oversight

The University of Illinois at Urbana-Champaign's Compliance with the TRIO Programs' Fiscal Requirements.

Published by the Department of Education, Office of Inspector General on 2006-07-18.

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

                      UNITED STATES DEPARTMENT OF EDUCATION
                                     OFFICE OF INSPECTOR GENERAL
                                              Chicago/Kansas City Audit Region

                      111 N. Canal St. Ste. 940                            8930 Ward Parkway, Ste 2401
                      Chicago, IL 60606-7297                               Kansas City, MO 64114-3302
                      Phone (312) 886-6503                                 Phone (816) 268-0500
                      Fax (312) 353-0244                                   Fax (816) 823-1398

                                                        July 18, 2006

                                                                                Control Number ED-OIG/A05G0013

Dr. Richard Herman
Chancellor
University of Illinois at Urbana-Champaign
Swanlund Administration Building
601 E. John Street
Champaign, Illinois 61820

Dear Dr. Herman:

This Final Audit Report, entitled The University 0/ Illinois at Urbana-Champaign's 

Compliance with the TRIO Programs' Fiscal Requirements, presents the results of our audit. 

The objectives of our audit were to determine whether the University of Illinois at Urbana­

Champaign (UIUC) (1) properly accounted for its use of TRIO program funds and (2) claimed 

only expenses that were allowable and adequately documented. UIUC received funding for three 

TRIO programs during the period June 1,2003, through September 30, 2005: Upward Bound 

(UB), Student Support Services (SSS), and the Ronald E. McNair Postbaccalaureate 

Achievement Program (McNair). Our audit covered UB from June 1,2003, through May 31, 

2005; SSS from September 1,2003, through August 31,2005; and McNair from October 1, 

2003, through September 30, 2005. 





                                                AUDIT RESULTS 



UIUC (1) properly accounted for its use of TRIO program funds and (2) generally claimed only
expenses that were allowable and adequately documented. We reviewed supporting
documentation for 897 transactions with an absolute value of approximately $271,000 from a
universe of 3,757 transactions with an absolute value of approximately $2.4 million. UIUC
charged the TRIO programs for 7 expenses totaling $5,897 that were unallowable pursuant to
Office of Management and Budget (OMB) Circular A-21, Attachment, Principles/or
Determining Costs Applicable to Grants, Contracts, and other Agreements with Educational
Institutions (Circular A-21), C.2. When we brought these 7 expenses to UIUC's attention, UIUC
reversed the charges. Therefore, we are not recommending any corrective actions.




         Our mission is to promote the efficiency, effectiveness, and integrity ofthe Department's programs and operations.
Final Audit Report                                                                         Page 2 of5
ED-OIG/A05G0013




                                       BACKGROUND 



The UB program is designed to generate skills and motivation necessary for success in education
beyond secondary school. This program serves high school students from low-income families;
high school students from families in which neither parent holds a bachelor's degree; and low­
income, first-generation military veterans who are preparing to enter postsecondary education.
This program is governed by the Higher Education Act of 1965, as amended (HEA), § 402C, and
34 C.F.R. Parts 74, 75, and 645. UIUC was awarded $785,418 in UB funds for the period June
1,2003, through May 31, 2005.

The SSS program is designed to increase college retention and graduation rates for eligible
students, increase the transfer rates of eligible students from two-year to four-year institutions,
and foster an institutional climate supportive of the success oflow-income and first generation
college students and individuals with disabilities. This program provides opportunities for
academic development, assists students with basic college requirements, and serves to motivate
students towards the successful completion of their postsecondary education. This program is
governed by the HEA, § 402D, and 34 C.F.R. Parts 74, 75, and 646. UIUC was awarded
$526,358 in SSS funds for the period September 1,2003, through August 31, 2005.

McNair is designed to provide college students from disadvantaged backgrounds, and who have
demonstrated strong academic potential, with effective preparation for doctoral study. Grants are
awarded to institutions of higher education for projects designed to prepare participants for
doctoral studies through involvement in research and other scholarly activities. Institutions work
closely with these participants through their undergraduate requirements, encourage their
entrance into graduate programs, and track their progress to successful completion of advanced
degrees. This program is governed by the HEA, § 402E, and 34 C.F.R. Parts 74, 75, and 647.
UIUC was awarded $534,252 in McNair funds for the period October 1,2003, through
September 30, 2005.

In addition to complying with the requirements set forth in the HEA and regulations, UIUC is
required to adhere to OMB Circular A-2l and OMB Circular A-II 0, Uniform Administrative
Requirements for Grants and Agreements with Institutions ofHigher Education, Hospitals, and
Other Non-Profit Organizations. OMB Circular A-2l provides principles for determining the
costs applicable to research and development, training, and other sponsored work performed by
colleges and universities under grants, contracts, and other agreements with the federal
government. The application of these cost accounting principles should require no significant
changes in the generally accepted accounting practices of colleges and universities. However,
the accounting practices of individual colleges and universities must support the accumulation of
costs as required by the principles and must provide for adequate documentation to support costs
charged to sponsored agreements. These principles shall be used in determining the allowable
costs of work performed by colleges and universities under sponsored agreements.
Final Audit Report                                                                                         Page 3 of5
ED-OIG/A05GOO 13




                     OBJECTIVES, SCOPE, AND METHODOLOGY 



The objectives of our audit were to detennine whether VIVC (1) properly accounted for its use
of TRIO program funds and (2) claimed only expenses that were allowable and adequately
documented. VIVC received funding for three TRIO programs during the period June 1, 2003,
through September 30, 2005: VB, SSS, and McNair. Our audit covered VB from June 1,2003,
through May 31,2005; SSS from September 1,2003, through August 31, 2005; and McNair
from October 1,2003, through September 30, 2005.

To achieve our objectives, we

    1. 	 Interviewed VIVC TRIO and Grants and Contracts Office officials;
    2. 	 Reviewed the annual perfonnance reports for all three programs for the audit period;
    3. 	 Reviewed the Single Audit Act reports for VIVC prepared by an independent public
         accountant for the years ended June 30, 2003, and June 30, 2004;
    4. 	 Reviewed written policies and procedures to obtain an understanding of the processes
         VIVC used to provide reasonable assurance of compliance with the TRIO programs'
         fiscal requirements;
    5. 	 Conducted a physical inventory of equipment and high-dollar value goods for VB, SSS,
         and McNair;
    6. 	 Reviewed supporting documentation such as purchase orders, invoices, receipts, and
         canceled checks for a random sample of non-personnel transactions for VB, SSS, and
         McN air; 1 and
    7. 	 Reviewed documentation such as payroll certifications, time sheets, and appointment
         letters supporting personnel transactions for VB, SSS, and McNair for four judgmentally2
         selected months: October 2003, February 2004, July 2004, and April 2005. 3

We also relied, in part, on computer-processed data recorded in VIVC's Banner system. VIVC
used Banner to record accounting transactions related to the TRIO programs. To assess the
reliability of the data, we reviewed accounting records for the period June 1,2003, through
September 30, 2005, and applied logic tests to 100 percent of the accounting transactions for
each program's audit period. We tested for missing data, the relationship of one data element to
another, values outside of a designated range, and dates outside valid time frames or in an
illogical progression. Based on these tests, we concluded that the computer-processed
accounting data VIVC provided was sufficiently reliable for the purposes of our audit.




1 See Attachment for the sizes of the universes, sample sizes, and the absolute values of the universes and samples. 

2 Because each program has a different fiscal year, we ensured that all four months selected would include the three 

programs. Further, VIVe did not always charge payroll directly to the programs each month, so we wanted to 

capture at least one payroll transaction for each program. Selecting these four months provided sufficient coverage 

to test personnel transactions for compliance. 

3 See Attachment for the sizes of the universes, sample sizes, and the absolute values of the universes and samples. 

Final Audit Report                                                                      Page 4 of5
ED-OIG/A05G0013


We conducted our fieldwork from December 2005 through June 2006, at UIUC's offices in
Champaign, Illinois, and at our offices in Chicago, Illinois, and Kansas City, Missouri. We
discussed the results of our audit with UIUC officials on June 14,2006. We performed our work
in accordance with generally accepted government auditing standards appropriate to the scope of
our audit.




                            ADMINISTRATIVE MATTERS 



This report does not include any recommendations that require corrective action. No response to
this report is required.

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

We wish to express appreciation for the cooperation and assistance extended by your staff during
the audit. If you have any questions, please contact Anj ali Shah, at (312) 886-6503, or Lisa
Robinson, at (816) 268-0500.




                                             Regional Inspector General
                                             for Audit
Final Audit Report                                                                        Page 5 of5
ED-DIG/A05GOO 13




                                                Attachment


                                   Universe and Sample Sizes
I
                                    Size of Absolute Value Size of
                                            I                              Absolute Value
      What We Tested               Universe   of Universe    Sample          of Sample
  Student Support Services ­
  Personnel Expenses                 434         $871,759.37         37      $24,759.10
  Student Support Services ­
  Non-Personnel Expenses             173          $42,138.04         37      $15,259.73 

  McNair-

                                                                                              I
  Personnel Expenses                 71          $107,856.78          4      $4,245.36
  McNair
                                                                                              I
! Non-Personnel Expenses             372         $341,644.03         77      $66,340.25
  Upward Bound ­               I

  Personnel Expenses                1,132        $689,388.45         426    $109,815.90       I
  Upward Bound ­
! Non-Personnel Expenses            1,575         $342,700.55        316    $50,292.61        I
                                                                 I

. Totals                            3,757        $2,395,487.22       897    $270,712.95