After a fiscal year marked by record-breaking University research expenditures and cuts in federal research funding, S. Jack Hu, interim vice president for research, called for continuing innovation in the ways in which the University funds its research at the meeting of the University’s Board of Regents Thursday.

Though statistics for the University’s 2013 fiscal year budget were released in September, Hu made his first in-depth regents meeting presentation Thursday, in which he emphasized the importance of collaborating with foundations and industries to offset the impact of federal funding declines.

Amid an uncertain climate for federal research funding, the University reported a 4.3-percent increase in research expenditures, reaching $1.3 billion in the 2013 fiscal year.

“We achieved this milestone in the climate of declining federal support,” Hu said. “But the increase in our research expenditure is a true measure of the excellence of our faculty.”

Hu said faculty members have continued to apply aggressively to grants despite projected declines from top funders such as the National Institutes of Health. According to the University’s report, NIH funding — which accounted for 40.8 percent of federal funding last year — declined by 1.8 percent in the previous fiscal year. The federal government sponsored 61.5 percent of University research last year.

After Hu’s report, University President Mary Sue Coleman, who has a background in biochemistry, asked him whether federal agencies maintained the number of grant awards by decreasing the amount of funding provided for each grant as a result of the federal sequestration.

Hu told Coleman this narrative is quite common. Agencies often offer researchers grants on the condition that the researcher reduce their budget by a certain percentage.

“They are trying to keep the number of grants up but reduce the amount of each grant,” he said.

However, Hu said decreases in total funding from the Department of Health and Human Services were mitigated by increases in funding from the National Science Foundation and the Departments of Energy and Defense. The Department of Transportation injected a 60.2-percent bump in University research funding.

Recently, transportation-related research projects have been a large focus of expansion for the University’s research portfolio.

On Thursday, the regents approved schematic designs for a $6.5 million Mobility Transformation Center, which will include simulated urban environments and roads to research new transportation-related innovations.

Last month, President Barack Obama announced a new establishment of the American Lightweight Materials Manufacturing Innovation Institute, part of a network of innovation centers run by collaborations of companies, nonprofits and higher-education institutions, including the University.

Hu said partnerships with industries and foundations are key components of safeguarding and expanding the University’s massive research enterprise.

Despite a precarious stream of federal funding, the report noted non-federal funding was up 18.4 percent over the previous fiscal year. Hu said industry-sponsored research rose by 14.2 percent. He also noted these partnerships “will enrich the experience of our students and better prepare them for future careers in academic, industry and have become an important mechanism to attract federal funding.”

Hu also listed several key strategies for growing the University’s research expenditures in a challenging climate, such as expanding clinical trials, seeking more funds from foundations and philanthropic gifts, streamlining submission proposals and forming international partnerships.

Still, he was unwilling to write off the role of local, state and federal government agencies in supporting the University’s research mission.

“We must work with policymakers to make sure the support from the federal government for research will continue over time,” Hu said.

In a November interview, Kristina Ko, the University’s Washington-based director of federal relations for research, said the fight for federal funds requires advocacy on behalf of the University.

“We’ve absolutely ramped up,” Ko said. “Obviously, in light of the budget issues, we’ve definitely increased our advocacy efforts in educating the delegation about the research we do and how necessary federal funding is.”

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