Mistakes including inappropriate spending and poor record keeping will force the school to repay about $4-million.
By ANITA KUMAR
Published September 11, 2003
TAMPA - The University of South Florida must return $4-million to the federal government for inappropriately spending research grants and failing to properly record purchases.
The university also owes the state $1.44-million after federal auditors found violations in almost all of USF's colleges, including the College of Public Health.
Federal auditors estimate USF might have wasted nearly $8-million the past four years. They accuse USF of a slew of mistakes, including charging clerical costs to grants without justification, purchasing equipment after a project already ended and paying for employees to travel who did not report working on a grant.
But the amount USF will actually owe is likely to amount to $4.1-million. The school and federal investigators are negotiating a settlement, which could allow the university to take 10 years to pay. It's unclear where the university will find the money, but it will come from research accounts.
The settlement will end a four-year investigation that began with a routine audit and mushroomed into the largest and most comprehensive inquiry of its kind in the school's 46-year history.
The federal government routinely conducts audits of nonprofit groups that receive federal grants, including universities that raise hundreds of millions of dollars in grants each year.
Florida International University is being investigated now, and auditors estimate the Miami school owes the federal government at least $4.5-million.
USF officials on Wednesday downplayed the violations, disputing some of the findings and describing others as old mistakes. They said they spent the money properly but failed to properly document the spending.
"Some mistakes we made, some we didn't," said Carl Carlucci, USF executive vice president and chief financial officer. "It's just about the bookkeeping."
Ian Phillips, vice president for research, said the disputed money is minor compared to the amount the school receives each year. USF has continued to receive other federal grants, Phillips said.
USF has become a research powerhouse in Florida, collecting a record $254-million in grants last year, second only to the University of Florida. Nearly $123-million came from the federal government; the rest was from state and local governments and private groups.
Among the largest: $6-million for antibioterrorism research, $2.9-million for public health and disaster preparedness and more than $6-million to explore ways to use underwater vehicles for homeland defense.
"The main thing is that we did the work," said Phillips, who was hired in February. "There is no question of the scientific merit of the work."
Phillips said the federal government has been notified about major changes that took effect July 1 allowing a more centralized record-keeping network. He said he also will educate the faculty about new procedures and what the audit showed went wrong.
USF president Judy Genshaft, who is in San Diego this week to speak to economic development experts, could not be reached Wednesday.
The Office of the Inspector General at the U.S. Department of Health and Human Services conducts routine audits of schools, hospitals and any other nonprofit groups that receive federal grants.
Officials there said they could not comment on pending cases. The case is not expected to be completed for several months.
The investigation stemmed from an audit of the Lawton and Rhea Chiles Center for Healthy Mothers and Babies, which opened as part of the USF College of Public Health in 1998. It began in December 1999, was expanded to other colleges in 2001 and concluded earlier this year.
The Chiles Center audit suggested that USF also failed to pay the state Agency on Health Care and Administration money to administer a Medicaid contract. USF is negotiating a $1.44-million settlement with the state.
The entire audit of 1998-99 records - a sample of documents from every college - revealed almost $2-million in errors. The worst offenders include the colleges of Education, Public Health, and Marine Sciences, totaling almost $1.5-million.
USF appealed that amount, claiming the mistakes were $700,000.
"We don't accept the $1.9-million worth of mistakes," Phillips said. "We're not hiding anything. This is past history."
At FIU, federal auditors last year began investigating a seven-year, $32-million grant to study nuclear waste decontamination. Provost Mark Rosenberg said the school disputes almost all of the cited violations and the $4.5-million the federal government recommends the school return.
