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From: Faculty Senate Budget Committee
Re: UT Research Foundation and it's effect on UTK Budget and Faculty
Date: November 27, 2002
cc: President Shumaker, Vice President McCay, Vice President Crabtree,
Professor Birdwell (Research Council), Professor Combs (Senate President)

Having had a chance to review the draft documents posted on the web,
we have a wide variety of concerns regarding the impact of this
new endeavor on UTK and the rights and activities of faculty and
staff involved in research. While the draft documents are likely
a necessary step in establishing a Foundation, these legal documents
lack a tremendous amount of detail critical in determining
how such a Foundation will affect faculty. The Senate Executive
Committee was informed that a Business Plan would be posted and
perhaps this will address many of the issues we raise here. We
hope our comments and suggestions will be taken account of in
the development of this Business Plan. Given the lack of detail
in what has been posted to date however, we strongly urge that
action on the implementation of this Foundation be slowed from
that in the Plan of Actions on the web site. In addition we
suggest that the Plan of Actions be modified to state how comments
from the Faculty Senate(s) would be addressed, and how disagreements
about the basic details of the Foundation's establishment would be

The web page indicates that all external grant and contract funding
to UT will flow through this Foundation, with all of this controlled
by the Board of Directors. We believe that an important addition
to the documents governing the Foundation pertains to the rights
and responsibilities of those who generated the external funding
(the Principal Investigators). We also urge that considerably
more detail be provided concerning the fiscal management of the
funds which flow through the Foundation. It would be helpful
to make it clear how the Foundation would handle all the
pre- through post- award management of the accounts, whether
this will affect the current responsibilities of unit bookkeepers
at UT, and what the expected fiscal management responsibilities
of the Principal Investigator would be.

We believe that it is critical to include details in the Business
Plan regarding F&A recoveries. There is an enormous impact any
reduction in F&A recoveries would have on operating budgets at UTK
if the Foundation were to "tax" F&A (as is allowed in the draft
documents). We suggest that the Plans explicitly state that the
UTK campus budget shall be held harmless initially, with no
diversion by the Foundation of funds that are currently used
to fund basic operations on campus.

The Draft describes a Board of Directors directly controlled by the
President (who appoints/controls directly 14 of the 22 voting members
since the Vice Presidents and Chancellors all report to the President,
and indirectly controls all the members since the Faculty members
are appointed by individuals reporting to the President). Given that
it is UT faculty and research staff who actually write the proposals
and carry out the research this Foundation is to support, it would
seem appropriate that faculty representation on the Board be
considerably higher than that of any other group, and that the
faculty chosen to serve on this be selected by the faculty, not the

We urge that considerably more details about the operation
of the Foundation and it's impact on budgeting at UT be provided
before further action is expected of the Senate.

The Senate Budget Committee will be happy to meet with appropriate
administrators regarding any aspect of the Foundation. Our
meetings are scheduled for 3:30PM on Dec. 2, Jan. 27, Feb. 24,
March 10, and April 21.


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