Performance Audit of Incurred Costs– Mississippi State University

Submitting OIG:

National Science Foundation OIG

Date Issued:

Friday, January 26, 2024

Agency Reviewed / Investigated:

National Science Foundation

Submitting OIG-Specific Report Number:

24-1-005

External entity, if applicable:

Mississippi State University

Location(s):

Starkville, MS

United States

Type of Report:

Audit

Questioned Costs:

$34,314

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
24-1-005-Mississippi-State-University.pdf	2.9 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1.1	Open	Yes
Direct MSU to provide documentation supporting that it has repaid or otherwise credited the $23,205 in questioned consultant services, conference costs, and participant support costs for which it has agreed to reimburse NSF.
1.2	Open	Yes
Direct MSU to strengthen its policies and procedures surrounding the establishment of consulting agreements. Specifically, MSU should implement additional policies and procedures designed to ensure that it: • Does not charge NSF awards for costs incurred to obtain intra-Institute of Higher Education consulting services in those cases where MSU does not receive approval for such agreements and/or does not intend to use the funds to directly pay the MSU employees providing the services. • Formally documents and approves consulting agreements before employees or external consultants execute effort to support an NSF-sponsored project.
1.3	Open	Yes
Direct MSU to strengthen its procedures and internal controls for approving consultant invoices. Updated procedures or controls should require the approver to verify that MSU has established an active contract with the consultant and that all expenses claimed were reasonable, allocable, and allowable prior to approving the invoice and charging the expenses to NSF awards.
1.4	Open	Yes
Direct MSU to establish additional guidance to ensure that it uses funds budgeted for participant support costs to cover participant expenses and/or appropriately rebudgets the funds with NSF approval. Updated guidance should specifically address: • How to request the required approvals from NSF before re-budgeting participant support cost funding. • How to ensure MSU has obtained the required approvals before using participant support funds to cover non-participant expenses.
2.1	Open	Yes
Direct MSU to provide documentation supporting that it has repaid or otherwise credited the $6,063 in questioned indirect costs for which it has agreed to reimburse NSF.
2.2	Open	Yes
Direct MSU to strengthen its policies, procedures, and internal control processes for applying its federally negotiated indirect cost rate to NSF awards. Updated procedures could include: • Requiring that personnel manually review expenses invoiced by MSU’s Facilities Management Team to ensure that MSU appropriately capitalizes any rearrangement/alteration and fabricated equipment expenses. • Developing additional procedures that require personnel responsible for approving cost transfers to verify that MSU will appropriately apply indirect costs before the personnel approve the cost transfer requests. • Implementing an annual review process for costs charged to awards that include funding for participant support costs to ensure MSU is appropriately segregating participant support costs in accounts that it has excluded from its Modified Total Direct Cost base. • Conducting training for individuals responsible for charging indirect costs to sponsored accounts that incur indirect costs. We suggest that MSU conduct the training at least annually.
2.3	Open	Yes
Direct MSU to strengthen its indirect cost rate application procedures to ensure it applies its indirect cost rates to all direct costs that should be included within its Modified Total Direct Cost base per its Negotiated Indirect Cost Rate Agreements. Updated procedures should ensure that indirect costs charged to NSF awards are not limited to only the amounts budgeted for indirect costs on each award.
3.1	Open	Yes
Direct MSU to provide documentation supporting that it has repaid or otherwise credited the $2,538 in questioned graduate student expenses for which it has agreed to reimburse NSF.
3.2	Open	Yes
Direct MSU to strengthen its policies and procedures and internal controls for allocating graduate student expenses charged to sponsored projects. Updated processes could include establishing formal guidance regarding how MSU will ensure it appropriately charges NSF awards for costs incurred to support graduate tuition and insurance expenses in a manner that is consistent with the graduate students’ effort.
4.1	Open	Yes
Direct MSU to provide documentation supporting that it has repaid or otherwise credited the $2,508 in questioned Award Cash Management $ervice drawdowns for which it has agreed to reimburse NSF.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

1.1

Open

Yes

Direct MSU to provide documentation supporting that it has repaid or otherwise credited the $23,205 in questioned consultant services, conference costs, and participant support costs for which it has agreed to reimburse NSF.

1.2

Open

Yes

Direct MSU to strengthen its policies and procedures surrounding the establishment of consulting agreements. Specifically, MSU should implement additional policies and procedures designed to ensure that it: • Does not charge NSF awards for costs incurred to obtain intra-Institute of Higher Education consulting services in those cases where MSU does not receive approval for such agreements and/or does not intend to use the funds to directly pay the MSU employees providing the services. • Formally documents and approves consulting agreements before employees or external consultants execute effort to support an NSF-sponsored project.