process for CIRM's big-ticket grant efforts as well as a job description for CIRM's first-ever chief financial officer.

The job description effort has been underway for some months and is linked closely to issues involving CIRM's controversial dual executive arrangement between the chairman and president. The new CFO will be reporting to both the president and the chairman.

The disease team planning grant item also reflected a change in the way CIRM presents the public summary of reviewer comments on the applications. The new format is more concise. Gone is the narrative format that often contained a more fulsome discussion of the applications. Here is a link to one summary on a planning grant application and another link to an application in January.

CIRM Directors Pay Proposal Advances; Another Openness Failure on Grants Management System

The California stem cell agency is set to pay 1/3 of its 29-member board of directors as much as $15,000 a year.

The action, however, is contingent on passage of legislation (SB1064) that is now in the “suspense” file in the Assembly Appropriations committee. Legislation in “suspense” is usually on hold pending action on the state budget, which is not likely to be adopted any time soon.

According to a CIRM spokesman, the agency's directors' Governance Subcommittee on Tuesday approved the new pay policy, which is aimed at compensating the 10 patient advocate members of the board for the extra time that they must put in. The policy will go before the entire board later this month.

A large part of the burden placed on patient advocate members of the board stems from the conflicts of interests built into the board by Prop. 71,  drafted by CIRM Chairman Robert Klein and a handful of others. The ballot initiative requires a super-majority (65 percent) for a CIRM governing board quorum, which is based on the number of board members eligible to vote. Since many of the board members have conflicts of interest that prevent them voting on matters before the board, the presence of patient advocates is necessary to take action – much more so than many other members of the board.

According to Don Gibbons, CIRM's chief communications officer, the subcommittee took no action on staff reports on CIRM's ongoing efforts to build a custom system to deal with its $3 billion in grants. Directors asked for a report after expressing concerns the effort could be an expensive failure. Details on their discussions will have to wait for release of the transcript.

However, once again, CIRM failed in its responsibility to the public by not posting the reports publicly in a timely fashion. The failure effectively bars the public from being able to make informed comments and violates CIRM's promise of highest standards of openness and transparency. Two reports were prepared. One did not appear until one business day before the Governance Subcommittee meeting. The other appears to have been posted on CIRM's Web site only minutes before the meeting was scheduled to begin.

We will have more on the grants management system when the transcript is posted.

Managing More than 300 Grants: CIRM's Thin Ice Question

A key panel of directors of the California stem cell agency on Tuesday will wrestle with ongoing issues involving its critical grants management system and consider changes in its policies concerning the many outside contractors CIRM is forced to rely on.

The agency has already posted some background information for the Governance Subcommittee meeting including a list of current contracts and the proposed changes in contracting. However, still missing is a report on the grants management system, which stirred strong concern from directors at their June meeting.

One director, Michael Friedman, CEO of the City of Hope, warned that CIRM was skating on “thin ice” with its plans to create its own software to monitor and track grants. Friedman said,

“Everybody has seen horrible examples of custom-designed systems that go bad.”

He continued,

“I have to express in the strongest possible terms my discomfort” with the CIRM staff decision to build a custom system.

Friedman's probing led CIRM directors to seek the report on the grants system for next week's meeting. CIRM plans to use the system for the entire grant process from application to termination. CIRM has awarded more than 300 grants involving more than $1 billion. It plans to hand out another $2 billion over the next seven years or so.

The grants management effort has a long history, dating back to 2007 when directors were told it would cost only $757,000. By our count, the agency has spent $1.2 million so far, not including staff time, with much more coming this year. CIRM has not publicly provided its own total nor has it forecast how much more will needed to be spent until the system is fully developed. Also missing are projected annual maintenance and service costs following that point.

For the current fiscal year, the CIRM budget forecasts that spending on information technology will jump by 53 percent, from $817,000 to $1.2 million, an increase of about $433,000. Most of that goes for the grant system.

Also on tap Tuesday are unspecified changes in the bylaws for the CIRM governing board.

Tuesday's meeting will have teleconference locations in San Francisco, Los Angeles, Sacramento, La Jolla, Irvine and Palo Alto. If you would like to attend any of those sessions, you should check the agenda for specific addresses. In some cases, you will need to call CIRM because it has not provided enough information on the agenda to let the public know exactly where the meetings will be held.

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.

CIRM Approves $300,000 More for Tech Help, Including Grant Management

The Governance Subcommittee of the California stem cell agency yesterday approved spending an additional $300,000 for technology assistance as it wrestles with its $1.2 million – and growing – grants management system.

A $100,000 increase was okayed for Turner Consulting Group of Washington, D.C., and a $200,000 extension for 25by7 of Santa Monica, Ca., according to a CIRM spokesman. Turner began work August 2008 on the grants management system under a $120,000 contract. Increases were approved last February and September. With the latest increase, the value of the two-year contract now stands at $350,000. Turner's contract is scheduled to end next June but may well be extended.

25by7's original $175,000 contract for network, server and desktop support began one year ago. Under the action yesterday, the contract was extended for one year, bringing its two year total to $375,000.

CIRM expects to seek additional information technology help next year.

The directors subcommittee also heard a report on the system designed to oversee $3 billion in grants and loans. It was first public accounting of how much has been spent on the grant management system, which CIRM has described as "a risk." No details were available concerning directors' comments.

New Figures Show CIRM Spending $1.2 Million-plus for Grant Management

In its first-ever public accounting of spending for its grant management system, the California stem cell agency this week disclosed it has already laid out more than $1.2 million, with substantially greater expenditures to come in the near future.

Overseeing CIRM's largess is no small task. The agency has approved 320 grants and one loan worth more than $1 billion. It is expected to approve another $2 billion over the next five or so years – more if it can secure funding beyond its current bonding authorization of $3 billion.

The amount CIRM is spending for grant management, not including state staff time, is tiny compared to the total portfolio. However, grant management is critical for the agency, which labelled the task as a “risk” as recently as last June.

In a new staff report prepared for a meeting Wednesday of the CIRM directors' Governance Subcommittee, the agency said it has made “considerable headway” since last spring. But CIRM said additional work will be needed, including a decision on whether to buy additional software or develop it in-house with the use of more consultants.

More immediately, the staff asked directors for approval of an additional $300,000 for technology assistance, extending and expanding two existing contracts with Turner Consulting of Washington, D.C., and 25by7 of Santa Monica, Ca. Some of the increases will cover costs in addition to grant management.

CIRM did not offer a total for past grant management spending in the documents it prepared for its directors. Nor did it predict the ultimate cost. The California Stem Cell Report compiled the $1.2 million figure from two new documents on the CIRM Web site. The first was a report on grants managements expenditures through June 30, 2009. The second was a report on all spending on outside contracts through Sept. 30, 2009, including additional funds for grant management.

The report on grant management is the most complete explanation of the status of the system, which was supposed to cost no more than $757,000, directors were told in October of 2007. But by spring of 2008, CIRM began hiring outside consultants to deal with the issue.

The contract at that time involved Grantium of Ottowa, Canda. CIRM staff said.

“However, that effort failed because CIRM's needs continued to evolve rapidly beyond the original scope, so the two parties mutual agreed to terminate the contract in 2009.”

CIRM cannot solve its technology issues in-house because Prop. 71, written by CIRM Chairman Robert Klein and others, capped the CIRM staff at 50 employees. The grant report said that “it has long been clear” that the agency faced critical problems because of the hiring cap.

Currently, 48 percent of CIRM's staff (20 out of the current 42 employees) is involved “centrally in some part of the grant life-cycle,” which includes everything from applications to standards enforcement,

The agency, however, does not have a single information technology staff person dedicated to grants management, according to its report. It had one in 2005-6, but he resigned. Currently CIRM has five grant management officers compared to one in 2006-7.

CIRM staff began “compliance site visits” in 2008-9 when it had 295 grants awarded, completing eight visits that fiscal year. CIRM expects to see 230 progress reports from grant recipients during the current fiscal year, compared to 16 in 2006-7.

CIRM posted the reports on the grant management system and the contract extensions on its Web site last Wednesday. The public can participate in next Wednesday's Governance meeting at teleconference locations in San Francisco, Palo Alto, Los Angeles(2), Stanford, Irvine and La Jolla. Specific addresses can be found on the agenda.

The item below contains additional links to additional information concerning CIRM grant management.

CIRM Grant Management Info and Costs

Here is a rundown on key documents related to CIRM's $1.2 million-plus expenditures on its grant management system.

Articles from the California Stem Cell Report

Cost Overruns and Candor from CIRM – May 29, 2008

Vagueness in CIRM budget, June 2009, with some info on the system:“The budget does not appear to contain a straight-forward accounting of all the past costs associated with the Grantium program or the projected cost of the new system. It appears to be something in the neighborhood of $610,000.”

CIRM's Troubled Grant Management System: A $1 Billion Oversight Matter – July 13, 2009

CIRM Grant Oversight Receives $150,000 Boost – July 22, 2009

California Courts and CIRM: Both Troubled by Technology Problems – Oct. 25, 2009

CIRM Documents

Transcript, CIRM directors meeting, October 2007, during which CIRM staff said the cost would not exceed $757,000

CIRM document describing grant management system as a risk – June 2009

First public accounting of CIRM expenditures on grant management system, November 2009

CIRM Directors to Discuss Agency's Management of $1 Billion in Grants

A panel of directors of the California stem cell agency is slated to be briefed early next month on the “at risk” system that it uses to oversee more than $1 billion in grants to more than 300 California scientists.

In June, CIRM staff warned that the grant management system was troubled. Its complete costs have not been reported publicly although directors were told in 2007 that the amount would be no more than $757,000. CIRM has since severed its contract with the original contractor and hired additional consulting and technology help.

Grant management and others issues related to CIRM's information technology are on the agenda of the Governance Subcommittee of the agency's board of directors on Dec. 2. The information posted on the agency's Web site is skimpy at this point, but hopefully will be supplemented before the long Thanksgiving weekend.

Also to be considered is the addition of Turner Consulting Group and 25by7 to CIRM's outside contractors, who together account for the second largest category of spending, $3.1 million, in the agency's operational budget. CIRM must rely on non-state employees because of the 50-person cap on its staff, a limit that is embedded in state law by Prop. 71, which created CIRM.

The 25by7 firm is appears to be a technology support business with operations in San Jose, Santa Monica, Los Angeles and New York. The one-sentence item on the CIRM agenda says directors will be asked to approve a contract with 25by7 for network, server and desktop services. No value for the contract was available on the CIRM Web site.

Also up for approval is a contract with Turner, again with no value specified. No details were provided on the nature of Turner's work nor was it identified beyond its name. Turner may well be the Washington, D.C., information technology firm that says that it saved the government more than $166 million through its work, which includes grants management. Its clients include the NIH, the National Science Foundation and the USDA.

The Governance meeting will be available for public participation at a number of locations throughout the state. Specific addresses can be found on the agenda.

Some Question CIRM Grant Oversight as Excessive

The California stem cell agency is receiving “mixed reviews” for its oversight of its research grants, which now total $1 billion, according to an article today in The Scientist magazine.

Commonly governmental agencies are chastised for failing to ensure that taxpayer funds are spent effectively. In this case, the stem cell agency is being faulted -- by some -- for being too tough.

The case in point is the termination -- first reported by the California Stem Cell Report -- of three out of more than 300 grants. The amounts are tiny compared to the $3 billion that CIRM expects to give away, accounting for only $1.8 million in a $46 million round approved in 2007.

The Scientist article by Jef Akst said,

“Clearly, funding agencies need to offer some oversight of grants to avoid misuse of funds. But can there be too much of a good thing? “

She continued,

“There are mixed reviews among the scientific community about whether CIRM's close watch of their grantees is a good thing. To some, it is an important practice for public funding agencies such as CIRM to show the taxpayers that their money is going towards productive and fruitful research. 'I think the oversight is outstanding,' said John Simpson, the stem cell project director at the advocacy group Consumer Watchdog in California. 'It shows that they're not asleep at the switch. CIRM is functioning as both a grant making agency [and] also something of a steward of the funds it hands out.'

“But others say this kind of intense supervision can burden investigators -- and the science itself. 'In theory, it's a terrific thing,' agreed David Kaplan of Case Western Reserve University in Ohio, who has written about the peer review system at NIH. "To have the granting agency being involved enough to be helpful to their grantees, I think that is a terrific idea. The problem with that kind of a system is that you can be too intrusive. That eliminates that kind of serendipity [in scientific discovery].'“

Akst wrote that CIRM's “short timeline” may lie behind its grant monitoring, which is more rigorous than performed by the NIH.

She said,

“While the NIH will exist for many years to come, CIRM has a 10-year lifespan, as approved by California voters in 2004. 'CIRM has very defined goals,' said the Burnham Institute for Medical Research's Huei-Sheng Vincent Chen, another SEED grant recipient. '[They] wanted something within 10 years so they have to be more aggressive.'"

The Scientist magazine also chose to publish the names of the scientists whose grants were terminated. Their names are by law public record. Only one of the three scientists spoke with Akst, John Cooke of Stanford.

Akst's story said,

"'I anticipated that they would be happy with that [new] proposal,' Cooke recalled. 'But] they weren't happy.' In January 2009, after a second, more detailed progress report, follow up phone discussions, and a petition for reconsideration from Cooke, CIRM revoked his second year of funding -- nearly half of what he had originally been awarded -- citing the new directions his research had taken.

'I can understand their reasoning,' Cooke said. 'I just wish I had understood that that applied to the SEED grants.'"

Last month, CIRM approved $230 million for 14 grants up to $20 million each that appear to require even more rigorous oversight than earlier rounds. Some CIRM directors said publicly that they expect to see some of the latest grants terminated early because they will fail to meet the required benchmarks.

You can find a list here of all the items published on the California Stem Cell Report concerning the terminated grants. They include comments from the other two scientists, who we have chosen not to identify for previously discussed reasons.

California Courts and CIRM: Both Troubled by Technology Problems

The Sacramento Bee today carried an instructive piece that has implications for governmental enterprises that engage in major outside contracting and need complex computerized systems to monitor data and dollars.

That includes the California's $3 billion stem cell research effort. CIRM would be out of business without its outside contractors, which it is compelled to use because of a legal cap of 50 on staff size. The agency is also wrestling with a computer system to monitor the performance of its grantees and manage its multi-year grants, which will total nearly $1 billion by the end of this week.

The Bee's article by Robert Lewis is a fine piece of investigative reporting. Lewis chronicled the ins-and-outs of an effort to computerize the state's court system. The project began in 2001 and now faces costs close to $2 billion, but it is years away from completion.

The original cost projections appear to be unknown. The Bee quotes a court spokesman as saying costs estimates “at junctures where critical decisions were made” do not exist. How much has been spent so far? Court officials could not provide an answer.

Lewis' article notes that the state court project ballooned without the scrutiny that other state computer systems face. That's because the courts are an independent branch of government. CIRM is not an independent branch of government, but it receives even less normal state oversight, which usually comes from either the governor or the legislature.

Lewis does not identify a particular point where the the state court effort went wrong, although the court system severed ties with one major contractor in midstream. The project seems to have grown willy-nilly with differing goals, lack of a cohesive plan and huge no-bid contracts. Court officials also apparently ignored advice that called for a “business case” justification that would spell out the project's objectives.

CIRM's grant management system is small change compared to the court boondoggle. However, CIRM directors were told this year that the critically needed grant managements program is “at risk.”

The history of the CIRM project does not instill confidence. In October 2007, CIRM directors were told that the “complete cost” of the system would be $757,000. By the following spring, CIRM was seeking additional help at a cost of $85,000. By this year, the original contractor, Grantium, no longer was working on the project. Other contractors had been hired, at a cost of more than $350,000. Just last month, CIRM advertised on its site for more programming assistance. CIRM has made no public disclosure of all the costs of the system since the beginning of the Grantium contract.

In July, John Robson, vice president of operations for CIRM, differed with our reports of “disarray” in the grants management system. Robson, who did not join CIRM until after Grantium was selected, said the current system provides all the necessary information but is labor and time intensive. That is not a small consideration given the tiny staff (40 something) at CIRM. Robson also predicted that the current grants management system will save money compared to Grantium.

Robson made his comments to us following a meeting of the CIRM directors' Finance Subcommittee at which they asked for a detailed breakdown of spending on the grants management system. So far, that information has not been forthcoming.

CIRM Grant Oversight Receives $150,000 Boost

SAN FRANCISCO – A key panel of CIRM directors Tuesday approved a $150,000 increase in a contract to help improve the agency's important grants management efforts after being told that the task has become bigger and more complicated.

The boost in the $200,000 contract with Kutir Corp. of Newark, Ca., was ratified on an 8-0 vote by the Governance Subcommittee.

John Robson, vice president for operations of CIRM, told the directors' panel that the agency “could not run our program” without Kutir. The grants management system is involved in everything from the initial request for applications to conflicts of interests to monitoring grant progress reports.

Currently CIRM has approved $761 million in grants and is expected to hit the $1 billion mark later this year.

Following the meeting, Robson took issue with our July 13 item in which we described the grants management system as in “disarray.” He said that the system does provides the necessary information but is labor and time intensive. Robson indicated that he expected that situation to improve with additional work by Kutir.

Robson also said that he expected the current grant management system to save money compared to the previous arrangement with Grantium. Robson said CIRM and Grantium had come to the “mutual conclusion” that the Grantium system was “not a good fit.”

Grantium originally had a $702,000 contract with CIRM. Robson told the California Stem Cell Report that the firm had been paid $260,000 and was no longer under contract. CIRM is also not engaged in legal action involving Grantium.

Directors also asked for a more detailed breakdown later on expenditures for the grants management system.

New Info on CIRM's Grant Management Problems

More details are now available on the latest attempt to solve major problems in the efforts to monitor $760 million in grants from the California stem cell agency.

The subject comes up at a teleconference meeting tomorrow morning of the Governance Committee of the agency's board of directors.

We wrote last week about the issue, which has troubled CIRM since 2006. The agency has not publicly disclosed the full nature of the difficulties, but discussed part of the problem briefly in a recent item on its Web site.

The latest posting shows that CIRM staff is seeking the directors' approval of a $350,000 contract with Kutir Corp., up $150,000 from $200,000 authorized for Nov. 20, 2008, to Nov. 20, 2009.

The staff memo says Kutir was brought aboard when Ed Dorrington resigned from CIRM in December 2008 as its director of grants managements systems. The staff memo says,

“When he departed there was no one on staff capable of taking over his responsibilities. Kutir now supplies those services, which include creating an application for each new RFA along with a matching review module. The review module takes data that are sorted and transferred from the application and uses this information to manage the Grants Working Group process, including conflicts of interest.”

The memo continues,

“Kutir now supplies (Dorrington's) services, which include creating an application for each new RFA along with a matching review module. The review module takes data that are sorted and transferred from the application and uses this information to manage the Grants Working Group process, including conflicts of interest. These tasks require progressively more time and effort for each RFA as CIRM has evolved and added new complexities to its programs, including collaborative funding partners, pre-application review and loans.

“In addition, CIRM is in the process of assessing and installing new grants management systems in order to meet its growing reporting and portfolio requirements. The IT developers from Kutir are assisting with this project by advising on how best to integrate CIRM’s existing custom-built software with the commercial products being purchased.”

Tomorrow's meeting begins at 11 a.m. And can be heard at teleconference locations in San Francisco (2), Los Angeles(2), La Jolla, Stanford and Irvine. Specific locations can be found on the agenda.

CIRM's Troubled Grant Management System: A $1 Billion Oversight Matter

The California stem cell agency is likely to have approved $1 billion in grants by the end of this year, but its grants management system appears to be in disarray, which may be something of an understatement.

CIRM has never publicly revealed the full nature of the problems, which date at least back to 2006. However, in its budget presentation last month, the agency identified oversight of grants as an area of “risk.”

In January, the California State Auditor reported that CIRM was not in compliance with the auditor’s two-year-old recommendations for implementation of a comprehensive grants management system. As the result of a months-long study in 2006, the auditor said that a system was needed to provide accountability and assess how well CIRM was meeting its strategic goals.

CIRM plans to spend at least $575,000 and likely more this year to help fix its problems. CIRM did not provide comparable figures for last year.

It is not clear how much has been spent in the last two years since directors were told that the “complete cost” of a solution from Grantium would be $757,000. The Grantium software now appears to have been tossed out.

CIRM’s budget for this year allots $335,000 for software, training and development connected to the grant management system. Another $240,000 is slated for Kutir Corp. of Newark, Ca., for information technology services. Kutir had a $200,000 contract during the last fiscal year.

This year’s contract with Kutir – size unspecified -- comes before the CIRM directors Governance Subcommittee on July 21 at a teleconference meeting with locations around California.

The June staff's budget commentary on the grants management system said,

“CIRM’s ability to track and report on its grant research portfolio
needs improvement.

“There is a critical need to have a robust electronic grants management system for managing grants, reporting outcomes, monitoring finances, complying with regulations and meeting other requirements as they arise. CIRM had been testing a grants management program that is not able to meet all if its needs. CIRM has revised its approach and has purchased, or is investigating, components of a grant management system that will be flexible enough to handle its evolving programs and processes. Funds for this process are included in this budget. In the long run it is expected that this new approach will be less costly to CIRM than the previous approach."

During next week's look at the Kutir contract, one would hope that there would be a full discussion of past costs connected to the Grantium system, the nature of the problems, the plan to resolve the issues and its likely cost.

Locations where the public can take part can be found in San Francisco (2), Los Angeles (2), La Jolla, Sacramento, Irvine and Stanford. Specific addresses are on the agenda.

CIRM Reassures Grantees on Their Cash

Late Friday, the California stem cell agency sent the following email to CIRM grantees:

"We at CIRM headquarters want to send you some reassuring news regarding CIRM’s finances and our plans to continue a full and robust research portfolio. This week the California State Treasurer successfully sold $6.85 billion in bonds, more than twice the amount originally sought by the treasurer. This vote of confidence by the investor community is good news for CIRM, our grantees and all the patients in California and elsewhere we seek to serve.

"Robert Klein, chair of the CIRM governing board, thanked the State Department of Finance and the State Treasurer’s Office for their tremendous efforts. He indicated that the estimated $275 million in additional funds expected for the agency raises the funds available for grants and facilities to some $400 million and this will cover all commitments, existing and expected, for the next 18 months."

CIRM: Some Scientists' Grants to be Pulled

Some researchers who have been funded by California's $3 billion stem cell agency are going to lose their grants because of a lack of progress, according to a top CIRM official.

John Robson, CIRM vice president for operations, made the statement April 14 at a meeting of the Citizens Financial Accountability Oversight Committee, a five-member panel chaired by state Controller John Chiang, California's top fiscal officer. The committee is is charged with assessing CIRM's financial practices.

Robson's remarks came as part of a general response to questions about risk assessments by CIRM.

According to the transcript, he said,

"....(W)e get annual reviews, progress reports and our science officers go through those. And it's not a perfunctory exercise. They go through these things quite carefully. If there's things they don't understand or if it doesn't look (like) there's been much progress, they call up the PI (principal investigator) and they say, 'What's going on? You know, we've seen these experiments being done. What's your progress?' And then we work from there.

"If it turns out that there's no progress, we can cut the grant. I suspect that's going to happen. Some people are going to lose some grants."

Ruth Holton-Hodson, deputy controller for health and consumer policy, raised the questions about risk. She chaired the meeting in the absence of Chiang, who had suffered a foot injury, and said she brought up the matter on his behalf.

The Citizens Financial Accountability Oversight Committee is not to be confused with CIRM's Independent Citizens Oversight Committee, which is the 29-member CIRM board of directors. Chiang, a Democrat, is a statewide elected official. He was given the role of chairman of the financial accountability committee by Prop. 71, the ballot measure that created CIRM.

The CIRM board of directors meets next Tuesday and Wednesday in Los Angeles. Item No. 8 on the agenda is an "update on CIRM grantee progress report monitoring." No further details were provided on the agenda on that item.

Cost Overruns and Candor from CIRM

The California stem cell agency now says it is "mind-bogglingly silly" to think, in effect, that the total cost of the Grantium contract for a new grant management program would only be $757,000.

CIRM's directors were assured last October during their meeting in San Diego that the figure was the "complete cost." The expenses were reviewed at the time in some detail by Ed Dorrington, CIRM's information technology director. Richard Murphy, interim president of CIRM, vouched for the figures as well.

We raised questions about the cost in our posting below -- "CIRM Lagging" – since CIRM is seeking an additional $85,000 to perform work that is necessary for the Grantium software.

Don Gibbons, chief communications officer for CIRM, responded to our item,

"Regarding your posting on Grantium, it is mind bogglingly silly to think that a one-person IT department at CIRM could handle all the internal aspects of migrating to a new grant management system while maintaining a legacy system that is our responsibility."

Our response: CIRM's chief executive told its board one thing in October. Now CIRM says something different. New, complex software installations are usually difficult. The costs should have been anticipated. That's what good management is all about.

Additionally, CIRM has chosen to go lean on its staff, keeping it far less than the 50 authorized even after some directors have repeatedly worried about burnout and overwork. In fact, last December Murphy told the directors' Governance Subcommittee that he had chosen not to replace a departing information technology staffer because "the institute is now working quite well in its computer capabilities." That was two months after the Grantium contract was approved by directors.

CIRM Chairman Robert Klein also chimed in at the time, praising the "lean" staffing at CIRM. Lean is good, especially in state agencies that sometimes tend to be overstaffed. But there can also be a financial cost – perhaps in this case $85,000. Less obvious is the wear and tear on employees that results from excessively long hours week-in and week-out.

(Editor's Note: An earlier version of this item incorrectly reported that CIRM had "roughly 26" employees. Following the posting of this item, CIRM reported that it has 31 employees.)

Stem Cell Snippets: Hanky-Panky to Jobs for Those Love Long Hours

Enviros Against Stem Cell Lab/Classroom Building -- An activist group and the city of Santa Cruz have blocked construction of an $80 million facility at UC Santa Cruz that would house stem cell research activities. A judge halted the project for environmental reasons. The four-story facility would include stem cell labs and service nearly 1,400-science students.

Scientific Integrity – The California stem cell agency has based many of its policies and rules on assumptions of nearly universal scientific integrity. Glenn McGee(see photo), writing in The Scientist and on the blog of the American Journal of Bioethics, indirectly questions those assumptions. He cites studies that show widespread hanky-panky in the authorship of peer-reviewed pieces, particularly in cases where senior researchers claim authorship even when they are marginally involved. McGee also has suggestions for reform. Interestingly, the entry point for his article is a matter that figured in the controversy over approval of a California stem cell agency grant to a subsidiary of the CHA Health Systems of South Korea.

Yolo Stem Cell Land Deal – Land developer Angelo Tsakopolous has shelved his land development deal that would have also established a stem cell research center in Northern California near UC Davis and Sacramento. Jeff Raimundo, a spokesman for Tsakopolous, told the California Stem Cell Report that the controversial proposal has been put off. California stem cell Chairman Robert Klein lobbied local government officials on behalf of the proposal, but they shied away from the effort. The concept of the plan was also supported by the International Stem Society for Stem Cell Research. Tsakopolous is a persistent man, however, and his proposal could well surface again in one form or another.

Stem Cell Lab Grants – On Oct. 2, the California stem cell agency will consider rules concerning administration of $222 million in grants for stem cell lab construction. The Facilities Working Group will take up the proposal prior to consideration by the CIRM Oversight Committee the next day.

NAS Stem Cell Meeting in California – Coming up Oct. 8-9 in Irvine, Ca., is a National Academy of Sciences conference called "Therapeutic Cloning: Where Do We Go From Here?" A host of top flight scientists are listed as speakers. The session will address such questions as sources of eggs and alternative methods of creating pluripotent cells.

Looking for Work? -- If you are interested in working across the street from the home field of the San Francisco Giants baseball team, CIRM is looking for a few good men and women. Jobs available at the agency include associate legal counsel, grants management specialist, paralegal and scientific officers.. Long hours are guaranteed. (CIRM headquarters is near the Giants field.)