Published on paper February 1997
by the Office of Research and Technology Transfer Administration
Research Organization
for Academic Affairs
Dean of the Graduate School
for Research and Technology Transfer
Fiscal year 1996 was a time of great challenge and change in the University of Minnesota research enterprise. One month into the fiscal year the University was notified by the National Institutes of Health that it was being designated an "exceptional organization," meaning that NIH was concerned about the University's management of federal research funds. Citing past problems in the Department of Surgery that were previously identified by the University and confirmed by NIH auditors, NIH removed for at least one year the University's expanded authorities provision, under which the Office of Research and Technology Transfer Administration could approve certain cost-related transactions on research grants.
As of this writing, the exceptional organization designation remains in place, despite substantial improvements by the University in its grants management oversight, and despite mutual agreement by University and NIH administrators that the sanctions should be lifted. Negotiations toward that end were complicated in December 1996, when the University and the U.S. Department of Justice filed legal actions against each other related to allegations of fraud in the Department of Surgery.
Recent improvements to the University's research administration processes date back to evaluations and planning begun in 1993. Recommendations from those reviews have been acted upon by project teams directed by the University's Grants Management Group, a high-level task force appointed by President Nils Hasselmo in July 1995. In fiscal year 1996 and the first half of fiscal year 1997, the project teams achieved results in five priority areas:
1. Clarified and disseminated information on research roles and responsibilities.
2. Drafted or revised grants management policies and procedures as necessary.
3. Enhanced and provided training programs and communication tools for faculty and administrators.
4. Began development of an electronic management system for grants, which will make it possible for faculty and administrators to prepare, process and submit proposals electronically, with on-line access to relevant policies, procedures and other aids.
5. Improved the utility of the existing financial system for managing grants and contracts, by providing sponsored project financial summaries electronically and giving principal investigators and unit administrators easy access to updated project financial summaries and lists of active projects.
In spite of difficulties experienced in the past year with respect to the NIH and the impact this has had on our administrative procedures, the information presented in this report documents that the level and trend in sponsored activity of our faculty continues to move upward. The scholarly work of our faculty continues to be first class. We anticipate that the above improvements and many more still in progress will substantially enhance the research climate at the University of Minnesota by making the infrastructure more supportive of research and assuring the highest of ethical standards. As the competition intensifies for the best researchers and scholars and the funding to support their endeavors, the University is well positioned to continue as a world-class research, learning, and outreach institution.
Mark Brenner
Vice President for Research and Dean, Graduate School
Edward F. Wink
Interim Associate Vice President,
Research and Technology Transfer
Many of the University of Minnesota's research, teaching, and public service activities are funded by grants and contracts from external sponsors. The major sponsors are federal and State of Minnesota agencies, private foundations, associations, and industry.
This report focuses on the externally supported research, training, and public service programs administered by the Office of Research and Technology Transfer Administration (ORTTA). Excluded from most tables are non-contract funds, including departmental research funds, special federal and state appropriations for research, and student aid. (Totals for these categories are included in Tables 1, 2 and Table A of the appendix). Also excluded are gifts to the University, which are administered and reported by the University of Minnesota Foundation and the Minnesota Medical Foundation.
This report includes a section describing activity in Patents and Technology Marketing, which has been a part of ORTTA since 1983. Called technology transfer, this facet of the University's outreach mission is becoming increasingly important, as the nation and state look to university researchers as the source of new knowledge, ideas, and technologies needed to maintain economic growth and industrial competitiveness.
In FY 1996, ORTTA administered $304.1 million in sponsored research, training, and public service expenditures, which was a 4 percent increase from FY 1995 funding of $293.5 million. Research expenditures comprised 80 percent of the total, or $242.8 million, which was an increase of 2 percent, or $5.2 million, from FY 1995 funding of $237.6 million. Training and public service programs constituted the remaining 20 percent, or $61 million.
Seventy-three percent of the total FY 1996 expenditures, $222.6 million, came from federal agencies. The University's share of federal support grew roughly 2 percent from $218.5 million in FY 1995 to $222.6 in FY 1996. Funding from the National Institutes of Health increased from $115.3 to in FY 1995 to $121.8 million in FY 1996. National Science Foundation increased from $27.1 to $30.3 million. Environmental Protection Agency funding dropped from $3.4 million in FY 1995 to $2.2 million in FY 1996; U.S. Department of State funding fell from $3.9 million to $2.4 million. Funding levels remained relatively static for most other federal agencies.
Seventeen percent of the total FY 1996 expenditures, $57.5 million, came from private sources. Private sources include business and industry, associations, foundations, and individuals. Industrial sponsorship of research has grown from $5.1 million in FY 1983 (4.4 percent of total research expenditures that year) to $28.1 million in FY 1996 (9 percent of total research expenditures).
Eight percent, or $24.2 million of FY 1996 sponsored research, training and public service expenditures came from state and local agencies. In addition, state special appropriations for research in FY 1996 totaled $53.3 million.
Funding for projects in Academic Health Center colleges, which account for 53 percent of the University's sponsored programs, increased from $151.2 to $160.0 million in FY 1996. Sponsored research expenditures for the Academic Health Center increased 6 percent, from $129.6 million to $137.4 million, while training and public service expenditures increased 4 percent, from $21.6 million to $22.5 million. Medical School expenditures increased 4 percent, from $99.0 million to $103.2 million. Expenditures in the School of Public Health rose 10.3 percent, from $31.9 million to $34.7 million in FY 1996.
Proposal activity is a good indication of how much effort is expended by faculty, staff, and administration to obtain funding for sponsored programs. In FY 1996, University faculty submitted 4,192 proposals requesting $687 million. While numbers requested were down in the Health Sciences, dollars requested were up from $329 million to $349 million. Numbers of proposals and dollars requested by the Institute of Technology were down in FY 1996 as compared to FY 1995.
Seventy-three percent of FY 1996 proposals were for new programs. Continuation proposals usually are awarded for the full amounts requested, since funding previously has been committed. New proposals, however, have a somewhat lower success rate. We cannot yet determine the success rate for FY 1996 proposals, since award or rejection of proposals may take more than a year. As of December 31, 1996, however, 32 percent of FY 1996 proposals had been awarded, for 83 percent of the amounts requested.
Over the past ten years, submission of proposals by University faculty has shown a steadily upward trend, increasing in numbers from 2,763 in FY 1986 to 4,192 in FY 1996. Although the number of submissions and dollars requested are independent, amounts requested have also increased substantially, from $435 million in FY 1986 to $687 million in FY 1996; average annual increase was 15 percent per year.
Award data represent agency commitments to fund specific research, training, and public service projects at given levels for stated periods. While these data provide interesting information on future funding, they are not reliable for year-to-year comparative analyses. Award data need to be considered in conjunction with expenditure data (dollars actually spent on sponsored programs), in formulating conclusions regarding the University's sponsored programs.
In FY 1996, the University received 3,171 awards for a total of $347.7 million. This was a decrease of 18 percent in number and a 15 percent increase in amount from the award levels for FY 1995. These adjustments notwithstanding, the annual increases in awards over the past ten years have averaged 4 percent in number and almost 10 percent in amount.
The University of Minnesota is one of the leading recipients of federal research, training, and public service support. According to the most recent report available from the National Science Foundation (NSF) as this publication went to press, the University of Minnesota was ranked 9th among all U.S. universities in total research and development expenditures in 1995, and 14th in federal R&D funding. This ranking is based on expenditure data provided by institutions in response to NSF's Survey of Scientific and Engineering Expenditures at Universities and Colleges.
Another measure used to compare institutions is based on federal obligations to universities and colleges for science and engineering activities. This indicator increased from $12.4 billion to $13.7 billion from FY 1993 to FY 1994, the most recent year for which data are available. The University of Minnesota ranked 14th in FY 1994 in total federal obligations, compared to the University of Washington (2nd), University of Michigan (5th), and University of Wisconsin (6th).
Technology transfer activities at the University continue to grow as companies seek new research discoveries on which to base future improvements and products. In FY 1996, ORTTA's division of Patents and Technology Marketing (PTM) made a major effort to encourage faculty to participate in the transfer of research discoveries to industry. As a result, PTM received a record high number of disclosures of inventions with potential commercial value.
The number of inventions disclosed dropped from 200 in FY 1995 to 159 in FY 1996. The greatest decrease was experienced in the Health Sciences; the Medical School dropped from 77 invention disclosures in FY 1995 to 63 in FY 1996; other Health Science departments dropped from 32 to 11. In FY 1996, 28 U.S. patents were issued to inventors and assigned to the Regents of the University of Minnesota. This was 6 fewer than the 34 patents assigned to the University in FY 1995; this drop was expected as a result of past budgetary decisions to reduce the University's expenditures for patent costs. However, rising licensing income and negotiation of patent cost reimbursements by licensees enabled PTM to reverse the trend in patent filing, with 47 new U.S. applications filed in FY 1996, compared to 31 the year before.
While the number of patents issued to a university's faculty is a good indication of how committed the university is to seeking patent protection for its inventions, the number of technology transfer agreements (licenses) with companies is a better indication of the quality of those patented inventions. As of December 31, 1996, the University of Minnesota had a total of 262 active technology license agreements with industry, including 86 agreements with Minnesota companies, 161 with companies in other states, and 15 with foreign companies. In addition, in FY 1996 more than 340 companies held licenses to use University of Minnesota trademarks on their products.
The University's sponsored program expenditures increased at about the rate of inflation in FY 1996. It is doubtful that this rate of increase will be maintained in coming years, but there is good reason to believe that University of Minnesota faculty will continue to do well in the intense competition for research funding. It is unclear at this time what will result from congressional discussions of severe cutbacks in federal funding for research and development activities over the next seven years. However, all indications are that basic research is recognized by the nation's leaders as a critical investment in the future. Likewise, leaders of the State of Minnesota have indicated their support for the University's research and technology transfer contributions to the public wellbeing. Therefore, with continued internal and external investments in the University's research infrastructure and human resources, the institution should remain a major contributor in a wide range of academic fields well into the next century.
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