College and Research Libraries Indirect Costs of Library Services Under U. S. Research Agreements BY R I C H A R D H. L OGSDON IN R E C E N T Y E A R S the United States gov-ernment has turned increasingly to colleges and universities for help in the research and development activities nec- essary to the accomplishment of various government programs. From a level of approximately $221,000,000! in 1951-52 funds for government-financed research on college and u n i v e r s i t y campuses reached $846,000,000 in I960.2 T h i s sum of money is large in relation to the total expenditures of the principal recipients3, but when considered in relation to the total of new funds becoming available for research, the proportion from the federal government shows up even more dramatically. Librarians, sensitive to the increasing demands generated by this government- financed research, have properly become concerned with the amount and distri- bution of these funds within their insti- tutions, and especially with the meth- ods of calculating overhead costs for reimbursement by the government. T h e y have watched departmental research ac- tivities grow while their own budgets tended barely to keep up with inflation. T h e y have experienced the pressure of additional readers' specialized demands on library services, sometimes even to the point of forcing a lowering of qual- ity of service to the more traditional 1 U. S. Office of Education, Biennial Survey of Edu- cation in the United States, 1950-52, chapter 4, sec- tion II (Washington: Government Printing Office, 1955). 2 U. S. National Science Foundation, Federal Funds for Research and Development I X (Washington: Gov- ernment Printing Office, 1960). 3 In several universities, federal grants for research and development programs account for more than one- third of the budget. 40 Dr. Logsdon is Director of Libraries, Co- lumbia University. This report is based on discussions at two conferences sponsored by the Association of Research Libraries on a grant from the Council on Library Resources, and was prepared by Dr. Logsdon for the Drafting Committee of the conferences. programs. T h e y have been generally aware of the inclusion of library costs in the calculation of the amount of reim- bursement to the institution for all over- head costs, but have not found satis- factory answers to several questions, including the following: (1) D o g o v e r n m e n t procedures give p r o p e r r e c o g n i t i o n to the role o f the library in serving government-sponsored re- search? (2) Are library costs properly represented in i n s t i t u t i o n a l n e g o t i a t i o n s with the g o v e r n m e n t ? (3) Is the i n s t i t u t i o n receiving a d e q u a t e p a y m e n t for services performed? (4) Are libraries receiving the financial support n e e d e d to provide a d e q u a t e service to government-sponsored re- research? T o the end of getting better answers to these and related questions, the Asso- ciation of Research Libraries sought and received a grant from the Council on Library Resources to sponsor discussions with institutional officers responsible for negotiating government contracts and overhead reimbursements. T h e objective of these three-way discussions—involv- ing librarians, finance officers, and offi- C O L L E G E A N D R E S E A R C H L I B R A R I E S cers in charge of government contracts- was to develop recommendations which, if adopted by the U. S. government, would provide the basis for calculating library costs on a practicable and equi- table basis. Representatives of nine institutions met at Princeton University on May 30, 1960, and again at Columbia University on November 18, 1960. Discussions served to clarify many aspects of the govern- ment-institutional relationship, and pro- duced a number of specific recommenda- tions. These will be mentioned here, to- gether with certain background infor- mation not readily available in printed sources. In the consideration of this ma- terial in relation to individual institu- tions, librarians will want to distinguish between research and development con- tracts or agreements, on the one hand, and grants to institutions from govern- ment agencies, on the other, inasmuch as the present method of reimbursement is different. Grants tend to include a per- centage for indirect costs varying in amount with different agencies, whereas the reimbursement for indirect costs re- lated to research agreements is negoti- ated annually by each institution. It is to be hoped, of course, that procedures will be worked out eventually to provide full reimbursement for indirect costs re- gardless of whether the monies come in the form of grants or under research agreements. Library service is only one of the costs for which institutions are reimbursed through the overhead allowance under research agreements. Other services in- clude departmental administration, re- search administration, general admin- istration and general expenses, and operation and maintenance of physical plant. In addition to the cost of these services, other indirect costs include use allowances for equipment and buildings and, at some institutions, employee bene- fits. T h e amount of institutional reim- bursement is determined annually on J A N U A R Y 1 9 6 2 the basis of those indirect costs that are deemed pertinent to the research proj- ects. T h i s may require negotiation be- tween representatives of the government and the individual institution. T h e gov- ernment auditor or auditors may be at- tached to the U. S. Navy Department, the U. S. Army Department, the U. S. Air Force, the Atomic Energy Commis- sion, or other branches of the govern- ment. These auditors are guided by pro- visions of the so-called " B l u e B o o k " 4 and Circular No. A-21.5 These documents in themselves pro- vide a certain latitude designed to meet and to accommodate the wide differ- ences in institutional practices. Reports from the several institutions presented at the Princeton session made it quite evident that differing local circumstances had led to a considerable variation in interpretation of regulations. Of par- ticular concern to the conference group was the failure in practice to allow for the substantially higher costs of library service for research than for instruction. T h e tendency has been to view costs more on a per-capita basis, counting even undergraduate students as com- parable to persons engaged in full-time research. A number of institutions have been successful in the past in gaining accept- ance of various weighting systems, in- cluding those based on the standards developed by the American Library As- sociation.6 While generally pointing in the right direction, by allowing higher costs for services to research and hence a larger reimbursement for research serv- ices under government contracts, the systems were viewed as falling short of 4 U. S. W a r Department—U. S. Navy Department, Explanation of Principles for Determination of Costs under Government Research and Development Con- tracts zinth Educational Institutions (August 1947) 14 p. S_U. S. Bureau 9f the Budget, Circular No. A-21, Principles for Costing Research and Development un- der Grants and Contracts with Educational Institutions. Cover letter, 2 p. Attachment A , 10 p. Attachment B, 10 p. 8 American Library Association,_ Classification and Pay Plans for Libraries in Institutions of Higher Edu- cation, 2nd ed. (Chicago: American Library Associa- tion, 1948) p. xxiii. 41 achieving an equitable division of costs. F u r t h e r m o r e , several i n s t i t u t i o n s re- ported an unwillingness on the part of government auditors to accept a weight- ing system without having more evi- dence of its validity. Between the May 30 and November 18 sessions of the group, several institu- tions prepared studies designed to sep- arate library costs for undergraduate instruction from costs for graduate in- struction and research. T h e costs for graduate instruction and research were found to be substantially higher than those for undergraduate instruction: the ratios reported were from 2.5 to 1, up to 5 to 1. These studies and the resulting dis- cussions indicated the reasonableness of: 1) separating costs attributable to undergraduate instruction and size of groups served in arriving at an equitable figure for indirect costs; 2) accepting dif- fering figures for different institutions; 3) using relatively simple methods of estimating such costs, as simple analyses are likely to produce results comparable to those of more elaborate ones. T h e group, while not unanimous on the point, believed that library service to graduate instruction is so interrelated with service to research as to make it impracticable to calculate costs sepa- rately. It was suggested, however, that the possibility of separate calculations be kept open for further study inasmuch as use and costs for research purposes would almost certainly exceed those for gradu- ate instruction. T h e group agreed that more objective methods for calculating library costs and use relating to spon- sored research were needed, and that the government should be concerned not only with such costs in negotiating agree- ments, but also with the adequacy of library service to contract personnel. Another topic of concern was the method of reimbursing institutions for expenditures for books and journals. Government regulations provide for a use charge not to exceed eight cents per volume, this to be applied to the total holdings of the library. Annual expendi- tures for books, periodicals, and binding are accordingly excluded from the calcu- lations. Discussion of this provision led to agreement with the American Coun- cil on Education Special Committee on Sponsored Research, which concluded that, "it is not practicable to determine the useful life of books for depreciation purposes, a realistic average cost or value per book, or in fact, the number of vol- umes in a library having many periodi- cals both bound and unbound, and ma- terials in microtext form." T h e group further agreed that expenditures for books, periodicals, and the like should be treated as annual expenses of the library. If adopted, this proposal would achieve reimbursement for that portion of cur- rent expenditures attributable to gov- ernment research presumably as a sub- stitute for the present "use" charge. Accordingly, there would be no compen- sation from the government for the in- stitution's previous investment in the book collection. On the other hand, the institution would have the continuing use of materials which were, in a sense, paid for by the government. T h e conference group agreed on three recommendations: (1) T h a t revision of C i r c u l a r A-21 pro- vide for a s e p a r a t i o n o f library costs for u n d e r g r a d u a t e instruction from those f o r graduate study and research in c a l c u l a t i n g the a m o u n t s u b j e c t to a l l o c a t i o n . Such a revision should p e r m i t individual institu- tions to develop simplified methods o f cal- c u l a t i n g such costs, i n c l u d i n g the use o f s a m p l i n g techniques, the use of j u d g m e n t s of i n f o r m e d members of the staff, and the a p p l i c a t i o n of f o r m u l a e derived in a par- ticular year to l a t e r years. (2) T h a t p a r a g r a p h ' I D i . d . " o f At- t a c h m e n t A of C i r c u l a r 21 which provides for a use allowance not to exceed eight cents per volume be revised to r e a d : " L i - brary expenses are those i n c u r r e d f o r the 42 C O L L E G E A N D R E S E A R C H L I B R A R I E S direct o p e r a t i o n o f the library, i n c l u d i n g the cost of books purchased, binding, and r e l a t e d costs." (3) T h a t the N a t i o n a l Science Founda- tion encourage or undertake studies n o t only of the adequacy of service to con- tract personnel, but o f cost factors in- volved. Such studies, the group believes, would provide i n d e p e n d e n t evidence that the library costs of servicing research are considerably h i g h e r than for servicing un- dergrate students. Such studies might also lend support to the various methods used by institutions in arriving at library costs allocable to U n i t e d States research agree- ments. R e p r e s e n t a t i v e s of the c o n f e r e n c e group plan to continue discussions and to seek opportunities to discuss the rec- ommendations with government agen- cies and other interested groups. Cer- tainly government funds will in the future represent an increasing propor- tion of the research budgets of institu- tions of higher education and will no doubt involve an increasing number of institutions. T h e Council of Library Resources has been instrumental in stimulating this first step toward a better understanding of the problems involved. It is to be hoped that further progress will be pos- sible through continued consultation of librarians, finance officers, and persons responsible for government contracts. "Non-Academic" Library Programs f C A T I T S ^ r s t m e e t i n g of the academic year, l \ earlier this m o n t h [ O c t o b e r ] , the faculty S e n a t e o f the University o f Kansas u n a n i m o u s l y voted to admit professional li- b r a r i a n s to m e m b e r s h i p in the S e n a t e on the same basis as the teaching staff. T h e first reading of this c o n s t i t u t i o n a l change was presented last spring with a favorable r e p o r t from the Senate's Advisory C o m m i t t e e , to- g e t h e r with e n d o r s e m e n t by the S e n a t e Li- brary C o m m i t t e e and by the C h a n c e l l o r of the university. T h e e n l i g h t e n e d decision climaxes a sequence of developments at Kan- sas over the past few years whereby the faculty a n d a d m i n i s t r a t i o n have b e e n wel- c o m i n g the university's l i b r a r i a n s i n t o full p a r t i c i p a t i o n in the academic enterprise. A t e n u r e s t a t e m e n t was adopted a few years ago, and sabbatical leaves are now granted, as well as research grants and the like. Such a generous and forward-looking a t t i t u d e has aided in a t t r a c t i n g a n d r e t a i n i n g a corps of e x t r e m e l y able librarians, and this in turn has e n r i c h e d the library program. " C o m p a r a b l e moves u n d e r way at the state universities of Iowa a n d C o l o r a d o now leave the University of C a l i f o r n i a in an increas- ingly l i m i t e d company of i n s t i t u t i o n s which profess to want e n l i g h t e n e d library pro- grams but which patently fail to admit li- brarians i n t o the g e n u i n e fellowship of aca- demic life or i n t o full p a r t n e r s h i p in the academic program. T h e University o f Illi- nois L i b r a r y has been a p i o n e e r in the newer personnel arrangements. W i t h i n the last few years H a r v a r d University has moved in the same direction by g r a n t i n g ' c o r p o r a t i o n ap- p o i n t m e n t s ' to its librarians. " I t is not unsignificant that b o t h I l l i n o i s and H a r v a r d have the k i n d o f vigorous and well-supported library program that is the envy of all o t h e r universities, i n c l u d i n g this one. I n my honest j u d g m e n t these matters go h a n d in h a n d . I t h i n k it fair, on the basis of e x p e r i e n c e , to say that any university at any time in its history actually has the k i n d of library program that it deserves. I n these terms b o t h Illinois and H a r v a r d deserve the library programs they have, because b o t h the administration and the faculty have given full and g e n u i n e support to the librarians as well as to the library programs. O n e can only wonder how significant it is that the University of C a l i f o r n i a labels its library program 'non-academic.' " — R o b e r t Vosper, in UCLA Librarian, O c t o b e r 27, 1961. J A N U A R Y 1 9 6 2 45