Federal Settlement Comes Long After UF Overhauls Its Research Accounting System

November 20, 2015
UF News

The University of Florida said today’s settlement with the federal government primarily deals with bookkeeping deficiencies that were first discovered nearly nine years ago and have since been remedied with significant upgrades in systems and procedures.

“UF cooperated fully with the Department of Health and Human Services and the Department of Justice, and has thoroughly revamped its bookkeeping procedures,” said UF Vice President for Research David Norton. “UF recognized that certain compliance systems had weaknesses and was in the process of addressing them when HHS began its audit years ago. UF has added automated support systems, personnel and training to make its compliance systems fully responsive to the expectations of federal agencies.”

“The university’s research budget – totaling $6 billion over ten years – continues to grow and produce groundbreaking results. UF proudly remains one of the top public research institutions in the country with its research awards last year reaching a record $706 million,” Norton added. “From breakthroughs in the treatment of Hepatitis C, Parkinson’s Disease and Multiple Sclerosis to advances in nerve regeneration and the fight against Ebola, UF research continues to save and improve lives, enhance agricultural output and advance technology.”

During an internal audit in 2006, UF officials first uncovered weaknesses in the system under which researchers confirm the allocation of salaries charged to research grants.  This shortcoming was also an area of focus during a routine federal audit of the university’s fiscal 2008 federal grants.  HHS indicated that UF’s bookkeeping system failed to consistently verify the amount of time and expenses UF employees charged against grants from 2005 to 2010. “Rapid expansion of the university’s sponsored research and an unexpectedly difficult rollout of a complex new university-wide accounting system significantly contributed to these issues,” Norton said. “This lack of specificity was unintentional but resulted in technical errors respecting the government’s accounting requirements. In the end, the settlement announced today is about 2 percent of the amount of funding UF received from HHS during the affected period.” 

In response to the internal audit findings, the university began to upgrade its procedures and processes in 2007. Since then, a new software platform was installed that significantly improved the university’s capacity to manage the verification process for all federally funded projects.  The university also started a comprehensive initiative to assess and improve all fiscal compliance functions relative to research contracts and grants. New processes and policies were implemented.  Researchers now receive mandatory training about federal accounting requirements.  The university developed and launched myinvestiGator, a web-based project-management tool that was a finalist last year for the Prudential Productivity Award, which is given by Florida to state employees who find ways to increase productivity.

UF will pay the nearly $19.9 million settlement from investment earnings and other non-state funds that would have been invested in research, much of which had been put aside for years in anticipation of today’s settlement, Norton said. None of the money will be paid by state taxpayers; the settlement will have no effect on tuition rates. Norton added that the university agreed to settle the matter to avoid years of litigation that would have needlessly drained resources over an issue that was long in the past. The audit findings have not affected the federal government’s level of research funding to the University of Florida. Over the past 15 years, UF’s research has more than doubled with renewed and new awards.

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