Showing posts with label recovered funds. Show all posts
Showing posts with label recovered funds. Show all posts

Monday, February 24, 2020

California's $250 Million Stem Cell 'Claw Back:' Recycling Research Cash

CIRM's recovery of cash is not common practice in government research
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California's stem cell agency, which critics have sometimes labelled a boondoggle, has managed to "claw back" $250 million during its 15-year life, an achievement that it attributes to diligent financial stewardship.

The cash includes $30.3 million last year with a high of $41.9 million in 2017.

The funds were recovered through a number of means including the cancellation of research awards when they failed to meet milestones. The terminations have left some scientists less than happy.

Termination of awards is not common in the world of government-funded science. In contrast to California, the National Institutes of the Health (NIH) do not generally engage in the practice, according to The Scientist magazine.   

The size of the two organizations, however, is much different. The NIH makes about 50,000 awards a year. The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has made only 1,031 awards during its lifetime. Its awards now total $2.7 billion for research into everything from cancer to incontinence. 

CIRM compiled its cash recovery figures in response to a request by the California Stem Cell Report. The request for the figures was prompted by CIRM board action this month to recycle $1.8 million in recovered funds into more research. The recovery practice is akin to what is known in Wall Street parlance as a "claw back."

Kevin McCormack, senior director of communications, said in a statement,
"The total amount of recovered funds collected since 2005 is $250 million which averages to an estimated $16.6 million 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 over time as the portfolio grew.  Since implementation of operational milestones in 2016, recovered funds have totaled to the following:
  • "2016 - $30 million
  • "2017 - $41.9 million
  • "2018 - $25.85 million
  • "2019 - $30.3 million
"The number of awards cancelled is 32 and the total amount for that category is $122.3 million."
The financial stewardship of the California stem cell agency is a matter that has come under intermittent scrutiny during CIRM's short life. Its performance, however, will draw considerably more attention from its foes during the next eight months as CIRM backers seek to win voter approval of a ballot initiative for $5.5 billion more.

One of the agency's opponents is Republican state Sen. John Moorlach of Costa Mesa, Ca., who produced a video in 2017 denouncing CIRM as a boondoggle, ineffective and unaccountable. 

Termination of awards by CIRM began in 2009 and was first reported by the California Stem Cell Report. At the time, the cancellations led to some ill will in segments of the scientific community more comfortable with the easy ways of the NIH.

But one of the researchers who lost an award said at the time:
“I think that it is very important for CIRM to closely monitor its grantees. As a California taxpayer, I want to know that state revenues supporting the CIRM effort are well utilized. Furthermore, CIRM (and its grantees) need to make good on the promise of translating the science of stem cell biology into novel therapies.”
It was a statement that agreed with the agency's position. McCormack said, 
"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."  
Not all of the "claw back" came from failure to meet milestones. McCormack said, 
"Cancelled awards are a portion of the funds returned, but recovered funds also include 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 full text of McCormack's comments can be found here.)

The agency is now down to its last $27 million for awards. Come the morning of Wednesday Nov. 4 the day after the election, CIRM will either start to shutter its operations at its Oakland headquarters or gear up for even more extensive forays into biomedicine.

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."  

Thursday, February 06, 2020

California Stem Cell Agency Approves $1.8 million to Speed Promising Research

OAKLAND, Ca. -- The California stem cell agency today approved the use of $1.8 million in newly recovered  funds to help researchers move promising basic research into products that would be available to the general public.


The money for the awards comes from $2.8 million that has been recovered from other CIRM-funded research that has not met its milestones. 

The agency expects to report on the status of any additional recovered funds in May. 

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