Audit calls for transparency on state biomedical spending

[Source: Ken Alltucker, The Arizona Republic] - The state commission that funds more than $10 million in biomedical research awards each year needs to do a better job of reporting how scientists and research organizations parlay those state funds into tangible benefits such as jobs, patents and federal grants.

A state audit of the Arizona Biomedical Research Commission released Tuesday concludes that state-funded research appears to benefit Arizonans, but the biomedical commission does not always collect and report pivotal details that would measure those benefits for taxpayers.

The state's auditor general recommends that the biomedical commission revamp the way it collects and reports data about projects it funds for groups such as the Translational Genomics Research Institute (TGen), the state's universities and others.

The audit and sunset review will be forwarded to a joint legislative committee that will recommend whether the biomedical commission's funding should continue. It is set to expire Oct. 1, 2009.

The legislative review, expected this fall, will be closely watched by bioscience groups that turn to the biomedical commission as a critical funding source for early-stage research. The commission is a key part of Arizona's push to invest millions in biotech research to create jobs and medical discoveries.

"The findings, at least as I have read through them, don't appear to point out anything glaring that would make people not want to fund (the biomedical commission)," said Rep. John Nelson, chairman of the joint legislative audit committee.

Jim Matthews, deputy director of the biomedical commission, said his group "agrees wholeheartedly" with the audit's recommendations and will make the requested changes.

The biomedical commission is funded by Arizona's tobacco fund and lottery collections, so the amount available for grant awards varies each year. In fiscal 2008, the biomedical commission awarded $6.6 million in competitive grants to scientists at the University of Arizona, Arizona State University, Sun Health Research Institute, St. Joseph's Hospital and Medical Center, Northern Arizona University, TGen and others.

In addition to the competitive grants, the commission awards TGen $5.5 million each year, making the Phoenix-based genomics group the biomedical commission's largest funding recipient.

Overall, the audit found that the biomedical commission's reporting was a mixed bag. It did not always report detailed information on projects that may be of interest to Arizona residents such as the seed funding that helped a team of Arizona research groups secure a $2.8 million grant from the Michael J. Fox Foundation for Parkinson's disease research. The biomedical commission also did not require state-funded scientists to report presentations made to other scientists.

The report also noted that the biomedical commission either did not collect or did not report key information provided from TGen under terms of its contract. The audit found that the biomedical commission did not report complete information about TGen's patent activities, the number or types of jobs created and research of interest to Arizona residents.

TGen considers the funding as a critical source of money to fund operating expenses such as personnel, equipment, supplies, travel, infrastructure and administrative expenses. The money allows TGen to pursue federal grants as it works to ramp up its research prowess.

TGen representatives said the funding is important because it typically can't spend federal grant dollars or some philanthropic gifts on operating costs.

"If we didn't have that $5.5 million, it would be a radically different looking TGen,"

One biomedical commission member sits on TGen's board, and the Phoenix research institute has opened its doors for periodic tours. Burleson added that TGen officials met with state auditors and members of the biomedical commission and agreed to include any requested information in the format the state wanted.

"Our goal is to make sure we are good partners in everything we do," Burleson said.

The audit recommends the biomedical commission:

• Revise its annual progress report to reflect more detailed information such as whether the state funding helped researchers secure patents or receive additional funding from other sources. The audit also suggests the biomedical commission report the progress of research projects relevant to Arizonans such as valley-fever or skin-cancer research.

• Post the annual report on its Web site.
• Ensure that TGen reports details about job creation, presentations, research projects relevant to Arizonans and collaborations with other scientists. It also recommended that the commission's annual report include the same information contained in TGen's annual report.