Audit Ties 15 Universities to Government Overcharges : Education: Federal officials tell panel that overhead expenses associated with research at the institutions, including USC, total $14 million.

WASHINGTON —  Fifteen universities besides Stanford have billed the government for a total of $14 million in questionable overhead expenses in connection with scientific research and even more institutions are being reviewed, federal auditors said Thursday.

The list of universities cited reads like a Who’s Who of elite institutions, including Dartmouth, Yale, Rutgers, Johns Hopkins, the University of Pennsylvania, Duke, the University of Michigan, the Massachusetts Institute of Technology and Cornell.

The auditors told a congressional panel that some of the institutions, including the University of Southern California, have agreed to delete more than $9.5 million of these so-called “indirect” costs after being questioned about them--a claim that USC disputed.

Fred J. Newton, deputy director of the Pentagon’s Defense Contract Audit Agency, said that MIT has announced it will repay $768,000 for charges to the government for dinners, receptions, flowers for the president’s home and other items.

The auditors pointed to a variety of apparent abuses, saying, for example, that the University of Pittsburgh attempted to charge the government for golf club memberships and for a flight to the Cayman Islands for the president’s wife.

Also among the 15 criticized for overbilling were Emory, the University of Chicago, the University of Texas Southwestern Medical Center at Dallas and Washington University of St. Louis.

Richard P. Kusserow, inspector general of the Department of Health and Human Services, testified that Washington University charged the government for a sculpture donated by a school contributor. He said that the university later said the charge was a bookkeeping error.

He added that “special merchandise” listed by one school turned out to be liquor.

“I guess they figured it wouldn’t be approved if they simply put ‘liquor,’ ” he told the oversight subcommittee of the House Energy and Commerce Committee.

Rep. John D. Dingell (D-Mich.) said that some universities offering to repay are responding to the embarrassment Stanford has suffered in recent months.

“Sometimes a public hanging is a deterrent,” said Dingell, head of the oversight panel, which last winter revealed improper charges by Stanford, including a wedding reception for the school’s president and an antique commode and luxurious bed at his residence on the campus.

Shortly after those revelations, Harvard Medical School and Caltech each withdrew about $500,000 in overhead charges, part of which were for entertainment expenses for school officials or for maintaining the homes of officials.

Referring to the auditor’s revelations, Dingell told the hearing:

“Universities now understand that this is a new day and that all overhead charges they make to the government must relate to government-funded research, rather than merely support a country club lifestyle.”

Kusserow indicated that the inquiry into such irregularities will continue. He told the panel that he is sending letters “to about 150 additional schools not yet contacted by federal officials, asking that they provide us with certain data preparatory to a potential site visit by my staff.”

He said his auditors found “a pervasive attitude” among major universities to try to pad overhead costs as much as possible on federal research contracts.

But it is hard to develop cases of criminal fraud because universities contend they have made bookkeeping errors or have misunderstood rules that admittedly are “convoluted,” he said. He noted that many rules now are being revised.

Kusserow also testified that USC has agreed to waive $3.1 million in previously submitted “indirect” expenses for biomedical and other scientific research performed for the government. These expenses had included the costs of dues and memberships in social and professional organizations for school officials, conferences for university trustees, communications costs and a wide variety of administrative costs, he said.

However, Kusserow’s statement was challenged by Dennis Dougherty, USC’s senior vice president for administration.

Dougherty, in a telephone interview, said that “it is incorrect for him to say we removed these costs because we never submitted them. These were costs borne by the university. Our own auditors have taken great care not to put in these costs because they are not associated with research and thus are not reasonable or allowable.”