This is the eleventh in a series of newsletter abstracts of audits to bring you up to date with what is happening in the Federal audit arena. Please not there is a considerable lag between when the audit occurred and when the audit report is published.
University of California – Berkeley – March 3, 2008
Audit Agency: NSF-OIG
Title: Audit of Effort Reporting System
Objective: To evaluate whether the University of California – Berkeley’s (UCB) internal controls were adequate to properly manage, account for, monitor and report salary and wage costs on NSF grants and to determine if salary and wage charges were allowable, allocable, and reasonable int accordance with Federal cost principles and NSF grant terms and conditions.
Awards: A statistical sample of 30 of 1,994 employees representing $850,781 out of $26.1 million in salary charges to NSF awards from FY 2006 was selected. due to the small sample size, the NSF did not make any projections to the total UCB population. The auditor did say that “the use of statistical tools and methodology will enable projecting our audit results to the entire population of universities to be included in the planned reviews of payroll distribution systems nationwide.”
Findings: The audit report stated that the effort reporting system did not always ensure that salary and wages charged to NSF awards reasonably reflected actual work performed. The audit found that 8 of the 30 employees tested, 1) did not have appointment letters documenting the institutional base salary, 2) improperly charged employee work activities not directly benefiting NSF grants and/or, 3) did not have a suitable means of verification that the work effort charged was actually performed. In addition, of 56 effort reports reviewed, 44 or 78% were either certified late or had inadequate documentation to determine approval dates. Specifically, 16 reports were only approved by UCB officials after being requested during the audit, 4 reports were incorrectly dated since the certification was prior to the distribution date of the effort report and 8 were missing the approval dates. These weaknesses and findings are proposed to have occurred because UCB had not established adequate internal controls over its effort reporting system and not adequately trained all the staff involved in the effort reporting process. Finally, UCB had not performed an independent internal evaluation of the effort reporting system to ensure the system was effective. As a result, the NSF felt that UCB forfeited an opportunity to identify and address needed improvements.
Significance of Audit: This is another statistical effort reporting system audit where the NSF is gathering nationwide statistics presumably of the purpose of improving compliance (read more regulations) . the NSF is again concerned with lateness of the effort certifications which make it very difficult for the certifier to recall with reasonable certainty what actually occurred. One approach to counter this is to have more frequent effort reporting. the favorable result would be that less time passes between the average activity and the certification. this is one of the reasons Emory recently chose quarterly effort reporting.
Lessons for Emory: Emory needs to ensure that our internal controls and policies are followed and that training is available for those involved with the certification. If you or a colleague needs training, check our web site for the next available training.
