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Our objective was to determine whether costs that the University of Massachusetts Medical School (the University) claimed for grant no. 5 R01 GM30626-22 from the National Institutes of Health (NIH) were allowable under the terms of the grant and applicable Federal regulations. We identified $281,993 in costs that did not comply with OMB Circulars A-21 and A-110. Of this total, $193,682 was in unsupported nonlabor costs and related indirect costs, and $88,311 was in overstated labor and related fringe and indirect costs. We recommended that the University: (1) ensure that accounting records are and retained; (2) comply with requirements to provide a timely and detailed explanation and related documentation on transfers; (3) improve its payroll distribution system; (4) ensure that the financial status reports that it submits are accurate and timely and correct its final financial report; (5) improve its payroll distribution system; (6) work with NIH to provide a reasonable adjustment for all improperly recorded grant application activity; (7) identify and notify NIH of unobligated balances exceeding 25 percent of the total award for the prior year; and, (8) refund $281,993 to NIH in overstated and/or unsupported costs. The University generally disagreed with our recommendations.