IP to Grant Oversight: Study Calls for Host of Improvements at California Stem Cell Agency

By Dr. Matthew Watson

The $3 billion California stem cell
agency is laboring under a range of problems that include protection of
its intellectual property and management of its nearly 500 grants plus an inadequate ability to track its own performance, a seven-month
study said yesterday.

The performance audit by the Moss Adams accounting
firm of Seattle, Wash., made 27 recommendations for improvements,
including more effort to ease strain connected to the agency's
controversial dual executive arrangement. The study said that the
nearly eight-year-old agency has many "opportunities" to
"enhance performance reporting and decision making, strengthen
effectiveness and efficiency, retain essential human resources and
leverage technology."

In response to the report, the stem
cell agency said, "(M)anagement concurs with the findings and
recommendations....The recommendations are focused and constructive.
CIRM is already implementing many of these recommendations, and we
will be investigating the others in the coming months."

The performance audit is the first ever
made of the California Institute for Regenerative Medicine. The
audit is required by state law and was commissioned by the agency at
a cost of $234,944. For years, the agency for years had resisted calls for a
performance audit until it sought legislative approval in 2010 for
removal of a 50-person cap on its staff. Originally, the performance
audit legislation would have put the study in the hands of the only
state body charged with oversight of the agency and its board. CIRM,
however, was successful in lobbying to have that provision removed.

The 54-page report identified once
again a number of issues that have troubled the stem cell agency for
some years. Moss made 12 top priority recommendations, many of which
dealt with information technology and grants management. Many of the
recommendations focused on providing better and faster information on
performance outcomes, which the audit said has been slow to come and
hard to generate.

The report said,

"Key performance information is
not readily available to CIRM leadership and other stakeholders on an
ongoing basis. CIRM board members and senior management do not
receive regularly updated, enterprise-level performance information.
The ability to evaluate performance against strategic goals is
critical to effective leadership and program monitoring, evaluation,
and reporting."

The audit stated,

"CIRM does not effectively
communicate outcome-based performance internally or externally. As
such, CIRM does not focus on performance metrics as part of its
(staff) meeting process."

The report additionally said,

"CIRM does not have an integrated
financial information system....The use of spreadsheets results in
labor intensive processes to generate reports and respond to
information inquiries, since data must be pulled from multiple
spreadsheets, a process that may be prone to error. ...Spreadsheets
are not linked to each other or a master report. CIRM does not have a
comprehensive list of spreadsheets or instructions for how to
maintain the files or generate reports from them."

Moss Adams said that CIRM needed to do
a better job in "bond forecasting," a reference to the
California state bonds that finance virtually every aspect of the
agency's operations. CIRM directors were caught by surprise a few
years ago when they suddenly learned the agency was up against a
major cash crunch.

Some of the recommendations will
require more work from CIRM grantees and their technology transfer
offices in an effort to track intellectual property and grant outcomes.
The report also recommended a speed-up in CIRM's review of progress
reports from grant recipients, which have been lagging completion by
several months.

The dual executive arrangement, which
was written into law by Prop. 71, has troubled CIRM since nearly day
one. CIRM's own external review panel also identified it as problem
two years ago. The executive structure is virtually impossible to
change because of the political difficulty in making alterations in
the ballot initiative.

Moss-Adams said,

"The working relationship between
the chairman’s office and the president’s office has vastly
improved over the past year, but there are still opportunities for
improvement."

The performance audit recommended,

"Make every effort to manage and
operate as one cohesive organization, while recognizing the varying
roles, responsibilities, and authorities that exist with positions in
both the chairman’s office and president’s office."

One of the top 12 recommendations
involved CIRM's public relations/communications effort. CIRM
Chairman J.T. Thomas told directors last June that the agency was in
a "communications war."

Moss-Adams said,

"CIRM does not have a
communication plan, and there is lack of clarity on how to address
mission-based communication to CIRM’s various target audiences,
especially the general public....The best way to facilitate
results-based communications is to 1) quantify goals and outcomes in
CIRM’s strategic plan and 2) report on achievement of those goals
and outcomes by enhancing CIRM’s annual report with additional
performance-based information."

Another performance assessment of the
stem cell agency is also underway. It is being conducted by the
prestigious Institute of Medicine and is costing CIRM $700,000. That
report is expected this fall.

CIRM's board of directors is scheduled
to consider the Moss Adams report at its meeting May 24.

Our take: While the findings and
recommendations of the performance audit were delicately worded in
many cases, they brought out issues that need to be addressed, many
of which have been around for a great deal of time. At their meeting
next week, CIRM directors should act very directly on the
recommendations. They can do that by requiring a written report each
month from CIRM Chairman J.T. Thomas and CIRM President Alan Trounson
on the specific steps that they are taking to implement the
performance audit's recommendations. Otherwise, the inevitable drift
will set in.

Source:
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