Abstract: Principal-agent relationship is constituted among project entrust organizations, universities and project leaders in the research fund management Taking principal-agent theory as an analytical tool, and applying it to the practical research funding management problems, the goals pursued and information known by project entrust organizations, universities and project leaders respectively are analyzed The three parts’ inconsistent goals and asymmetric information obtained result in the "moral hazard" problem in the use of research funding, which is consistent with the principal-agent theory Based on the theory, suggestion on research funds management is proposed from the perspectives of restriction, incentive and dissuasion

Key words: research funds, principal-agent, moral hazard, incentive