For over 40 years, the promotion of scientific research has benefitted from a comfortable relationship between the government and institutions of higher learning.

Scholars and federal officials shared an interest in the pursuit of research--in the fields of medicine, engineering and national security, for instance.

With this common goal in mind, the government and higher education came to an understanding-- the universities do the research, and the government covers the costs.

And during that time, everyone profited from this arrangement. The government could hire the best people in the country to do research, and the universities could build and maintain their facilities with federal funds.

Now, the government is not so comfortable with the relationship.

In fact, they're angry, and they're changing the terms of the deal.

In September of 1990, several representatives in the House, led by Rep. John D. Dingell (D-Mich.), decided to look into where federal research money was actually going.

The next month, the Subcommittee on Oversight and Investigations arrived at its guinea pig site, Stanford University, and the government discovered significantly, costly improprieties. As their interest piqued, investigators then broadened the scope to Harvard Medical School and MIT. And now, after nine months, what began as a low-key fact-finding mission has snowballed into a massive federal inquiry that has drawn the interest of at least seven independent federal agenices and has engulfed nearly 300 colleges and universities.

The government investigations are concerned with billings for overhead costs on research-- called indirect costs. Each school receives a certain amount of money over and above the direct federal grant money, tagged for expenditures such as building depreciation, heating and lighting.

For example, for every dollar of federal research money granted to a Harvard Medical School researcher, the University can charge the government up to 88 cents more to cover overhead costs.

Inappropriate Billings

Under the heat of federal inquiry, 17 schools have admitted improper billings to the government for indirect costs and have either offered to pay back the government or reduce billing requests--in many cases, billings totaling hundreds of thousands of dollars.

For example, Harvard announced in April that it would withdraw $500,000 from this year's request for indirect cost reimbursements. The University cited as questionable billings a senior dean's retirement party (University officials will not disclose the name of the dean), contributions to Boston public schools and any costs relating to the home of President Derek C. Bok.

And at Stanford, investigators revealed that the university charged the government for depreciation on a 72-foot yacht (complete with jacuzzi) and floral arrangements and cabinets for the home of President Donald Kennedy '52.

Stanford presented the Office of Naval Research (ONR), its regulatory agency for research, with a check worth in excess of $900,000 at a Congressional hearing last month, but the check was rejected because Stanford attached conditions that the ONR could not accept. Federal investigators for the subcommittee have said that Stanford overcharged taxpayers nearly $200 million over the last decade.