OHSU statement regarding Department of Justice complaint
11/01/16 Portland, Ore.
OHSU has a long and honorable relationship with the National Institutes of Health (NIH) in pursuing its important research mission, and is disappointed that the Justice Department has filed a lawsuit, challenging OHSU's use of an overhead rate that was approved by the appropriate government agency.
OHSU vigorously disputes the claims in the Justice Department's lawsuit. OHSU has been consistently transparent in its method of calculating overhead rates for federal grants—receiving explicit approval from the appropriate federal agency before applying the rate. The facts will demonstrate that this a disagreement about an accounting practice, not fraudulent behavior.
The core complaint is that OHSU used the wrong overhead rate for Building 637 on its West Campus—using the overhead rate for the Oregon National Primate Research Center (ONPRC) rather than the OHSU main campus rate. Building 637 is where ONPRC scientists, and other OHSU scientists, conduct research in furtherance of ONPRC objectives.
In 2008, OHSU disclosed and described the proposed rate for Building 637 to the federal agency that sets the rates—the Division of Cost Allocation at the Department of Health and Human Services. The agency made inquiries and conducted a site visit. It raised no objections, proceeded to negotiate with OHSU, and then approved the proposed rate.