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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Graduate Student Compensation at Selected Universities," (A-01-94-04002)

October 26, 1994

Complete Text of Report is available in PDF format (1.84 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final audit report points out that for the most recently completed fiscal year for which data was available, three of the four universities we reviewed charged federally sponsored research about $5.7 million that we believe constitutes unreasonable compensation to graduate students. In our opinion, the three universities, in light of the unclear guidance provided by Office of Management and Budget (OMB) Circular A-21, used a liberal interpretation of reasonableness which did not meet the "prudent person" requirement for such charges. We recommended that the Assistant Secretary for Management and Budget (ASMB) work with the OMB to provide more specific guidance on the standard of reasonableness for graduate student compensation. The ASMB concurred with our recommendation.