Summary: GAO discussed its report on university finances for the period 1975 to 1984, focusing on: (1) revenues and expenditures for operations and physical plant support; (2) revenues for research and development; (3) indirect costs for research and development; and (4) academic executives' perceptions on their research capabilities under alternative levels of federal funding. GAO found that: (1) university revenues and expenditures increased faster than the rate of inflation over the past 10 years; (2) university operating revenues increased by 37 percent, educational and general revenues increased 25 percent, and auxiliary and other revenues increased 66 percent; (3) revenue from federal and state sources decreased as proportions of total physical plant revenue over the period, while revenue from private and other institutional sources rose; (4) federal research support increased, but at a slower rate than most other research revenue; (5) industrial research funding more than doubled, but it still amounted to about 6 percent of overall research revenue in 1984; (6) indirect costs as a percentage of each federal research dollar rose from 22 percent in 1975 to 26 percent in 1984; and (7) many university officials reported that a decline in federal research funding could adversely affect their research efforts. GAO also noted that: (1) private universities received a greater portion of their research revenues from the federal government than did public universities; and (2) public universities drew on government appropriations and other sources of institutional funds for a greater portion of their research.
