6
Organizational and Funding Issues

Previous chapters have summarized the committee’s assessment of the quality, fairness, relevance, and responsiveness of the NRI competitive grants program; the program’s priority-setting processes and research priorities; and the program’s overall role and scope within the nation’s research and development enterprise. Issues directly related to the NRI’s organization and funding have been raised repeatedly during the committee’s analysis of these subjects. For example, many respondents to the committee’s survey indicated that the impact of the program, although important, has been limited by an inadequate budget and by awards that are too short, too few, and too small (see chapter 3). Similarly, the committee found (chapter 4) that the NRI is too small to take an active role in interagency research initiatives. The committee found (chapter 5) that the NRI’s formal priority-setting process needs improvement and that organizational changes were warranted. And the committee found (chapters 4 and 5) that mechanisms are not well established to coordinate NRI research goals with those of complementary research organizations in the US Department of Agriculture and in other federal agencies.

Those findings suggest that organizational and funding issues play an important role in the nature and content of changes that will be required to make the NRI a more effective part of the nation’s research efforts in the food, fiber, and natural-resources area. In the first half of this chapter, the committee briefly considers several organizational issues, such as the location of the NRI in USD A and issues related to its day-to-day governance. In the second half, the



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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research 6 Organizational and Funding Issues Previous chapters have summarized the committee’s assessment of the quality, fairness, relevance, and responsiveness of the NRI competitive grants program; the program’s priority-setting processes and research priorities; and the program’s overall role and scope within the nation’s research and development enterprise. Issues directly related to the NRI’s organization and funding have been raised repeatedly during the committee’s analysis of these subjects. For example, many respondents to the committee’s survey indicated that the impact of the program, although important, has been limited by an inadequate budget and by awards that are too short, too few, and too small (see chapter 3). Similarly, the committee found (chapter 4) that the NRI is too small to take an active role in interagency research initiatives. The committee found (chapter 5) that the NRI’s formal priority-setting process needs improvement and that organizational changes were warranted. And the committee found (chapters 4 and 5) that mechanisms are not well established to coordinate NRI research goals with those of complementary research organizations in the US Department of Agriculture and in other federal agencies. Those findings suggest that organizational and funding issues play an important role in the nature and content of changes that will be required to make the NRI a more effective part of the nation’s research efforts in the food, fiber, and natural-resources area. In the first half of this chapter, the committee briefly considers several organizational issues, such as the location of the NRI in USD A and issues related to its day-to-day governance. In the second half, the

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research committee discusses important issues related to NRI funding, including the total budget for the program, the average size and length of grants, and the limit on overhead rates. ORGANIZATIONAL ISSUES Location in USDA USDA’s Research, Education, and Economics mission area comprises four agencies—the Agricultural Research Service (ARS), the Economics Research Service (ERS), the National Agricultural Statistics Service, and the Cooperative State Research, Education, and Extension Service (CSREES) (figure 6–1). CSREES comprises nine units, including the Competitive Research Grants and Awards Management Division (CRGAM). Other CSREES units are responsible for allocating formula funds and special grants to land grant institutions, agricultural experiment stations, and cooperative extension services. The NRI is one of four operating units in CRGAM (figure 6–2). The NRI therefore is two organizational levels below USDA’s main intramural research organizations—ARS and ERS. A previous National Research Council report (NRC, 1989) presented four criteria to evaluate the strengths and weaknesses of various options for locating an expanded competitive grants programs (the NRI) within USDA. In particular, for such a competitive grants program to be successful, the location should Ensure the program’s openness to high-quality science and provide it with broad appeal, visibility, and stature in the scientific community. Provide the program director and chief scientists with direct access to key high-level policy-makers in USDA. Develop strong relations between the competitive grants program and the research programs of other agencies. Attract nationally prominent scientists and managers to positions of program leadership and to service on program advisory committees and peer-review panels. On the basis of the analyses presented in the previous chapters and the results of the committee’s survey (see appendix C), the committee believes that the location of the NRI in USDA has several shortcomings with respect to those criteria. First, the location does not provide the NRI with broad appeal, visibility, and stature in the scientific community. Second, the two organizational levels between the NRI and the under secretary for research, education, and economics (CSREES and CRGAM) can limit the access of NRI leaders to such high-level USDA policy-makers. Third, the NRI’s location

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research FIGURE 6–1 Organization of Research at the US Department of Agriculture

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research FIGURE 6–2 Competitive Research Grants and Awards Management

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research might be partly responsible for the tendency of the NRI to take a supportive, rather than leadership, role in interactions with other federal research agencies (see chapter 4). Finally, the location of the NRI as one component of CRGAM, rather than on an organizational level equivalent to USDA’s two main research agencies, suggests that USDA and Congress place a higher priority on formula funds, special grants, and intramural research than on extramural, merit-based peer-reviewed research. The committee believes strongly that unless extramural competitive research is given the same stature organizationally in USDA that formula-funded research and intramural research receive, it might remain difficult for the NRI program to achieve its mission. NRI GOVERNANCE Chief Scientist The scientific leadership for the NRI is provided by a chief scientist who functions as the director of the NRI. The chief scientist holds a part-time, apolitical, nonadvocacy position. Candidates are generally recruited from academe and serve 2-year terms. Since the program’s inception, all chief scientists have been members of the National Academy of Sciences. The stated responsibilities of the chief scientist are to Interact regularly and directly with the under secretary for research, education, and economics, the administrator of CSREES, the deputy administrator of CRGAM, the Board of Directors of the NRI, and other administrators and staff scientists of CSREES. Establish policies for the NRI in consultation with NRI division and program directors and administrators listed above. Serve as the principal communicator for the NRI with representatives of federal and state agencies, private organizations, and special-interest, academic, professional, and commodity groups. Interact with division and program directors day to day. Oversee the peer-review process used to assess the merits of research proposals received for consideration by the NRI. Provide general scientific leadership responsibilities, including supervising the preparation of program descriptions and requests for proposals; publications of the NRI, such as its annual report; and NRI Highlights. Allocate NRI appropriations to the panels after merit review is completed. Serve as a member of the NRI Board of Directors. In the committee’s view, those responsibilities are equivalent to a full-time position. This view is shared by the four former chief scientists who were interviewed by the committee (see appendix C). It became clear to the committee that the current part-time, revolving chief scientist cannot meet the strategic-planning, priority-setting and communication needs of an effective NRI (see also chapter 5). Having a chief scientist who serves part-time hampers

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research continuity in accountability and leadership and counters successful long-range planning and followup and consistent stakeholder involvement. Board of Directors The NRI Board of Directors meets regularly and determines policy for the program. The under secretary for research, education and economics chairs the Board, which also includes the administrators of CSREES, ARS, and ERS; the deputy chief for research of the US Forest Service; and the NRI chief scientist. The NRI executive officer is the deputy administrator of CRGAM (figure 6–2). The NRI Board of Directors provides administrative oversight of the NRI program and can be used to link the NRI with USDA’s other research organizations. The NRI Board of Directors is not responsible for providing guidance on scientific or technologic priorities, providing a forum for stakeholder concerns, or measuring research outcomes and the evaluation of NRI operations. The committee believes that an external advisory board of some type is necessary to fulfill these responsibilities (see discussion in chapter 7). Organization The NRI has six divisions. Ideally, each division has a permanent director, who oversees all operations involved in the application, review, and award processes. In 1998, three division directors were managing the six divisions (see figure 6–3). One, for example, was responsible for program areas within the Plant Systems Division and the Markets, Trade, and Rural Development Division, even though this director did not have substantive training in social science (in fact, the committee observed a general lack of social-science expertise among NRI staff in 1998). Program directors provide scientific oversight of individual research programs and, with rotating panel managers recruited from the research community, are responsible for administering NRI review panels. Implicit in the NRI table of organization is a range of intellectual and administrative tasks that sustain the integrity of any competitive grants process. These include ensuring continuity across program areas, regulating workload in proposal handling, and determining award amounts on the basis of panel rankings of priorities. In recent years, the NRI staff has been stretched to cover those tasks, increasing the burdens of communication and timeliness on NRI staff at all levels and on the all-important scientists who serve as ad hoc reviewers and panel members.

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research Figure 6–3 National Research Initiative Competitive Grants Program Organization

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research FUNDING ISSUES Funding has been a recurring theme throughout the committee’s study. Nearly all survey respondents, chief scientists, and those who testified before the committee expressed the view that the total budget for the program was inadequate and that awards were too short, too few, and too small (appendix C). The low level of funding has limited the NRI’s ability to take a lead role in interagency initiatives (see chapter 4) and might have contributed to the recent decision to locate the Plant Genome Research Project in the National Science Foundation (NSF) rather than USDA. It also has led to a substantial reduction in application numbers from 1994 to 1998 (see appendix F). In the following sections, the committee briefly discusses three important components of the NRI’s funding: the total budget for the program, the average size and length of grants awarded by the program, and the congressionally mandated limit on overhead rates. Total NRI Funding When the NRI was established in 1991, its initial funding goals were designed to ensure the growth of a dynamic research program. The enabling legislation, Public Law (PL) 101–624, authorized $150 million for 1991, $275 million for 1992, $350 million for 1993, $400 million for 1994, and $500 million for 1995 (PL 101–624, 101st Congress, Federal Register). The amount of funding appropriated, however, has never approached those optimistic goals. NRI funding fell short in the very first year, when funding was appropriated at only $73 million. Although nearly double the amount for the preceding competitive grant programs in USDA ($42.5 million in 1990), the 1991 appropriation was only about half the authorized amount. As a result, the program funded only four of the recommended program divisions (now titled Plants; Animals; Nutrition, Food Safety, and Health; and Natural Resources and Environment). Programs in the remaining two divisions (Markets, Trade, and Rural Development; and Enhancing Value and Use of Agricultural and Forest Products) and in strengthening awards (Career Enhancement, Equipment, Seed, and Standard Strengthening) were not initiated until 1992. Despite the intended increase in NRI funding from 1991 to 1995, appropriations remained at or near the $100 million level during that period (see table 6–2). Special initiatives or “earmarks”, such as the BARD Program in 1994 and 1995, cut into the NRI budget and effectively decreased the total funding available to the six original NRI divisions. The NRI budget remained flat at approximately $100 million until FY 1999, when the budget was increased to nearly $120 million (see table 6–2). The NRI has labored under the expectation of a $500 million research portfolio, although federal budget pressures have maintained annual appropriations far below this authorized level. NRI staff testified that some researchers have expressed a reluctance to submit proposals to the NRI because

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research TABLE 6–1 NRI Funding Levels, 1991–1998 Year No. Awards Total Amount Awarded, $ Average Grant Award,a $ Average Grant Length, years Average Funding, $/year 1991 590 69,204,000 NAb NAb 52,591 1992 777 92,138,350 126,998 NA NAb 1993 790 91,814,480 124,846 2.1 59,450 1994 833 96,631,441 137,256 2.35 58,407 1995 783 93,796,282 127,773 2.13 59,987 1996 739 87,801,344 125,620 2.14 58,701 1997 712 87,315,733 133,379 2.6 51,300 1998 699 88,106,761 136,065 2.2 61,848 aExcluding research career enhancement awards, equipment grants, and seed grants, bNot available. Source: NRI annual reports for 1991, 1992, 1993, 1994, 1995, 1996, 1997, and 1998. of a combination of factors: modest budget sizes, low success rate, small awards, short grant duration, and the low 14% overhead cap (which many institutions will not accept). The recent increase to a 19% overhead rate is not expected to change the situation substantially. Failure to obtain the originally proposed appropriations has stunted the development of the NRI and has challenged its effectiveness, potentially reducing the desired number of high-quality research grants with sufficient size and duration to achieve research goals. The practical result has been that a large pool of US scientists might not have been fully used in research directed to issues critical to the food, fiber, and natural-resources system. The committee concludes that inadequate funding of the NRI has significantly limited its potential and placed the program at risk. Size and Length of Grants As shown in table 6–1, the number of grants awarded in a single year has ranged from 590 (in 1991) to 833 (in 1994). Between 1993 and 1998, the average annual funding level has remained relatively constant at about $60,000 per year. Over the same period, the average grant length remained relatively

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research TABLE 6–2 History of Funding for Food, Fiber, and Natural-Resources Research in the USDA (in millions of dollars)   CREES   Year Intramural Formula Funds Competitive Grants Special Grants Other Total   ARS FS ERS NAL Research Extension Research Extension Researcha Extension   1985 491.4 113.8 46.6 11.5 197.1 260.2 53.8 32.0 77.6 1.5 5.9 1,291.4 1986 483.2 113.6 44.1 10.8 189.0 260.2 48.8 30.2 78.9 1.6 5.5 1,265.9 1987 511.4 126.7 44.9 11.1 189.0 254.1 46.7 55.1 78.6 2.9 6.3 1,326.8 1988 544.1 132.5 48.3 12.2 201.8 260.8 45.4 51.8 80.2 4.1 16.9 1,398.2 1989 569.4 138.3 49.6 14.3 202.8 260.8 39.7 41.9 82.0 6.4 18.6 1,423.8 1990 593.3 150.9 51.0 14.7 202.8 265.1 42.5 73.1 86.4 8.2 18.2 1,505.7 1991 631.0 167.6 54.4 16.8 212.0 276.4 73.0 78.6 103.4 9.7 18.7 1,641.6 1992 668.4 180.5 58.7 17.8 220.3 288.5 97.5 87.1 110.0 10.6 20.9 1,760.2 1993 668.0 182.1 58.9 17.7 220.3 288.6 97.5 73.4 118.0 10.5 18.4 1,753.4 1994 691.6 192.5 55.3 18.3 225.9 298.1 112.2 72.9 117.4 12.1 19.1 1,815.3 1995 752.0 194.0 53.0 18.0 226.0 301.0 101.0 75.0 112.0 10.0 16.0 1,858.0 1996 704.0 178.0 53.0 19.0 217.0 296.0 94.0 75.0 107.0 11.0 12.0 1766.0 1997 697.0 180.0 53.0 20.0 250.0 327.0 94.0 80.0 71.0 57.0 28.0 1,857.0 1998 722.0 188.0 71.6 20.0 221.0 295.0 97.0 65.0 104.0 86.0 20.0 1,889.6 1999 795.0 197.0 65.0 19.0 236.0 305.0 119.0 71.0 109.0 62.0 19.0 1,997.0 a Includes Fund for Rural America. Source: USDA Office of Budget Policy Analysis

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research constant at about 2.2 years.1 As discussed in chapter 4, NSF, the National Institutes of Health (NIH), and the Department of Energy (DOE) support competitive research projects in some of the same basic science and engineering fields as the NRI, that are complementary with food, fiber, and natural-resources research. The median annualized research award for NSF's Biology Directorate in FY 1998 was $90,000 per year (total costs including overhead) with an average grant duration of 2.9 years. The Biology Directorate estimates that for FY 2000, its median annualized research award will be approximately $105,400 with an average grant duration of 3.0 years (http://www.nsf.gov/bfa/bud/fy2000/00BIO.htm). Similarly, the Division of Energy Biosciences of DOE's Office of Basic Energy Sciences averaged close to $100,000 per year for grants awarded typically for a 3-year duration (http://www.er.doe.gov/production/grants/fr99_07.html). A comparison of those data with table 6-1 shows that on the average NRI research grants are much smaller and shorter than grants supporting similar types of research in NSF, NIH, and DOE. Continued underfunding of NRI research grants relative to those of other federal research agencies will tend to discourage new researchers outside the traditional food and fiber system from applying for NRI grants—one original goal of establishing the NRI (to "seek the widest possible participation of qualified scientists"). It might also cause highly qualified scientists who have received NRI support to apply for research funds from other sources and possibly to redirect their research away from issues important to the food and fiber system. The sharp decrease (over 20%) in the number of new proposals received from 1995 to 1998 (appendix F) suggest that this is occurring.2 Such trends could lead to a decrease in the overall quality of food, fiber, and natural-resources research. The low funding levels and short grant durations and their effect on the functioning of the NRI was addressed in a 1995 Office of Technology Assessment report, Challenges for U.S. Agricultural Research Policy (OTA 1995): Thus, on the critically important issue of funding of individual awards—in terms of amount of award and duration—the program is woefully inadequate, especially in comparison to the closely related comparison programs in NSF and NIH, and little improvement has been made between earlier Competitive Research Grants program and NRI. [P. 34] The small grants of short duration have resulted in a dwindling enthusiasm for NRI grants in the food and fiber scientific community, especially in view of the substantial administrative burden of proposal preparation. For example, one corporate scientist observed that the NRI program could actually have an adverse effect on research productivity because "the cost to the scientific enterprise nationally may exceed the funding received" owing to administrative 1   FY 1997 was anomalous in that the average award length was greater and the average annual award amount lower than in other years. 2   The increase in new applications that accompanied the budget increase in FY 1999, however, suggests that this effect can be reversed to some extent by increases in funding.

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research overhead of grant preparation and submission coupled with low funding levels. At very low funding rates, the effort expended by scientists in writing unsuccessful applications can exceed that of the scientists who receive research support. Some have argued that such a program is a net burden rather than an asset to the scientific community as a whole (Chubin, 1998). Overhead Rates When it established the NRI program in 1991, Congress imposed a 14% limit on the amount of indirect costs that can be charged as a percentage of the total award.3 The 14% limit was replaced by a 19% limit4 in FY 2000 as part of the Agricultural Research, Extension, and Education Reform Act of 1998. Although the increase from 14 to 19% reduces the gap between overhead rates on NRI grants and rates on grants awarded by other federal agencies, overhead rates for most academic and private-sector research institutions are significantly higher than the 19% limit currently allowed. Average overhead rates for NSF’s Biology Directorate, for example, are approximately 45% of the modified total direct costs of the award—nearly double the NRI limit. The committee is not aware of any other federal merit/peer-reviewed research program with such a congressionally mandated limit on overhead rates. Presumably, the motivation for setting such a limit was to increase the percentage of NRI research funds spent on research activities. However, such a mandated cap on overhead may have a negative effect on the NRI program because it causes some institutions (especially those from outside the traditional applicant community) to discourage their researchers from submitting proposals to the program. Because the committee did not address this issue in its survey, it was not able to estimate the magnitude of this effect on the NRI program. However, the committee is aware of one research institution that prohibits its scientists from submitting proposals to the NRI because the low overhead rates do not cover the true institutional costs associated with such research and because its auditors require consistency among all incoming grants. Other institutions discourage their researchers from submitting proposals by requiring that the researchers (or their departments) use other funds to make up the difference between mandated low overhead rates and the established rates used by other federal agencies. This is especially problematic for smaller institutions where researchers do not have the flexibility to balance low-overhead grants against other sources of unrestricted funds. These factors also may have a disproportionate impact on institutions (or departments) from outside the traditional food, fiber, and natural resources system because they do not have a historic association with the USDA, and hence, may be less willing to accept a low overhead rate that is unique to USDA-sponsored research. 3   This limitation is equivalent to 0.16279 of the total direct costs of an award. 4   This limitation is equivalent to 0.23456 of the total direct costs of an award.

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research SUMMARY FINDINGS Organization The location of NRI as one component of CRGAM, rather than on an organizational level equivalent to USDA’s two main research agencies, suggests that USDA and Congress place a higher priority on formula funds, special grants, and intramural research than on extramural, merit-based peer-reviewed competitive research. The committee believes strongly that unless extramural competitive research is given the same stature organizationally within USDA as formula-funded and intramural research receive, it might remain difficult for the NRI program to achieve its mission. The responsibilities of the NRI chief scientist are equivalent to a full-time position. The part-time, revolving chief scientist cannot meet the strategic-planning, priority-setting and communication needs of an effective NRI. Having a chief scientist who serves part-time hampers continuity in accountability and leadership and counters successful long-range planning and followup and consistent stakeholder involvement. The NRI Board of Directors provides necessary administrative oversight of the NRI program and can be used to link the NRI with USDA’s other research organizations. The Board of Directors is not responsible for providing guidance on scientific or technologic priorities, providing a forum for stakeholder concerns, or measuring research outcomes and the evaluation of NRI operations. An external advisory board of some type is necessary to fulfill those responsibilities. In recent years, the NRI staff has been stretched to cover its responsibilities, increasing the burdens of communication and timeliness on NRI staff at all levels and on the all-important scientists who serve as ad hoc reviewers and panel members. Funding Inadequate funding of the NRI has significantly limited its potential and placed the program at risk. NRI research grants are much smaller and shorter than grants supporting similar types of research in NSF, NIH, and DOE. Continued underfunding of NRI research grants relative to those of other federal research agencies will tend to discourage new researchers outside the traditional food and fiber system from applying for NRI grants—one original goal of establishing the NRI. It might also cause highly qualified scientists who have received NRI support to apply for research funds from other sources and possibly to redirect their research away from issues important to the food and fiber system. This could lead to a decrease in the overall quality of food, fiber, and natural-resources research. Congress imposed a 14% overhead limit on the NRI when it established the program in 1991. The 14% limit was replaced by a 19% overhead limit in

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National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research FY 2000. There is no clear reason why the NRI is treated differently from other federal peer-reviewed research in this regard.