oversight

Creighton University's Administration of Its Federal TRIO Projects.

Published by the Department of Education, Office of Inspector General on 2000-03-31.

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

           Audit of Creighton University’s Administration
                    of Its Federal TRIO Projects


                                 FINAL AUDIT REPORT
                                                 .




                                          ED-OIG/A07-80027
                                             March 2000




Our mission is to promote the efficient              U.S. Department of Education
and effective use of taxpayer dollars                                 Office of Inspector General
in support of American education.                              Western Area - Kansas City Office
                              NOTICE
 Statements that management practices need improvement, as well as other
conclusions and recommendations in this report represent the opinions of the
 Office of Inspector General. Determination of corrective action to be taken
     will be made by the appropriate Department of Education officials.

In accordance with the Freedom of Information 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.
                 Audit of Creighton University’s Administration
                          of Its Federal TRIO Projects

                                  Table of Contents

Executive Summary …………………………………………………………………………………….1

Audit Results ……………………………………………………………………………………………3

     Finding No. 1 – Creighton Could Not Support Services to TRIO Participants ……………….… 3

     Finding No. 2 – Changes in Project Scope Were Not Reported to the Department ……………. 14

     Finding No. 3 – Improvements in Management Controls Are Needed ………………………… 18

Background ……………………………………………………………………………………………..22

Audit Scope and Methodology …………………………………………………………………………23

Statement on Management Controls ……………………………………………………………………25

Exhibit 1 – Definition of Eligible Services By Program ……………………………………….……... 26

Exhibit 2 – Schedule of Upward Bound and Upward Bound Math and Science Reductions to
            Grant Award Amounts and Amounts to Be Refunded by Creighton University ………... 27

Appendix A – Creighton University Response to Preliminary Audit Results ………………….…….. 28

Appendix B – Creighton University Response to Draft Audit Report… ……………………….….…. 29




                                        ED-OIG/A07-80027
                 Audit of Creighton University’s Administration
                          of Its Federal TRIO Projects

                                    Executive Summary


We found that Creighton University did not always administer its Federal TRIO projects in
accordance with Federal regulations. Specifically, Creighton University failed to assure that it:

•   could support that services were rendered to the number of participants reported to the
    Department of Education as served by its Upward Bound, Upward Bound Math and Science,
    and Talent Search projects;

•   filled, or filled timely, key positions in the administration of its TRIO projects in accordance
    with Federal regulations;

•   obtained U.S. Department of Education approval before making changes in project scope,
    objectives, and key personnel; and

•   adhered to management controls in the areas of accounting for travel expenses, reconciling
    budgets to actual expenditures, documenting student citizenship, and inventory controls.

Creighton University was not able to provide documentation of services to the number of
participants it was funded to serve in its Upward Bound and Upward Bound Math and Science
projects during the 1996-97 and 1997-98 budget years, nor was it able to support the numbers of
participants it reported to the U.S. Department of Education for those years. We recommend that
the Assistant Secretary for Postsecondary Education reduce the 1996-97 and 1997-98 Upward
Bound funds and 1996-97 Upward Bound Math and Science funds awarded to Creighton
University by amounts that are proportionate to the numbers of participants for whom the
University was funded but could not document having provided required services. The
University should also be required to refund $69,381, which is the amount of grant funds
received in excess of the revised award amounts. (See Exhibit 2.)

Based on our analysis of randomly selected samples of participant files, Creighton University
was not able to support that appropriate services were provided to 680 of the 850 individuals its
Talent Search project was funded to serve in the 1996-97 budget year and 530 of the 850
individuals the project was funded to serve in the 1997-98 budget year. Creighton University’s
administration of the Talent Search project was so deficient that recovery of the entire amount of


ED-OIG                                      A07-80027                                     Page 1
1996-97 and 1997-98 Talent Search grant funds received by Creighton University ($303,018 as
of February 10, 2000) is appropriate.

In addition, to ensure that Creighton University complies with Federal regulations and to
improve the administration of its current and future TRIO projects, we recommend that the
Assistant Secretary for Postsecondary Education require Creighton University to:

1. Develop and follow specific written policies and procedures for the administration of its
   TRIO projects, including policies and procedures to ensure that:

       •   An individual’s participation in a project during the summer and academic year are
           properly documented.
       •   Reports to the U.S. Department of Education are supported by documentation
           maintained by Creighton University.
       •   Only those students who continue their participation for the minimum time required
           by Federal regulation are counted as participants.

2. Obtain approval from the U.S. Department of Education before undertaking any of the
   following actions with regard to its TRIO projects:

       •   Extending the project period of a grant beyond the project period end date specified in
           the most recent revision of the Grant Award Notification.
       •   Carrying forward grant funds that the grantee has not obligated in a budget period.
       •   Making cumulative transfers among direct-cost budget categories that exceed 10
           percent of the approved budget for an award period.

3. Improve its management controls to ensure that its TRIO personnel:

       •   Follow institutional travel policies and procedures.
       •   Reconcile actual expenditures and revenues to the project budgets on a monthly basis.
       •   Properly document all eligibility elements to ensure that students participating in the
           TRIO projects meet all Federal requirements.
       •   Follow institutional policies and procedures for safeguarding equipment purchased
           with Federal funds.

We further recommend that the Assistant Secretary for Postsecondary Education monitor
Creighton University’s adherence to the requirement that it obtain Department of Education
approval before making changes to the scope, objectives, or key personnel of its TRIO projects.

Creighton University officials did not agree with all of our findings and recommendations. The
full text of Creighton’s response is provided as Appendix B.


ED-OIG                                     A07-80027                                    Page 2
                                            Audit Results


We found that Creighton University did not always administer its Federal TRIO projects in
accordance with Federal regulations found in Title 34 Code of Federal Regulations (CFR).1
Creighton University failed to assure that it: (1) could support that services were rendered to the
number of participants reported to the U.S. Department of Education (Department) as served by
its Upward Bound, Upward Bound Math and Science, and Talent Search projects; (2) filled, or
filled timely, key positions in the administration of its TRIO projects in accordance with Federal
regulations; (3) obtained Department approval before making changes in project scope,
objectives, and key personnel; and (4) adhered to management controls in the areas of
accounting for travel expenses, reconciling budgets to actual expenditures, documenting student
citizenship, and inventory controls.




Finding No. 1 – Creighton Could Not Support Services to TRIO Participants


Creighton University could not support that services were provided to the number of participants
it reported to the Department for the Upward Bound, Upward Bound Math and Science, and
Talent Search projects for the 1996-97 and 1997-98 budget years. Our analysis of a randomly
selected sample of student files indicated that Creighton University did not document that it had
served the number of students reported to the Department and the number of participants for
which the projects had been funded. We recommend that the Assistant Secretary for
Postsecondary Education reduce the 1996-97 and 1997-98 Upward Bound funds and 1996-97
Upward Bound Math and Science funds awarded to Creighton University by amounts that are
proportionate to the numbers of participants for whom the University was funded but could not
document having provided required services and the entire amount of the funds awarded for the
Talent Search projects for budget years 1996-97 and 1997-98.




1
 The regulations applicable to the various TRIO programs are: 34 CFR §642 - Training Program for Federal TRIO
Programs; 34 CFR §643 - Talent Search; 34 CFR §645 - Upward Bound and Upward Bound Math and Science; and
34 CFR §646 - Student Support Services.


ED-OIG                                          A07-80027                                          Page 3
TRIO Regulations

Student Eligibility: For an individual to be eligible to participate in TRIO projects, he or she
must meet citizenship or residency requirements. For Upward Bound and Upward Bound Math
and Science projects, the individual must also be: (1) a potential first-generation college student
or a low-income individual; (2) have a need for academic support in order to pursue successfully
a program of education beyond high school; and (3) at the time of initial selection, have
completed the eighth grade but not entered the twelfth grade and be at least 13 years old but not
older than 19. Individuals participating in a Talent Search project must have completed five
years of elementary education or be at least 11 years of age but not more than 27 years of age.

Number of Students to be Served: According to program regulations, an Upward Bound
project must serve at least 50 participants. However, Creighton’s approved grant application for
Upward Bound funding for the years covered by our audit committed the University to serve 75
students during each of the funding years, beginning July 1. An Upward Bound Math and
Science project must serve at least 50 participants. However, Creighton’s application, which was
approved by the Department, stated that Creighton officials would identify and select 40 high
school students by July 30 of each year. A Talent Search project must serve a minimum of 600
students per year. Creighton’s approved Talent Search grant application for budget periods 1997
and 1998 stated that Creighton officials would serve 850 students annually.

Participation Requirements: To participate in a TRIO project, a student must meet the
eligibility requirements specified above and meet the definition of a “participant.” In addition, in
Upward Bound and Upward Bound Math and Science projects, students must be “… determined
by the project director to be committed to the project, as evidenced by being allowed to continue
in the project for at least—(i) Ten days in a summer component if the individual first enrolled in
an Upward Bound project’s summer component; or (ii) Sixty days if the individual first enrolled
in an Upward Bound project’s academic year component.” To be identified as a participant in a
Talent Search project, an individual must receive “… project services designed for his or her age
or grade level.” TRIO program officials interpret this Talent Search requirement to mean that to
be counted as a participant a student must receive service at least twice in an award year.

Documentation Requirements: Program regulations require that student participation be
documented. Under Title 34 CFR Sections 643.32(c) (Talent Search) and 645.43(c) (Upward
Bound and Upward Bound Math and Science), a grantee institution shall maintain records on
each student participant that includes, among other things, documentation of the services
provided to the student. According to TRIO program officials, examples of documentation to



ED-OIG                                      A07-80027                                     Page 4
support that services were provided to program participants include attendance records,
counseling notes, field trip records, participant progress reports, and client contact forms.



Results of Sample Reviews

Talent Search Program: For budget year 1996-97, we randomly selected 40 of 850 students on
a participant list for that year that was provided to us by Creighton officials. For budget year
1997-98, we selected 40 of 853 students on the participant list provided by Creighton. Our
analysis of the files for these students indicated that most did not contain documentation to
support participation in the project. The results are summarized below.

•      Talent Search 1996-97: Only eight of the 40 student files we sampled contained
       documentation of services received sufficient to meet the definition of a participant (i.e.,
       receiving service at least twice during the award period). Based on the sample results, we
       estimate that Creighton only had documentation supporting the participation of 170
       students in the project. Thus, Creighton’s records do not support either the number of
       participants that it was required to serve by regulation (600) or the number of participants
       that it reported to the Department as served (850).

•      Talent Search 1997-98: Only 15 of the 40 student files we sampled contained
       documentation of services received sufficient to meet the definition of a participant.
       Based on the sample results, we estimate that Creighton only had documentation
       supporting the participation of 320 students in the project. Thus, Creighton’s records do
       not support either the number of participants that it was required to serve by regulation
       (600) or the number of participants that it reported to the Department as being served
       (850).

Based on our review, we concluded that Creighton could not support that it provided services to
the number of students it was required to serve for the 1996-97 and 1997-98 budget periods.
TRIO Program officials informed us that, had Creighton reported the actual number of students
that it could support as served, it could have jeopardized its continued funding. Creighton
University records showed that, as of February 10, 2000, it had received $119,759 of the
$201,329 it was awarded for the 1996-97 budget period and $183,259 of the $209,382 it was
awarded for the 1997-98 budget period. Because the University’s documentation of services
provided to participants in the Talent Search project was so deficient, we believe recovery of all
grant funds received is appropriate.



ED-OIG                                     A07-80027                                     Page 5
Upward Bound Program: For budget year 1996-97, we randomly selected 30 of 75 students on
the 1996-97 participant list that was provided to us by Creighton officials. For budget year
1997-98, we randomly selected 30 students from the participant list of 93 provided by Creighton.
The results of this review are summarized below.

•      Upward Bound 1996-97: Twenty-two of the 30 student files we sampled contained
       documentation of participation in either the summer or academic year sufficient to meet
       the definition of a participant. Based on these results, we estimate that 55 of the total 75
       students listed for 1996-97 had documentation supporting their participation in the
       project. Although most of the files contained documentation to support student
       participation in the project, our analysis indicates that Creighton’s records do not support
       either the number of participants that it was funded to serve (75) or the number of
       participants that it reported to the Department as served (81). For the 1996-97 budget
       period, the number of participants documented as served was 20 (27 percent) below the
       75 participants approved and funded by the Department.

•      Upward Bound 1997-98: Nineteen of the 30 student files we sampled contained
       documentation of participation in either the summer or academic year sufficient to meet
       the definition of a participant. Based on these results, we estimate that 59 of the total 93
       students listed for 1997-98 had documentation supporting their participation in the
       project. Although most of the files contained documentation to support student
       participation in the project, our analysis indicates that Creighton’s records do not support
       either the number of participants that it was required to serve (75) or the number of
       participants that it reported to the Department as served (76). For the 1997-98 budget
       period, the number of participants documented as served was 16 (21 percent) below the
       75 participants approved and funded by the Department.

Based on our review, we concluded that Creighton could not support that it provided services to
the number of students it was funded to serve or the number of participants that it reported to the
Department as served for the 1996-97 and 1997-98 budget periods. TRIO Program officials
informed us that, had Creighton reported the actual number of students that it could support as
served, it could have affected future funding. Creighton University records showed that, as of
February 10, 2000, it had received $299,547 of the $350,429 it was awarded for the 1996-97
budget period and $313,513 of the $364,446 it was awarded for the 1997-98 budget period. As
discussed in the Recommendations section of this report, the Assistant Secretary for
Postsecondary Education should reduce the 1996-97 and 1997-98 Upward Bound grant funds
awarded to Creighton University by amounts that are proportionate to the numbers of
participants for whom the University was funded but could not document having provided

ED-OIG                                     A07-80027                                     Page 6
required services. The Assistant Secretary for Postsecondary Education should then require
Creighton University to refund $69,381, which is the amount of 1996-97 and 1997-98 Upward
Bound grant funds that the University has drawn down in excess of the revised award amounts.

Upward Bound Math and Science Program: For budget year 1996-97, we selected all 41
students on the participant list that was provided to us by Creighton officials. For budget year
1997-98, we randomly selected 30 students from the participant list of 72 provided by Creighton.
We found that most of the files for these students contained documentation to support student
participation in the project. The results of this review are summarized below.

•      Upward Bound Math and Science 1996-97: Thirty-one of the 41 student files for this
       year contained documentation of participation in either the summer or academic year
       sufficient to meet the definition of a participant. Thus, Creighton’s records do not
       support that services were provided to the 40 participants approved and funded by the
       Department.

•      Upward Bound Math and Science 1997-98: Twenty-two of the 30 student files we
       sampled contained documentation of participation in either the summer or academic year
       sufficient to meet the definition of a participant. Based on the sample results, we
       estimate that 53 of the total 72 students listed for 1997-98 had documentation supporting
       their participation in the project. The estimated 53 students documented as having
       received services exceeds the 40 participants approved by the Department. Therefore, we
       have not recommended that the Assistant Secretary reduce the Upward Bound Math and
       Science grant funds for this budget year.

Based on our review, we concluded that Creighton could not support that it provided services to
the 40 students it was funded to serve or the number of participants that it reported to the
Department as served for the 1996-97 budget period. TRIO Program officials informed us that,
had Creighton reported the actual number of students that it could support as served, it could
have affected future funding. Creighton University records showed that, as of February 10,
2000, it had received $167,856 of the $226,686 it was awarded for the 1996-97 budget period
and $151,155 of the $235,753 it was awarded for the 1997-98 budget period. As discussed in the
Recommendations section of this report, the Assistant Secretary for Postsecondary Education
should reduce the 1996-97 Upward Bound Math and Science grant funds awarded to Creighton
University by amounts that are proportionate to the numbers of participants for whom the
University was funded but could not document having provided services. We have not
recommended a cash refund related to the 1996-97 Upward Bound Math and Science project as



ED-OIG                                    A07-80027                                   Page 7
Creighton University drew down 74 percent of the grant funds available ($167,856 of $226,686)
to serve 78 percent of the participants (31 of 40).

Initial Response Provided by Creighton on Our Student File Reviews
During the course of our work at Creighton University, we provided preliminary results of our
student file reviews to Creighton University. Creighton officials responded on November 19,
1998, by providing us with information indicating their position as to each student’s eligibility
for a project and receipt of services (Appendix A). However, Creighton’s November 19, 1998,
response did not substantiate its position regarding the number of project participants in the years
covered by our review.

According to its November 19, 1998, response, Creighton officials counted some students as
participants in the 1997 Upward Bound Math and Science project because they had received
summer 1996 informational packets. We did not consider 1996 informational packets as
evidence that the student participated in the Upward Bound Math and Science project during the
1996-97 budget period, which began November 1, 1996. Creighton officials counted other
students as eligible for Upward Bound and Upward Bound Math and Science based on grade
reports. However, Creighton University officials provided no documentation with its November
19, 1998 response to show whether a counselor had met with a student regarding his grade report
or whether the student participated in any other project activities.

To document participation in the Talent Search project, Creighton included mailings of
newsletters and fliers as documentation of services provided. Based on discussions with
Department program officials, we did not consider mailings to students as “services” for the
purpose of documenting participation.



Creighton University Response to the Draft Audit Report and Auditor Comments

Creighton University’s January 14, 2000, response to the draft report refers to additional
documentation that Creighton provided for our review on December 22, 1999, subsequent to the
issuance of the draft report. This was documentation that Creighton officials did not provide to
the auditors during their fieldwork, nor did Creighton provide it in its November 1998 response
to our preliminary results. Creighton officials offered no explanation for not providing, during
the course of our audit, the additional records we had requested to document student
participation.



ED-OIG                                      A07-80027                                     Page 8
Based on the additional records made available to us in December 1999, for the 1996-97 Upward
Bound project, we revised the number of students who had documentation supporting their
participation in the program, as reported in our draft report from 3 of 30 students sampled, to 22
of the 30 students sampled. In the January 2000 response, the University acknowledged the
revised numbers, but disagreed with the concept of a pro-rata return of funds because the
projected number of 55 students served met the minimum 50 required by regulations. To support
its position, the University noted, correctly, that OIG had stated in its draft audit report that no
costs would be questioned for the 1997-98 Upward Bound project since the required minimum
number of students were served for that year.

In our draft report, we questioned the total amount the University received for the 1996-97
Upward Bound project. The documentation the school had provided, during our fieldwork and
in its November 1998 response to our preliminary results was so inadequate that the existence of
a viable project was questionable. However, the additional information supplied in December
1999 supported significantly more participants than the numbers cited in the draft report. The
issue is no longer whether Creighton had functioning Upward Bound and Upward Bound Math
and Science projects during the years audited but whether it had met the terms of its grant
awards. The regulations in 34 CFR 645.43(a) state, “In each budget period, Regular Upward
Bound projects shall serve between 50 and 150 participants….” However, since the amount of a
grant award is based on the number of individuals an applicant proposes to serve, we calculated
reductions to grant awards based on the number of students served as compared to the number
the University proposed to serve in its grant application. In addition, while we had not
recommended a recovery of funds for the Upward Bound 1997-98 budget period in our draft
report, we have re-evaluated this action after discussions with the TRIO program staff. TRIO
officials informed us that, in determining the amount of a grant award, the Department considers
the number of participants the project plans to serve. A TRIO project serving 50 participants
would receive less than a similar TRIO project serving 75 participants. Therefore, we also
applied this pro-rata formula to the Upward Bound 1997-98 budget period.

For the 1996-97 Upward Bound Math and Science project, we revised the number of students
who had documentation supporting their participation in the program, as reported in our draft
report from 9 of 41 students, to 31 of the 41 students. We have not recommended a cash refund
related to the 1996-97 Upward Bound Math and Science project as Creighton University drew
down 74 percent of the grant funds available ($167,856 of $226,686) to serve 78 percent of the
participants (31 of 40). The University noted that there were an additional six students who
should have been considered eligible based on various records. However, we did not consider
these records as acceptable documentation because they lacked signatures, they did not



ED-OIG                                      A07-80027                                     Page 9
document that services had been provided for the minimal 60 days, or the services that were
documented were provided outside of the budget period being reviewed.

The University also disagreed with our findings and recommendations for the 1996-97 and the
1997-98 Talent Search projects. The University indicated that its disagreement with us was due
to our differing interpretations of the program regulations in 34 CFR 643. The main differences
involve the provision that an individual must receive project services to be counted as a
participant:

       The University contends that Sec. 643.7 (b)(2) does not specify a minimum
       number of services, and that one instance … during the award year is sufficient to
       meet the definition of participant. The University contends that its Needs
       Assessment Process contains an element of counseling and qualifies as a service
       under Sec. 643.4 (e) and (k). The University also contends that newsletters and
       other communications when considered as one aggregate service (i.e. Information
       Service) qualify as a service under Sec. 643.4 (k).

We disagree with the University that “one instance” of service is sufficient to meet the definition
of a participant. The regulations in 34 CFR 643.7(b)(2) define “participant” as an individual
who receives project services. The Department interprets the plural form of the word “services”
to mean that an individual must be provided at least two services to be counted as a project
participant. University officials claimed in their response, “The OIG audit team agreed that there
has not been any official clarifications, guidance, or instructions provided to the grantees…
regarding the proper determination of a participant.” Creighton officials’ interpretation of our
comments is incorrect. We did state in our December 1999 meeting that, to our knowledge, the
Department had not informed grantees in writing about a minimum number of services that must
be provided to a student for the student to be counted as a project participant. However, we
noted that the Department had assured us that they routinely instruct the TRIO community at
workshops and conferences (e.g., workshops for potential applicants and workshops for new
project directors) about all aspects of participant counts, including the minimum number of
services.

We also disagree with the University that mailings should be considered as a service in defining
project participation. To support their position, University officials suggested that an official
with the Council on Educational Opportunity (CEO) agreed with their view on mailings. When
asked, this CEO official denied making any statement indicating that mailings could be counted
as a service in documenting project participation. We maintain that a mailing may inform an
individual about a service but unless a recipient of the mailing avails her/himself of the service,


ED-OIG                                     A07-80027                                     Page 10
s/he has not received the service. Furthermore, mailing a flyer does not ensure that the addressee
will read it before throwing it away, or, for that matter, even receive it. In our opinion, a
“service” that does not involve an active response on the part of the intended recipient cannot be
used to identify the recipient as a participant in any activity. Yet, Creighton University used
mailings as a significant portion of its documentation for supporting its project participation
figures.

The University’s documentation for project participation stands in contrast to its Talent Search
grant proposal, which notes, “While students may have the ability and unrefined skills to succeed
in school, they may still be missing essential counseling and assistance with academic skills,
career awareness, motivation, and financial aid.” We have listed below examples of services to
increase academic skills that were proposed by Creighton in its Talent Search grant application
and approved by the Department. Similar activities were planned for career and financial aid
awareness.

       •   Outreach Advisors will discuss grades, study habits, and test taking
           preparation with participants.
       •   Outreach Advisors will discuss general academic strengths and weaknesses
           and provide participants with tips for academic success during individual
           counseling and/or workshops at target schools and community agencies.
       •   Outreach Advisors will discuss implications for academic progress with
           participants, and offer six postsecondary and jobsite visitations annually….
       •   The Vocational Coordinator will make transportation arrangements,
           coordinate the activity as well as make arrangements for project participants.
       .…
       • Tutors will assist participants improve their academic grades….
       • Outreach Advisors will assist participants develop short and long term
          educational goals through the IEP during individual sessions or in
          workshops.
       • Time management, study skills and test-taking workshops will be conducted
          by Outreach Advisors twice each year.
       .…
       • Workshops and individual counseling on postsecondary admissions
          applications will be provided to participants.
       • ETS will sponsor ACT/SAT preparatory workshops for participants each year.




ED-OIG                                     A07-80027                                    Page 11
In our opinion, the University’s Talent Search proposals would not have received favorable
reviews if mailings had been identified as a primary method for providing to students counseling,
academic assistance, career awareness, motivation, and assistance in applying for financial aid.

Finally, we disagree with the University that the Needs Assessment Form checklists constitute
documentation of a service. We consider needs assessment to be a procedure for determining if
a student needs one or more of the services provided by a project. The University maintained the
process may include some counseling but admitted that summaries of what happened during the
1996-97 and 1997-98 assessment meetings were not provided on the forms. The University also
acknowledged that the needs assessment checklists were not signed or dated by the counselor.
The checklists do not identify the nature of the service provided, who may have provided the
service, whether the service was provided within the budget period in question, or even whether
a counselor had met with the student in making the assessment. Because the University’s
documentation of services provided to participants in the Talent Search project was so deficient,
we believe recovery of all the grant funds is appropriate.



Recommendations

We recommend that the Assistant Secretary for Postsecondary Education reduce the 1996-97 and
1997-98 Upward Bound and 1996-97 Upward Bound Math and Science grant awards to
Creighton University by amounts that are proportionate to the numbers of participants for whom
the University was funded but could not document having provided services. (See Exhibit 2.)

In addition, we recommend that the Assistant Secretary for Postsecondary Education require
Creighton University to:

1.   Refund $372,399, which represents the total of:

     •   The amounts for the Upward Bound project for budget years 1996-97 and 1997-98,
         recorded as received by Creighton University as of February 10, 2000, that are in
         excess of the award amounts as adjusted based on the numbers of participants the
         University could not document as having provided required services, which totals to
         $69,381; and

     •   The entire amount of Talent Search funds received by Creighton University for budget
         years 1996-97 and 1997-98 ($303,018).



ED-OIG                                    A07-80027                                    Page 12
2.   Develop and follow specific written policies and procedures for the TRIO projects’
     administration, including policies and procedures to ensure that:

     •   An individual’s participation in a project during the summer and academic year are
         properly documented.

     •   Reports to the U.S. Department of Education are supported by documentation
         maintained by Creighton University.

     •   Only those students who continue their participation for the minimum time required by
         Federal regulation are counted as participants.




ED-OIG                                   A07-80027                                  Page 13
Finding No. 2 - Changes in Project Scope Were Not Reported to the Department


Contrary to Federal regulations, Creighton University did not always obtain U.S. Department of
Education approval before making changes to the scope, objectives, or key personnel of its TRIO
projects. Although recent regulatory changes reduced the administrative burden for grantees and
provided more flexibility in planning and implementing project activities, grantees are still
required to obtain Department approval prior to making changes in project scope, objectives, or
key personnel. Changes to key personnel may have been a contributing factor in Creighton’s
inability to serve the number of students approved by the Department.


Expanded Authority Regulations
On July 28, 1997, the Department of Education amended Part 75 of the Education Department
General Administrative Regulations (EDGAR) to provide “Expanded Authorities” to
discretionary grant recipients. This amendment reduced regulatory and administrative burden
and allowed grantees more flexibility in planning and implementing project activities. The new
provisions permit grantees to do the following without seeking prior Department approval:

•   Extend a grant at the end of its project period for a period of up to one year.
•   Carry funds over from one budget period to the next.
•   Obligate funds up to 90 days before the effective date of the grant award.
•   Transfer funds between direct cost line items.

Nonetheless, grantees still must request prior approval for a number of program and budget
related changes. The regulations in 34 CFR §74.25 clarify that recipients must obtain prior
approval from the Department for the following:

•   Change in the scope or the objectives of a project (even if there is no associated budget
    revision requiring prior written approval).
•   Change in key personnel specified in the application or award document.
•   Absence by the approved project director or principal investigator for more than three
    months or a 25 percent reduction in time devoted to a project.




ED-OIG                                      A07-80027                                 Page 14
Key Personnel Changes Not Reported to the Department
Creighton University TRIO officials did not request approval from the U.S. Department of
Education for key personnel changes. Officials from Creighton University submitted grant
proposals to the Department that outlined key personnel positions for implementation and
oversight of all of its TRIO projects. However, we found that several of the key positions were
never filled or remained vacant for more than the three months allowed by Department
regulations. We identified the exceptions listed below:

•   Talent Search: The project director position remained vacant for five months. Once the
    position was filled, the time allocated for the position decreased from the proposed 100
    percent to 50 percent. In addition, the grant proposed three counselor positions. These
    positions have become vacant several times throughout the course of the grant. One position
    remained vacant for 11 months. In November 1998, two of the counselor positions again
    became vacant.

•   Upward Bound: The project director position remained vacant for eight months prior to
    being filled. In addition, the assistant director position became vacant in August 1997 and
    still had not been filled at the time of our review.

•   Upward Bound Math and Science: In October 1998, an assistant director position was
    created and filled. A Creighton official informed us that the creation of this position resulted
    in the elimination of the academic advisor position, four instructors and four tutors for the
    academic year, sixteen summer tutors and a decrease in the supply expense account. In
    addition to the elimination of positions, the tutoring sessions were reduced from four days to
    two days a week. Approval from the Department was not requested for this change in scope.

•   Training Program: During the first year of the grant (1996-97), the project director position
    was budgeted at 50 percent time charged to the project for a 12-month period at $20,000.
    However, this position was never filled in the first year. The individual hired as the project
    director for the 1997-98 year held a bachelor’s degree, which did not meet the qualifications
    outlined in the grant. According to the grant document, the project director is required to
    hold a master’s degree as well as have at least five year’s work experience with TRIO
    projects.

•   Student Support Services: The grant document shows that the project director position will
    be charged 100 percent to the project. However, in 1998, the time devoted to the Student



ED-OIG                                      A07-80027                                     Page 15
       Support Services grant was reduced to 50 percent time charged to the project, without
       notifying the Department of the change.


Expenditures Significantly Less Than Amounts Awarded
The significant changes in project scope and unfilled key positions resulted in $643,649, or 15
percent of the total amount awarded, not being drawn down or expended as of February 10,
2000. If managed effectively, amounts of unexpended funding such as this could mean the
difference between failure and success for a large number of students. Because of the problems
identified regarding changes in key personnel and project scope, as well as Creighton’s inability
to support the numbers of project participants that it reported to the Department, Creighton
should be restricted in its use of the Expanded Authority provisions.

According to Attachment Z of Grants Policy Bulletin #19, issued by the Grants Policy and
Oversight Staff, on January 27, 1998,2 the discretion provided to grantees under the Expanded
Authority provisions may be limited under certain circumstances. One such circumstance is “…
where the Department has designated a grantee as ‘high-risk,’ or is making an award to a grantee
that has historically exhibited great difficulty complying with statutory, regulatory, or
administrative requirements. Some of the considerations that discretionary grant teams might
take into account in making such a determination would include, but are not limited to, instances
where a grantee:

•      Has frequent turnover in key personnel and/or the person(s) managing grant projects is (are)
       not familiar with federal statutes or ED regulations; and

•      Does not have a strong financial management system or a sound knowledge of cost principles
       and consistently proposes using grant funds for unallowable costs and activities….”


Creighton University Response to the Draft Audit Report and Auditor Comments

Creighton University agreed with our findings regarding its failure to report changes in project
scope and key personnel to the Department.




2
    Grants Policy and Oversight Staff, Office of the Chief Financial Officer, U.S. Department of Education


ED-OIG                                               A07-80027                                               Page 16
Recommendations
We recommend that the Assistant Secretary for Postsecondary Education monitor Creighton
University’s adherence to the requirement that it obtain Department approval before making
changes to the scope, objectives, or key personnel of its TRIO projects.

We further recommend that the Assistant Secretary for Postsecondary Education require
Creighton University to obtain approval from the U.S. Department of Education before
undertaking any of the following actions with regard to its TRIO projects:

1.   Extending the project period of a grant beyond the project period end date specified in the
     most recent revision of the Grant Award Notification.

2.   Carrying forward grant funds that the grantee has not obligated in a budget period.

3.   Making cumulative transfers among direct-cost budget categories that exceed 10 percent of
     the approved budget for an award period.




ED-OIG                                     A07-80027                                       Page 17
Finding No. 3 – Improvements in Management Controls Are Needed


We found that Creighton University did not always follow its own management controls in the
areas of accounting for travel expenses, reconciling budgets to actual expenditures, documenting
student citizenship, and inventory controls. Internal management controls, when followed, help
safeguard assets, ensure the reliability of accounting data, promote efficient operations, and
ensure compliance with established policies.


Creighton Officials Did Not Follow the University’s
Policy and Procedures Regarding Travel
Creighton University budgeted approximately $316,000 for travel for all of its TRIO projects
during budget years 1996-97 and 1997-98. Our review of invoices and Travel Expense Reports
showed that Creighton officials did not always follow the University’s policy and procedures
regarding travel. This resulted in Creighton’s TRIO projects being charged for unallowable
travel costs. While the aggregate of the unallowable travel costs we found was not material in
relation to the total travel amounts budgeted, it indicates that Creighton did not adhere to
management control procedures that protect program interests.

OMB Circular A-21, Cost Principles for Educational Institutions, states that travel costs may be
charged to a Federal grant “… to the extent such costs do not exceed charges normally allowed
by the institution in its regular operations as a result of an institutional policy…. ” Creighton’s
travel policy states that employees will be reimbursed for reasonable meal expenses incurred
while on out-of-town business. More specifically, the policy states that Travel Expense Reports
must be submitted to the Controller’s Office within seven working days of the traveler’s return to
campus.

We reviewed a sample of payments made from TRIO grant funds. We found the following
examples of questionable travel practices:

•   Lodging and meal costs incurred for more days than the training sessions were scheduled.

•   Lodging and meal costs incurred by Creighton staff for local training held in Omaha.




ED-OIG                                     A07-80027                                     Page 18
•   Claimed reimbursement for meals that were provided at no cost to participants attending
    training workshops.

•   Group meals for which the participants had already received individual cash advances.

•   Cash advances for which there were no Travel Expense Reports or any other documentation
    showing actual expenses.

•   Cash advances for which no receipts could be found to document required refunds (e.g.,
    several instances where fewer students went on a trip than were estimated).


Reconciliation of Budgets to Actual Expenditures
Would Improve Project Administration
Our review of Creighton’s accounting records showed that TRIO officials did not always follow
sound fiscal management practices. Creighton’s grant proposals for these projects stated that the
program director would reconcile on a monthly basis TRIO expenditures and encumbrances to
budget line-item status. We found that Creighton officials did not perform these monthly
reconciliations. We found no evidence of any reconciliation of expenditures to budgeted
amounts.

Grantees are responsible for maintaining accurate records and the overall fiscal management of
their federally funded projects. Timely reconciliation of actual expenditures to project budgets
would provide an accurate picture of funds available for program improvements.


Student Citizenship Not Always Documented
In our review of student files, we found that student citizenship was not always documented.
Federal regulations require that citizenship of a student be determined as part of meeting the
eligibility requirement to participate in the Federal TRIO projects. In our analysis we found the
following:

•   Talent Search: 32 of 40 student files reviewed did not document citizenship in 1996-97. In
    award year 1997-98, 30 of 40 student files reviewed did not document citizenship.

•   Upward Bound: 12 of 30 student files reviewed from 1996-97 and 28 of 30 student files
    reviewed from 1997-98 did not document citizenship.



ED-OIG                                    A07-80027                                    Page 19
•   Upward Bound Math and Science: 35 of 41 student files reviewed from 1996-97 and 28 of 30
    student files reviewed from 1997-98 did not document citizenship.

Without properly documenting citizenship, Creighton may be serving ineligible students.


Inventory Controls Should Be Followed to Safeguard
Equipment Purchased with Federal Funds
TRIO personnel did not follow Creighton University’s policies and procedures for safeguarding
equipment. According to EDGAR, under 34 CFR §74.34(f)(4), grantee institutions must have
safeguards to prevent loss, damage or theft of equipment purchased with Federal funds.
Creighton’s policies and procedures, specifically those related to Fixed Asset Tagging, state:
“All fixed assets with an original acquisition cost of $500 or more will be identified and tracked
in the University’s Fixed Asset system. This will be accomplished by attaching a pre-numbered
tag to each asset identifying it as ‘Property of Creighton University.’” We selected all 26 items
identified as being purchased with Federal TRIO funds ($43,887) to confirm their location. We
found that 11 of the 26 items did not have barcodes attached even though barcodes were assigned
based on the inventory list.


Creighton University Response to the Draft Audit Report and Auditor Comments

Creighton University officials generally agreed with our recommendations. School officials
noted that they had created a new financial budget analyst position for the TRIO programs
during fiscal year 1999 who will assist the program directors in monitoring grant expenditures on
a continuous basis. The University response stated that in preparing a revised student
application, the question on citizenship had been omitted. The University believes that the
likelihood that it served non-U.S. citizens during the audit period is extremely remote but did not
provide further details.



Recommendations
We recommend that the Assistant Secretary for Postsecondary Education require Creighton
University to improve its management controls to ensure that TRIO personnel:

1. Follow institutional travel policies and procedures.



ED-OIG                                     A07-80027                                     Page 20
2. Reconcile actual expenditures and revenues to the project budgets on a monthly basis.

3. Properly document all eligibility elements to ensure students participating in the TRIO
   projects meet all Federal requirements.

4. Follow institutional policies and procedures for safeguarding equipment purchased with
   Federal funds.




ED-OIG                                    A07-80027                                   Page 21
Background

Creighton University is a private, Jesuit university of three colleges, five professional schools, a
graduate school and summer sessions. It enrolls more than 6,000 students annually. The school
is located in Omaha, Nebraska. The Vice President for Academic Affairs is responsible to the
President of the University for academic administration of the Educational Opportunity
Programs, which include the Federal TRIO projects. These projects are listed below.

•   Student Support Services offers first generation, low income or disabled students academic,
    intervention, financial, counseling, cultural and support services.

•   Educational Talent Search provides academic support and career guidance to individuals
    between the ages of 11 and 27. The goal of the Talent Search project is to encourage,
    support and motivate participants to achieve academic success, obtain a high school diploma
    or General Educational Development (GED) and pursue advanced education.

•   Upward Bound is an educational program designed to enhance its participants’ academic
    skills so that they can successfully complete high school and enroll in a postsecondary
    institution. Creighton’s Upward Bound project is designed to assist Omaha area students in
    achieving the academic skills and personal growth necessary for the successful completion of
    high school and for entry into a postsecondary institution. Potential Upward Bound students
    should be motivated to excel academically and desire a college education. The project
    supplements a student’s high school experience and assists the student in academic
    preparation and in career exploration and self-development.

•   Upward Bound Math and Science is an educational program structured to motivate
    students’ interest in the math and science fields. The goal of the Creighton University
    Upward Bound Math and Science project is to offer economically disadvantaged high school
    students an opportunity to study and explore topics in the math and science fields. This
    preparation will prepare students to pursue courses of study in math and science at a
    postsecondary institution.

•   Training Academy (Training Grant Program) provides training for staff and leadership
    personnel of TRIO projects to enable them to more effectively operate the projects.



ED-OIG                                      A07-80027                                     Page 22
Audit Scope and Methodology

The purpose of the audit was to determine if Creighton University has administered the Federal
TRIO projects in accordance with Federal regulations. The audit covered the two most recent
budget periods, 1996-97 and 1997-98.

To accomplish our audit objectives we reviewed applicable Federal regulations and files relating
to Creighton University at the Department’s TRIO program office located in Washington, DC.
In addition, we conducted interviews with key personnel in each of Creighton University’s TRIO
projects (Upward Bound, Upward Bound Math and Science, Talent Search, Student Support
Services and Training Grant) and obtained and analyzed documentation related to those projects.
Furthermore, we judgmentally selected files to review services received from the Student
Support Services project and found no material non-compliance with documentation supporting
the provision of services. As discussed below, we reviewed student files for services received
for the Upward Bound, Upward Bound Math and Science and Talent Search projects using
random sampling.

We relied on computer-processed data contained in Creighton University’s accounting records to
estimate the amount of Federal funds received. We assessed the reliability of this data at
Creighton University. Based on our assessments and tests, we concluded that the data used was
sufficiently reliable to meets our use of the information. Our conclusion was based on testing the
accuracy of the data by comparing computer data to source records. Due to the manner in which
the U.S. Department of Education accounted for the disbursement of TRIO grant funds, the
information to verify the amount received by Creighton was not available by grant for budget
years 1996-97 and 1997-98.

We visited the Department’s TRIO program office located in Washington, DC on September 14,
1998. We conducted our initial fieldwork at the institution from September 21, 1998 through
March 24, 1999, and updated our fieldwork related to project participation at the institution on
December 22, 1999, and updated our fieldwork related to the receipt of TRIO grant funds on
February 9 and 10, 2000. In addition, we continued to collect and analyze data in our offices
through February 22, 2000. Our audit was conducted in accordance with government auditing
standards appropriate to the scope of review described above.




ED-OIG                                     A07-80027                                    Page 23
   Supplementary Statistical Information

   The necessity for determining compliance with reporting requirements for each project and each
   budget period caused us to select two independent samples for each of the three projects
   (Upward Bound, Upward Bound Math and Science, and Talent Search). The sample population
   for each project and year was a participant’s list provided by Creighton from which we used a
   simple random sample to select the participants to review. Due to the small sample sizes and the
   small percentage of participants with documented services, the sample precision varied. The
   table below provides relevant statistical information related to our samples.

                               Table of Statistical Information

              Minimum        Population                                 Range for Which We Are 90%
Program &      Required     (Participants    Sample         Point        Confident That Services Are
Award Year    Per Award         List)         Size       Estimate (1)           Documented
                                                                        Lower Limit     Upper Limit
                                 Upward Bound (Including Summer)
1996-97            75            75          30            55 (2)             46               64
1997-98          75           93          30            59 (3)        47             71
1997-98 Academic Year Only                              19             9             29
                      Upward Bound Math and Science (Including Summer)
1996-97          40           41      41 (100%)         31            31 (100% Review)
1997-98          40           72          30            53 (4)        45             61
1997-98 Academic Year Only                              26           17              35
                                      Talent Search
1996-97         850          850          40           170            82            258
1997-98         850          853          40           320           213            427


   1. Point estimate represents the number of student files we project as containing adequate
      documentation to support participation in the project.
   2. Example: Using the Upward Bound 1996-97 award year as an example, we are 90%
      confident that 55 student files contained adequate documentation. Using the sampling error,
      it could be as few as 46 student files but no more than 64 student files that contain adequate
      documentation to support participation in the project.
   3. 1997-98 Upward Bound point estimate of 59 includes the 19 academic-year-only students.
   4. 1997-98 Upward Bound Math and Science point estimate of 53 includes the 26 academic-
      year-only students.



   ED-OIG                                    A07-80027                                    Page 24
Statement on Management Controls

As part of our audit, we assessed the management control structure, policies, procedures, and
practices applicable to the scope of our audit at Creighton University, Omaha, Nebraska. The
purpose of our review was to assess the level of control risk for determining the nature, extent,
and timing of substantive tests. For the purpose of this report, we assessed and classified the
significant management controls into the following categories:

       •   Participant services
       •   Participant eligibility
       •   Program record maintenance
       •   Fiscal record keeping

In performing this assessment, we also considered work performed by the school’s external
auditors.

Because of inherent limitations, a study and evaluation made for the limited purposes described
above would not necessarily disclose all material weaknesses in the control structure. However,
our assessment disclosed weaknesses at Creighton University related to the area of compliance
with Federal regulations, as well as with Creighton University’s internal policies and procedures.
These weaknesses are discussed in the Audit Results section of this report.




ED-OIG                                     A07-80027                                    Page 25
                                                                                       Exhibit 1

                       Definition of Eligible Services by Program

Upward Bound: 34 CFR Sections 645.11 and 645.12 describe the type and extent of services
that are to be provided to project participants. Participants in an Upward Bound summer
component receive services such as academic instruction, tutoring, and career counseling at least
five days a week for six weeks. Participants in the academic year component receive such
services on a weekly basis. Section 645.11 describes the core curriculum for the Upward Bound
project to include instruction in “(1) Mathematics through pre-calculus; (2) Laboratory science;
(3) Foreign language; (4) Composition; and (5) Literature.” These projects may also include
personal counseling, academic advice and assistance in secondary school course selection,
tutorial services, exposure to cultural events, activities designed to acquaint youths with career
options, and mentoring projects.

Upward Bound Math and Science: In addition to the services that must be provided by a
regular Upward Bound project, an Upward Bound Math and Science Center must provide
intensive instruction in mathematics and science that includes hands-on experience, opportunities
to learn from mathematicians and scientists engaged in research, as well as teaching or applied
science, and involvement with college students majoring in mathematics and science (34 CFR
§645.13).

Talent Search: 34 CFR Section 643.4 states that Talent Search projects may provide the
following services: (a) academic advice and assistance in secondary school and college course
selection; (b) assistance in completing college admission and financial aid applications; (c)
assistance in preparing for college entrance exams; (d) guidance on secondary school reentry or
entry to other projects leading to a secondary school diploma or its equivalent; (e) personal and
career counseling; (f) tutorial services; (g) exposure to college campuses as well as cultural
events, academic programs, and other sites or activities not usually available to disadvantaged
youth; (h) workshops and counseling for parents of students served; (i) mentoring programs
involving elementary or secondary school teachers, faculty members at institutions of higher
education, students, or any combination of these persons; (j) activities previously described that
are specifically designed for students of limited English proficiency; and (k) other activities
designed to meet the purposes of the Talent Search project, including activities to meet the
specific educational needs of individuals in grades six through eight.




ED-OIG                                     A07-80027                                    Page 26
                                                                                                    Exhibit 2


    Schedule of Upward Bound and Upward Bound Math and Science Reductions to
     Grant Award Amounts and Amounts to Be Refunded by Creighton University



                                         1996-97                          1997-98
                                                 Upward                           Upward
                               Upward             Bound          Upward            Bound
                                                 Math &                           Math &              Totals
                               Bound                             Bound
                                                  Science                          Science
Award Amount                    $350,429         $226,686        $364,446         $235,753          $1,177,314
Amount Received @
                               ($299,547)       (167,856)       ($313,513)       ($151,155)         ($932,071)
February 10, 2000
Amount Not Drawn @
                                $50,882          $58,830          $50,933          $84,598           $245,243
February 10, 2000
Number of Participants -
                                    55               31              59               >40                 -
Services SupportedΑ
Number of Participants
                                    75               40              75               40                  -
Proposed & Funded
Number of Participants -
                                    20               9               16                0                  -
Services Not Supported
Percent Not SupportedΒ            27%              23%              21%                0%                 -
Pro-Rata Over-Award
                                $93,448          $51,004          $77,748             $0             $222,200
(Grant Award Reduction)∗
Recommended Amount
to be Refunded by
Creighton University
                                $42,566              $0           $26,815             $0              $69,381
(Pro-Rata Over-Award
less Amount Not Drawn
@ February 10, 2000)


Α
  The number of participants for the Upward Bound project for both 1996-97 and 1997-98 are point estimates. The
number of participants for the 1996-97 Upward Bound Math and Science project is the number of participants
supported after reviewing all Upward Bound Math and Science participant files. The point estimate for the 1997-98
Upward Bound Math and Science project is 53, which is greater than the 40 participants approved and funded by the
Department of Education for the budget period.
Β
 The Percent Not Supported has been rounded to the nearest whole percent for presentation purposes. The Pro-Rata
Over-Award has been calculated using the percent to the nearest one-hundredth of a percent.



 ED-OIG                                          A07-80027                                            Page 27
                                     Appendix A
          Creighton University Response to Preliminary Audit Results




  NOTE: Personal identifiers have been removed to protect the privacy rights of students.




ED-OIG                                 A07-80027                                    Page 28
                                     Appendix B
              Creighton University Response to Draft Audit Report




  NOTE: Personal identifiers have been removed to protect the privacy rights of students.




ED-OIG                                 A07-80027                                    Page 29
             Audit of Creighton University’s Administration
                      of Its Federal TRIO Projects

                              Report Distribution List

                                                                                    No. of
                                                                                    Copies
Auditee

Michael G. Morrison, S.J., President
Creighton University
2500 California Plaza
Omaha, Nebraska 68178                                                                  1

Action Official

Lee Fritschler, Assistant Secretary for Postsecondary Education
U.S. Department of Education
1990 K Street, Room 6114
Washington, D.C. 20006                                                                 4

Other ED Offices

Director, Higher Education Preparation and Support Service                             1
Deputy General Counsel, Office of the General Counsel                                  1
Under Secretary, Office of the Under Secretary of Education                            1
Public Affairs Office                                                                  1

Office of Inspector General

Inspector General                                                                      1
Deputy Inspector General                                                               1
Assistant Inspector General for Audit (electronic)                                     1
Assistant Inspector General for Investigations (electronic)                            1
Director, Elementary and Secondary Education Advisory and Assistance (electronic)      1
Planning, Analysis & Management Services (electronic)                                  1
Area Managers (electronic)                                                             1 each




                                       ED-OIG/A07-80027
         OIG AUDIT TEAM

             Audit Staff:

         James Okura, CPA
          Neil Nelson, PhD
           Lisa Robinson
            April Steven
      Beverly Cornelison-Mines



         William Allen, CPA


    Information Technology Staff:

       Jan Keeney, CPA, CISA


     Advisory & Assistance Staff:

            Brent Weston


Counsel to the Inspector General Staff:

          Shelley Shepherd