1. Fiscal Compliance Corner Recent Happenings, etc. MRAM May 2015 Ted Mordhorst Director for Post Award Financial Compliance Research Accounting & Analysis

2. Audit News NSF Audits University of Florida Total findings: $992,462 Univ of Wisconsin Total Findings $1,669,588

3. NSF Data Analytics Audit  UF findings:  $867K related to 2 month salary limit  $48K related to travel costs  $33K lack of supporting documentation  $27K in unreasonable equipment  $7K meal & associated costs

4. NSF Data Analytics Audit  Wisconsin findings:  $1,276,668 of salary costs for senior personnel that exceeded NSF’s two-month maximum for salary allocation  $192,707 of unreasonably allocated leave accrual payouts  $70,189 of inappropriately allocated equipment expenses

5. NSF Data Analytics Audit  Wisconsin findings:  $56,965 of expenses incurred after the NSF award period had expired  $35,592 of unreasonable consulting expenses  $30,107 of unallowable relocation expenses  $7,360 of unreasonable travel expenses

6. NSF Data Analytics Audit  Auditor Recommendations:  Strengthen the administrative and management controls and processes  Implement university-wide procedures to ensure that all departments are monitoring the allocation of costs charged to NSF awards

7. NSF Data Analytics Audit  Auditor Recommendations:  Strengthen controls and processes over allocating expenses for equipment and supplies to sponsored funding sources.  Require documentation of the methodology used to allocate expenses to sponsored projects, as well as a justification for how the methodology was determined.

8. NSF Data Analytics Audit  Auditor Recommendations:  Strengthen controls and processes over allocating expenses for equipment and supplies to sponsored funding sources.  Require documentation of the methodology used to allocate expenses to sponsored projects, as well as a justification for how the methodology was determined.

9. NSF Data Analytics Audit  Auditor Recommendations:  Strengthen the administrative and management controls and processes over charging expenses to federal grants near or after the grant’s expiration date  Ensuring that all payments made to consultants are supported by an academic services support agreement that is signed before the services are provided.

10. NSF Data Analytics Audit  Both institutions disagreed with the findings related to the 2 month salary limit.  Auditors did not remove the findings

11. Audit News NIH Audit University of North Carolina Total findings: $352,843

12. NIH UNC Audit  Related to Cost Transfers Transfers occurred 10 months after the initial transaction Documentation did not provide sufficient information to determine a direct benefit to the project

13. NIH UNC Audit  Related to Cost Transfers Documentation did not provide an explanation for the allocation method for partial transfer Documentation did not explain why it took 10 months for the transfer to be processed.

14. NIH UNC Audit  Reason for disallowances  Costs were not Reasonable  Costs were not treated consistently

15. NIH UNC Audit  Reason for disallowances  Department did not follow institutional policy  Lack of adequate review of expenditures

16. Final thought  Audits are increasingly looking at factors related to internal controls  Expense documentation must demonstrate reasonableness, necessary and allocability  Expenses during the last 90 days of the award are most often questioned

17. Final thought  Both in the UG and in the audit there is an increased emphasis on “necessary”, “essential” and “integral” to define when a cost is allowable.  It behooves us to think in these terms when processing transactions

18. TRAINING  On May 18 Training on Cost Transfers  http://www.washington.edu/research/learning http://www.washington.edu/research/learning  Classes are only 1 hour each (short! sweet!)  Future trainings in development  Direct Charging of Admin/Clerical salaries and other normally F&A costs  Principals for cost Allocation

19. QUESTIONS?