California's Little Hoover Commission meets this week to consider recommendations for changes in the operations of the California stem cell agency, perhaps even adopting final findings.
The committee will go over the draft report on CIRM Wednesday afternoon in Sacramento. Stuart Drown, executive director of the good government agency, said the commission could adopt the recommendations or ask the staff to make revisions.
If the revisions are minor, he said the staff could bring them back for a final vote on Thursday afternoon. If changes are major, the report will be brought back to the commission in August.
The commission has withheld copies of the recommendations, but it did discuss them publicly earlier this month at a subcommittee hearing. Under the preliminary recommendations, the size of the CIRM board would be reduced from 29 to 15, the dual CEO situation would be eliminated, salaries for the chairman and vice chairman would be halted and the super-majority quorums for board action would vanish.
One longtime CIRM supporter has described the recommendations as “ludicrous” and a “disaster.”
The Hoover Commission has no power to impose changes. They would have to be enacted by the legislature or made voluntarily, if possible, by CIRM. Many of the recommendations, if not most, could take place without changes in state law.
Monday, June 22, 2009
CIRM PR Puffs Fanciful Budget Number
Here is a link to the press release that the California stem cell agency issued concerning its board meeting last week. In it, the agency persists in trying to paint the budget as a 3 percent decrease, rather than a 25 percent increase.
CIRM Chairman Robert Klein at one point last week described comments on the budget by board member Jeff Sheehy as a “gross distortion.” In reality, the distortion is coming from Klein and CIRM. As we have noted, Klein's use of fanciful figures raises questions about the reliability of other financial information that he presents to the board.
You can read more about the budget via these links: 25 percent increase, festering issues, budget puffery, budget poorly documented.
CIRM Chairman Robert Klein at one point last week described comments on the budget by board member Jeff Sheehy as a “gross distortion.” In reality, the distortion is coming from Klein and CIRM. As we have noted, Klein's use of fanciful figures raises questions about the reliability of other financial information that he presents to the board.
You can read more about the budget via these links: 25 percent increase, festering issues, budget puffery, budget poorly documented.
Link to Bee Editorial Repaired
The “time is ripe” item below (June 21) had a bad link to The Bee editorial. The link has been fixed, and you can find the editorial here.
Sunday, June 21, 2009
Bee Says Time is Ripe for Klein to Leave
The Sacramento Bee Saturday said Bob Klein's departure as chairman of the California stem cell agency is “long overdue.”
Writing in an editorial, The Bee said Klein 's tenure “has not been in the best interest of either taxpayers or the stem cell agency.” Klein announced earlier this month he would not seek re-election as chairman at the end of his term in 2010.
The Bee is the only daily newspaper in the state Capitol and is widely read by lawmakers and policy makers. It has long been critical of Klein. The editorial also appeared in the Fresno Bee, which is owned by the parent company of both papers, and may well appear elsewhere in the McClatchy newspaper chain. (Fresno is Klein's home town.)
The Bee said,
The editorial generated some reader commentary, including a posting from journalism professor Michael Fitzgerald that said,
Writing in an editorial, The Bee said Klein 's tenure “has not been in the best interest of either taxpayers or the stem cell agency.” Klein announced earlier this month he would not seek re-election as chairman at the end of his term in 2010.
The Bee is the only daily newspaper in the state Capitol and is widely read by lawmakers and policy makers. It has long been critical of Klein. The editorial also appeared in the Fresno Bee, which is owned by the parent company of both papers, and may well appear elsewhere in the McClatchy newspaper chain. (Fresno is Klein's home town.)
The Bee said,
“Chairing a 29-member board that is far too large and rife with conflicts of interest, Klein has operated the institute in a smothering manner, with little regard to transparency or lines of authority.The Bee also declared that CIRM should closely examine its internal expenditures, citing coverage of its budget by the California Stem Cell Report.
“Since 2005, Klein has run off talented scientists, such as former CIRM President Zach Hall. He has helped direct millions of dollars to contracts for law firms and public relations consultants – money that could have gone to science.
“Whenever any lawmaker or outside group scrutinizes his decisions or expenditures, Klein cranks up his political attack machine. While serving as a public official, Klein has led or has been affiliated with at least two nonprofit groups that have gone after legislators who sought to reform CIRM.”
The editorial generated some reader commentary, including a posting from journalism professor Michael Fitzgerald that said,
“Perhaps Mr. Klein has suffered from hubris, but give him some credit. There would not be a stem cell institute if it wasn't for his efforts.”Most of the other comments were less generous.
Friday, June 19, 2009
Festering Issues Surface at Contentious Stem Cell Meeting
SAN DIEGO – A bit of a rumpus broke out Thursday at the board meeting of the California stem cell agency. Nominally, the dispute was about hiring an additional staffer to help support the 29 persons who serve on the board that oversees the $3 billion enterprise.
But the heated discussion raised a host of issues, some of which have been festering behind closed doors for years. They included staff support for the 10 patient advocates on the 29-member board, the two-tier board structure, conflicts of interest, super-quorum requirements, ill-conceived legal limits on staff size, CIRM hiring plans, micromanagement and the agency's budget for the coming year.
“Festering” was a word used more than once by board members. It was connected to concerns of patient advocates about the lack of CIRM staff support for their CIRM-connected responsibilities. The discussion also highlighted the fact that other board members can designate alternates to attend meetings, but the patient advocate members cannot.
Those who are permitted to use alternates are executives at research institutions, universities or businesses. They also can use their own staffs to assist with their CIRM responsibilities. But some of the patient advocate members do not have jobs that allow them to do that.
One patient advocate director, Marcy Feit, CEO of ValleyCare Health Systems of Pleasanton, Ca., pointed out that patient advocates must attend more CIRM meetings -- of which there are many -- than other directors because that is the only way that CIRM, in many cases, can get its business done. She described the workload as “incredible.”
The meeting attendance problem arises because of the board's super-majority quorum requirements, which are embedded by Prop. 71 in state law. Conflicts of interests also regularly disqualify many board members from being counted as part of a quorum, voting and even participating in debates. One example occurred at the Wednesday meeting of the board, when only six board members could vote on $41 million in funding for training grants. All the rest in attendance were barred from the discussion.
Why do the conflicts of interest exist? Because Prop. 71 required the appointment to the board of the very persons whose institutions and enterprises benefit from CIRM largess. And Prop. 71 is all but impossible to change, also because of language the ballot measure wrote into the law.
Patient advocate director Jeff Sheehy, a communications manager at UC San Francisco, triggered Thursday's contentious discussion when he said he would not vote for the proposed budget unless another person was added to the support staff for the board. Currently, virtually all of the support goes through a single person, Melissa King, executive director of the board.
While Sheehy and other patient advocates had high praise for King, they said CIRM staff often was not responsive to their concerns. They said “significant difficulties” have arisen when they have tried to get information from staff.
Patient advocate director Jonathan Shestack, a Hollywood film producer, said that the problems have been festering “since the five-month mark” in CIRM's life. Shestack said,
Patient advocate director David Serrano Sewell, a deputy city attorney for San Francisco, resisted a suggestion from one board member that Thursday's discussion take place in private instead of at a public meeting. He said that efforts have been made in the past to resolve the problem both cordially and in private. But he said they have failed.
Some directors objected to Sheehy's attempt to add help for the board. They said it amounted to micromanagement and would be “demotivating” for top CIRM management. Sheehy flared at comments by Ed Penhoet, former co-founder of Chiron, that singling out a specific individual to be added to staff constituted micromanagement. Sheehy said the Penhoet's comments were “condescending,” something that Penhoet said later that he did not intend.
Board Chairman Robert Klein said the concerns of the patient were legitimate. He said,
Director Michael Friedman, CEO of the City of Hope in Los Angeles, noted that CIRM has not reached its legal cap of 50 employees, suggesting it could be fully staffed to help solve some of the issues. Director Ted Love, president of Nuvelo of San Carlos, Ca., asked,
CIRM President Alan Trounson indicated that staffing was a bit of a juggling act. He said more persons would be needed in the science office as CIRM gives out more money and adds more complex research to its oversight responsiblities.
At one point, Klein, who says he wrote Prop. 71, said,
Klein bridled at the comment, which he called a “gross distortion.” He said,
Following Thursday's session, Penhoet said,
But the heated discussion raised a host of issues, some of which have been festering behind closed doors for years. They included staff support for the 10 patient advocates on the 29-member board, the two-tier board structure, conflicts of interest, super-quorum requirements, ill-conceived legal limits on staff size, CIRM hiring plans, micromanagement and the agency's budget for the coming year.
“Festering” was a word used more than once by board members. It was connected to concerns of patient advocates about the lack of CIRM staff support for their CIRM-connected responsibilities. The discussion also highlighted the fact that other board members can designate alternates to attend meetings, but the patient advocate members cannot.
Those who are permitted to use alternates are executives at research institutions, universities or businesses. They also can use their own staffs to assist with their CIRM responsibilities. But some of the patient advocate members do not have jobs that allow them to do that.
One patient advocate director, Marcy Feit, CEO of ValleyCare Health Systems of Pleasanton, Ca., pointed out that patient advocates must attend more CIRM meetings -- of which there are many -- than other directors because that is the only way that CIRM, in many cases, can get its business done. She described the workload as “incredible.”
The meeting attendance problem arises because of the board's super-majority quorum requirements, which are embedded by Prop. 71 in state law. Conflicts of interests also regularly disqualify many board members from being counted as part of a quorum, voting and even participating in debates. One example occurred at the Wednesday meeting of the board, when only six board members could vote on $41 million in funding for training grants. All the rest in attendance were barred from the discussion.
Why do the conflicts of interest exist? Because Prop. 71 required the appointment to the board of the very persons whose institutions and enterprises benefit from CIRM largess. And Prop. 71 is all but impossible to change, also because of language the ballot measure wrote into the law.
Patient advocate director Jeff Sheehy, a communications manager at UC San Francisco, triggered Thursday's contentious discussion when he said he would not vote for the proposed budget unless another person was added to the support staff for the board. Currently, virtually all of the support goes through a single person, Melissa King, executive director of the board.
While Sheehy and other patient advocates had high praise for King, they said CIRM staff often was not responsive to their concerns. They said “significant difficulties” have arisen when they have tried to get information from staff.
Patient advocate director Jonathan Shestack, a Hollywood film producer, said that the problems have been festering “since the five-month mark” in CIRM's life. Shestack said,
“The truth is for many patient advocates they have other jobs that do not support the work here.”He added that “I for one gave up at a certain point” trying to get the information and support that he needed. He said board members cannot go easily to staff to find explanations about complex bond financing or scientific issues.
Patient advocate director David Serrano Sewell, a deputy city attorney for San Francisco, resisted a suggestion from one board member that Thursday's discussion take place in private instead of at a public meeting. He said that efforts have been made in the past to resolve the problem both cordially and in private. But he said they have failed.
Some directors objected to Sheehy's attempt to add help for the board. They said it amounted to micromanagement and would be “demotivating” for top CIRM management. Sheehy flared at comments by Ed Penhoet, former co-founder of Chiron, that singling out a specific individual to be added to staff constituted micromanagement. Sheehy said the Penhoet's comments were “condescending,” something that Penhoet said later that he did not intend.
Board Chairman Robert Klein said the concerns of the patient were legitimate. He said,
“The organization is under stress.”Sheehy said, however, that Klein has failed to address the concerns for much too long.
Director Michael Friedman, CEO of the City of Hope in Los Angeles, noted that CIRM has not reached its legal cap of 50 employees, suggesting it could be fully staffed to help solve some of the issues. Director Ted Love, president of Nuvelo of San Carlos, Ca., asked,
"Are we trying to do much too inexpensively?”He said the staff should not be subjected to “extraordinary unbearable long-term situations.”
CIRM President Alan Trounson indicated that staffing was a bit of a juggling act. He said more persons would be needed in the science office as CIRM gives out more money and adds more complex research to its oversight responsiblities.
At one point, Klein, who says he wrote Prop. 71, said,
“I made the mistake perhaps of setting a 50 person cap.”Sheehy was upset about the inadequate budget documents presented to the directors' Finance Subcommittee last week. And he said the budget material presented this week also was not up to snuff. He said basic year-to-year financial comparisons remained missing along with “global” figures that would show complete totals for spending in various categories, such as legal and communications. Sheehy said he had asked for budget figures by function, which were not provided. And he declared that the proposed budget amounted to a “dereliction of our fiscal duty.”
Klein bridled at the comment, which he called a “gross distortion.” He said,
“I understand your frustrations but we have a mission. Let's not destroy our mission.”Ultimately the budget was adopted on a 19-4 vote with the requirement that a 5 percent contingency fund be included. Added also was a requirement that Klein and Trounson come up with a plan within two weeks to solve the board support problem. The board will convene in a teleconference meeting to consider the proposal.
Following Thursday's session, Penhoet said,
“The board deserves more support if they think they need it.”But Sheehy said, also after the meeting, he had little faith that the issue would be properly resolved, given past performance.
Klein's Misguided Budget Puffery
SAN DIEGO – Robert Klein, chairman of the $3 billion California stem cell agency, is a man who should know his numbers.
He is a real estate investment banker and sometimes even seems to revel in the arcane world of state bond financing.
But he persisted at this week's CIRM board meeting here, along with CIRM president Alan Trounson, in trying to characterize CIRM's budget for the coming fiscal year as a 3 percent decrease.
The reality is that it is a 25 increase over what is being spent by CIRM this year.
The peg on which Klein hangs his dubious, PR spin is that the budget is 3 percent less than the unrealistic spending plan proposed 12 months ago. But Klein's posturing defies well-accepted accounting and budget standards for describing year-to-year budget changes.
It is difficult to understand why Klein is trying characterize CIRM's spending plan as something it isn't. One can dispute some of the expenditures, but the total amount the agency is spending on operations is not excessive. Indeed, it may even be too little, as suggested by some CIRM directors.
Klein's misguided puffery does not serve him or CIRM well. It only generates skepticism about other CIRM actions and creates suspicion that the agency may be engaged in activities that cannot stand the light of day.
He is a real estate investment banker and sometimes even seems to revel in the arcane world of state bond financing.
But he persisted at this week's CIRM board meeting here, along with CIRM president Alan Trounson, in trying to characterize CIRM's budget for the coming fiscal year as a 3 percent decrease.
The reality is that it is a 25 increase over what is being spent by CIRM this year.
The peg on which Klein hangs his dubious, PR spin is that the budget is 3 percent less than the unrealistic spending plan proposed 12 months ago. But Klein's posturing defies well-accepted accounting and budget standards for describing year-to-year budget changes.
It is difficult to understand why Klein is trying characterize CIRM's spending plan as something it isn't. One can dispute some of the expenditures, but the total amount the agency is spending on operations is not excessive. Indeed, it may even be too little, as suggested by some CIRM directors.
Klein's misguided puffery does not serve him or CIRM well. It only generates skepticism about other CIRM actions and creates suspicion that the agency may be engaged in activities that cannot stand the light of day.
Thursday, June 18, 2009
Mouse Breeding Plan Receives $3.8 Million from CIRM
SAN DIEGO – The California stem cell agency this morning approved a $3.8 million grant to breed special mice in the Sacramento area to be used by stem cell researchers.
The vote on the grant was 19-1.
Jackson Laboratory, the grant applicant, said in its application,
Marie Csete, chief scientific officer for CIRM, made a case for approval of the grant, saying it would aid researchers. Board member Ed Penhoet, a co-founder of Chiron, said the grant was a “good investment.”
The mouse grant was the only one approved out of the “tier two” applications for early translational grants.
The vote on the grant was 19-1.
Jackson Laboratory, the grant applicant, said in its application,
“The lack of mouse models of disease in which the immune system has been suppressed significantly hinders the efforts of investigators in California and elsewhere to develop new HuSC-based disease therapies. An additional impediment is the lack of efficient access to the quantities of mice required for such studies, and to mice whose health, reproducibility, and research effectiveness has been assured. In the proposed project at (Jackson), we will develop multiple state-of-the-art, immune-deficient mouse models of human disease that can be used for testing HuSC therapies, and we will establish the production processes for making these models readily available to California researchers.”Reviewers earlier recommended approval of the grant if funds were available. But they were sharply split in their scores they assigned to the grant.
Marie Csete, chief scientific officer for CIRM, made a case for approval of the grant, saying it would aid researchers. Board member Ed Penhoet, a co-founder of Chiron, said the grant was a “good investment.”
The mouse grant was the only one approved out of the “tier two” applications for early translational grants.
Wednesday, June 17, 2009
CIRM Pulls Three Grants from Researchers
SAN DIEGO -- The California stem cell agency tonight said it has terminated three research grants for lack of progress, but declined to release immediately the names of the researchers or the institutions involved.
James Harrison, outside counsel to the CIRM board, acknowledged that the names were public record but said the agency wanted time to work out a well-considered way of releasing the information.
Marie Csete, CIRM's chief scientific officer, disclosed the terminations during a report on the progress of CIRM grants. The information came in response to a question from board member Ricardo Azziz, chairman of the department of obstetrics at Cedars-Sinai Hospital n Los Angeles.
She said efforts to monitor the progress of grants were generally well-received by investigators. She said that they discovered several grants that would have been abandoned without the progress monitoring effort by her staff.
Board member Floyd Bloom, executive director of science communication at the Scripps Institute, said the monitoring effort is a “wonderful thing.” He said CIRM's “nuturing relations with PIs is absolutely unique in the grant world.”
James Harrison, outside counsel to the CIRM board, acknowledged that the names were public record but said the agency wanted time to work out a well-considered way of releasing the information.
Marie Csete, CIRM's chief scientific officer, disclosed the terminations during a report on the progress of CIRM grants. The information came in response to a question from board member Ricardo Azziz, chairman of the department of obstetrics at Cedars-Sinai Hospital n Los Angeles.
She said efforts to monitor the progress of grants were generally well-received by investigators. She said that they discovered several grants that would have been abandoned without the progress monitoring effort by her staff.
Board member Floyd Bloom, executive director of science communication at the Scripps Institute, said the monitoring effort is a “wonderful thing.” He said CIRM's “nuturing relations with PIs is absolutely unique in the grant world.”
CIRM Training Programs Receive a $41 Million Boost
SAN DIEGO -- The board of California stem cell agency tonight pumped $41 million into 15 California institutions to support training programs for stem cell researchers.
The grants were approved last January, but the board deferred funding because of CIRM's financial woes. Those problems have now been eased for the next 18 months. However, the funding decision will add $9 million to CIRM grant outflows for the coming fiscal year.
The 29-member board voted 6-0 to go ahead with funding. Only six of the members in attendance were able to vote or even participate in discussion because of conflicts of interest.
The CIRM staff made a strong case for funding the program beginning July 1. The CIRM board was told that the 221 trainees already in training programs have accounted for two-thirds of the published research papers linked to CIRM funding.
Art Torres, vice chair of the CIRM board and a former state legislator, said that letters would be sent to all 120 state lawmakers, pointing out the benefit of the training programs in their districts. The funding comes as state legislators are trying to make up a mammoth $24 billion state budget deficit.
The training program was the first grant round approved by CIRM in 2005. The names of the insitutions can be found here.
The grants were approved last January, but the board deferred funding because of CIRM's financial woes. Those problems have now been eased for the next 18 months. However, the funding decision will add $9 million to CIRM grant outflows for the coming fiscal year.
The 29-member board voted 6-0 to go ahead with funding. Only six of the members in attendance were able to vote or even participate in discussion because of conflicts of interest.
The CIRM staff made a strong case for funding the program beginning July 1. The CIRM board was told that the 221 trainees already in training programs have accounted for two-thirds of the published research papers linked to CIRM funding.
Art Torres, vice chair of the CIRM board and a former state legislator, said that letters would be sent to all 120 state lawmakers, pointing out the benefit of the training programs in their districts. The funding comes as state legislators are trying to make up a mammoth $24 billion state budget deficit.
The training program was the first grant round approved by CIRM in 2005. The names of the insitutions can be found here.
New CIRM Figures Show 25 Percent Budget Increase
SAN DIEGO – The California stem cell agency is proposing a nearly $13 million budget for the next fiscal year, a 25 percent increase over its estimated spending this year.
The largest component of the budget goes for salaries and benefits, which are projected at $7.4 million for 47 employees. That is $1.9 million more than this year's estimated figure of $5.5 million. Personnel costs next year amount to an average of roughly $150,000 in salaries and benefits for each CIRM employee.
The figures are drawn from budget documents posted yesterday on the CIRM Web site. They contain far more details than the spending plan offered last week. CIRM directors were not entirely pleased and asked for more information before taking up the budget today or tomorrow at their meeting here.
Still missing from the budget information are CIRM staff calculations for the percentage increases and decreases in spending for the next fiscal year compared to estimated spending for the current fiscal year. Any such comparisons in this article are the responsibility of the California Stem Cell Report.
Other than salaries and benefits, the next largest budget category is outside contracts. CIRM did not compile total figures, instead placing them in at least three different categories. Out calculations show that they appear to be close to $3.1 million. It is difficult to make a comparison to the previous year because of changes in the way CIRM calculates the figures.
Travel for the upcoming year, which begins in three weeks, is budgeted at $497,000, which is $209,000 or 73 percent more than this year's estimated $288,000.
The CIRM staff presented a 3-page justification for the travel, which includes oversea trips and lobbying expeditions to Washington, D.C. CIRM said travel by Chairman Robert Klein and others in his office (six employees) to the nation's Capitol is necessary for lobbying purposes. They include building support for federal tax exemptions for the California bonds that finance research grants, which could save $400 million, and lobbying for federal loan guarantees for CIRM's $500 million lending program for the biotech industry. The office of the chairman is allotted $148,000 for travel.
As for international forays by CIRM President Alan Trounson, his office (five employees) is provided $83,00 for travel. The budget material said he is central to CIRM's international agreements and must travel to Washington as well.
The science office (25 employees) accounts for $204,000 in travel, which CIRM said is needed to maintain leadership in stem cell science and to stay abreast of the field.
CIRM signaled it is dumping its troubled Grantium grants management program. It identified grants management as a “risk” and “critical” for CIRM It said that Grantium has not met all of CIRM's needs.
CIRM said the budget contains funds to create a new grant management program, but did not specify the amount. 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. The amount may be on top of the more than $800,000 allotted in the past for the troubled Grantium program. That figure, however, probably is low.
Possibly linked to the grant management issues are future research grants, although CIRM did not specifically tie them to the problems.
CIRM said,
The largest component of the budget goes for salaries and benefits, which are projected at $7.4 million for 47 employees. That is $1.9 million more than this year's estimated figure of $5.5 million. Personnel costs next year amount to an average of roughly $150,000 in salaries and benefits for each CIRM employee.
The figures are drawn from budget documents posted yesterday on the CIRM Web site. They contain far more details than the spending plan offered last week. CIRM directors were not entirely pleased and asked for more information before taking up the budget today or tomorrow at their meeting here.
Still missing from the budget information are CIRM staff calculations for the percentage increases and decreases in spending for the next fiscal year compared to estimated spending for the current fiscal year. Any such comparisons in this article are the responsibility of the California Stem Cell Report.
Other than salaries and benefits, the next largest budget category is outside contracts. CIRM did not compile total figures, instead placing them in at least three different categories. Out calculations show that they appear to be close to $3.1 million. It is difficult to make a comparison to the previous year because of changes in the way CIRM calculates the figures.
Travel for the upcoming year, which begins in three weeks, is budgeted at $497,000, which is $209,000 or 73 percent more than this year's estimated $288,000.
The CIRM staff presented a 3-page justification for the travel, which includes oversea trips and lobbying expeditions to Washington, D.C. CIRM said travel by Chairman Robert Klein and others in his office (six employees) to the nation's Capitol is necessary for lobbying purposes. They include building support for federal tax exemptions for the California bonds that finance research grants, which could save $400 million, and lobbying for federal loan guarantees for CIRM's $500 million lending program for the biotech industry. The office of the chairman is allotted $148,000 for travel.
As for international forays by CIRM President Alan Trounson, his office (five employees) is provided $83,00 for travel. The budget material said he is central to CIRM's international agreements and must travel to Washington as well.
The science office (25 employees) accounts for $204,000 in travel, which CIRM said is needed to maintain leadership in stem cell science and to stay abreast of the field.
CIRM signaled it is dumping its troubled Grantium grants management program. It identified grants management as a “risk” and “critical” for CIRM It said that Grantium has not met all of CIRM's needs.
CIRM said the budget contains funds to create a new grant management program, but did not specify the amount. 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. The amount may be on top of the more than $800,000 allotted in the past for the troubled Grantium program. That figure, however, probably is low.
Possibly linked to the grant management issues are future research grants, although CIRM did not specifically tie them to the problems.
CIRM said,
“Many of the more clinical (grant) programs will have complicated milestones and 'go-no-go' decision points, detailed risk and efficacy data and decisions regarding maturity and development with multiple partners. Such evaluation will require new capacity in the science office and the office of the general counsel.”Links to all the budget documents can be found on the board's agenda this week.
Tuesday, June 16, 2009
More Info on CIRM's Finances and its Federal Patent Lobbying Position
The California stem cell agency today posted several major background information pieces for its board meeting, including details and justification for its proposed budget and an analysis dealing with its endorsement of industry-backed patent protection legislation.
The documents came as the agency is scheduled to begin a two-day meeting tomorrow in San Diego, which can heard via the Internet(instructions on the agenda).
We have not had a chance to read all the material carefully, but the budget documents go a long way in answering the questions we raised on Friday and presumably the earlier requests for more details from CIRM board members.
The budget material includes more year-to-year comparisons, a commentary explaining some of the assumptions in the budget, a justification for extensive travel and more. All of the items can be found through links on the agenda
In addition, Nancy Koch, one of CIRM's outside attorneys, wrote a three-page analysis of a Federal Trade Commission report last week that dealt with many of the issues involved in the federal patent legislation on biotech therapies.
Koch wrote:
Koch performed a careful analysis of the FTC study, reaction to it and its impact on the CIRM position, including exploration of the FTC report's assumptions and weaknesses.
She wrote that the FTC “analysis sidesteps the financially daunting circumstances faced by smaller companies.”
Koch said,
The documents came as the agency is scheduled to begin a two-day meeting tomorrow in San Diego, which can heard via the Internet(instructions on the agenda).
We have not had a chance to read all the material carefully, but the budget documents go a long way in answering the questions we raised on Friday and presumably the earlier requests for more details from CIRM board members.
The budget material includes more year-to-year comparisons, a commentary explaining some of the assumptions in the budget, a justification for extensive travel and more. All of the items can be found through links on the agenda
In addition, Nancy Koch, one of CIRM's outside attorneys, wrote a three-page analysis of a Federal Trade Commission report last week that dealt with many of the issues involved in the federal patent legislation on biotech therapies.
Koch wrote:
“Lengthy market exclusivity periods (like those proposed by Rep. (Anna) Eshoo in HR 1548), according to the FTC, are not necessary and could actually dampen innovation.”The Eshoo bill has been endorsed by the CIRM board, which is likely to vote again on the measure during its meetings during the next two days.
Koch performed a careful analysis of the FTC study, reaction to it and its impact on the CIRM position, including exploration of the FTC report's assumptions and weaknesses.
She wrote that the FTC “analysis sidesteps the financially daunting circumstances faced by smaller companies.”
Koch said,
“For CIRM, this last point is particularly significant. Even if the FTC's prediction were generally correct, stem cell research and the market for stem cell therapies would seem to fall outside the agency's analysis.”Whether you agree or disagree with Koch's analysis or the budget justification and plans, all are important tools for CIRM directors tomorrow. The information also adds significantly to the understanding of the public and parties interested in CIRM's $3 billion operation.
Webcast of CIRM Board Meeting This Week
Here are instructions for listening to the Web audiocast of the Wednesday and Thursday meetings of the board of the California stem cell agency, according to Melissa King, executive director of the board.
On Wednesday, to access the live event or archive, use this URL:
http://65.197.1.15/att/confcast
Enter conference ID#101434 Then click go.
On Thursday, to access the live event or archive, use this URL:
http://65.197.1.15/att/confcast
Enter conference ID# 101436. Then click go.
On Wednesday, to access the live event or archive, use this URL:
http://65.197.1.15/att/confcast
Enter conference ID#101434 Then click go.
On Thursday, to access the live event or archive, use this URL:
http://65.197.1.15/att/confcast
Enter conference ID# 101436. Then click go.
The $10 Billion Patent Litigation Bill
As the directors of the $3 billion California stem cell agency this week reconsider their endorsement of an industry-backed, patent protection bill, they may want to think about some of the issues raised in an article in Monday's Wall Street Journal headlined “Why Technologists Want Fewer Patents.”
The opinion piece was written by L. Gordon Crovitz, former publisher of the Journal, and discusses the current state of patent law and intellectual property.
He wrote,
The three scientists who founded the company, Stem Cells Inc. of Palo Alto, Ca., which holds the patents in the Childrens Hospital case, have never spoken publicly on the issue, and we do not expect to hear from them.
It is unclear whether the Crovitz piece is available to non-subscribers. If you would like a copy, please email djensen@californiastemcellreport.com.
The opinion piece was written by L. Gordon Crovitz, former publisher of the Journal, and discusses the current state of patent law and intellectual property.
He wrote,
“The Patent Office now gets some 500 million applications a year, leading to litigation costs of over $10 billion a year to define who has what rights. As Judge Richard Posner has written, patents for ideas create the risk of 'enormous monopoly power (imagine if the first person to think up the auction had been able to patent it).' Studies indicate that aside from the chemical and pharmaceutical industries, the cost of litigation now exceeds the profits companies generate from licensing patents.”Crovitz continued,
“The Supreme Court may decide that more progress would be made with narrower definitions of what is patentable. A book on the U.S. approach to patents, 'Jefferson vs. the Patent Trolls' by Jeffrey Matsuura, makes the key point that 'intellectual property rights were not goals in and of themselves, but were instead a mechanism through which society attempted to facilitate creative collaboration.'"Some of you may recall that zealous stem cell patent protection has blocked research at Childrens Hospital of Orange County. And some have pointed to excessively tight control of IP as a main reason why nearly all biotech companies have been unprofitable for decades.
The three scientists who founded the company, Stem Cells Inc. of Palo Alto, Ca., which holds the patents in the Childrens Hospital case, have never spoken publicly on the issue, and we do not expect to hear from them.
It is unclear whether the Crovitz piece is available to non-subscribers. If you would like a copy, please email djensen@californiastemcellreport.com.
More on Klein's 2010 Departure Plans
Plans by Robert Klein, chairman of the California stem cell agency, to step down from the post in 2010 drew coverage Monday from the San Francisco Weekly.
Peter Jamison quoted Don Gibbons, chief spokesman for CIRM, as saying Klein plans to rededicate himself to his real estate investment business.
Gibbons was quoted as saying,
Peter Jamison quoted Don Gibbons, chief spokesman for CIRM, as saying Klein plans to rededicate himself to his real estate investment business.
Gibbons was quoted as saying,
"He can't afford to take a second term. It's a huge financial commitment for him to do this, because he cannot run his business at anywhere near full capacity. He's been saying this internally for a very long time."Jamison wrote,
“Gibbons said Klein may continue to be involved with CIRM in some way after 2010, noting that he would have to be appointed if he were to remain on the agency's governing board.“
Monday, June 15, 2009
CIRM Goes to Washington: Patents, Tornados and Bench Warming
As California stem cell directors this week consider once again their federal lobbying efforts, the Wall Street Journal offers an insight into just what it takes to have an impact in the august halls of Congress.
Can you say $27.6 million?
That's what a coalition of financial services organizations spent during the first quarter to change an accounting rule – albeit an important one – and lobby on other issues. The coalition also pumped $286,000 into the campaign organizations of lawmakers on a key committee.
Compare that to the $240,000 CIRM is spending for a federal lobbyist for 10 months work.
The issue that is coming up this week is CIRM's support for industry-backed legislation dealing with creation of generic biotech therapies. The agency currently has endorsed a measure by Rep. Anna Eshoo, D-Palo Alto, but has taken no position on a competing measure by Rep. Henry Waxman, D-Los Angeles, a far more important and powerful lawmaker.
The generic issue is complex enough on its own. But it apparently is going to be wrapped into the Obama administration's health plan, which Waxman will be carrying in the House. The rationale is that generic biotech therapies will cut costs, thus helping to trim the mammoth price of the health care deal. If the generic therapies are delayed because of industry-sought patent exclusivity, it means higher health care costs, according to supporters of the Waxman approach.
John Carroll of FierceBiotech recently wrote:
CIRM directors are oozing into a significant – for CIRM – federal lobbying role. But it is tiny in the world of Washington. Some on the board are concerned about mission creep and wasting time, money and focus on an effort where CIRM will never be more than a bench-warmer, if that. Directors are dealing with lobbying in what California stem cell Chairman Robert Klein calls an “incremental” fashion. Certainly CIRM can legally lobby Congress and probably should in some cases. But directors have never had a full-blown discussion on when, where and why.
Can you say $27.6 million?
That's what a coalition of financial services organizations spent during the first quarter to change an accounting rule – albeit an important one – and lobby on other issues. The coalition also pumped $286,000 into the campaign organizations of lawmakers on a key committee.
Compare that to the $240,000 CIRM is spending for a federal lobbyist for 10 months work.
The issue that is coming up this week is CIRM's support for industry-backed legislation dealing with creation of generic biotech therapies. The agency currently has endorsed a measure by Rep. Anna Eshoo, D-Palo Alto, but has taken no position on a competing measure by Rep. Henry Waxman, D-Los Angeles, a far more important and powerful lawmaker.
The generic issue is complex enough on its own. But it apparently is going to be wrapped into the Obama administration's health plan, which Waxman will be carrying in the House. The rationale is that generic biotech therapies will cut costs, thus helping to trim the mammoth price of the health care deal. If the generic therapies are delayed because of industry-sought patent exclusivity, it means higher health care costs, according to supporters of the Waxman approach.
John Carroll of FierceBiotech recently wrote:
“Waxman has been pushing a bill that provides a five-year window of market exclusivity for biologics, something the biotech industry views with the kind of alarm a farmer feels when he sees a tornado heading for the barn. But there are a lot of numbers in play on the Hill. A competing bill offers 14 years of exclusivity and the president's budget proposal for 2010 pencils in a seven-year period.“A Wall Street Journal blog this spring said the time may be ripe for a compromise and noted that some Big Pharma companies are warming to the idea of selling the copy-cat drugs themselves. The blog drew 18 comments, some of which indicated a high level of industry insight.
CIRM directors are oozing into a significant – for CIRM – federal lobbying role. But it is tiny in the world of Washington. Some on the board are concerned about mission creep and wasting time, money and focus on an effort where CIRM will never be more than a bench-warmer, if that. Directors are dealing with lobbying in what California stem cell Chairman Robert Klein calls an “incremental” fashion. Certainly CIRM can legally lobby Congress and probably should in some cases. But directors have never had a full-blown discussion on when, where and why.
Sunday, June 14, 2009
CIRM Pulls a Grant, Aggressive Monitoring Reported
In what appears to be a first, the California stem cell agency has pulled at least one grant from one of its researchers, apparently because of a lack of progress.
Don Gibbons, CIRM's chief communications officer, confirmed the action in response to a query from the California Stem Cell Report.
Gibbons refused to disclose the identity of the researcher or the institution, declaring that more details would be forthcoming in a report to the CIRM board of directors from President Alan Trounson at its meeting in San Diego on Wednesday and Thursday.
We asked CIRM about the withdrawal after we were told by another source that one grant had, in fact, been been pulled and some “push-back” was coming from institutions. At the last CIRM board meeting in April, a report on grant monitoring was on the agenda but was removed with no explanation.
Here are the questions we directed to Gibbons last week.
Gibbons has not responded to an additonal question on June 10 seeking the identity of the researcher and the grant number, both of which are public record.
Marie Csete, chief scientific officer for CIRM, and her staff have been aggressive in checking progress on CIRM grants, we have been told. Some grantees have been surprised and have complained that the NIH does not follow the same practice.
CIRM is to be lauded for monitoring the grants carefully. While strong oversight of grants may be bothersome to some researchers, institutions and perhaps some CIRM directors, it is a healthy practice that should stand CIRM in good stead when it faces its skeptics.
Don Gibbons, CIRM's chief communications officer, confirmed the action in response to a query from the California Stem Cell Report.
Gibbons refused to disclose the identity of the researcher or the institution, declaring that more details would be forthcoming in a report to the CIRM board of directors from President Alan Trounson at its meeting in San Diego on Wednesday and Thursday.
We asked CIRM about the withdrawal after we were told by another source that one grant had, in fact, been been pulled and some “push-back” was coming from institutions. At the last CIRM board meeting in April, a report on grant monitoring was on the agenda but was removed with no explanation.
Here are the questions we directed to Gibbons last week.
“Can you confirm or deny that a grant has been pulled?Gibbons replied,
“Are institutions pushing back in any form whatsoever?
“Are any of the board members involved in any way whatsoever in reactions to monitoring of grantees' progress?
“What was the reason for removal of the monitoring item from the agenda last month?
“Will it be rescheduled?
“Do you have any other comments on this general subject? “
“Yes, we have pulled at least one grant, but the leadership of the science office uniformly reports they are not getting push back from the institutions. No board members were involved in the process. The last board agenda was jammed so plans were made to include the progress reports in the President’s Report for the upcoming meeting. You can hear the details then.”(The last board meeting ended at 1:24 p.m. on April 29, which is early for most board meetings.)
Gibbons has not responded to an additonal question on June 10 seeking the identity of the researcher and the grant number, both of which are public record.
Marie Csete, chief scientific officer for CIRM, and her staff have been aggressive in checking progress on CIRM grants, we have been told. Some grantees have been surprised and have complained that the NIH does not follow the same practice.
CIRM is to be lauded for monitoring the grants carefully. While strong oversight of grants may be bothersome to some researchers, institutions and perhaps some CIRM directors, it is a healthy practice that should stand CIRM in good stead when it faces its skeptics.
Snippets: Creation of Stem Cell Argonauts, Klein and Biotech Outsourcing
Klein Farewell, Sort Of – Robert Klein's not-so-imminent departure as chairman of the California stem cell agency has received no major media attention. But the San Francisco Business Times picked up the story, citing both this Web site and Consumer Watchdog. You can read the Times piece here. Here is a link to The Pluripotent blog on which Michael Scott wrote, “Get ready my popcorn and nachos, waiting for the scene when Bob Klein dumps CIRM, CIRM gets all cried out, and begs her man back.”
Is State Stem Cell Funding Necessary? – Yes, is the answer from Susan Solomon, CEO of the New York Stem Cell Foundation. She gave the response in a speech Friday. While she did not talk about the effort in California, some have asked whether CIRM is needed, given President Obama's moves on stem cell research. She said the proposed federal hESC guidelines are likely to be more conservative than many had hoped. And she said federal funding for the most advanced human embryonic stem cell research will remain limited. The text of Solomon's speech was carried on the Huffington Post.
Sending California Biotech Jobs to China? – Or is it business-building international collaboration? Ask Tergegen of San Diego about the experience. Or ask the 46 employees the firm laid off this year. Peter Ulrich, founder and head of Targegen, told Helen Kaiao Chang of the San Diego News Network,
The Stem Cell 'Gold Rush' – Legislation aimed at creating a host of latter-day argonauts for the biotech industry has passed the state Senate and is now before the Assembly. The measure – SB 471 – Sen. Gloria Romero, D-Los Angeles, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, cleared the Senate on a 24-14 vote. The CIRM-backed bill would embed stem cell and biotechnology workforce training in the state's public schools. Mid Valley News quoted Romero as saying,
Is State Stem Cell Funding Necessary? – Yes, is the answer from Susan Solomon, CEO of the New York Stem Cell Foundation. She gave the response in a speech Friday. While she did not talk about the effort in California, some have asked whether CIRM is needed, given President Obama's moves on stem cell research. She said the proposed federal hESC guidelines are likely to be more conservative than many had hoped. And she said federal funding for the most advanced human embryonic stem cell research will remain limited. The text of Solomon's speech was carried on the Huffington Post.
Sending California Biotech Jobs to China? – Or is it business-building international collaboration? Ask Tergegen of San Diego about the experience. Or ask the 46 employees the firm laid off this year. Peter Ulrich, founder and head of Targegen, told Helen Kaiao Chang of the San Diego News Network,
“The trick in biotech is to survive the period of time when you’re not making any money in product sales. Being able to utilize outsourcing to China enables more companies to survive the neo-natal process and grow up to be big companies. Collectively, they will employ a whole lot more people by surviving than not surviving.”Ulrich was quoted in a piece leading up to Biocom's “CalAsia” conference, which began today in San Diego and runs through Tuesday.
The Stem Cell 'Gold Rush' – Legislation aimed at creating a host of latter-day argonauts for the biotech industry has passed the state Senate and is now before the Assembly. The measure – SB 471 – Sen. Gloria Romero, D-Los Angeles, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, cleared the Senate on a 24-14 vote. The CIRM-backed bill would embed stem cell and biotechnology workforce training in the state's public schools. Mid Valley News quoted Romero as saying,
“California's next Gold Rush will be found in the Petri dishes and laboratories of this great state, but only if we produce the next generation of scientists, technicians and trained professionals capable of translating stem cell research into therapies and cures.”(The vote in the Mid Valley story was incorrectly reported as 21-12, probably because the roll was held open and more votes were added after the initial approval.)
Saturday, June 13, 2009
Stem Cell Research as Economic Development
The New York Times earlier this week wrote about how some regions are courting the biotech industry. The story contained some caveats about the economic impact of biotech research, much less stem cell research.
In a counterpoint to arguments in California that CIRM is a major economic engine, Shaila Dewan wrote,
“...(B)iotech is a relatively tiny industry with a lengthy product-development process, and even in its largest clusters offers only a fraction of the jobs of traditional manufacturing. In the United States, only 43 biotechnology companies employ more than 1,000 people, according to BioAbility, a consulting firm in the Research Triangle Park in North Carolina.
“There is no guarantee that if a blockbuster drug materialized, it would be manufactured and marketed in the same place it was developed and tested.
“Joseph Cortright, an economist who has studied biotechnology clusters, gave the example of a promising anti-leukemia compound developed at Oregon Health Sciences University in Portland, where Mr. Cortright is based. 'The economic impact in the Portland area is zero because the rights to manufacture and market this drug were owned already by Novartis,' Mr. Cortright said.”
In a counterpoint to arguments in California that CIRM is a major economic engine, Shaila Dewan wrote,
“...(B)iotech is a relatively tiny industry with a lengthy product-development process, and even in its largest clusters offers only a fraction of the jobs of traditional manufacturing. In the United States, only 43 biotechnology companies employ more than 1,000 people, according to BioAbility, a consulting firm in the Research Triangle Park in North Carolina.
“There is no guarantee that if a blockbuster drug materialized, it would be manufactured and marketed in the same place it was developed and tested.
“Joseph Cortright, an economist who has studied biotechnology clusters, gave the example of a promising anti-leukemia compound developed at Oregon Health Sciences University in Portland, where Mr. Cortright is based. 'The economic impact in the Portland area is zero because the rights to manufacture and market this drug were owned already by Novartis,' Mr. Cortright said.”
Friday, June 12, 2009
$41 Million in Stem Cell Training Grants Look Good for CIRM Funding
The California stem cell agency today posted more information about what its board plans to do at its meeting next Tuesday, including what is close to a staff recommendation that $41 million be pumped into training programs at 15 institutions.
The training grants were approved earlier this year, but funding deferred because of CIRM's financial woes. But now that cash is available, CIRM staff urged the board to “seriously consider the resumption of funding” at the earliest possible date.
The memo supporting the move said that researchers need the trainees to continue support of research projects.
The memo said the previous training program, the first grants funded by CIRM, was well-regarded. The staff said,
Remcho charges CIRM $350 an hour for work by Harrison, which the CIRM memo said “is significantly lower than the market rates for firms with similar expertise.” Work done by others at the firm is charged at lesser rates. If Remcho billed $450,000 at the $350 rate, it would amount to about six months of full-time work.
Also on tap next week is a do-over on motions for CIRM support of industry-backed legislation aimed at protecting biotech patents against development of generic biotech therapies. Now available on the CIRM Web site is a memo that summarizes the latest developments in Congress and the White House.
An updated version of the CIRM conflict of interest code is also available and has been placed on the consent calendar as a non-controversial item. Removed from the agenda are the consolidated IP regulations, which are to be considered at a later date. No reason was given for delaying the item.
Still missing are guidelines for a change in board voting procedures that could enhance the powers of the board chairman and information about the leadership and some of the membership of the directors subcommittee that will evaluate Chairman Bob Klein, the two vice chairs and CIRM President Alan Trounson.
The training grants were approved earlier this year, but funding deferred because of CIRM's financial woes. But now that cash is available, CIRM staff urged the board to “seriously consider the resumption of funding” at the earliest possible date.
The memo supporting the move said that researchers need the trainees to continue support of research projects.
The memo said the previous training program, the first grants funded by CIRM, was well-regarded. The staff said,
“CIRM Scholars (trainees) conducted stem cell research in 219 distinct laboratories and produced 221 publications, many in high impact journals.Also posted was a three-page justification for continuing the longstanding contract with Remcho, Johansen & Purcell of San Leandro, Ca., as outside counsel to CIRM at $450,000 a year. James Harrison, an attorney with that firm, has been Remcho's visible and unflappable representative on CIRM matters since 2005.
“Upon completing training, individual CIRM Scholars have moved on to faculty positions at top universities, to scientific positions in biotechnology/pharmaceutical companies, or to further training at laboratories of leading stem cell scientists. Many physician CIRM Scholars are now also practicing medicine with a strong knowledge base of stem cell science. Outstanding examples of CIRM Scholar achievements include: research leading to the founding of a biotechnology company and the research leading to a Phase 1 clinical trial.
“In addition to trainee success, the program has served as a focal point for stem cell research at each of the training institutions and produced an attractive stem cell research environment that has contributed to the recruitment of new faculty as well as top trainees. The research conducted by trainees has spanned the spectrum from basic to preclinical research and, importantly, has accelerated research through synergy with other CIRM funded projects.”
Remcho charges CIRM $350 an hour for work by Harrison, which the CIRM memo said “is significantly lower than the market rates for firms with similar expertise.” Work done by others at the firm is charged at lesser rates. If Remcho billed $450,000 at the $350 rate, it would amount to about six months of full-time work.
Also on tap next week is a do-over on motions for CIRM support of industry-backed legislation aimed at protecting biotech patents against development of generic biotech therapies. Now available on the CIRM Web site is a memo that summarizes the latest developments in Congress and the White House.
An updated version of the CIRM conflict of interest code is also available and has been placed on the consent calendar as a non-controversial item. Removed from the agenda are the consolidated IP regulations, which are to be considered at a later date. No reason was given for delaying the item.
Still missing are guidelines for a change in board voting procedures that could enhance the powers of the board chairman and information about the leadership and some of the membership of the directors subcommittee that will evaluate Chairman Bob Klein, the two vice chairs and CIRM President Alan Trounson.
CIRM Spending Plan Poorly Documented, Lacking Key Information
The budget presented this week for the $3 billion California stem cell agency is a sad disappointment.
One would expect more from an enterprise that is now overseeing $761 million in state-funded grants. The budget lacks important details needed for the agency's board of directors to determine whether the agency is being properly run. CIRM directors served notice on Thursday they want more, including such basic information as how the spending plan for the next fiscal year compares to actual expenditures this year.
It is easy to regard budget preparation as mindless number-crunching. But a budget reflects the agency's thinking, priorities and direction. It is a key tool for directors. A spending plan should open a window on management's effectiveness. It identifies problems that remain unresolved. Failure to produce a realistic and well-documented budget raises questions about management's abilities in other areas.
Here are some of the highlights from the slim information that CIRM has given to directors and made public on its Web site.
The two-page spending plan for 2009-10 totals $12.98 million. CIRM staff compared that to a $13.4 million plan advanced 12 months ago, a budget that was clearly not on target. CIRM did not provide a current estimate for what its spending will total in three weeks, which is the end of the current fiscal year. However, the most recent CIRM documents available showed that as of the end of March, CIRM had spent only 50 percent of its budget for this year. Parsimony can account for part of that savings. But the disparity between the budget and actual spending shows that the original proposal was flawed, to put it mildly.
The major expense, as usual, for the coming year is salaries and benefits. They amount to $7.4 million and reflect a much-needed increase in staff from 44.5 positions to 47 positions. The agency is capped by law at 50 employees.
The No. 2 spending category is outside contracts at $2.1 million, although that figure seems to be vastly understated. It does not include $853,000 for information technology, most of which appears to be linked to Grantium, its troubled grant management program. The $2.1 million also does not include $208,000 for outside help from other state agencies.
CIRM directors were told in October 2007 that the “complete cost” of Grantium program would be $757,000. The proposed budget appears to allocate $610,000 for Grantium issues, including a $275,000 contract with Kutir Corp. for “development” of the grant management program. Some of the $610,000 may include funds that were included in the original $757,000, but the CIRM budget did not include that information.
The latest information on Grantium dates back to a March report, which included figures only as of December 2008. CIRM reported that it had a $702,000 contract with Grantium running from April 2008 to April 2011. Payments of $28,112 were listed. The March document also reported $389,750 in IT contracts for this fiscal year, including $200,000 to Kutir. (The CIRM Web site redesign appears to have dropped the link to the March outside contracts report. If you are interested in a copy, please email djensen@californiastemcellreport.com.)
If all this about Grantium sounds confusing, that's because it is. The proposed budget sheds no light on the matter.
The largest component of the $2.1 million contracts figure is $945,000 for legal services. That figure is based on our calculations, since CIRM did not provide a total in the category. No total was also provided for “communications/media” services, which ran, by our calculations, $455,000. As with other components of outside contracts, CIRM made no comparisons to actual spending this year or even last year's proposed budget.
Another $250,000 was allotted for an economic impact analysis, which could be classified as public relations since that is one of its prime functions. That contract was originally scheduled to be let during this fiscal year.
One category that raised questions last year was travel, which would total $497,000 for the coming year. The category, however, is not defined and may not include travel by board members to CIRM board meetings. John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., analyzed last year's travel plans, pointing out that they would put CIRM Chairman Robert Klein out of the state on CIRM business for 88 days, CIRM President Alan Trounson 68 days and Chief Science Officer Marie Csete 75 days. Simpson has not yet produced a similar analysis for the latest proposed budget.
The proposed CIRM budget will come before the full board of directors at its meetings next week in San Diego.
One would expect more from an enterprise that is now overseeing $761 million in state-funded grants. The budget lacks important details needed for the agency's board of directors to determine whether the agency is being properly run. CIRM directors served notice on Thursday they want more, including such basic information as how the spending plan for the next fiscal year compares to actual expenditures this year.
It is easy to regard budget preparation as mindless number-crunching. But a budget reflects the agency's thinking, priorities and direction. It is a key tool for directors. A spending plan should open a window on management's effectiveness. It identifies problems that remain unresolved. Failure to produce a realistic and well-documented budget raises questions about management's abilities in other areas.
Here are some of the highlights from the slim information that CIRM has given to directors and made public on its Web site.
The two-page spending plan for 2009-10 totals $12.98 million. CIRM staff compared that to a $13.4 million plan advanced 12 months ago, a budget that was clearly not on target. CIRM did not provide a current estimate for what its spending will total in three weeks, which is the end of the current fiscal year. However, the most recent CIRM documents available showed that as of the end of March, CIRM had spent only 50 percent of its budget for this year. Parsimony can account for part of that savings. But the disparity between the budget and actual spending shows that the original proposal was flawed, to put it mildly.
The major expense, as usual, for the coming year is salaries and benefits. They amount to $7.4 million and reflect a much-needed increase in staff from 44.5 positions to 47 positions. The agency is capped by law at 50 employees.
The No. 2 spending category is outside contracts at $2.1 million, although that figure seems to be vastly understated. It does not include $853,000 for information technology, most of which appears to be linked to Grantium, its troubled grant management program. The $2.1 million also does not include $208,000 for outside help from other state agencies.
CIRM directors were told in October 2007 that the “complete cost” of Grantium program would be $757,000. The proposed budget appears to allocate $610,000 for Grantium issues, including a $275,000 contract with Kutir Corp. for “development” of the grant management program. Some of the $610,000 may include funds that were included in the original $757,000, but the CIRM budget did not include that information.
The latest information on Grantium dates back to a March report, which included figures only as of December 2008. CIRM reported that it had a $702,000 contract with Grantium running from April 2008 to April 2011. Payments of $28,112 were listed. The March document also reported $389,750 in IT contracts for this fiscal year, including $200,000 to Kutir. (The CIRM Web site redesign appears to have dropped the link to the March outside contracts report. If you are interested in a copy, please email djensen@californiastemcellreport.com.)
If all this about Grantium sounds confusing, that's because it is. The proposed budget sheds no light on the matter.
The largest component of the $2.1 million contracts figure is $945,000 for legal services. That figure is based on our calculations, since CIRM did not provide a total in the category. No total was also provided for “communications/media” services, which ran, by our calculations, $455,000. As with other components of outside contracts, CIRM made no comparisons to actual spending this year or even last year's proposed budget.
Another $250,000 was allotted for an economic impact analysis, which could be classified as public relations since that is one of its prime functions. That contract was originally scheduled to be let during this fiscal year.
One category that raised questions last year was travel, which would total $497,000 for the coming year. The category, however, is not defined and may not include travel by board members to CIRM board meetings. John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., analyzed last year's travel plans, pointing out that they would put CIRM Chairman Robert Klein out of the state on CIRM business for 88 days, CIRM President Alan Trounson 68 days and Chief Science Officer Marie Csete 75 days. Simpson has not yet produced a similar analysis for the latest proposed budget.
The proposed CIRM budget will come before the full board of directors at its meetings next week in San Diego.
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