Not only is taxation at issue, but the allocation of indirect costs
to a foundation is also sensitive.  Many of these questions will have
to be resolved in the Disclosure Statement process now called under
the Cost Accounting Standards.  It can also become an issue in
financial statement preparation and A-133 schedule preparation.  The
key is whether they are sponsored agreements or not.  If yes, all
else should follow.  If they aren't treated as sposnored agreements
but should be, we have problems.  An internal control feature is not
to allow the foundation to expend the money but move it to an
institutional account via a Budget Revision.  Try your best to
"capture" the Budget Revision to see if the funds should be pointed
towards the restricted fund.  It is unrealistic to think that the
development office, assuming it is always involved, to send funds to
the restricted fund.  At lease we can get the expenditures in the
right place.  Still another issue is the proposal that includes
indirect cost and fringe benefits but by going through a foundation
to an operating account that isn't charged either the effect is to
evade payment of indirect cost and benefits.  This is an issue that
calls for 24-hour surveillance to make it right and will be a
discussion topic at the Academic Health Centers Conference coming up
in January in Florida.  Clinical trials operated in separate
corporate organizations (clinics not part of the institution nor
nonprofit foundations) present the same challenge.
Brad Quinn
University of Oklahoma
1000 Asp Avenue, Room 210
Norman, OK 73019
(P) 405-325-7091
(F) 405-325-7229
(E) xxxxxx@uoknor.edu