05/10/91

CONTACT: Stanford University News Service (650) 723-2558

Confusion resolved; government accepts two Stanford checks

STANFORD -- After the quick resolution of some confusion, the Office of the Chief of Naval Research has accepted two Stanford University checks for a total of $1,030,117.

The checks, for $924,517 and $105,600, were repayment of previously withdrawn charges for indirect costs of research. The checks were accepted Thursday, May 9, by Michael Kuc, chairman of the Navy office's special university team.

Stanford originally delivered a single check in the larger amount to Kuc Wednesday. However, because of a misunderstanding, the Navy later informed the University -- and Rear Admiral William C. Miller, Chief of Naval Research, told congressional hearings Thursday -- that the check would not be accepted.

University officials said the misunderstanding was on two points:

• The Navy wished confirmation that Stanford was not asking it to waive legal rights by accepting the payment. Stanford officials confirmed that neither side was waiving its legal rights.
• In writing the original check, Stanford had subtracted a credit of $105,600 owed to the University from the full amount of withdrawn charges, $1,030,117. The Navy preferred to receive payment by check of the full amount and have the credit come to Stanford in "carryforward" -- that is, adding it to future federal reimbursements to the University.

Carryforward is the standard procedure for both withdrawn and credited indirect costs. However, the Defense Contract Audit Agency first proposed two weeks ago that Stanford instead pay its withdrawn charges by check made out to the U.S. Treasury. The University agreed once it was given assurance that the method would satisfy all federal claims.

The checks cover indirect research costs charged from 1980-81 to 1987-88 and withdrawn by the University between November 1990 and the end of March.

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