Performance Audit of Incurred Costs – University of Houston

Submitting OIG:

National Science Foundation OIG

Date Issued:

Thursday, July 23, 2020

Agency Reviewed / Investigated:

National Science Foundation

Submitting OIG-Specific Report Number:

20-1-005

External entity, if applicable:

University of Houston

Location(s):

Houston, TX

United States

Type of Report:

Audit

Questioned Costs:

$133,305

Funds for Better Use:

Number of Recommendations:

View Document:

Attachment	Size
20-1-005_University_of_Houston.pdf	1.38 MB

Related Open Recommendations

Recommendation Number	Recommendation Status	Significant Recommendation
Finding 2, Rec. 7	Open	Yes
Direct UH to ensure that it only applies fringe benefits based on eligible employee salary costs, as outlined in its Negotiated Indirect Cost Rate Agreement.
Finding 2, Rec. 8	Open	Yes
Direct UH to establish clear guidance regarding the allowability of publication expenses.
Finding 2, Rec. 9	Open	Yes
Direct UH to establish clear guidance regarding the allowability of participant expenses. This guidance should address: a. When UH is required to request approval to re-budget participant support cost funding, as well as how to request and document the approval. b. When UH may use participant support costs to provide meals or refreshments during a conference and how to segregate and account for unallowable participant support costs, such as costs associated with employee meals, alcohol, and entertainment. c. The type of documentation that departmental personnel must maintain to support the allowability of participant stipend payments.
Finding 3, Rec. 1	Open	Yes
Direct UH to provide documentation that it has repaid or otherwise credited the $19,445 in questioned indirect costs for which it has agreed to reimburse NSF.
Finding 3, Rec. 2	Open	Yes
Direct UH to strengthen its administrative and management procedures for applying indirect costs to Federal awards. Processes could include: a. Implementing an annual review process for costs charged to awards that include funding for participant support and tuition remission to ensure that UH is appropriately segregating participant support costs and tuition remission costs in accounts that UH has excluded from its Modified Total Direct Cost base. b. Requiring that personnel manually review material and supply purchases to evaluate whether UH should account for the items as equipment. Specifically, UH should consider whether the items purchased have a useful life that exceeds 1 year and a value that exceeds $5,000, or if the items are necessary for the use of an asset that meets those criteria.
Finding 4, Rec. 1	Open	Yes
Resolve the $7,650 in questioned inappropriately procured goods and services for which UH has not agreed to reimburse NSF and direct UH to repay or otherwise remove the sustained questioned costs from its NSF awards.
Finding 4, Rec. 2	Open	Yes
Direct UH to provide documentation that it has repaid or otherwise credited the $3,306 of questioned costs that it has agreed to reimburse.
Finding 4, Rec. 3	Open	Yes
Direct UH to strengthen its administrative and management controls and processes for procuring goods and services that it will charge to NSF awards. Processes could include: a. Implementing a control that prevents a vendor from being paid more than $3,000 unless UH has competitive bidding documents and/or a sole-source justification form in place. b. Providing annual training to PIs and other departmental personnel responsible for performing purchasing activities. This training should outline the requirements for competitive bidding processes that buyers must perform before procuring services or equipment. c. Issuing specific guidance regarding whether a “Recommendation for Award” form can be used in lieu of a sole-source justification form.
Finding 5, Rec. 1	Open	Yes
Direct UH to provide documentation that it has repaid or otherwise credited the $9,954 in questioned costs for which it has agreed to reimburse NSF.
Finding 5, Rec. 2	Open	Yes
Direct UH to strengthen its policies and procedures related to the creation and retention of documentation, including introducing additional controls to help ensure that UH maintains the appropriate documentation to support the allowability of expenses charged to sponsored programs.

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Performance Audit of Incurred Costs – University of Houston

Related Open Recommendations

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