Costs claimed for Temple University's Laboratory for Student Success, contract number RJ96006201, for the period December 11, 1995, through December 16, 2000.

Published by the Department of Education, Office of Inspector General on 2002-10-25.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                  U.S. DEPARTMENT OF EDUCATION
                                                THE WANAMAKER BUILDING 

                                            100 PENN SQUARE EAST. SUITE 502 

                                                  PHILADELPHIA, PA 19107 


     Dr. JoAnn Manning, Executive Director
     Temple University
     Mid-Atlantic Regional Education
      Laboratory for Student Success 

     1301 Cecil B. Moore Avenue 

     933 Ritter Annex
     Philadelphia, P A 19122-6091

     Dear Dr. Manning:

     This Final Audit Report (Control Number ED-OIG/A03-C0001) presents the results of
     our contract closeout audit of costs claimed for Temple University's (TU) Laboratory for
     Student Success (LSS), contract number RJ9GOOG201, for the period December 11, 1995,
     through December 16, 2000.

     A draft ofthis report was provided to TU. In its response, TU acknowledged receipt of
     the report and stated that it is working on resolving the discrepancy. TU's response is
     included as an attachment to the report.

                                                  AUDIT RESULTS

     We concluded that TU billed the U. S. Department of Education (ED) for costs claimed
     that were reasonable, allowable, and adequately supported. However, we found a
     discrepancy between TU's and ED's contract payment records as detailed below.

           Finding No.1 - TU's and ED's Contract Payment Records Do Not Agree

     TU's records show that it is owed $3,609,124, while ED's records show that TU was
     overpaid $1,637,082. During the contract period, TU's records show that it expended
     $25,649,186 and was paid $22,040,063 to date. In contrast, ED's records show that TU
     was paid $27,286,268.

     In early 1998, TU switched from the automated Monthly Electronic Expenditure
     Reporting System method of payment made through ED's Payment Management System
     (EDPMS) to the Advanced Payment System made through ED's Education Central
     Automated Processing System (EDCAPS), Contract Purchasing Support System. Due to
     ED's method of allocating cash on hand to contracts during the payment system

       ·Our Mission is to Ensure Equal Access to Education and to Promote Educational Excellence Throughout the Nation"
conversion to EDCAPS, TU's and ED's contract payment records do not agree. Table I
below summarizes the discrepancy between ED's and TU's payment records.

Table l. Comparison of ED and TV Payment Records
 .•. . < .. ... ... ..... ......• ................. .... . ". 
 . ..... .'EJjRe~Qrqs. ........... 
   tURe:C:~tds  ··.·.T· . .
    Actual Contract Expenditures                                                               NA              $25,649,186
    Amount Billed\Paid from 4/96­
    4/98 (according to EDPMS)                                                     $10,449,680                   $5,203,475
    Amount Billed\Paid from 5/98­
    3/01 (according to EDCAPS)                                                    $16,836,588                  $16,836,588
    Total                                                                         $27,286,268                  $22,040,063
    Amount due to TU l                                                                    NA                    $3,609,123
    Amount Overpaid by ED2                                                         $1,637,082                          NA

We determined the amount paid under EDCAPS (1998-2001) to be correct, but we could
not reconcile the amount paid under EDPMS (1996-1998). The invoices maintained by
ED's Office of the Chief Financial Officer, Contracts and Purchasing Operations for the
1996-1998 period show that TV billed ED $5,203,475. As shown in Table T, TU's
records also show that it was paid this amount for the period.

ED has not paid the final contract payment to TU. A reconciliation of the usage of
Federal cash 011 hand as of April 24, 1998, needs to be performed in order to determine
the correct amount ofEDPMS cash on hand chargeable to the contract. The
reconciliation should include all contract awards made in EDCAPS becausc any
adjustment to the amount charged to the contract would have required an offsetting
adjustment to another contract award. A failure to reconcile the contract payment records
before the final invoice is paid could result in an overpayment of funds to TU


1.1 	       We recommend that the Office of the Chief Financial Officer work with TU to
            perform a reconciliation of the usage of Federal cash on hand as of April 24, 1998
            to determine if TU was overpaid.

TU's Response

TU stated that the Grant Accounting Office is working collectively with ED to resolve the
discrepancy between TU and ED contract payment records.


The Regional Education Laboratories (RELs) are authorized by Section 941 (h) of Part D
of the Educational Research, Development, Dissemination, and Improvement Act of
1994. The RELs suppOli development and applied research that directly contributes to

IThis amount equals TV expenditures totaling $25,649,186 minus payments to TV totaling $22,040,063.
2This amount equals payments made to TV totaling $27,286,268 minus TV expenditures totaling

successful, broad-based school reform. The RELs' primary function is to carry out
development, applied research, dissemination and technical assistance activities. Each
REL contract is awarded for a five-year period.

TU's LSS is one of ten RELs administered by the Office of Educational Research and
Improvement and funded through ED. The primary goal of the LSS is to strengthen the
capacity ofthe mid-Atlantic region (which serves Delaware, Maryland, New Jersey,
Pennsylvania, and Washington D.C.) to enact and sustain lasting systemic educational
reform for grade levels K-12 through collaborative programs of applied research and
development and services to the field. There is a focus on four key issues that are specific
to the mid-Atlantic region:

    1) Improving teacher quality.
    2) Building and sustaining comprehensive school improvement.
    :)) Developing school-family-community connections.
    4) Integrating technology as a catalyst for high-performing learning communities.

TU's total contract award was $29,359,691. TU expended $25,649,186 to carryout the
contract during the five-year contract period.

                           AUDIT OBJECTIVE, SCOPE, AND METHODOLOGY

Our audit objective was to detern1ine whether costs claimed to ED, during the period
December 11, 1995, through December 16,2000, were reasonable, allowable, and
adequately supported.

To accomplish our audit objective, we interviewed officials from LSS, TU, and ED. We
reviewed ED's administrative and program contract files, federal laws, regulations, and
other contract related guidance. In addition, we reviewed the LSS' administrative and
accounting policies and procedures, and single audit reports.

We reviewed a sample of 80 randomly selected expenditures, as shown in Table II below.
We traced the expenditures to source documents, verified that appropriate documentation
was maintained, and appropriate approvals were obtained.

   Table II. Sample Selections

             Payroll              9,515         $8,170,341             35              $24,268
          Non-Payroll             18.213       $lO,167,290             35              $30,686
     Expenditures over $50K         19          $1,587,702             10              $843,716
             Totals               27,747       $19,925,333 3           80              $898,670

3 We excluded fringe benefit ($1,889,154) and overhead ($1,422,936) expenditures from the expenditure
population. Additionally, we did not include expenditure adjustments ($2,411,763) processed after
December 2000.

To achieve our audit objective, we relied in part on computer-processed data contained in
TUs accounting system. We assessed the reliability of this data, including the relevant
general controls, and found them to be adequate. We tested the accuracy, authenticity,
and completeness of the data by comparing source records to computer data and computer
data to source records. Based upon these tests and assessments, we believe the data used
to be sufficiently reliable for the purpose of our audit.

We conducted our survey fieldwork at Temple University in Philadelphia, Pennsylvania,
from December 3, 2001, through April 18, 2002. An exit conference was held on April
18,2002. We held a subsequent conversation with TU officials on August 27,2002. Vle
conducted our audit in accordance with government auditing standards appropriate to the
scope of the audit work described above.


As a part of our review, we assessed the system of management controls, policies,
procedures, and practices applicable to the costs claimed for the contract. Our assessment
was performed to detemline the level of control risk fur determining the nature, extent,
and timing of our substantive tests to accomplish the audit objective.

For the purpose of this audit, we assessed and classified the significant controls into the
following categories:

   •   Disbursements;
   •   Cost Sharing;
   •   Time and Effort Reporting;
   •   Procurement; and
   •   Records Management.

Because of inherent limitations, a study and evaluation made for the limited purpose
described above would not necessarily disclose all material weaknesses in the
management controls. We do not consider the contract payment discrepancy described in
the Audit Results section of this report to be a significant management control weakness
for TU.

                               ADMINISTRATTVR M ATTRRS

If you have any additional comments or information that you believe may have a bearing
on the resolution of this audit, you should send them directly to the following Department
of Education official, who will consider them before taking final Departmental action on
the audit.

               Philip Maestri, Director, Financial Improvement &
                Post Audit Operations
               U.S. Department of Education 

               Office of the Chief Financial Officer 

               400 Maryland Avenue, SW, Room 4C135 

               Washington, DC 20202 

Office of Management and Budget Circular A-50 directs Federal agencies to expedite the
resolution of audits by initiating timely action on the findings and recommendations
contained therein. Therefore, receipt of your comments within 30 days would be greatly

Statements that managerial practices need improvements, as well as other conclusions
and recommendations in this report represent the opinions of the Office of lnspector
General. Determinations of corrective action to be taken will be made by the appropriate
Department of Education officials.

In accordance with the Freedom ofInformation Act (5 U.S.c. § 552), reports issued by
the Office of Inspector General are available, if requested; to members of the press and
general public to the extent information contained therein is not subject to exemptions in
the Act.

If you have any questions, or wish to discuss the contents of this report, please contact
Teri L. Lewis, Assistant Regional Inspector General for Audit, or me at 215-656-6900.
Please refer to the control number in all correspondence related to the report.


                                      Bernard E. Tadle~ 

                                      Regional Inspector General for Audit 

Electronic cc: 	 Glenn Perry, Director, Contracts and Purchasing Operations, OC1<'O 

                 Richard Mueller, Supervisor, Indirect Cost Group, OCFO 

                 Carol Chelemer, Director, State and Local Support Division, OERI