Reimbursements for indirect costs are slated for expenses for needs such as lighting, heating and renovating laboratories, which aid the school in conducting its research.

The Medical School's indirect cost rate is now 88 percent, according to the school's administrator of financial affairs Angela R. Foss.

This means that for every dollar that the government awards faculty members in grant monies, the University receives an additional 88 cents, which is to be used as overhead but is not specifically earmarked by the government for certain expenses.

Because government auditors are years behind on reviewing the accounts of universities, schools may have been able to classify as indirect costs items that are in no way related to research, according to an article in The New York Times last fall.

The investigators do not know if this situation has developed at the Medical School, but top University administrators say Harvard has not overcharged the government.

Scott said that he believes the University has followed regulations concerning indirect costs.

"We work very hard to make sure we do [follow regulations]," Scott said. At the time of the interview, Scott said he was not aware of any planned federal inquiry.

At the Medical School, Foss said she believed the institution would not be implicated in any wrongdoing. "I think we'll come out clean because I believe Harvard is above board on all of this," Foss said.

Why Harvard?

The Medical School's indirect cost rate of 88 percent eclipses those of all other academic institutions, including Stanford's 74 percent, an investigator said. It is this high rate which has made the school a target of inquiry.

"What can they be doing with the money?" one subcommittee investigator asked, adding that the question is posed for the reason of curiousity, not accusation.

"We're concerned that the rate is so high," the investigator said. "How can it cost this much money to do research?"

The University gives the money for indirect costs to the Medical School for renovations, overhead, and other research-related needs, according to Scott.

"All of the monies that Harvard receives in indirect costs for Medical School grants are returned to the Medical School," Scott said.

The school began negotiations with the the Department of Health and Human Services in July to raise the indirect cost rate to above 100 percent, a change which would give the University more than one dollar in indirect costs per dollar in grant monies.