The review by the Institute of Medicine lauded the California Institute for Regenerative Medicine for making the state a leader in the field by funneling research money with an eye toward stem cell therapies.
But the report found too many members of the governing board represented schools that won funding and recommended a restructuring to avoid the appearance of conflict of interest.
California voters in 2004 passed Proposition 71, a state ballot initiative that created CIRM, at a time when there were federal restrictions on human embryonic stem cell research and such work was opposed by some on religious and moral grounds because embryos have to be destroyed to harvest the cells.
The agency was given broad power to distribute $3 billion in bond proceeds to promising research. So far, it has awarded $1.3 billion to nearly five dozen universities that went mostly to new buildings and basic research.
The team of experts that reviewed the stem-cell agency's operations did not judge the merits of individual studies because it would have been too time-consuming and costly. And while the panel did not find any specific cases of conflict, it noted that the potential exists because of how the board is made up.
CIRM is composed of 29 members, mostly from academia. They have the dual role of providing oversight and day-to-day management. While the structure may have worked when CIRM was first launched and shielded it from political meddling, change is needed going forward, experts said.
"It's an odd structure," said genetics professor Terry Magnuson of the University of North Carolina at Chapel Hill and vice-chair of the report.
Among the recommendations: The board should remain at arm's length from the management team, focus on providing better oversight and should not decide what projects to fund. It also needs to be more diverse and include more representatives from industry and members with no stake in the grant-awarding process. Experts also favored the creation of an outside scientific group to give advice and expertise.
The panel recognized that some of these changes would require amendments to the law, but felt they were needed to erase concerns about possible conflicts of interest. An email to CIRM was not immediately answered.
Since cutting the first check in 2006, CIRM is at a crossroads. The federal research limits that existed when it was created have been relaxed and it recently shifted focus from basic research to funneling research dollars to projects that can swiftly begin human trials. Experts felt this goal was unrealistic and should have a more balanced approach.
The $700,000 report was sponsored by CIRM a customary practice for organizations seeking a review. The Institute of Medicine said sponsors have no influence on the fact-gathering process and are barred from reviewing drafts or weighing in on the report before publication.
California Institute for Regenerative Medicine: http://www.cirm.ca.gov/
Institute of Medicine: http://www.iom.edu/