Audit of KUCR Questions Over $800K in HINU Subaward Expenses

The University of Kansas Center of Research, Inc. (KUCR) is undergoing a 6-month resolution period after the National Science Foundation (NSF) Office of Inspector General (OIG) delivered a final audit report questioning $1,550,054 in direct and indirect costs claimed by KUCR on their Established Program to Stimulate Competitive Research (EPSCoR) funding awards. Out of the total questioned costs KUCR charged to the EPSCoR awards, the audit report identified $888,855 as either unsupported or unallowed expenses in subawards provided to Haskell Indian Nations University (HINU).

In the report, KUCR conceded to remove $14,311 of the questioned HINU subaward expenses. This included removing $11,989 in lodging costs for the Haskell Environmental Research Studies (HERS) Summer Internship Program that claimed an additional week of expenses that did not match the dates interns were being lodged. Additionally, KUCR agreed to remove $382 of indirect costs HINU reported to have been refunded and $1,941 in HINU travel charges that could not be supported.

The remaining $874,544 of questioned expenses were contested by Alicia Reed, Director at KUCR. Auditors reviewing Reed’s responses reported, that for each instance of questioned HINU subaward expenses, the audit findings did not change—$567,155 in contested expenses were still found to be unsupported where HINU did not maintain documentation of actual costs of salaries and fringe expenses and neither KUCR nor HINU could provide cost records for a previously closed award during the required document retention period; $301,520 of contested shared cost expenses were also found to be similarly unsupported; and $5,869 were still found to be unallowed which included unallowed promotional expenses for the HERS program and unallowed participant support costs inappropriately reported as indirect costs.

The Division of Institution and Award Support (DIAS) will oversee the 6-month resolution period. The audit report advises that the DIAS “resolve questioned unsupported subaward costs, and direct KUCR to repay or otherwise remove the sustained questioned costs from its NSF awards”; and “Direct KUCR to provide additional oversight to ensure Haskell is charging its subaward based on actual costs incurred and develops processes and controls to appropriately account for salary and fringe benefit charges”.

Reed said, “The NSF OIG audit is not yet complete, so we cannot speak to any potential program impacts at this time. KU values its partnership with Haskell and does not anticipate any change in that collaboration.” Reed did not comment on whether HINU would be required to repay KUCR any of the amounts removed from the NSF awards.

HINU programs funded by KUCR subawards are currently still ongoing. The HERS Summer Internship Program will begin accepting applications February 3.

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