This is the twelfth in a series of newsletter abstracts of audits to bring you up to date with what is happening in the Federal audit arena. Please note there is considerable lag between when an audit occurred and when the audit report is published.
University of Arizona – March 25, 2008
Audit Agency: NSF-OIG
Title: Audit of Effort Reporting System
Objective: to evaluate whether the University of Arizona’s 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 in accordance with Federal cost principles and NSF grant terms and conditions.
Awards: A statistical sample of 30 of 1,071 employees representing $724,186 out of $12.8 million in salary changes to NSF awards from FY 2007 was selected. However, due to the small sample size, the NSF did not make any projections to the total of Arizona’s population. On the other hand, this is another effort report audit in the series of NSF audits where they believe “the use of statistical tools and methodology will enable projecting audit results to the entire population of universities to be included in the planned reviews of payroll distribution systems nationwide.”
Findings: Arizona departmental administrative officials improperly certified 770 of the 780 effort reports tested, representing 98% of the salary charges and overcharged the NSF $16,584 in salary, fring benefits and overhead by exceeding NSF compensation policies. these findings occurred because sufficient emphasis was not placed on proper effort reporting. Specifically they lacked detailed written guidance, adequate monitoring to ensure compliance with existing policies and procedures, and didn’t ensure sufficient effort reporting training. The auditors noted that Arizona had not had an independent internal review of the effort reporting system since 1992.
Significance of Audit: this is another statistical effort reporting system audit where the NSF is gathering nationwide statistics presumably for the purpose of improving compliance (read more regulations).
Lessons for Emory: At Emory, administrators know that effort reports need to be certified by an official with suitable means of verifying an employee’s effort (preferably the employee themselves). However, we need to ensure those involved in administering NSF awards are aware of the NSF salary limitation on summer salary. In addition, we need to make certain that Emory’s effort reporting policy is comprehensive, visible, and that training is available. If you or a colleague needs training, please see our training page for the next available training opportunity:
http://www.ogca.emory.edu/communication/training/index.cfm