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Audit (A-07-11-06013)

The University of Colorado Denver Did Not Always Claim Selected Costs Charged Directly to Department of Health and Human Services Awards in Accordance With Federal Regulations

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Of $42.5 million in costs covered by our review, we estimated that the University of Colorado Denver (the University) charged at least $1.2 million in unallowable salary and nonsalary costs to the Department of Health and Human Services (HHS) grants, contracts, and other agreements (awards) during the period October 1, 2009, through September 30, 2010 (fiscal year (FY) 2010). In addition, the University charged unallowable direct and facilities and administrative costs totaling $185,000 for two awards.

For FY 2010, the University claimed reimbursement for approximately $151.2 million in costs incurred on 971 awards with components of HHS. In addition to its regular funding through grants and contracts, the University was awarded 276 grants totaling $71.5 million in funding provided by the American Recovery and Reinvestment Act of 2009.

In our sample of 100 salary transactions, 82 were allowable, but 18 were not. In our sample of 100 nonsalary transactions, 91 were allowable, but 9 were not. These unallowable transactions occurred because the University's oversight did not ensure that all costs claimed were allowable. Although its finance and accounting procedures often incorporated text from the applicable cost principles, the University largely left it to the discretion of its individual colleges, departments, and principal investigators to interpret the University's policies and procedures for charging costs to Federal awards correctly and to comply with Federal regulations and guidance.

We recommended that the University (1) refund $1.4 million to the Federal Government and (2) exercise more stringent oversight of charges to Federal awards to ensure compliance with Federal regulations. The University disagreed with some of our findings.

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