The article by Robert J. Kenney Jr. provides comprehensive guidance for federally funded research institutions seeking to conduct human embryonic stem cell (hESC) research that is prohibited from federal funding under the Bush administration’s policy. The policy, announced in August 2001, restricts the use of federal funds to a narrow set of pre-approved hESC lines, necessitating stringent safeguards to prevent any direct or indirect federal support for research using non-approved lines, especially as new funding streams (e.g., California’s Proposition 71) expand non-federal support for such work. The primary challenge addressed is how institutions can comply with this prohibition within the context of complex funding and resource allocation scenarios, where federal and non-federal research often coexist.
Kenney outlines that, according to NIH guidance, strict adherence to established federal cost accounting principles, specifically OMB Circular A-21 and related rules, is central to ensuring that ineligible hESC research is supported solely by non-federal funds. Institutions are not mandated to physically segregate facilities or resources, provided costs can be accurately and consistently allocated; properly documented allocation of direct and indirect (facilities and administrative, or F&A) costs is sufficient. However, the article emphasizes the importance of robust internal protocols, training, and oversight to avoid inadvertent violations, given the reputational, political, and potential legal risks associated with misallocation. Kenney also identifies ambiguities and special circumstances not fully resolved by current guidance—such as the use of federal property, core facilities, or overlap between eligible and ineligible research lines—and advises a conservative, transparent approach, recommending written institutional policies, investigator instructions, administrative monitoring, and ongoing vigilance for policy changes. The article concludes that while the NIH framework offers practical solutions, institutions must exercise both technical compliance and prudent judgment to minimize risk amidst an evolving regulatory landscape.
