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Noting that the board of the California Institute for Regenerative Medicine (CIRM) has approved 253 research grants totaling more than $635 million, the agency's website home page proudly calls CIRM "the largest source of funding for embryonic and pluripotent stem cell research in the world."

Not so fast, I say.  Right now it's funny money like what caused the nation's financial crisis. Yes, the board, known as the Independent Citizens Oversight Committee (ICOC), has authorized grants totaling that amount.  And, its agenda for Thursday and Friday's meeting says the board will consider awarding another $68 million worth of grants

But let's slow down here.  The checks aren't necessarily in the mail.  We're not talking a Ponzi scheme a la Bernie Madoff, but what I am saying is this:

The board has committed to fund $653 million and could commit more this week. Because most of the grants are multi-year deals, not all the money has gone out the door.  The very real question is: Given the state's impending financial crisis, how will the agency fund its existing commitments?

CIRM gets it's money by selling bonds.  Initially stymied by a court challenge, the agency raised donations and then sold bond anticipation notes (BANs) that were privately placed.  Then Gov. Schwarzenegger lent CIRM $150 million from the general fund.  Soon thereafter CIRM won the legal challenge and $250 million in bonds were sold.

Today, I decided to refresh my memory on CIRM finances.  Don Gibbons, communications officer at CIRM, confirmed that both the $45 million in BANs and the loan were paid back. Referring to the loan he said in an e-mail:

"It was repaid with the 2007 bonds, but it was more of a line of credit than an outright loan. Because of the BANs, we did not use that much of it, so we did not have to repay too much."

I asked the state Controller John Chiang's office what had happened. The response from Hallye Jordan, deputy controller, communications:

"The loan they took out was for $150,000,000 and they repaid $156,685,992.78 on 10/19/07."

That's the sort of precision I like when talking about the people's money. It's also the sort or precision that CIRM consistently lacks.  Presumably a large portion of the $150 million loan sat in CIRM accounts rather than going out to grantees, so it was readily available to be paid back with about $6.69 million in interest when the bonds were sold.
 
At the time of the bond sale Treasurer Bill Lockyer said about $45 million was going to pay off the BANs leaving about $200 million for grants.  That means CIRM has at least $435 million it has committed, but doesn't yet have.

You'd think the most important thing for ICOC members right now would be a spread sheet showing how much of  the $200 million has been spent and how much longer CIRM can keep commitments to grantees.

So far there hasn't been any such document. Last week's Finance Subcommittee meeting would have been an ideal venue to present and discuss the issue. Instead there was discussion of a proposed loan program and two recaps of how the BANs were placed.

Chairman Bob Klein suggests that it may be necessary to do a private placement of bonds given the state of the credit markets and California's financial crisis.  He cites the success of the BANs a model. But that was then and this is now.  I'm skeptical that it's possible to do so in the amount needed -- $150 million or so.

What's been missing in all of this is an accurate accounting of where CIRM stands financially.

There have been vague statements from Klein that there is enough money on hand to get through until the end of the fiscal year -- June 30. Then last week President Alan Trounson spoke at the Milken Institute and said there should be money until about October.

As I write, we're two-days away from the ICOC meeting Thursday and no budget documents have been posted.  We're paying President Alan Trounson $490,00 a year.  John Robson, vice president for operations, makes $310,000.  Klein's job is considered half-time and he gets paid $150,000.

Well, here's my two-cents worth:  Somebody in this highly paid group needs to present a real budget that shows when CIRM will run out of money.  Then there needs to  be a serious, realistic discussion about what to do about it. Approving more grants when you're already $435 million in the hole might just not be the prudent course.

One thing for certain, the ICOC and public are entitled to a clear explanation of where CIRM stands financially, not bafflegab about pie-in-the sky funding schemes and Obama stimulus packages.