Performance Audit of Incurred Costs –University of North Carolina, Chapel Hill

Submitting OIG:

National Science Foundation OIG

Date Issued:

Monday, July 13, 2020

Agency Reviewed / Investigated:

National Science Foundation

Submitting OIG-Specific Report Number:

20-1-004

External entity, if applicable:

University of North Carolina, Chapel Hill

Location(s):

Chapel Hill, NC

United States

Type of Report:

Audit

Questioned Costs:

$744,671

Funds for Better Use:

Number of Recommendations:

View Document:

Attachment	Size
20-1-004_University_of_North_Carolina.pdf	12.74 MB

Recommendation Number	Recommendation Status	Significant Recommendation
Finding 1, Rec. 1	Open	Yes
Resolve the $136,024 in questioned conference, travel, and AURA service costs and direct UNC to repay or otherwise remove the sustained questioned costs from its NSF awards.
Finding 1, Rec. 2	Open	Yes
Direct UNC to provide support verifying that it has repaid or otherwise credited the $39,389 of questioned equipment, internal service center, salary, and other direct costs for which it has agreed to reimburse NSF.
Finding 1, Rec. 3	Open	Yes
Direct UNC to strengthen its policies and procedures related to the creation and retention of documentation, including introducing additional controls to help ensure that UNC appropriately creates and maintains all documentation necessary to support the allowability of expenses charged to sponsored programs.
Finding 1, Rec. 4	Open	Yes
Direct UNC to strengthen its administrative and management processes and procedures surrounding the approval of travel expense reports. Updated procedures could include: a. Conducting annual training for those individuals responsible for reviewing and approving each department’s expense reports. b. Updating UNC’s travel policies and procedures to specifically identify the level of documentation that travelers must provide to support airfare expenses. c. Establishing clear guidance regarding what types of expenses personnel may pay in cash while conducting on-site fieldwork and how to document those payments.
Finding 1, Rec. 5	Open	Yes
Direct UNC to strengthen its administrative and management processes and procedures surrounding the approval of vendor and service provider invoices. Updated procedures could include: a. Updating UNC’s invoice approval process to require that the approver verify that costs invoiced by the vendor or service provider are consistent with the costs outlined in the vendor/service agreement. b. Requiring organizations that invoice UNC for conference travel expenses to provide original receipts that support the allowability of the travel expenses and/or justifications to support how the organization established the travel stipend award amounts.
Finding 1, Rec. 6	Open	Yes
Direct UNC to strengthen its administrative and management processes and procedures surrounding the internal service center billing process. Updated procedures could include: a. Conducting annual training for those individuals responsible for billing internal service expenses within each center. b. Developing standard billing processes for each center that establish how the center will bill direct material expenses to UNC departments and external users. c. Performing periodic reviews of internal service center invoices to ensure that the centers are billing departments appropriately, using the rate(s) established for each center.
Finding 1, Rec. 7	Open	Yes
Direct UNC to strengthen its administrative and management processes and procedures surrounding the reconciliation and tracking of gift cards or other prepaid cards. Updated procedures could include: a. Establishing a standard document for tracking the disbursement of gift cards. b. Updating its policies and procedures to require that departments maintain gift card disbursement logs to support all gift card expenses claimed on cash advance reconciliations. c. Requiring that employees keep itemized receipts for all expenses paid using prepaid cards.
Finding 2, Rec. 1	Open	Yes
Resolve the $164,313 in questioned subaward costs and direct UNC to repay or otherwise remove the sustained questioned costs from its NSF awards.
Finding 2, Rec. 2	Open	Yes
Direct UNC to strengthen the administrative and management controls and processes over transferring significant parts of federally funded research to other organizations. Processes could include: a. Establishing procedures to require that, before issuing a subaward for NSF-sponsored research, UNC verify that the subaward was specifically approved (a) within the NSF grant budget, or (b) through a formal request to transfer a significant amount of the research or effort submitted and approved through NSF’s FastLane system, before issuing a subaward. b. Requiring periodic training for PIs and other personnel responsible for entering into subaward agreements.
Finding 3, Rec. 1	Open	Yes
Direct UNC to provide support verifying that it has repaid or otherwise credited the $103,250 of questioned unsupported ACM$ cash drawdowns for which it has agreed to reimburse NSF.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

Finding 1, Rec. 1

Open

Yes

Resolve the $136,024 in questioned conference, travel, and AURA service costs and direct UNC to repay or otherwise remove the sustained questioned costs from its NSF awards.

Finding 1, Rec. 2

Open

Yes

Direct UNC to provide support verifying that it has repaid or otherwise credited the $39,389 of questioned equipment, internal service center, salary, and other direct costs for which it has agreed to reimburse NSF.