According to the GAO audit, Harvard asked thegovernment to subsidize the cost of employeememberships in a local health club, extra pensioncosts of a Harvard dean not at the Medical Schooland costs associated with recruiting a new facultymember--which included paying for mortgagepayments on a condominium.

The federal investigators also said Harvardbilled the government for the travel expenses ofthe University's governing board, including a tripto South Africa.

GAO officials ruled that all thesecosts--totalling $75,000--were unallowable. Thatfigure is in addition to the $250,000 that theMedical School withdrew last spring after hiringan accounting firm to conduct an independentaudit.

The University also asked the government to payfor more than $8000 in legal fees, including moneyspent defending a sex discrimination suit broughtagainst the business school and related to thesale of property in New York, officials said. TheGAO considered these costs "questionable, meaningthey appeared inappropriate but are not absolutelyunallowable.

Perhaps the most significant defeat for theMedical School yesterday was the GAO's technicaldecision to reject a Harvard accounting systemthat resulted in an additional $663,000 inbillings to the government.

"Harvard Medical did not adequately justifythis [accounting] approach's equity," the GAOsaid.

This last matter of cost allocation brings thetotal of questionable and overruled costs in lastyear's reimbursement request to nearly $1 million,including the $250,000 the Medical School hasalready volunteered to withdraw.

One federal investigator said there may be moreto come in the technical area of cost allocationand that the GAO may question hundreds ofthousands more dollars.

Hundreds of Schools.

Federal officials yesterday clarified theextent to which money is regularly and wronglybilled to the government as indirect researchcosts and emphasized the government's resolve toconduct an effective review of how schools chargethe government for overhead on research.

The Department of Health and Human Services hasalready completed a review of 126 schools and iscurrently looking at 72 more.

Officials said "in depth reviews at 14universities disclosed $20.4 million ofunallowable" indirect costs. Of the remainingschools, another $18 million more were cited.

The Pentagon's Direct Contract Audit Agency(DCAA) has completed audits of direct and indirectcost claims at 22 universities, covering a totalof 54 fiscal years. Officials said audits of 20more schools, covering 49 fiscal years, arecurrently in progress.

In addition to Stanford and MIT, the DCAA hascited Penn State for $6.4 million in excessivebillings to the government in the fiscal years1986 and 1990. The DCAA written testimony alsolisted thousands of dollars in unallowable traveland entertainment costs at such schools asCarnegie Mellon University and SyracuseUniversity.

Of particular concerns to the subcommittee wasthe government's finding that universitiescommonly gave foreign governments and privatecorporations substantially lower indirect costrates than the government. Some schools--Harvardwas not cited--charged foreign governmentsabsolutely nothing for indirect costs on research.