Report 2006-108 All Recommendation Responses

Report 2006-108: California Institute for Regenerative Medicine: It Has a Strategic Plan, but It Needs to Finish Developing Grant-Related Policies and Continue Strengthening Management Controls to Ensure Policy Compliance and Cost Containment (Release Date: February 2007)

Recommendation #1 To: Regenerative Medicine, California Institute for

To provide accountability and assess annual progress in meeting its strategic goals and initiatives, the institute should fulfill its plans to develop a process to track management information reported annually by grantees.

Annual Follow-Up Agency Response From January 2010

Grantees submit annual reports detailing scientific progress on the funded research project. Grantees also have reporting requirements triggered by certain events. For example, when a CIRM grantee publishes a scientific article reporting results of CIRM-funded research, the grantee must report that to CIRM within 60 days. CIRM uses these reports to compile and report information about CIRM-funded scientific progress. (Annual reporting requirements are set out in the grants administration policies. Event-based reporting requirements are set out there and in the intellectual property regulations.) Each scientific progress report is reviewed by the assigned CIRM science officer. Grantees are required to provide data and figures to support the report, and may be asked for supplemental information if the report is incomplete or inadequate. (See 2009-041 p. 28)

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Recommendation #2 To: Regenerative Medicine, California Institute for

The committee should ensure that it follows through with its plan to identify the appropriate standard for providing uninsured Californians access to therapies developed using institute funds and to convey clearly to grantees its expectations for providing access in its intellectual property policies. In addition, the committee should identify practical benchmarks to use as a standard for discount prices for therapies and apply the standard to its policies for grants to nonprofit and for-profit organizations.

Annual Follow-Up Agency Response From January 2010

By the time of last year's update, CIRM had adopted its "Intellectual Property Requirements for Non-Profit Organizations" (17 Cal. Code Reg. §§ 100300 et seq. ) and "Intellectual Property and Revenue Sharing Requirements for For-Profit Organizations" (17 Cal. Code Reg. §§ 100400 et seq.), and embarked on the process of combining them into a single, updated set of comprehensive regulations. CIRM's governing board, the Independent Citizens Oversight Committee (ICOC) has adopted the new regulations, "Intellectual Property and Revenue Sharing Requirements for Non-Profit and For-Profit Grantees" (17 Cal. Code Reg. §§ 100600 et seq.). The regulations include requirements for discount pricing and access (§ 100607). (See 2009-041 p. 30)

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Recommendation #3 To: Regenerative Medicine, California Institute for

The committee should monitor the effectiveness of its policy to make institute-funded patented inventions readily accessible on reasonable terms to other grantee organizations for noncommercial purposes to ensure that it does not inhibit the advance of stem cell research.

1-Year Agency Response

The institute points to recently-adopted regulations that are intended to promote rapid advancement of the field. These regulations generally require institute grantees to give other researchers access to biomedical materials discussed in published research, at no more than cost, for research purposes. The institute reports that it monitors compliance with these regulations by requiring grantees to submit annual progress reports that identify publications and licensed patented inventions, as well as any requests for access by other scientists for noncommercial research purposes. (See 2009-406, p. 230)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #4 To: Regenerative Medicine, California Institute for

The institute should complete the development of its grants administration policy targeted toward for-profit organizations.

1-Year Agency Response

The committee adopted a grants administration policy targeted toward for-profit organizations in December 2007. As a result of the adoption of the policy, the institute opened its funding request process to for-profit organizations. (See 2009-406, p. 230)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #5 To: Regenerative Medicine, California Institute for

To provide increased accountability over the grants award process, the institute should ensure that the grants review working group follows the new procedures to record its votes to recommend funding for stem cell research grants, and that it maintains those records.

6-Month Agency Response

In 2006 the institute developed new procedures designed to ensure every voting action is recorded. Shortly after, it implemented those procedures during its grants working group meetings held during November 28 through November 30, 2006, and January 8 through January 10, 2007. The institute now retains these records as part of its documentation of the grant award process. (See 2008-406 p. 196)

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Recommendation #6 To: Regenerative Medicine, California Institute for

To monitor the performance of grantees effectively, the institute should complete the implementation of a grants monitoring process, including audits, and the development of related procedures.

Annual Follow-Up Agency Response From January 2010

From the outset, CIRM has tracked the financial and scientific information reported by grantees. Initially, staff relied on spreadsheets and other standard office software to track the information. These methods allowed staff to collect and analyze the information, but it was cumbersome, and intended as a temporary system.

Initially, CIRM sought development of a customized system that would handle all stages of the grantmaking process - application, expert review, issuance, funding, oversight and close-out. CIRM awarded a contract to Grantium, Inc. , and began working with Grantium on implementation.

With further experience, and based on systems analysis that occurred in the Grantium implementation process, CIRM staff concluded that a simpler approach would be more effective and less expensive, and could be implemented more quickly. CIRM already has custom-designed software, developed in-house, to handle the application and review process. That custom software continues to meet CIRM's needs for all stages of the grant process up to and including the ICOC's final funding decisions.

For post-award management, CIRM opted for an existing grants management product, MicroEdge GIFTS, that is widely used among grantmaking agencies. This software was much less expensive than it would have cost to continue development of a complete customized system. Because GIFTS is in widespread use, most of the grants management staff had prior experience with it, which expedited training. It has been installed and configured for CIRM's processes, and existing data has been transferred. CIRM's grants management staff now use GIFTS to manage post-award activities and reporting. As discussed in CIRM's response regarding Recommendation No. 1, this system allows tracking of substantive scientific information across all CIRM grants. (See 2009-041 p. 31)

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Recommendation #7 To: Regenerative Medicine, California Institute for

The institute should seek a formal opinion from the attorney general regarding whether the exemptions created for working groups from conflict-of-interest laws are intended to exempt them from the conflict-of-interest provisions that apply if the recommendations of an advisory body are adopted routinely andregularly by the decision-making body to which they are made.

6-Month Agency Response

The institute states that it has given careful consideration to our recommendation and has decided that it is not appropriate to implement it at this time. The institute states that in almost three years of operation and approval of four rounds of grants, the committee has never routinely or regularly adopted the recommendations of the institute's working groups. Until the time that such a pattern is detected, the institute believes the question we raise is hypothetical and not appropriate for submission to the attorney general. However, the institute states that it will continue to monitor the committee approvals for such a pattern and will reconsider our recommendation if such a pattern emerges. (See 2008-406 p. 198)

California State Auditor's Assessment of 6-Month Status: Resolved

Recommendation #8 To: Regenerative Medicine, California Institute for

In addition, the institute should follow its plans to amend its conflict-of-interest policies to include specialists invited to participate in stem cell research program activities, such as grant application review.

6-Month Agency Response

In March 2007 the committee adopted a change in the conflict-of-interest policy for the grants working group to include specialists. (See 2008-406 p. 198)

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Recommendation #9 To: Regenerative Medicine, California Institute for

To provide employees with the information they need to disclose all potential conflicts of interest, the institute should develop the necessary procedures to ensure that its employees are aware of the companies that apply for funding.

6-Month Agency Response

The institute's conflict-of-interest procedure for institute employees now incorporates a mechanism that identifies all entities that have applied for funding pursuant to a particular request for applications. Employees are to review a list of applicants to note any conflicts and disqualify themselves from reviewing any application with which they may have a conflict of interest. (See 2008-406 p. 199)

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Recommendation #10 To: Regenerative Medicine, California Institute for

To ensure compliance with its conflict-of-interest policies, the institute should revise its procedures for reviewing grants to include a review of the Statements of Economic Interest for committee members of the working groups before every grants review meeting. Moreover, it should revise its procedures for grants review meetings to ensure that it retains documentation regarding conflicts of interest of the working groups, including information that it took appropriate recusal actions.

6-Month Agency Response

The institute's current procedures to identify conflicts of interest of members of the grants working group include staff review of their conflict-of-interest disclosures prior to each meeting. The institute further reports that it now documents the recusal actions of each member with respect to each application reviewed to ensure that no one participating in the review of a particular application has a conflict of interest. The institute reports that it maintains these records. (See 2008-406 p. 200)

California State Auditor's Assessment of 6-Month Status: Fully Implemented

Recommendation #11 To: Regenerative Medicine, California Institute for

The institute should ensure that it follows its newly revised policies that address some of the concerns raised in our audit. The institute also should amend its policies further to include the rest of the concerns we have raised. Those concerns are as follows:
• Although the institute now monitors staff members who attend its meetings, it should implement a preapproval requirement for travelers who want to claim meals separately.
• The institute should revise its travel reimbursement claim form for working groups to require sufficient information that would allow an adequate review of amounts claimed.
• The committee should adopt a travel reimbursement policy for its members that will result in the reimbursement of reasonable and necessary travel expenses, as stated in the act, and that addresses the concerns we raised in the report.

1-Year Agency Response

The institute reports that under its policy and practice, employees are not reimbursed for meals at meetings where meals are provided without prior authorization. The institute reports that it monitors the travel claims of staff who attend meetings to ensure that reimbursement is not claimed when the institute provides a meal.

The institute states that as of March 1, 2007, it uses the standard state travel claim form to process claims for all members of working groups. The institute reviews and allows these claims in accordance with the same policy and procedure applicable to institute employees.

At its January 2008 meeting, the committee amended the travel policy previously adopted for institute employees and working group members to apply to committee members. The institute reports that the committee adopted other amendments at the meeting that were designed to align institute policy more closely to that of the University of California regents. The institute adds that deviations from that policy were adopted when the policy did not address the requirements of the institute's mission or did not make sense in the context of the institute's organization. (See 2009-406, p. 235)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #12 To: Regenerative Medicine, California Institute for

To ensure that the methodology to set salary ranges complies with the act, the institute should follow through with its plan to resurvey any positions whose salary ranges were affected by the errors, omissions, and inconsistencies in its initial salary survey and salary-setting activities.

Annual Follow-Up Agency Response From January 2009

As noted in the above status summary, CIRM commissioned a new salary survey designed to correct the deficiencies identified by BSA. The survey was presented to ICOC at its March 2008 meeting. In response to the survey, the ICOC approved adjustments to CIRM's salary structure. That salary structure groups all positions into 10 salary levels, and provides the salary range for each level. Positions are assigned to salary levels on the basis of the salary survey data. When CIRM has created new positions that were not included in the Mercer survey, those positions were assigned to a salary level by comparing the duties and qualifications to those of existing positions. (See 2008-041 p. 30-31)

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

All Recommendations in 2006-108

Agency responses received after June 2013 are posted verbatim.