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Auditors Read Your Technical Reports Too!
April 7, 2021 by Sarah Hill
When a grant is awarded, the auditor's job typically involves reading financial reports, accounting transaction processes and internal controls. The auditor also reviews and evaluates complex financial statements. But did you know that the auditors also read the technical/progress reports as part of their financial review?
So, let me get this straight…
A PI must verify and approve all costs posted to their grants in their university's financial systems, but they do not have to prepare and submit financial reports to the sponsor; administrators do that. However, PIs are responsible for preparing and submitting technical reports, aka progress reports, documenting accomplishments, demonstrating compliance with the terms of the award, identifying significant changes, reporting personnel and describing plans for subsequent reporting periods.
What could really happen?
Unfortunately, if the information on the progress or technical report does not correlate with the expenses on the grant financial statements, the university may be asked to remove the cost and refund the sponsor. "Information in technical reports — or lack thereof — could lead to unallowable costs that must be removed from the grant funds," said Beverly Rymer, executive director of the Office of Contracts and Grants at the University of Houston.
Recent NSF unallowable costs
Recent NSF audit findings will help give an idea of what sorts of expenses for individuals are not covered. If the PI fails to mention certain actors and their roles in the project, an auditor will document this. Some examples of these sort of unallowable costs are stipends for trainees, tuition remission for graduate students not paid on the grant and research staff travel to conferences that are not named specifically in the technical reports.
Other instances
Also, travel expenses that were paid to a guest and to a graduate student did not appear to be allowable on awards because the PI did not mention the collaboration in their progress report. In another instance, a student did not acknowledge the sponsor's support in the paper presented. The cost of travel to a conference was not allowed because the PI presented and did not denote support from the sponsor or include the trip in the grant's annual progress report. So, it is imperative that your report writing is thorough.
Don't delay!
Timeliness is also important. If technical reports are not turned in on time, there is a possibility that the sponsor will postpone action on further awards until all reports are received, withhold payment of invoices or suspend the award. So, it's critical that you stay on top of the documentation.
If delays beyond your control prevent a timely report, notify the sponsor and request an extension. Your OCG Research Administrator can help you request an extension from the sponsor.
No one likes the idea of an audit, but the checks and balances keep costs down and maintain scientific integrity. If you don't already, consider working closely with the research administrator responsible for your reporting and make sure your technical and financial reports correlate with one another. It could mean the difference between you receiving more grants in the future or more oversight for future projects.
Filed Under: University Research Explained Tagged With: auditors, audits, contracts and grants, NSF, progress reports, technical reports
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Hello! I'm Sarah, communications manager for the UH Division of Research. I'll be contributing mostly compliance-related blog posts – especially in the "What Went Wrong" section. I'm honored to work alongside my colleagues in order to bring the most exciting topics in research and innovation to you. In my spare time, I love reading memoirs, writing poetry and listening to music!
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