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Government says USF owes $4M for mistakes

USF owes the federal government approximately $4 million for inappropriately spending research grants and failing to properly record purchases, the St. Petersburg Times reported Thursday.

Federal auditors are accusing USF of mis-documenting some of its expenses and making several mistakes, including charging clerical costs to grants without justification and purchasing equipment after a project already ended and paying employees, who did not report working on a grant, for traveling expenses.

Michael Reich, media relations director for USF, said the exact amount the university will owe is still pending, but the amount will most likely be in the $4-million range.

“We are negotiating on what amount is appropriate and are waiting for the federal government to give us a final number,” Reich said. “Once that is determined, we will be able to determine how long it will take the university to pay the government and what the payment plan will be.”

Reich added that the money would most likely come out of research funds.

The government reported USF might have wasted nearly $8 million over the past four years.

USF also owes Florida $1.44 million after federal auditors found violations in almost all of its colleges.

Reich said the audit began four years ago when an audit of the College of Public Health and the Lawton and Rhea Chiles Center for Healthy Mothers and Babies in 1998-99, turned into a large and comprehensive search.

The audit suggested that USF failed to pay the state Agency on Health Care and Administration money to administer a Medicaid contract.

“When they looked at our record keeping they saw some mistakes,” Reich said.

However, Reich added that the university had already received the grants and completed the research before the audit began.

The federal government then determined through the 1998-99 audit that USF had almost $2 million in errors. The federal government then assumed that USF had continued to make mistakes in the following years. Instead of conducting a large auditing process, Reich said USF and the auditors began to negotiate.

Some of the mistakes that were noted in the audit dealt with administrative costs, equipment costs as well as salary and wages. Reich said the administrative costs were mistakes for changing items in the grants without proper justification, such as people assigned to the grant. Equipment mistakes include purchasing items that are not listed in the terms of the grant.

And the salary and wages mistakes represented inadequate representation of the time sheets.

Reich said this auditing process has taught the university to learn from its mistakes and correct and improve the procedures of record keeping. Such was the case when the university implemented the new financial record keeping system FAST in July.

“We have made a number of changes and there will still be ongoing changes as well,” he said. “We have learned from our mistakes.”

A new task force for institutional compliance was formed, Reich said, that will check to be sure the university is complying with the terms of all the research grants.

However, Reich also indicated that inquiries by the federal government are common. In fact, they routinely conduct audits of nonprofit groups that receive federal grants such as universities.

Florida International University is currently being investigated now and auditors estimate that FIU owes the federal government at least $ 4.5 million.