Transparency in Research Expenditures

Historically, it has been difficult for many academic health center leaders to accurately track research-related expenditures. 

There have been many reasons for this, including the general lack of mission-based budgeting and accounting, as well as the decentralized administration and management of research activities. As a result, many CEOs were unaware of the true all-in cost of conducting research and the proportion of funding derived from intramural, rather than extramural, sources.

In the past, when research funding was increasing, this lack of transparency was not a major concern. But the current financial environment, which is characterized by NIH funding that is significantly lower in inflation-adjusted dollars compared to its historic peak, significant reductions in state government financial support for academic health centers, and volatile investment performance by endowments, the concern has become more sharply focused.

As a result, the CEOs of member institutions reached a consensus that AAHC should place high priority on determining the average true all-in cost of research conducted by academic health centers, and the proportion of research funding that is derived from intramural (rather than extramural) sources, in order to help them assess their institution’s relative performance, allocate resources more efficiently, and plan strategically for the future.

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