A change in federal research grant regulations designed to put a ceiling on overhead costs may leave Harvard footing part of the research bill, University and government officials said this week.

Starting next month, scholars awarded federal funding will receive a set percentage of grants as a rebate for administrative overhead costs, University and government officials said. In the past, compensation for administrative costs has been flexible and based on professors' reports on how much time they spent in administrative work.

The new set percentage, which is 3.6 percent of each grant, will not cover some administrative costs, said Vice President for Government and Community Affairs John Shattuck. He added that excess administrative costs are more likely to occur at the Medical School than in the Faculty of Arts and Science, because medical area research is more capital intensive.

"Harvard is going to lose a lot of money," said Patty Sullivan, a research for the Association of American State Colleges and Universities. She said that while small institutions will make money from the 3.6 percent overhead rebate, major research universities report an average of 6 percent of grants for overhead costs.

Government officials said they made the change in order to cut out what they viewed as very large overhead costs reported by universities. "After all, the original purpose of the set percentage was to reduce the huge and growing amount of overhead costs," said Edwin Dale, assistant director of the Office of Management and Budget (OMB).

"It's more likely they're trying to find money to reduce the deficit wherever they can," Shattuck said of the decision by the OMB. He added that the government will save about $100 million. "It's a small amount, but I think for them it's also a matter of principle," Shattuck said.

"We've made plenty of concessions already," Dale said in response to Harvard concerns that it might losemoney. The OMB planned last June to giveuniversities only 3 percent of grants for overheadcosts but compromised with the 3.6 percent rebate,Dale said.

Shattuck said that Harvard has not yetdetermined how much money the change in accountingprocedure will cost the University, but said thatno matter what the cost, government sponsoredresearch at Harvard will not decline.

Last week, professors praised the change,saying that it would save them time which had beenspent on paperwork. The set percentage freesresearchers from filing forms to show the timethey spent on administrative work, said Dean ofthe Division of Applied Sciences Paul C. Martin.He added that many professors had troubledetermining what time was spent on administrativework and what was spent on actual teaching orresearch.

"This is a plus for all sides," Dale said