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SUMMARY
The Office of the Auditor General has conducted a
performance audit and sunset review of the Arizona Biomedical Research
Commission (Commission) pursuant to an October 5, 2006, resolution of the
Joint Legislative Audit Committee. This audit was conducted as part of the
sunset review process prescribed in Arizona Revised Statutes (A.R.S.)
§41-2951 et seq.
The Commission was created in 1984 to provide monies to
individuals, organizations, corporations, and institutions, public or private,
in this state that conduct research on the causes and cures, medically accepted
treatments, or prevention of diseases, including new drug discovery and
development. It does this in two primary ways:
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The Commission provides about $6.6 million annually
through a competitive contract process to various Arizona medical research
institutions employing biomedical researchers. The Commission's contracts
vary in size, with smaller projects receiving up to $50,000 per year and
larger projects receiving between $150,000 and $250,000 per year. The
Commission's contracts generally last up to 3 years, and its larger projects
are designated for collaborative projects involving multiple researchers and
institutions. Awarded contracts have included projects related to
Alzheimer's Disease, cancer, cerebral palsy, Parkinson's Disease, and the
West Nile Virus.
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The Commission provides $5.5 million annually to a
nonprofit biomedical research organization known as the Translational
Genomics Research Institute (TGen) headquartered in Phoenix. TGen is a
private nonprofit research institute performing research on a variety of
diseases such as prostate cancer, renal (kidney) disease, and Amyotrophic
Lateral Sclerosis (Lou Gehrig's Disease).
The Commission does not receive General Fund monies. Rather,
it receives funding primarily from two non-General Fund sources, tobacco tax
revenues and lottery fund monies, which are used to cover its personal services
and related benefits and operating expenses, the research project contracts, and
the TGen contract.
Commission-funded projects appear to have positive
impacts, but impacts could be better documented
and reported (see pages 11 through 20)
Biomedical research funded by the Commission appears to
benefit the State in several ways. However, the Commission can take steps to
better demonstrate and report those impacts. Auditors found that the Commission
could collect more complete information about what these projects accomplish and
make more information available to the public.
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Impact of projects can be better documented and
reported—To help identify impacts, auditors compiled and reviewed
information about 27 competitive contract projects that received funding
between fiscal years 2001 and 2007. Impacts included more than 100 published
articles about the research conducted, numerous collaborations among
researchers and institutions, and direct application to needs that are
relevant to Arizona, such as research about Valley Fever. The Commission is
collecting and reporting information about some of these impacts, such as
number of publications. However, other impact information, such as the
number of patents or number and amount of additional research grants
resulting from commission-funded projects, is only partially collected and
is not included in the Commission's annual report. Collecting and reporting
more complete impact information in the Commission's annual report, as well
as making the annual report available on its Web site, would further help
show how the Commission's funding of biomedical research projects has
positive impacts.
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Commission should require and report impact
information on TGen—The Commission annually provides $5.5 million to
TGen for operating expenses such as personnel, professional and outside
services, equipment, supplies, travel, and other administrative costs.
According to TGen, national entities do not offer grants that provide
funding solely for these operating costs. The Commission's contract requires
TGen to provide to the Commission an annual report that contains a summary
of TGen's activities and includes such impacts as grants obtained and
patents applied for and granted. According to commission and TGen officials,
the Commission receives information on TGen's activities through the
contractually required annual report as well as through one commission
member's participation on TGen's Board, and periodic meetings and tours.
However, auditors' review of TGen's annual reports found that although TGen
is providing a summary of its activities, these reports did not always
contain all of the contractually required information, and that the
Commission does not include TGen's impact information in its annual report.
For example, auditors found that the TGen reports submitted for fiscal years
2003 through 2007 did not contain information on patents. A commission
official indicated that it is satisfied with the information it is receiving
about TGen and according to TGen, all required information is requested and
reported to the Commission through a variety of means. However, the
Commission should ensure that TGen includes all contractually required
information in its annual report. In addition, the Commission should require
TGen to include other measures, such as the number and types of jobs created
and the relevance of TGen’s activities to Arizona-specific populations or
needs. Finally, the Commission should include in its annual report some of
the impacts reported in TGen's annual reports.
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