That's among the findings of a draft evaluation of the Industrial R&D Internship program, created with fanfare by the Harper government in 2007 and currently spending $13.8 million in tax dollars each year.
The evaluation from October last year found that high overhead costs begin at the Natural Sciences and Engineering Research Council, the federal agency that runs the program.
The council, through its Networks of Centres of Excellence arm, spends about six cents per dollar on administration, higher than for other similar agency initiatives.
But costs also include the overhead of two non-government agencies that actually deliver the program, Mitacs and Connect Canada, both non-profits.
The report says combined costs hit 44 cents for every internship dollar spent in 2009-2010, though officials say the level has since fallen, to about 36 cents currently.
"Administration costs are very high in comparison to those of other programs," the draft report concludes.
"There are mixed opinions among key informants regarding whether the ... program is an efficient and economical mechanism to deliver R&D internships."
The draft report was obtained by The Canadian Press under the Access to Information Act. It was commissioned from a Vancouver consultant, Ference Weicker & Co. Ltd., for $158,000, including travel.
The internship program for science and technology graduates was announced in the March 2007 federal budget, with the goal of eventually funding 1,000 spots in private firms each year.
"Businesses will benefit from the knowledge and skills brought by students," said the announcement, "while interns will acquire hands-on research experience and greater exposure to research challenges and opportunities in the private sector."
The program was made permanent in 2009, and paid for 970 internships by 2011-12. Its base budget is $6.9 million annually, though that was topped up by almost $7 million for the current fiscal year.
The program pays a minimum of $10,000 for each four- to six-month internship, to a maximum of half the total cost. Universities, provinces and private-sector firms pay the balance, and most of the positions are in computer science and engineering.
The evaluation gives the program high marks for relevance and effectiveness, but raises fundamental questions about costs.
The report cited the fact that two non-profits deliver the program rather than one, which may increase fees. Restrictive rules on eligibility may also be adding to expenses.
"Although there was general agreement ... that the costs of delivery are high, there were differing opinions as to whether those high costs are warranted," the authors found.
"Some argued that this is an expensive but effective and needed program, which requires extensive on-the-ground support from business development staff who will work directly with sponsor organizations and others in order to be successful."
The federal agency in charge of the program, the Networks of Centres of Excellence, was to review the evaluation results at a March 25 meeting before providing a response, spokesman Andre Isabelle said in an email.
A spokeswoman for Vancouver-based Mitacs, Megan Airton-Cindric, said the group had not yet seen the report and could not comment on the findings.
But she said Mitacs' contract with the federal government sets a limit on overhead costs — a level she did not specify — and the group has stayed below the cap.
"We continue our commitment to staying below contractually mandated overhead rates and to finding efficiencies wherever possible," Airton-Cindric said in an email.