This is the thirteenth 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 that there is a considerable lag between when an audit occurred and when the audit report is published.
University of Illinois – Urbana – March 27, 2008
Audit Agency: NSF-OIG
Title: Audit of Effort Reporting System
Objective: To evaluate whether the University of Illinois – Urbana (UI-U) 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 2,211 employees representing $799,066 out of $29.5 million in salary charges to NSF awards for FY 2006 was selected. Unlike in other audits, the NSF did not make any projections to Arizona’s total population due to the small sample size.
Findings: There were three findings: First, the report stated that UI-U did not provide 100% of each employee’s work activities to the certifying officials. the NSF felt that seeing all labor charges would give the certifying officials a better idea if the charges were reasonable and equitable relative to total activities. Second, 49 of the 77 effort reports of the selected 30 employees were late by up to 205 days. This represented 61% of the NSF salaries reviewed. The later the review the less likely it is accurate. the third finding was that UI-U had not had an independent internal review of the effort reporting system, which forfeited an opportunity to identify and address any needed improvements.
Significance of Audit: This is another statistical effort reporting system audit by a CPA firm where the NSF is gathering nationwide statistics presumably for the purpose of improving compliance. It is also another audit where the noted a lack of an independent internal review of the effort reporting system.
Lessons for Emory: This is a reminder that NSF and other agencies continue to consider effort reporting to be a high visibility audit area. It is anticipated that at some point NSF will consolidate all of the findings and issue new/updated regulations.