Yes, purchases in the final months of an award are an area of interest to auditors.
Below are examples of unacceptable direct costing practices
- End of award: purchasing items to exhaust unobligated balances
- Assigning charges on the basis of the remaining balance to resolve availability of funding issues or to avoid loss of carry-forward balances
- Assign charges to an award before the cost is incurred
- Charge an expense exclusively to a single award when the expense clearly has supported other activities
- Rotate charges among sponsored projects without establishing the direct benefit to each project
- Assign charges to the sponsored projects with the largest remaining balance
- Assign charges to the sponsored project on the basis of ability to pay (i.e. largest budget)
- Charge the budgeted amount rather than the amount based on actual usage
- Describe a cost as something other than what it is (e.g. describing office supplies as lab supplies)
- Below is an example of recent audit findings at The University of Florida :
Inappropriately Allocated Purchases Near Grant Expiration
UF inappropriately charged five NSF awards a total of $35,648 in expenses associated with purchases near the awards’ expiration dates, when UF had little to no time to use the purchases to benefit the awards.
*In December 2016, UF charged NSF Award for $4,502 in costs incurred to purchase lab supplies. Because UF purchased the supplies during the final month of the award’s 5-year POP, UF does not appear to have allocated the cost of these items to this award based on the relative benefits received.
*In February 2018, UF charged NSF Award No. for $8,900 in costs incurred to purchase materials for specimen testing. UF purchased the materials during the last five days of the award’s nearly 6-year POP and does not appear to have received the materials before the grant’s expiration date. As such, UF does not appear to have allocated the costs of these materials to this award based on the relative benefits received.
UF agreed to reimburse NSF for these expenses.