Overhaul

The settlement also provides for HHS to reevaluate Harvard's cost accounting systems after the University follows recommendations for improvement of the systems in the audits and the settlement.

"I expect that I will be contacting the Harvard people," said Edward J. Parigian, a regional inspector general for HHS who supervised the government's two audits in 1980 and 1981.

Parigian joined Harvard and Coopers & Lybrand officials in praising the University for improvements in its accounting system during the last three years.

"I think it's a more important issue that Harvard is taking actions to improve its system. That will prevent occurance of the things we found before," Parigian said.

David M. Bray for management and administration at the Medical School, said "the system we have now has been modified by the central University."

Harvard has improved the "effort reporting" of researchers, said Clark J. Bernard, a partner in Coopers and Lybrand. "People around the University are much more conscious" of how they distribute their time among projects, he explained.

Bernard added that Harvard's publication of accounting guidelines for researchers and efforts to streamline the University's Office of Sponsored Research have also reduced the number of errors in handling outside grants.

The government's tight scrutiny of Harvard is part of an HHS "pilot program" to find better methods of cost accounting, said Raymond Lazorchak of the HHS Inspector General's office.

The program, now in its sixth year, involves both federal and independent audits at 39 universities.

Bernard, who oversees Coopers & Lybrand's audits of many other universities in the program, said the audits have spurred improvements in accounting practices across the country.

"There are a number of other institutions which have had tighter systems" initiated which are similar to Harvard's, he added.

O'Brien has praised this aspect of the pilot program in the past while maintaining that Harvard's grant funds were always spent properly, despite the University's inadequate accounting procedures.

"Our faculties have met their responsibilities to the government with a high level of integrity," he said.

O'Brien has cited the Harvard audit as a key test case for establishing guidelines for research done at all universities, and once maintained that the University should repay almost no past funds to HHS.

Yesterday he said he felt "no sense of victory or defeat" over the larger issue but expressed relief that the process was over.

Tefft echoed O'Brien, saying, "A lot of time and energy has been consumed by the audit process. I'm glad that's over.