In connection with its jurisdiction over biomedical research and development at higher education institutions, the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations met twice to hear testimony on abuses in the indirect cost recovery practices at universities for Federal research grants and contracts. At the first hearing witnesses testified about the legitimacy and reasonableness of Stanford University's overhead charges and the adequacy of government oversight provided by the Office of Naval Research. The hearing revealed extensive abuses at the university and ineffective oversight from the Navy. Appearing were witnesses representing the Office of Naval Research, the General Accounting Office, Stanford University, and the Defense Contract Audit Agency. Two months later the committee met again to hear suggestions for changing the regulatory and staffing practices of audit agencies, and to hear about the status of audits initiated shortly after the first hearing at the 41 universities that the Office of Naval Research oversees. Appearing were witnesses representing the Department of Health and Human Services (HHS), the Office of Grant and Contract Financial Management, the Inspector General, Office of Naval Research, and the Defense Contract Audit Agency. Included are the prepared statements of the witnesses, an HHS report, "Federal Funding to Colleges and Universities in Support of Research" and various documents and letters from Stanford University. (JB)