[Plsfaculty] FW: HHS OIG recommended Duke refund $1.7 million to Federal Government

[Donna-Rae Marquez]

ON Behalf of the Sponsored Projects Office"

  _____  

Sent: Thursday, February 05, 2009 2:11 PM
Subject: HHS OIG recommended Duke refund $1.7 million to Federal Government

 

Dear colleagues,

 

I want to call your attention to this newly published audit report titled
"Review of Administrative and Clerical Costs at Duke University for the
Period October 1, 2002 through September 30, 2004".

 

You can find the audit report on line at:
http://www.oig.hhs.gov/oas/reports/region4/40501014.pdf

 

This audit was conducted by the Department of Health and Human Services'
Office of Inspector General.  The auditors, after reviewing over 200 charges
for administrative costs, recommended that Duke University refund $1.7
million to the Federal Government.  Duke University disagreed with most of
the findings and the recommendations.  See Duke's response from page 32 to
page 50 of the audit report.

 

To learn what types of administrative costs may be disallowed by the Federal
auditors, read page 17 to page 19 of the audit report carefully.  Here is an
excerpt from the report:

 

"The principal investigator for the "Targeting BETAARK 1 in Heart Failure"
project, for example, stated that he considered clerical salaries ". . .
specific to creating, copying, and assembling the annual progress report . .
." to be allowable. However, he provided no explanation why the production
of an annual report, which is required of almost every sponsored project
awarded to the University, might be interpreted as requiring an "extensive
amount of administrative or clerical support" as required for reimbursement
under section F.6.b.2 of the Circular. 

 

The principal investigator for "Genetic Epidemiology of Alzheimer's Disease
in Twins" also cited ". . . administrative support to assist in report
preparation . . ." and added that support was justified by the need to ". .
. arrange travel and process paperwork for travel expenses for the study
assessment teams who traveled biweekly . . . ." However, the detailed
project budget included only $10,811 of total staff travel costs over the
year, or less than $416 per biweekly period, and neither the University nor
the principal investigator provided any evidence that the effort involved in
arranging that $416 of travel was significantly greater than the routine
level of such services provided by academic departments."

 

The auditors also gave these examples of unallowable costs:

 

"The University charged an NIH-funded project $3,364 for a laptop computer
and asserted that the computer was used solely for project data and allowed
the employee "the opportunity to work from home or wherever she may be
located at anytime of the day." We noted, however, that the involved
employee was budgeted to devote only 5 percent of her University time to the
project charged for her computer. 

 

The University charged an NIH project $193 for a swivel chair. In response
to our request for justification, the University did not address the chair
itself but pointed out that they had requested grant funding for
miscellaneous office supplies. 

 

The University charged an NIH grant $47 for two letter trays. When asked to
explain circumstances related to the expense, the University asserted this
was a major project that required "separate files for patient and site
information in accordance with the scope of work."" 

 

So, the lesson learnt is: we need to budget and justify administrative
salaries and other administrative costs carefully.  What you think allowable
may be disallowed by Federal auditors. 

 

Please refer to our Direct and Indirect Cost Policy at:
http://www.sps.arizona.edu/postaward/directindirectcostpolicy.htm

 

If you have questions or concerns, contact me at 626-6442 or via email at
jingliu at email.arizona.edu .  

 

Thank you,

 

 

Jing Liu, CPA
Manager, Sponsored Projects Quality Assurance
Sponsored Projects Services
The University of Arizona
PO Box 3308
Tucson, AZ 85722-3308
(520) 626-6442
Fax: (520) 626-4137

 

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