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
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)